Construction Estimating Techniques

Civil Engineering Estimates

An estimate is a calculation of the quantities of various items of work, and the expenses likely to be incurred
there on. The total of these probable expenses to be incurred on the work is known as estimated cost of the
work. The estimated cost of a work is a close approximation of its actual cost. The agreement of the estimated
cost with the actual cost will depend on accurate use of estimating methods and correct visualization of the
work, as it will be done. Importance of correct estimating is obvious. Under-estimating may result in the client
getting an unpleasant shock when tenders are opened and drastically modifying or abandoning the work at
that stage. Over-estimating may lose the engineer or estimator his client or his job, or in any case his
confidence.

Estimating is the most important of the practical aspects of construction management, and the subject
deserves the closest attention of one aspiring to a career in the profession. It is a comparatively simple
subject to understand; however, as it brings one up against practical work, methods and procedure,
knowledge of it cannot be acquired without close application.

. Purpose of Estimating:
To give a reasonably accurate idea of the cost
An estimate is necessary to give the owner a reasonably accurate idea of the cost to help him decide whether
the work can be undertaken as proposed or needs to be curtailed or abandoned, depending upon the
availability of funds and prospective direct and indirect benefits. For government works proper sanction has to
be obtained for allocating the required amount. Works are often let out on a lump sum basis, in which case the
Estimator must be in a position to know exactly how much expenditure he is going to incur on them
1. Estimating Materials
From the estimate of a work it is possible to determine what materials and in what quantities will be required
for the work so that the arrangements to procure them can be made.
2. Estimating Labor
The number and kind of workers of different categories who will have to be employed to complete the work in
the specified time can be found out from the estimate.
3. Estimating Plant
An estimate will help in determining amount and kind of equipment needed to complete the work.
4. Estimating Time
The estimate of a work and the past experience enable one to estimate quite closely the length of time
required to complete an item of work or the work as a whole.
Whereas the importance of knowing the probable cost needs no emphasis, estimating materials, labor, plant
and time is immensely useful in planning and execution of any work.

. Types of Construction Estimates:

There are several kinds of estimating techniques; these can be grouped into two main categories

1. Approximate Estimates
An approximate estimate is an approximate or rough estimate prepared to obtain an approximate cost in a
short time. For certain purposes the use of such methods is justified.

2. Detailed Estimate
A detailed estimate of the cost of a project is prepared by determining the quantities and costs of everything
that a contractor is required to provide and do for the satisfactory completion of the work. It is the best and
most reliable form of estimate. A detailed estimate may be prepared in the following two ways:
(a). Unit quantity method
(b). Total quantity method.

(a) Unit Quantity Method

In the unit quantity method, the work is divided into as many operations or items as are required. A unit of
measurement is decided. The total quantity of work under each item is taken out in the proper unit of
measurement. The total cost per unit quantity of each item is analyzed and worked out. Then the total cost for
the item is found by multiplying the cost per unit quantity by the number of units. For example, while
estimating the cost of a building work, the quantity of brickwork in the building would be measured in cubic
meters. The total cost (which includes cost of materials. labor, plant, overheads and profit) per cubic meter of
brickwork would be found and then this unit cost multiplied by the number of cubic meters of brickwork in the
building would give the estimated cost of brickwork.
1 of 10
This method has the advantage that the unit costs on various jobs can be readily compared and that the total
estimate can easily be corrected for variations in quantities.

(b) Total Quantity Method

In the total quantity method, an item of work is divided into the following five subdivisions:
(I) Materials
(II) Labor
(III) Plant
(IV) Overheads
(V) Profit.

The total quantities of each kind or class of material or labor are found and multiplied by their individual unit
cost. Similarly, the cost of plant, overhead expenses and profit are determined. The costs of all the five sub-
heads are summed up to give the estimated cost of the item of work. For example, the cost of brickwork in a
building would be determined as below:
I ( i ) Cost of Materials at the source $
Bricks $
Sand $
Cement $
Water $
(ii) Cost of Handling and transporting
$
above materials
II Cost of Labor, both skilled and unskilled $
III Cost of plant $
IV Overheads $
V Profit $
Total Cost of Brickwork $

. Qualifications of an Estimator
A good estimator should possess the following quantifications:
1. A thorough understanding of architectural drawings.
2. A sound knowledge of building materials, construction methods and customs prevailing in the trade.
3. A fund of information collected or gained through experience in construction work, relating to materials
required, hourly output of workers and plant, overhead expenses and costs of all kinds.
4. An understanding of a good method of preparing an estimate.
5. A systematic and orderly mind.
6. Ability to do careful and accurate calculations.
7.Ability to collect, classify and evaluate data that would be useful in estimating.

