CEM103 LECTURE 2

COST ESTIMATING COMPONENTS

Kinds of Estimates

Range in Accuracy
Floor Area Estimate ± 40%
Function Estimate ± 30%
Factor Estimate ± 20%
Parameter Estimate ± 15%
Contractor Detailed Estimate ± 7%

1. Floor Area Estimate – Experience showed that for similar buildings, the building cost are very
closely related to floor area. It is based on historical data.
2. Function Estimate – Measures the cost of a building relative to its use or function.
Type of Project Function Estimates
School Building Cost per student
Hospital Cost per bed
Theater Cost per seat
Parking Space Cost per parking space

3. Factor Estimate – based on historical data. However, unlike other estimating models that gather
and structure past cost data, the factor estimate develops factor for each components as a function
of a predominant cost. Example:

Type of Work Cost Factors

General Conditions P 54,000 0.09
Excavation 42,000 0.07
Framing System 132,000 0.22
Equipment 600,000 1.00
Equipment Installation 108,000 0.18
Process Piping 420,000 0.70
Electrical 60,000 0.10
Plumbing 108,000 0.18
Mechanical 264,000 0.44

4. Parameter Estimates – this is an improvement over the floor area estimate because several
parameter measures are used instead of one. Lump sum cost of trades are related to component
system of construction. Examples:
a. Structural Steel Cost related to gross area covered.
b. Parking area per number of building occupants.
c. HVAC cost per CM of the building.

5. Contractor Detailed Estimate

5.1 Components of a contractor’s detailed estimate
1. Direct Cost
2. Project Cost
3. Indirect Cost
4. Profit
5.2 Sources of Information
a. Tender Documents
• Project Drawings Specifications
• Invitation to Bid
• Bill of Quantities
• General Conditions of Contract
• Special Conditions of Contract
• Contract Agreement
• Bid Addendums

b. Work Site and its Vicinity

• Geotechnical Report
• Private Tests
• Photographs
• Construction work in progress in the vicinity
 • Old time residents in the area

c. Client, or his representative

d. Suppliers and subcontractors
5.3 Components of Direct Cost
a. Material
• Include a factor for waste
• Is delivery included?
• Is there minimum order involved?
• Who provides samples, shop drawings and certifications?

b. Labor
• Worker’s base wage + fringe benefit
• Productivity
c. Equipment
• Rental or depreciation
• Operator
• Fuel and maintenance
• Cost of moving equipment to and from jobsite
• Set up costs
Maximizing chances of getting contracts

a. Sharpen the accuracy of estimating

• Ability to secure contract is reduced (1:6)
• Average profit margin is increased

b. Review your bids thoroughly

• Concentrate on big items
• Check parameter items
1. Cost per SM (floor area)
2. Cost per CM (volume)
3. Cost per capacity

• Relationship of bid price with direct cost

• Check according to established ratios

c. Participate in more bids/choose bidding with less competitors

d. Bargain for good quotations from subcontractors and suppliers
e. Know your competitors
• Determine who are the competitors in every bid
• Find out the need for work of each strong competitor
• In each bid opening, record all the competitors and your bids, along with the estimated cost
of the project

f. Improve productivity in the company’s operation

 • Introduction of new and improved technology
• Use of more efficient equipment and tools
• Use of better materials
• Improved production management
• Harder working efforts
• Improved training of labor force

VERTICAL ESTIMATES

INTRODUCTION

The program derives unit cost and generates bill of materials for the following items of work:
❖ Earthworks ❖ Masonry
❖ Concrete ❖ Painting
❖ Rebars ❖ Structural Steel
❖ Formworks

The program is flexible and adaptable to any company because of two features:
1. There are three existing databases for the cost of materials, labor and equipment. The databases
are accessed by all the estimating routines in the program and the contents of the databases may
be revised by the user anytime.
2. The factors used in preparing the routines are herewith attached for the user’s reference. For a
small additional cost, you may request that the factors be customized for your company only.

