$CO$T ESTIMATING

$Why Cost Estimating?

• Budget Control• Contractor Ratification• Defense

$Project Budgets

• No Easy Method for Establishing• Usually Prepared Before:– there is a definitive project design– good information on construction costs

$Realistic Project Budgets

• Project Scope Stage Set By:– gross built floor area from accurate functional

space requirements, including allowances for circulation, mechanical and electrical equipment, custodial space, and other non-usable areas

– volume – occupancy type & number of occupants – included equipment & furnishings – soft costs: fees, financing and other

development costs

$• Quality and Performance Levels• Site – straightforward or complex• Schedule – Accelerated schedules - $$$$$–Winter construction - $$$$$

• Broad Conceptual Statement – key design and budget assumptions

• Contingencies – design & construction

Other Critical Budget Factors

$Contingencies

• Conceptual Phase 20%• Schematic Phase 15%• Design Development 10%• Final Working Drawings 3%

$• Renovations and Alterations– availability of as-built drawings– condition assessment– updating to current codes & regulations– continued occupancy during alterations– unforeseen structural changes– Extent of exterior envelope renovations and

alterations – contractor access to space and staging areas

• International Projects

Special Estimating Challenges

$What’s Behind the Numbers?

• Material Costs• Labor Costs• Equipment Costs• Overhead and Profit• General Conditions• Taxes

$Factors Affecting Costs

• Quality• Overtime• Productivity• Size of the Project• Location

$Other Factors

• Season of Year• Contractor Management• Weather Conditions• Local Union Restrictions• Building Code Requirements

$Other Factors

• Availability of:

a) adequate energy

b) skilled labor

c) building materials

• Owner’s Special Requirements• Safety Requirements• Environmental Considerations

$Unpredictable Factors

• General Business Practices Influence “in place” costs

• Substitute Materials & Construction Methods Impact:

a) installed costs

b) life cycle costs

• Safety Requirements• Environmental Considerations

$Owner’s Cost ?

• Permits• Insurance • Testing and Inspections• Utilities

$What are the Methods ?

• Unit Price Method• Square Foot Method• Cost Indexes