WHAT IS ESTIMATE?
FACTORS AFFECTING PROJECT COST
ESTIMATE
• an educated guess
• probable quantities and cost of
material, labor, equipment including
tax, overhead and profit
• BID PRICE – cost goes in the contract
ESTIMATING
• Process of predicting cost and resource
requirements
ESTIMATOR
• Responsible for deciding the projected
time frame and cost of the project
ESTIIMATORS RESPONSIBILITY
• come up with accurate and competitive
estimate
• set stage for overall management target
of the project
• analyze requirements, plans and specs
for understanding of the project
• preparing material and cost estimate
• develop and maintaining relationship
with vendor and contractors
• presentation of the prepared estimate
to the management
CHARACTERISTICS OF GOOD ESTIMATOR
• read contract document well
• knowledgeable with construction
techniques
• familiar with construction products
• creative yet practical
• can meet deadline and work and under
pressure
• familiar with purchasing
• has a very good organizational skill
ADVANTAGE OF ESTIMATTE
• gives the estimated duration and cost
of the project
• work planning can be more easier
• materials can be ordered as required
*LONG LIVED ITEMS – materials na
matagal dumating
DISADVANTAGE
• estimate cannot communicate between
labor and supervisor
• certain overheads cannot be controlled
1. PROJECT SIZE- larger the project the
more it cost
*Economies of scale – cost advantage
experience by a firm when it increased
its level of output
2. COMPLEXITY OF THE PROJECT –
complexity impacts productivity
a. SHAPE – every time you turn a
corner, it cost you more money
b. HEIGHT – anything a worker
cannot reached by standing on
the ground will increased cost
c. UNIQUE MATERIALS OR
APPLICATION – unique
materials required more time
for delivery
3. SITE LOCATION – impacts the ease of
procurement, delivery of materials,
labor and equipment
*PRICING CAN VARY FROM CITY TO CITY
4. TIME OF CONSTRUCTION – the longer
the duration of the project, the more it
cost
* TIME OF THE YEAR CAN ALSO AFFECT
COST
5. QUALIITYY OF THE WORK – the higher
the quality standard, the higher it cost
6. MARKET CONDITION – law of supply
and demand
7. MANAGEMENT FACTORS – all the extra
work takes extra time, extra time means
extra cost
TYPES OF ESTIMATE
1. CONCEPTUAL
• Called ballpark estimate
• No drawing available
2. PRELIMINARY
• higher level of accuracy and
used to establish initial budget
3. DETAIILED
• w/ complete set of plans and
specs
• quantity and cost is calculated
in every aspect of the project
TYPES OF PROJECT COST
1. DIRECT COST
• cost that actually go into
building the facility
• e.g. materials, labor, equipment
and subcontracts
 2. INDIRECT COST
• Expenses to manage and deliver
materials, labor and equipment
• Also called as job-specific
overhead
• e. g. Insurance, testing and
inspection, temporary utilities,
safety supplies and photograph
STEPS IN COST ESTIMATE
1. REVIEWING THE PLANS AND SPECS
• Reading technical details of the
plan and looking for any
discrepancy
• Reviewing of special clause,
criteria and demands of the
owner
2. PROVIDE A QUERY LIST
• a query list ensures clarification
and understanding of potential
issue
3. THE PRE-BID MEETING
• Dito binibigay yung query list
• Allows clarification of project,
sets expectation and builds
relationship between
contractors and the owner
4. SITE VISIT
• Gaining first hand experience
with the project site to mitigate
risk and asses the site
5. BUILDING AND ORGANIZING ESTIMATE
• Using WBS to create a detailed
items of work to be executed
6. CALCULATING AND PRICING OF WORK
• Involves in determining the
total cost of the project
including material, labor,
equipment ,overheads and
profit
7. OBTAINING THE CONTRACTOR AND
VENDOR BID
• ensure the competitiveness in
construction
QUANTItY TAKEOFF/SURVEYING
• development of the quantities of work
to be placed in appropriate units
COMMON ERRORS
1. Arithmetic
2. Transposiiton
3. Errors of omission
4. Poor Reference
5. Unrealistic water or loss factor
METHODS OF COST DETERMINATION
1. UNIT PRICING – focused on
identifying materials, equipment
and labor
2. RESOURCE ENUMERATION –
specifies a particular crew or
resource group
3. WORK PACKAGE/ASSEMBLE
MEtHOD – viewed as estimating
group and appropriate dimensional
are defined
ADD ONS
• added to the estimate after all other
cost have been calculated
1. TAXES
a. SALES TAX – for materials
b. PAYROLL TAX – for labor
2. GENERAL OVERHEAD – indirect
costs
3. PROFIT – financial gain of the
company
APPLYING TECHNOLOGY
ADVANTAGE
• Increased accuracy
• Improved efficiency
• Enhance collaboration
• Reduced cost
COST ESTIMATE SOFTWARES
• RS Means Cost Work
• Planswift
• Timberline Software
• McCaffer Cost Estimating Software
VALUE ENGINEERING
• Systematic and organized approach to
execute a project at a lowest cost
• Promotes substitution od materials and
method
• Employs to improve the value of the
project
ORIGIN OF THE VE
• Engineers at General Electric
namely LAWRENCE MILES, HARRY
ERLICHER, JERRY LEFTOW
PIONEERED VE
WHEN TO USE VE?
• There is no wrong time to value
engineer
 • Design team shouldn’t compromise 2. FEWER PROJECT DELAY – through
safety VE, construction team consider the
alternative method which is way
VE DURING PROJECT PLANNING
faster
• Best time to value engineer 3. IMPROVE QUALITY - maximizing
• Review the plans and specs to the budget while delivering a high
create ideas to reduce cost value result
4. REDUCE WASTE – reducing
VE DURING DESIGN PHASE unnecessary waste throughout the
• Value engineering team need to project
look at the cost in long term VALUE ANALYSIS VS VALUE ENGINEERING
basis and value the project as a
whole 1. TIMING
• VE – initial stage
VE DURING CONSTRUCTION PHASE • VA – throughout the
• Since construction is underway construction process
changes to plan may be costly 2. APPROACH
• During this phase value • VE – flexible and creative
engineers should be think • VA – structural and
critically to understand the methodological
impact of the changes to be 3. PURPOSE
implemented on the project • VE – preventing
unnecessary cost
STEPS IN VALUE ENGINEERING • VA – elimination of
1. GATHER INFORMATION – analyzing unnecessary cost
and reviewing the plans and specs
2. FUNCTION ANALYSIS – identifies
and defines function of the project,
process and product to be used to
evaluate its importance to the goal
of the project
a. PRIMARY FUNCTION – critical
to the project
b. SECONDARY FUNCTION –
notable but not critical
3. CREATIVE PHASE – develop
alternative solution
4. DEVELOPMENT PHASE – assess the
alternative solution
5. COST ANALYSIS – assess the cost of
the alternative compare to the
original plan
6. DEVELOPMENt PHASE – polished
the alternative solution and weigh
its pros and cons
7. PRESENTATION PHASE - present
the plan to the board of directors
and determine whether it is
approved or no
8. IMPLEMENTATION PHASE – execute
the idea with the approval of
management

IMPORTANCE OF VALUE ENGINEERING

1. CUT COST – optimize the budget of

the project