ESTIMATING FACTORS

EARTHWORKS

1. EXCAVATION

Manual (Man day/CM) Equipment (EH/CM)

Common Earth 1.04 Backhoe – 0.067

Sand/Silt 1.31 Backhoe – 0.077
Clay/Heavy Soil 1.64 Backhoe – 0.097
Rock Adobe 2.04 Jackhammer – 1.000

2. BACKFILLING

Manual (Man day/CM) Equipment (EH/CM)

Common Earth 0.45 Loader – 0.034

Escombro 0.55 Loader – 0.044
Gravel Fill 0.65 Loader – 0.048
 3. COMPACTION (Equipment only)
Roller 0.072 EH/CM
Plate Compactor 0.067 EH/CM

4. CLEARING & GRUBBING

Manual 0.4 man-hour/SM
Dozer 0.008 EH/SM

*Rental rate includes operator and fuel

REBAR WORKS
Structure Difficulty Factor

Foundation 1.00
Beam 1.05
Slab 1.03
Column 1.08
Shear Wall 1.05
Stair 1.05
Tie wire (kg) = kg of steel x 1.05 x 1/78
Labor = 80 MH/1000 kg of steel

CONCRETE WORKS
Structure Difficulty Factor
Foundation 1.00
Beam 1.15
Slab 1.20
Column 1.15
Shear Wall 1.15
Stair 1.25

Construction Method Ideal Crew Daily Output

1. Place concrete directly from ready mixed truck 60
2. Place concrete from ready mixed truck to 9
wheelbarrows
3. Place concrete from ready mixed truck to concrete 12.5
buggies
4. Hoisting concrete in buggies vertically with hoist 12.5
5. Hoisting concrete in crane bucket and placing 25.0
6. Hoisting concrete in crane bucket and placing 7.5
7. Placing concrete with a concrete pump 45.0
8. Mixing concrete with bagger mixer and placing 6.0
 9. Mixing and placing concrete manually 4.0

Ideal Crew Daily Output

Actual Crew Daily Output =
Factor of Difficulty

Concrete Materials (If site mixed) per CM

Concrete Strength Cement Sand Gravel

(psi) (Bags) (CM) (CM)

5,000 14 0.38 0.75

4,000 11 0.40 0.76
3,500 10.46 0.40 0.80
3,200 9.47 0.42 0.82
3,000 7.85 0.42 0.84
2,800 6.49 0.44 0.87
2,500 5.49 0.44 0.89

MASONRY WORK (Materials)

CHB (pcs) = SM x 12.5 x 1.05

Cement (bags)
4” CHB = SM x 12.5/32
6” CHB = SM x 12.5/14
8” CHB = SM x 12.5/10
Sand (CM) = Bags of Cement x 0.08

Rebars
Spacing in meters
Vertical Horizontal LM/SM
0.60 0.60 3.6
0.80 0.80 3.2
0.80 1.00 2.8
1.00 1.00 2.4
1.00 1.20 2.3

Labor

Daily Accomplishment (SM/Man-Day)

4” CHB = 4.44
6” CHB = 4.00
8” CHB = 3.64

FORMWORKS
Man-hour table per SM
Structure Assemble Erect Strip/Clean Repair
Foundation 0.53 0.32 0.32 0.21
Beam 0.86 0.43 0.43 0.43
Slab 0.64 0.32 0.32 0.32
Column 0.63 0.43 0.32 0.32
Shear Wall 0.73 0.43 0.43 0.21
Stair 1.07 0.75 0.43 0.53

If No. of Use = 1 F= 1
If No. of Use = 2 F = 1.8
If No. of Use = 3 F = 2.7

Materials
Plywood (pcs) = SM of forms x 10.76 /(F x 32)
Form 2 x 3 x 12 (pcs) = SM of forms x 0.86/F
Form 2 x 4 x 12 (pcs) = SM of forms x 1.61 / F
Nails (kg) = Plywood x 0.018 + Form 2 x 3 (0.1) + Form 2 x 4 (0.05)
Form Oil (lit) = Plywood x 0.048

STEEL WORKS
Basic Input
1. Tonnage of steel required
2. No. of paint coats required
Materials
Oxy-acetylene 2.2 sets/ton (1 set = 2 oxygen ; 1 acetylene)
Welding rod 2.5 % of steel tonnage (20 kgs/box)
Paint
Area 300 SF/ton of steel
Coverage 300 SF/gal of paint/coat
Mix 2 gal paint
1 gal thinner
Labor
Fabrication 0.55 MH
Erection 0.40
Delivery 0.10
Painting 0.05
 1.10 MH/kg = 1100 MH/ton