Good instruction or careful and thorough study of a standard book will help a beginner to become a good
estimator. He must, however, try to develop all the above mentioned qualities while obtaining practical
experience.

. Data Required for Preparing an Estimate:

In order to prepare a detailed estimate the estimator must have with him the following data:
1. Plans, sections and other relevant details of the work.
2. Specifications indicating the exact nature and class of materials to be used.
3. The rates at which the different items of work are carried out.
To enable an estimator to take out the quantities accurately, the drawings must themselves be clear, true to
the fact and scale, complete, and fully dimensioned. The estimator has also to bear in mind certain principles
of taking out quantities.

. Steps in Preparation of an Estimate:

There are three clearly defined steps in the preparation of an estimate.
1 . Taking out quantities
In the first step of taking out quantities, the measurements are taken off from the drawings and entered on
measurement sheet or dimension paper. The measurements to be taken out would depend upon the unit of
measurement. For example, in the case of stone masonry in superstructure, length, thickness and height of
the walls above plinth level would be taken out from the drawings and entered on the measurement sheet,
whereas, in the case of plastering only the lengths and heights of the walls would be entered. Obviously, the
unit of measurement in the first case is cubic meter and that in the second case is square meter.
2 of 10
2. Squaring out
The second step consists of working out volumes, areas, etc. and casting up their total in recognized units.
3. Abstracting
In the third step all the items along with the net results obtained in the second step are transferred from
measurement sheets to specially ruled sheets having rate column ready for pricing.
The second and third steps above are known as working up. All calculations in these stages and every entry
transferred should be checked by another person to ensure that no mathematical or copying error occurs.

. Standard Method of Measurement of Building Works:

The different methods of measuring used by various Central and State Government departments and by
construction agencies were found to be a serious difficulty to estimators and a standing cause of disputes. For
this reason a unification of the various systems at the technical level had been accepted as very desirable and
wanting.
Although the standard has no legal sanction and as such need not be adopted unless it is referred to in the
contracts.
. Principles of Deciding Unit of Measurement:
A beginner may find it difficult to remember the units of measurement of different items. Memorizing of units of
measurement would be greatly simplified if he knows the principles kept in view while selecting the units of
measurements. Following are the most important principles of selection of unit of measurement:
1. The unit of measurement should be simple and convenient to measure, record and understand.
2. It should be one, which provides for fair payment for the work involved.
3. In the result it should yield quantities, which are neither too minute nor too large.
4. The price per unit should not be a very small figure or a very large one, that is, generally costlier items will
be measured in smaller units, cheaper ones in larger units.
5. The unit of measurement may sometimes depend upon the unit for the raw material and/or labor and/or
important dimensions. For example, stone masonry is measured in cubic meters because raw materials are
measured in cubic meters plastering or pointing is measured in square meters, as the labor is considerable.

Cost Control In Construction

. Cost Control and Cost information systems
Cost Control is an obvious objective in Construction Management and Construction Scheduling. It should be
recognized that no amount of paperwork achieves this construction cost control. The actual control is
achieved through the ultimate decision of the manager that something should be done differently and the
translation of that decision into practice. The paperwork provides guidance on what control actions should be
taken and therefore it is rather a cost information system.
The elements of a cost control system are:

• Observation
• Comparison of observation with some desired standard
• Corrective action to take if necessary.

A construction cost control system should enable a manager to observe current cost levels, compare them
with a standard plan or norm, and institute corrective action to to keep cost within acceptable bounds.

Most construction cost control systems have an inordinately long response time. Even the best cost control
system would provide information on what was happening last week or last month. Since, in construction
projects some activities might finish in a week or a month, then nothing could be done if the performance of
such activities was reported to overrun estimates of respective costs.

