Presentation on theme: "Construction Estimating"— Presentation transcript:
1 Construction Estimating Introduction toConstruction EstimatingThe use of computers on estimating and bidding
2 National Institute of Building Sciences. (http://www.wbdg.org) In the business of design and construction, profitability is based on accurate and complete cost estimation“Cost estimating is employed as one of the main tools of successful cost management. Once an initial budget has been established, it is important to test its assumptions by employing a series of increasingly precise cost estimating techniques that coincide with further development of design and construction details.”National Institute of Building Sciences. (http://www.wbdg.org)
3 Estimating requires a talent to predict or avoid the unexpected. A good estimator understands construction materials, methods and systems, as well as the labor and equipment required to complete all tasks in their correct sequence, on time and on budget.
4 The structure of an estimate Estimates are typically organized in a work-breakdown structure (WBS). A work breakdown structure (WBS) is a hierarchical system used to define and group discrete tasks or elements, covering the work scope of the project.100% Rule:A WBS must include 100% of the work defined by the project scope and capture all deliverables – internal, external and interim. The rule applies at all levels within the hierarchy: the sum of the work at the “child” level must equal 100% of the work represented by the “parent” and the WBS cannot include more than 100% of the project’s scope.The Construction Specification Institute’s (CSI) has created the "de facto" standard for the Construction Industry (known as MasterFormat).The CIS has also created the UniFormat, a new design-based structure focusing on early stages of a project planning.
5 MasterFormat (also referred as the CSI Format) Created by the Construction Specification Institute CSI, 1961Used by nearly every business, in specifications and pricingFocus on materials and methods (construction approach)Contains 49 divisions (as of 2008)Better suited for pricing & constructionExample:DIVISION 05 – METALSMETALSMaintenance of MetalsSTRUCTURAL METAL FRAMINGStructural Steel FramingFor more information
6 UniformatFirst introduced in 1998, Guiding Principles established in 2007Functional elements of a project (design approach)Organized in nine categoriesBetter for conceptual understanding of a buildingProvides a way to compare major components of different projectsA Substructure B Shell C Interiors D Services E Equipment & Furnishings F Special Construction & Demolition G Building Sitework Z General
7 Uniformat (cont.) The purpose of UniFormat is to: UniFormat is an arrangement of construction information based on physical parts of a facility called systems and assemblies. These systems and assemblies are characterized by their function without identifying the products that compose them. Systems and assemblies render a view of a constructed facility different from the view rendered by a breakdown of building materials, products, and activities such as MasterFormat. UniFormat is intended to complement MasterFormat.CSI – (www.csinet.org)The purpose of UniFormat is to:achieve consistency in economic evaluation of projectsenhance reporting of design program information; andpromote consistency in filing information for facilities management, drawing details and construction market data.For more information:
8 Types of estimates ROM (Rough Order of Magnitude) Estimates Used in strategic or preliminary planning, proforma analysesUsed to assist go/no-go decisionsLow level of accuracy, general in scopeDetailed Costs EstimatesIncreased accuracyUsed to define tasks and schedulesBased on assemblies & systemsNational Institute of Building Sciences ClassificationPreliminary estimatesIntermediate estimatesFinal estimates
9 Preliminary estimates (20% - 25% margin of error) Early planning stages - Systems-based WBS (eg. Uniformat) - May also be based on other metrics cost/parking space, cost/hospital bed may be referred to as “guesstimates" of “ballpark numbers” - Feasibility focus - Large contingency values (low confidence)Intermediate estimates (10% - 15% margin of error)SDs & DDs - Focus on systems, alternatives & comparisons - Begin migration from ‘systems' to ‘materials & labor‘ - Frequent updates, refinement with design - Gradual reduction of contingencyFinal estimates (2% - 3% margin of error)For bidding, construction & control - Multiple bidders, comparisons by major tasks/systems - Very detailed take-offs and specifications - Contingency reduced or eliminated - Once construction is completed, data can be used for future projects
10 Time and Accuracy Relationship in Estimates Data based on John D. Bledsoe’s - Concept to Bid…Successful Estimating Methods
11 Major elements of an estimate Direct costs (may be grouped in systems or assemblies) Materials Labor Equipment- Indirect costs Taxes Insurance Bonds Operating costs- Overhead, profit, other markups- Contingency- Time & escalation- Phasing & mobilization costs- Geographic index
12 The use of computers“Years ago we created estimates using a calculator and a yellow tablet.You sat down, counted the parts and pieces, added them up and that was the cost for a job.”Mac Crawford, Crawford Construction. Lexington KY- The practice of cost estimating precedes the use of computersBecause of this legacy, many of its original methods persisted even after computers were introducedComputers are today an intrinsic part of the business, used not only in actual calculations, but also in the storage, organization, retrieval and reporting of data, as well as a collaboration tool between different disciplinesAs a result, estimates are now much more accurate and detailed, and the industry’s requirements have also increased accordinglyThere are thousands of software packages on the market, ranging from simple “excel-like” spreadsheet programs to complete corporate solutions. Pricing also varies widely with the complexity of the softwareOne of the greatest challenges is to migrate ‘field knowledge’ to the computer. Experienced field professionals often rely on others to operate estimating software.
13 Common estimating options - Spreadsheets and manual takeoffs “Excel is still the king”CAD and digital takeoff systems- Online databases and servicesBNI R.S. MeansCorporate software (modular systems)Building Information Modeling (BIM)
14 Estimating Software - Desirable Features - Must be able to handle multiple projects (!)- Hierarchical/WBS organization- Detailed view per item- Take-off system (screen-based or digitizing devices)- Handling of complex systems and assemblies- Items linked to cost of products & resources (labor, materials, subcontractors, etc)- Automated calculations- Indirect costs, markup & overhead
15 Estimating Software - Desirable Features (cont.) - Purchasing & contracting- Cost comparisons (between different systems &/or providers)- Closeout capabilities, (Manual overrides & customization)- Reporting (links to scheduling)- Import/export capability- Database storage vs. flat-file structure- Online updates and subscription (cost data, specs.)- Archival, backup & historic data- * GOOD SUPPORT & DOCUMENTATION
16 To Be or not to Be(IM) BIM Advantages BIM Challenges: Better coordinationProblems identified earlierHidden conflicts are discovered more easily (Structural vs MEP)Reduction of RFIs2D Drawings are an output of modelProduce takeoffs (debateable)BIM Challenges:Heavy requirements (processing power, storage, net traffic)Adoption of same technology across different disciplinesExisting legacy of 2D CADNo standards to dateDoes not replace knowledge of materials & systemsMisconception that BIM will do the work for youFor more information:
17 Conclusion How have computers changed estimating? - Level of detail (depth of work)- Accuracy (takeoffs, calculations)- Better WBS structure- Ease of navigation (from general view to individual tasks)- Automated recalculations (less chance for error)- Cascading updates- Online pricing and specification databases- Systems integration (design, documentation specifications, estimates, construction)- * Field experience vs. computer literacy