Equipment
Fabrication 50% of Fabrication labor cost
Erection 50% of Erection labor cost

PAINTING WORKS

1. XYLADECOR 0.40 MH/SM

Materials
Wood Lite 0.25 lit/SM
Sand Paper 0.30 lit/SM
Xyladecor 0.15 lit/SM/Coat
Stoppa Rugs 0.100 kgs/SM

2. ACRYTEX 0.50 MH/SM

Acrytex Cast 0.225 lit/SM
Acrytex Primer 0.15 lit/SM
Acrytex Top Coat 0.15 lit/SM/Coat
Acrytex Reducer 0.15 lit/SM

3. MASONRY PAINT 0.40 MH/SM

Masonry Neutralizer 0.10 lit/SM
Perma Coat Latex 0.15 lit/SM/Coat
Patching Compound 0.05 lit/SM
Sand Paper 0.10 SM/SM

4. FLATWALL ENAMEL 0.50 MH/SM

Flatwall Enamel 0.15 lit/SM/Coat
Glazing Putty 0.10 lit/SM
Paint Thinner 0.10 lit/SM/Coat
Sand Paper 0.05 SM/SM

5. DUCO 1.2 MH/SM

Lacquer Flo 0.15 lit/SM/Coat
Lacquer Thinner 0.15 lit/SM/Coat
Lacquer Primer 0.05 lit/SM
Lacquer Primer Putty White 0.10 lit/SM
Sand Paper 0.10 SM/SM
Auto White 0.225 lit/SM

6. VARNISH 1.2 MH/SM

Wood Lite 0.30 lit/SM
Wood Bleach 0.15 lit/SM
Wood Stain 0.15 lit/SM
Sanding Sealer 0.15 lit/SM
Dead Flat Lacquer 0.15 lit/SM/Coat
Sand Paper 0.10 SM/SM
SAMPLE COMPUTATION

Work Description : Common Earth Backfill

Method : Machine – Loader
Capacity : 0.034 EH/CM
Rental Rate : P 330.00/EH – Operated
Fill Material Cost : P 125.00/CM
Quantity : 1000 CM
Equipment Unit Cost = 0.034 x 330.00 = P 11.22/CM
Material Unit Cost = 125 x 1.3 = P 162.50 /CM
Total Cost = (11.22 + 162.50) x 1000 = P 173,720.00
Duration = 1000 x 0.034 / 8 = 4 days
Order:
Backfill 1300 CM @ P 125.00 = P 162,500.00

SAMPLE COMPUTATION

Work Description : Rebar Works

Structure : Shear Wall
Quantity : 3000 kgs
Rebar Type : High Tensile Grade
Working Crew : Leadman – 1
Steelman – 9
No. of Crews : 1
Material Unit Cost = 14.85+ 35.00 x 1.05/78 = P 15.32 /kg
Labor Unit Cost = [112 + (9 x 107)] x 1.06/1000 = P 1.14/kg
Total Cost = (15.32 + 1.14) x 3000 = P 49,380.00
Duration = 3000 x 1.06 / 1000 = 3 days
Order:
High tensile grade rebars
3000 kgs @ P 14.85 = P 44,550.00
Tie Wires – 3000 x 1.05/78 = 40.38
40.38 kgs @ P 35.00 = 1,413.00
Total = P 45,963.00

Note: Do not forget to incorporate wastage in the takeoff.

SAMPLE COMPUTATION

Work Description : Concreting Works

Structure : Foundation
Quantity : 180 CM
Construction Method : Place concrete with a concrete pump
Working Crew : Carpenter B – 1
Mason - 2
Laborers – 10
No. of Crews : 4
Type of Concrete : Mixed-on-site
Strength : 3000 psi
Material Unit Cost = 247,689/180 = P 1376.05 /CM
Labor Unit Cost = [107 + (2 x 117) + (10 x 106)] x 1.00/45 = P 31.13/CM
Equipment Cost = (55 + 360.8) (8)/45 = P73.92/CM
Total = P 1481.10/CM
Total Cost = 1481.1 x 180 = P 266,598.00
Duration = 180 / (45 x 4) = 1 day