. Developments in Cost Control Systems

There are three developments in construction management which show promise of improving cost control
system in the construction industry
1. Short term scheduling and control.
This system was developed at Loughborough University in association with a contractor. It aims to merger the
planning and supervision and hence to obtain a more or less zero response time.
. 2. Project Cost model.
This a system developed by Dr Martin Barnes for simulating future actions and thus guiding the manager in
his choice between them
. 3. Quantitative Scheduling

3 of 10
One of the unique Construction Software that provides a futuristic construction cost control tool for
construction management is the CFF3 for cash flow forecasting. Version three has taken into consideration
the possible deviations from estimates of cost as well as cash in patterns and provided a means to return
back to the original estimate by damping out these deviations through the remaining period of construction.
Updated estimates are provided each time an actual figure is added such that the end cost remain same as
was originally estimated. It provides an excellent guide for managers through the construction project to
capture the best possible actions in each period activities. Labor rate and efficiency constitute the core of
Quantitative Scheduling which is highly recommended if cost minimization in respect of productivity rates is
sought.
Also Construction Cost is directly related to Material price, Material usage and waste, Fixed and varied
overhead expenditure. These are the areas where managers should seek action for future adjustments in
order to get back to original estimate or practically as near as possible.

Construction Scheduling Techniques

The four scheduling techniques widely used in construction projects are:
. Bar Charts and Linked Bar Charts
. Network Analysis and Critical Path Method
. Line of Balance
. Q Scheduling
each is briefed below with a focus on Q Scheduling being a new technique increasingly being applied in
construction management.
1- Bar Charts and Linked Bar Charts;
Bar Charts are the easiest and most widely used form of scheduling in construction management. Even with
other scheduling techniques the eventual schedule is presented the form of a bar chart. A typical Bar chart is
a list of activities with the start, duration and finish of each activity shown as a bar plotted to a time scale. The
level of detail of the activities depends on the intended use of the schedule.

Free Online Bar Chart Construction Schedule

The linked bar chart shows the links between an activity and its preceding activities which have to be
complete before this activity can start.

The bar charts are also useful for calculating the resources required for the project. To add the resources to
each activity and total them vertically is called a resource aggregation. Bar charts and resource aggregation
charts are useful for estimating the work content in terms of man-hours and machine hours.
2- Network Analysis and Critical Path Method
Practically network analysis offers little more than a linked bar chart, though its protagonists claim, with some
justification, that the self contained steps of a network are more applicable to complex operations than the bar
chart, and that the greater rigor imposed by the logic diagram produces more realistic models of the proposed
work. The steps in producing a network are:
- Listing of activities
- Producing a network showing the logical relationship between activities.
- Assessing the duration of each activity, producing a schedule, and determining the start and finish times of
each activity and the available float
- Assessing the required resources.

There are now two popular forms of network analysis in construction management practice, activity on the
arrow and activity on the node, the latter now usually called a precedence diagram. Each of these approaches
offers virtually the same facilities and it seems largely a matter of preference which is used.
3- Line of Balance
The line of Balance is a planning technique for repetitive work. The principles employed are taken from the
planning and control of manufacturing processes greatly modified by E. G. Trimple. The basis of the technique
is to find the required resources for each stage or operation so that the following stages are not interfered with
and the target output can be achieved. The line of balance technique has been applied in construction work
mainly to house building and to a lesser extent to jetty work and in conjunction with networks to road works.
4- Q Scheduling
The Q Scheduling is a new technique, though getting rapid popularity among contracting firms. It is the only
scheduling technique that reveals a relation between the sequence of doing a job and the cost to be incurred.
The Q schedule is similar to the Line of Balance with some modifications made by A. R. A. Z. A in 2004, to
allow for a varying volume of repetitive activities at different segments or locations of the construction project,
thus the model produced is closer to reality. The following example explains the technique.

4 of 10
Having a project site with three buildings A, B, C with following quantities
Average daily
Activity unit Building A Building B Building C
output
Excavation m3 20 60 20 40
Foundations m3 15 30 15 15
Backfilling m3 30 30 60 60
Note: Above quantities are chosen for illustration purpose and may not reflect a practical construction case.
There are six possible arrangements for doing the job in respect of location sequence with the constraint of
ensuring a continuous flow of work for each activity so that no idle time for employed crews might be
encountered, and no allowance for more than one activity to take place simultaneously at one location:

• A - B - C,
• A - C - B,
• B - A - C,
• B - C - A,
• C - A - B,
• C-B-A

C 2 1 2
Alternative 1 gives a total duration of 10 working B 1 1 2
days A 3 2 1
Days 1 2 3 4 5 6 7 8 9 10
B 1 1 2
C 2 1 2
Alternative 2 gives a total duration of 10 working days
A 3 2 1
Days 1 2 3 4 5 6 7 8 9 10
C 2 1 2
A 3 2 1
Alternative 3 gives a total duration of 9 working days
B 1 1 2
Days 1 2 3 4 5 6 7 8 9 10
A 3 2 1
C 2 1 2
Alternative 4 gives a total duration of 10 working days B 1 1 2
Days 1 2 3 4 5 6 7 8 9 10

B 1 1 2
A 3 2 1
C 2 1 2
Alternative 5 gives a total duration of 10 working days
Days 1 2 3 4 5 6 7 8 9 10
A 3 2 2
B 1 1 1
Alternative 6 gives a total duration of 10 working days
C 2 1 2
Days 1 2 3 4 5 6 7 8 9 10
The example shows that alternative 3 can produce a saving of 10% relative to other alternatives, either in
output rates if duration is kept same, or in total duration and subsequently in overheads and supervision
costs. Actually Q Scheduling software picks up alternative 3 as the most economic sequence and considers
other alternatives as having additional cost of 11.11% proportional to the most economic alternative.
However, with a construction project having four locations there would be twenty four possible alternatives,
and for a five location project there would be 120 alternatives. For a project with ten locations there would be
three million, six hundred twenty eight thousand, and eight hundred alternatives to consider.
Q Scheduling software is currently limited to consider up 5 locations; i.e. 120 alternatives so that it can work
on normal computers - Pentium II and above. It can be used efficiently for small to medium projects. However,
for the time being large projects can use Q Scheduling first by integrating segments together so that a
maximum total of five segments is there, then considering each segment as a separate construction project.
Thus a twenty five location project can be handled.
5 of 10
Quality Management
. Quality Control
Quality is defined as 'fitness to purpose', i.e. providing a product (a building) which provides an appropriate
quality for the purpose for which it is intended. The price to be paid for a building is a reflection of the
expectations of quality - A cheaper building probably uses inferior materials and is likely to be less attractive
and less durable. The quality is also related to the timing of when it is delivered.
Quality control in the construction industry can be looked at as having three elements:

• To produce a building which satisfies the client

• To produce a building where quality is related to the price.
• To produce a building in which sufficient time is allowed to obtain the desired quality.

Like most other aspects of construction management quality control has to be planned. Planning seeks 'order'
and a quality control system for a construction project reflects this sense of order. It may be seen to be in five
basic stages:

• Setting the quality standard or quality of design required by client.

• Planning how to achieve the required quality, construction methods, equipments, materials and
personnel to be employed.
• Construct the building right first time.
• Correct any quality deficiencies.
• Provide for long term quality control through establishing systems and developing a quality culture.

. The costs of quality

It is obvious that quality is proportional to costs associated with the construction process. Costs associated
with quality need to be identified for management decisions. The costs of quality can be broken down as
follows:

• Failure costs: The costs of demolishing and rebuilding, the cost of production time, delays to other
gangs
• Appraisal costs: The cost of inspection and testing.
• Prevention costs: The costs of providing better designs, more training to reduce failure costs, more
maintenance.