Order:

Cement : 180 x 7.85 = 1413 bags @ P125 = 176,625.00

Sand : 180 x 0.42 = 75.6 CM @ P240 = 18,144.00
Gravel : 180 x 0.84 = 151.20 CM @ P350 = 52,920.00
Total = P 247,689.00

SAMPLE COMPUTATION

Work Description : Masonry Works

Structure : 6” CHB Non-load Bearing
Quantity : 238 SM
Masonry Reinforcement : 0.80 m x 0.80 m
Bar diameter : 12 mm
Working Crew : Mason - 1
Laborer – 1
No. of Crews : 3
Type of Concrete : Mixed-on-site
Strength : 3000 psi
Material Unit Cost : 57,478.21/238 = P 241.51/SM
Labor Unit Cost : (117 + 106) /(2 x 4.0) = P 27.88/SM
Total = P 269.38/SM
Total Cost : 269.38 x 238 = P 64,112.00
Duration : 238 / (3 x 2 x 2) = 10 days
Order:
6” CHB (Non-LB) : 12.5 x 1.05 x 238 = 3125 pcs @ P 5.90 = P 18,437.50
Cement : 12.5 x 238 /14 = 214 bags @ P125 = 26,750.00
Sand : 214 x 0.08 = 17.12 CM @ P240 = 4,080.00
Rebars : 3.2 x 0.888 x 238 = 676.3 kgs @ P12.95 = 8,210.71
Total = P 57,478.21

SAMPLE COMPUTATION

Work Description : Formworks

Structure : Beam
Quantity : 118 SM
No. of Uses : 2
Working Crew : Carpenter B - 2
Laborer – 1
No. of Crews : 4
Plywood : 20 mm thick

Material Unit Cost : 24,867.00/118 = P 210.74/SM

Labor Unit Cost : {(2 x 107) + 106) /8 + [(2 x 1.72) + 0.43]/2} = P 76.92/SM
Total = P 287.66/SM
Total Cost : 287.66 x 118 = P 33,943.00
Duration : [118 x (2 x 1.72 + 0.43)/ (24 x 4)] = 5 days

Order:
20 mm thick Plywood : 118 x 10.76 /( 32 x 1.8) = 23 pcs @ P 620 = P 14,398.00
2 x 3 x 12 lumber : 118 x 0.86 /1.8 = 57 pcs @ P 51 = 2,913.00
2 x 4 x 12 lumber : 118 x 1.61 /1.8 = 107 pcs @ P 68 = 7,246.00
CW Nails : (118 x 0.018) + (57 x 0.1) + (107 x 0.05) = 12 kgs @ P 25 = P 3,000.00
Form Oil : 118 x 0.048 = 2 lit @ P 5.50 =P 11.00
Total = P 24,867.00

SAMPLE COMPUTATION

Work Description : Structural Steel

Quantity : 3624 kgs
No. of Paint Coat : 2
Working Crew : Leadman - 1
Welder - 5
Painter – 1
No. of Crews : 2
Materials to order
Structural steel : 3624 kgs @ P 23.20 = P 84,077.00
Oxy-acetylene : 3624 (2.2)/1000 = 9 sets @ P 5,000.00 = P 45,000.00
Welding rod : 3624 (0.025)/20 = 6 boxes @ P 780.00 = P 4,680.00
Red Oxide Primer : 3624 (2)/1000 = 8 gals @ P 210.00 = P 1,680.00
Thinner : 5 gals @ P 64.00 =P 320.00
Total = P 135,750.00

Material Unit Cost : 135,750.00/3624 kg = P 35.66/kg

Labor Unit Cost : (112 + 5(117) + 107) (1.1) /(8 x 7) = P 15.79/kg
Equipment Unit Cost : 700(0.75)(1.1)/(8 x 7) = P 7.90/kg
Total = P 59.35/kg
Total Cost : (59.35/kg) (3624 kg) = P 215,078.19
Duration : (3624) (1.1)/ (8 x 7 x 2) = 36 days

SAMPLE COMPUTATION

Work Description : Painting

Paint Type : Masonry Paint
Quantity : 425 SM
No. of Coats : 2
Working Crew : Painter A – 1
Painter B – 2
No. of Crews : 1
Plywood : 20 mm thick