. Quality Assurance QA
Quality assurance is a mechanism for ensuring that the construction process takes place within the
framework of a quality management system. This suggests that quality assurance defines the organization
structure, tasks and duties for implementing quality management.
In 1987, the Building research establishment surveyed the quality problems on Britain's construction sites.
They found that half of the faults were design related, and 40% of the problems arose from faulty construction.
10% were product failing.
Design faults

• misunderstanding the client's brief to develop the design

• using information which is incorrect or out of date
• misunderstanding of the client's expectations of quality standards
• lack of co-ordination between the designers.
• Loose or inappropriate specifications

Construction faults

• Not building to drawings or specifications

• poor supervision leading to bad workmanship
• insufficient management of the quality of construction.
• In order to eliminate those potential problems many clients have looked to quality assurance to
reassure them that they will get the right building without undue quality problems.
• Value Engineering Definition and Concept
6 of 10
 • . Value Engineering Concept
• The concept evolved from the work of Lawrence Miles who, in the 1940's was a purchase engineer
with the General Electric Company (G. E. C). At that time, manufacturing industry in the United States
was running at a maximum capacity to supply the allies with arms. There were shortages in steel,
copper, bronze, nickel, bearings electrical resistors, and many other materials and components. G. E.
C wished to expand its production of turbo supercharger for B24 bombers from 50 to 1000 per week.

Miles was assigned the task of purchasing the materials to permit this. Often he was unable to obtain
the specific material or component specified by the designer, so Miles reasoned, "if I can not obtain
the product, I must obtain an alternative which performs the same function". Where alternatives were
found they were tested and approved by the designer.
Miles observed that many of the substitutes were providing equal or better performance at a lower
cost and from this evolved the first definition of value engineering.
• . Value Engineering Definition
• It is an organized approach to providing the necessary functions at the lowest cost
From the beginning the concept of value engineering was seen to be cost validation exercise, which
did not affect the quality of the product. The straight omission of an enhancement or finish would not
be considered value engineering. This led to the second definition :

It is an organized approach to the identification and elimination of unnecessary cost

Unnecessary cost is Cost which provides neither use, nor life, nor quality, nor appearance, nor
customer features.
• . How different it is from Quantity surveying
• The following tasks are undertaken by quantity surveying practitioners and are not considered to
form any part of value engineering

- Producing contract documents including the bill of quantities

- Analyzing complex projects into manageable work packages
- Planning and controlling cost
- Valuing work in progress and exercising cost control during construction
- Evaluating tender bids and contractual arrangements
- Preparing valuations for insurance purposes and advising on insurance claims
- Sub contract documentation
- Settlement of final accounts
- Advice and settlement of contractual disputes and claims
- Advising on taxation grant and financial matters
- Schedule resources
- Planning and programming design and construction work
- Use of network analysis techniques
- Project and construction management

The following tasks are undertaken by Quantity Surveyors, and are involved in value engineering
practice:

- Preparing and administering maintenance programs.

- Forecasting expenditure flows.
- Advising on cost limits and preparing budgets.
- Advising on Cash Flow Forecasting.
- Advising on Life Cycle Costing.
- Cost Analysis.
- Cost benefit Analysis.
- Estimating
- Evaluating alternative designs.
- Undertaking feasibility Studies.
- Investment Appraisal
- Measuring and describing construction work but only in terms of cost planning.
• . Download "Value engineering" e-book
• This volume aims to teach effective and practical techniques to improve the overall performance and
outcome of design projects in various industries. It shows how to maximize budgets, reduce life cycle
costs, improve project understanding and create better working relationships.

7 of 10
Construction safety
Unfortunately the construction industry has become stereotyped as an accident prone industry, in fact only
mining and fishing industries have higher fatalities. Depressingly, the accident rates experienced closely
correlate to the level of activity within the industry, indicating that when work load is high, safety tends to
receive less attention.

It is argued that construction management must have a prime concern for safety and therefore should have a
moral, economic, and legal commitment to ensure workplace safety on sites. However the responsibility for
safety must commence upstream of the construction phase of a project; architects and engineers must have
the technical knowledge to design buildings which can be safely constructed, as well as a commitment to safe
working conditions for site workers.
. Construction Safety costs
To many managers who have been brought up to the importance of construction scheduling, and controlling
costs, the economic aspect of safety is the most forceful. In construction the costs associated with an accident
can be immense. For material losses in which no injury occurs the accounting of loss can be easily assessed;
but where human loss is concerned, the costing becomes more difficult since life or a physical facility cannot
crudely be financially evaluated, yet it has been widely recognized that monetary compensation to either the
injured party or relatives in the event of fatality has to be paid.
Most compensation payments are paid by the contractor's insurance company. Insurance companies will base
their premiums upon historical evidence and a poor safety record will inevitably be reflected in insurance
premiums.