Order:
Masonry Neutralizer : 0.1 x 425 = 42.5 liters @ P 55.00 = P 2,338.00
Permacoat Latex : 0.15 x 425 x 2 = 127.5 liters @ P 52 = 6,630.00
Patching Compound : 0.05 x 425 = 21.25 liters @ P 12 = 2,255.00
Sandpaper :
0.10.25 (425) = 42.5 SM @ P 19.80
Total
= P 1,842.00
= P 10,064.00
Material Unit Cost : 10,064.00/425 SM = P 23.68/SM
Labor Unit Cost : (0.4 + 0.2) (117 + 2 x 112)/(8 x 3) = P 8.53/SM
Total = P 32.21/SM
Total Cost : (P 32.21/SM) (425 SM) = P 13,687.10
Duration : (425 x 0.6)/ (8 x 3)] = 11 days

HORIZONTAL ESTIMATES next 4B

INTRODUCTION

The program derives unit cost and generates bill of materials for the following items of work.

 Equipment estimates  Concrete drainage works

 Earthworks  Pavement
 Riprap works  Curbs and gutters
 Sidewalks

1. EQUIPMENT ESTIMATE

OWNERSHIP COST – INCLUDES INVESTMENT AND DEPRECIATION

a. INVESTMENT COST

It costs money to own an equipment. One part of ownership cost includes the interest on the
money invested, taxes, insurance, registration and storage.

Although the owner pays cash for the equipment, he should charge interest on the investment,
as the money spent for the equipment could be invested into another asset that would return the
interest to the owner. Some owners charge a fixed rate of interest against the full purchase cost
of the equipment each year it is owned. This method gives an annual interest cost that is higher
than it should be. One approach is that for each year that the equipment is used, the owner should
deduct form its earnings an amount equal to the annual cost of depreciation. After the equipment
 has been used for the estimated depreciation period, the owner will have recovered its original
cost.

The average annual cost of interest should be based on the average value of the equipment during
its useful life.

Average Value of Equipment with salvage value

𝑃 (𝑁 + 1) − 𝑆(𝑁 − 1)
𝑌𝐴𝑉 =
2𝑁

b. DEPRECIATION

The loss in value of a piece of equipment over time generally caused by wear and from use,
deterioration and reduced need (obsolescence). The owner must recover this loss of value in
equipment that he owns during its useful life.

1. STRAIGHT LINE (LS) – the most widely used method in computing depreciation for
construction equipment.

(𝑃 − 𝑆 )
𝐷=
𝑁

Where N = number of years of economic life of equipment or the recovery period allowed
for income tax purposes, asset life
P = Purchase price
D = Amount of depreciation for any year
S = Estimated resale value at the end of economic life (salvage value)

OPERATING COST

Operating costs are those associated with the operation of a piece of equipment. It includes fuel and
lubrication costs, operator cost, and minor maintenance and repair costs. The other costs involved in
equipment are major maintenance, major repair, and tires. Either way, they represent a significant cost
category and should not be overlooked.

a. Maintenance and Repair

The annual cost of maintenance and repairs may be expressed as a percent of the annual cost of
depreciation, or it may be expressed independently of depreciation. In any event, it should be
sufficient to cover the costs of keeping the equipment operating.

b. Fuel Consumed

When operating under standard conditions, a gasoline engine will consume approximately 0.06
gallon per flywheel horsepower hour, while a diesel engine will consume approximately 0.04 gallon
per fwhp-hr.
 Engine Factor

Example:

Operation of engine at maximum power = 5 sec out of a cycle of 20 sec, the remaining 15 sec, the
engine may operate more than ½ of its rated power. Assuming a 160 fwhp engine operates only 50
minutes per hour.

Time factor = 50/60 = 0.833

Engine factor (5 sec)
Engine factor (15 sec)
Total engine factor
f = operating factor
Fuel consumed per hour
Fuel consumed per hour
= 5/20 x 1 = 0.25
= 15/20 x 0.5 x 1 = 0.375
= 0.625
= (0.625) (0.833) = 0.520
= 0.520 (160) (0.04)
= 3.33 gal (if diesel)
= 0.520(160) (0.06)
= 5.00 gal (if gasoline)

c. Lubricating Oil

The quantity of lubricating oil used by an engine will vary with the size of engine, the capacity of
the crankshaft, the conditions of the piston ringers and the number of hours between oil changes. It
is common practice to change oil every 100 to 200 hours operation. It is assumed between changes
will be 0.006 lbs.

hp 𝑥 0.006 per hp − hr 𝑐
𝑞= +
7.4 lb per gallon 𝑡

Where: q = quantity of consumed gph

hp = rated hp of engine
c = capacity of crank case, gal.
f = operating factor
t = number of hours between changes

for our purpose, c/t maybe assumed = 0.04

d. Equipment Unit Cost

An equipment is assumed effective only 50 minutes per hour. Equipment Unit Capacity may be
expressed in:
1. Cycle time – time in minutes required to complete one cycle.

Hourly owning & Operating cost Cycle time

EUC = ( )
Equipment Capacity 50
2. Actual productivity
 Hourly owning & Operating cost 60
EUC = ( )
Equipment Capacity 50

e. For Programming Purposes

1. If purchase price < P 400,000 then only an operator is required.

2. If purchase price ≥ P 400,000 then an operator and a helper are required.

SAMPLE COMPUTATION

Computation for 12 CM Dump Truck

𝑃 (𝑁 + 1) − 𝑆(𝑁 − 1)
𝑌𝐴𝑉 =
2𝑁

450,000 (15 + 1) − 45,000(15 − 1)

𝑌𝐴𝑉 = = P 219,000.00
2(15)

0.14 (219,000)
Interest Cost = = P 12.77
2400

0.06(219,000)
Taxes, Insurance, Storage = = 5.48
2400

(450,000 – 45,000)
Depreciation = = 11.25
15(2,400)
Total = P 29.50
Maintenance & Repairs = Depreciation =P 8.44
Fuel = (108) (0.60) (0.06) (10.00) (3.785) = 147.16

108(0.60)(0.006)
Lubrication = [ + 0.04] (31.00)(3.785) = 10.86
7.4
Operator = (150 + 100)/8 = 31.25
Sub-Total = P 197.71
Grand Total = P 227.21

227.21 25
Equipment Unit Cost = ( ) = P 9.47/CM
12 50
cu.m.
2. CONCRETE DRAINAGE PIPES

Installation Rate (MH/pc)

Cement Factor Sand Factor
Non-Reinforced w/bagger
(Bags/pc) (CM/pc) Manual
mixer
100 mm dia x 1 m 0.16 0.020 3.00 2.0
150 mm dia x 1 m 0.17 0.021 3.15 2.1
 200 mm dia x 1 m 0.18 0.022 3.30 2.2
250 mm dia x 1 m 0.18 0.023 3.45 2.3
300 mm dia x 1 m 0.19 0.024 3.60 2.4

Reinforced
300 mm dia x 1 m 0.19 0.024 3.60 2.4
375 mm dia x 1 m 0.22 0.027 4.05 2.7
450 mm dia x 1 m 0.26 0.032 4.80 3.2
600 mm dia x 1 m 0.34 0.042 6.30 4.2
750 mm dia x 1 m 0.42 0.053 7.95 5.3
900 mm dia x 1 m 0.52 0.064 9.60 6.4

3. EARTHWORKS

a. Excavation
b. Backfilling
c. Compaction
d. Clearance and Grubbing

4. RIPRAPPING WORKS

Mortar Cement Factor Sand Factor Gravel

Mixture (Bags/CM) (CM/CM) (CM/CM)
1:2 6 0.3 0.03
1:3 3.6 0.3 0.03
1:4 2.7 0.3 0.03

Riprapping rate (MH/CM)

With concrete mixer - 16
Manually - 24

5. MISCELLANEOUS CONCRETING WORKS

Work Item Rebar Factor Form Factor

(Kg/CM) (SM/CM)
Parent 7.00 1.5
Curbs and gutter 5.00 3.0
Sidewalks 15.00 1.0

Construction Method Ideal Crew Daily

Output (CM)
1. Place concrete directly for ready mix truck 60
2. Place concrete for ready mix truck to concrete buggies 12.5
3. Mixing concrete with bagger mixer and placing 6.0
4. Mixing and placing concrete manually 4.0