However, the loss to a company by an accident can be broken into:

• lost working hours of an injured employee.

• Cost of repair or replacement of property damage, whether it is an equipment or an element of the
permanent construction.
• Insurance premiums increase.
• Costs of Re-scheduling or even delay costs in some cases. Though, it was noticed that contractors
who use CM Reporter for construction delay analysis can reduce this effect tremendously for the
forecasting facility and past performance analysis it provides, yet other safety costs would be
inevitable.

. Construction Safety policy

To generate safety consciousness within construction organizations, a firm lead must be taken by top
management. It is recognized that finance and lost production are convenient measurements of accidents, but
accidents should generate an emotional response, and if this emotion is genuine it will carry conviction. A
safety policy which is founded upon compassion will more often succeed, since it will impervious to shifts and
changes in construction scheduling and fashion and, consequently, will be less easily diluted.

Contractors should give careful thought to the role of the full time safety officer. Two basic concepts exist
about this role:

• Safety officers should be advisers to site management

• Safety officers undertake the safety responsibility on behalf of sites.

In general the role of the safety officer shall consist of the following duties:

• Formulating the company's safety policy

• Advising management on legislation and safety matters
• Assisting in drafting of safe working procedures and codes of practice.
• Reporting and investigating accidents with the preparation and analysis of safety records.
• Safety training.
• Safety assessment of site management.
• Inspection of sites to ensure compliance with safety measures (Safe working methods, proper use of
construction equipments, protective clothing, and availability of First aid)

8 of 10
 • Providing information to sites on accidents that have happened elsewhere on similar sites to help
generate safety consciousness within working sites.

Construction Risks
(Quoted from a Study by the National Economic Development Office, London)
The construction risks can be broadly grouped under the following categories:
. Technical Risks

• Incomplete design.
• Inadequate site investigation.
• Uncertainty over the source and availability of materials.
• Appropriateness of specifications.

. Logistical Risks

• Availability of resources - particularly construction equipments, spare parts, fuel and labor.
• Availability of sufficient transportation facilities.

. Construction Risks

• Uncertain productivity of resources.

• Weather and seasonal implications.
• Industrial relations problems.

. Financial Risks

• Inflation.
• Availability and fluctuation in foreign exchange.
• Delay in Payment.
• Repatriation of funds.
• Local taxes.

. Political Risks

• Constraints on the availability and employment of expatriate staff.

• Customs and import restrictions and procedures.
• Difficulties in disposing of plant and equipment.
• Insistence on use of local firms and agents.

Construction Delay Causes

(Quoted from an article by Raymond N. NKADO, University of Witwatersrand)
The duration of construction projects right from inception to completion is assuming great importance in the
construction industry. Clients or consumers are no longer content merely with minimal cost and adequate
functional performance for their projects; increasing interest rates, inflation and other commercial pressures,
among other factors, mean that it is in many instances most cost-effective to complete a project within the
shortest possible time.

There is no consensus in the literature on the identification of factors which affect stipulated, planned or
achieved construction times of buildings. One reason for this is that researchers have largely viewed the
subject from diverse prospective. Such view points include identification of discrete factors which affect
productivity on site and taking a systems view of the construction process and end product.
The following factors have been traced to be the construction time influencing factors, with different weights
assigned to them by each individual planner.
. Delay Factors pertinent to Clients

• Financial ability/ financial arrangement for the project

• Previous working relationship
9 of 10
 • Category ( Public, private)
• Priority on construction time
• Specified sequence of completion
• Possible changes to initial design

. Delay Factors pertinent to Consultants

• Completeness and timeliness of project information

• Build-ability of design
• Provision for ease of communication
• Previous working relationships
• Priority on construction time

. Delay Factors pertinent to contractors

• Availability of suitable management team given firm's current work load.

• Programming construction work.
• Previous performance of site management team
• No of sub-contractors

. Delay Factors pertinent to Contract Form

• Suitability to project time

• Use of standard form of contract

. Delay Factors pertinent to project conditions

• Function or end use ( office, residential, industrial,...)

• Complexity
• location

. External Delay Factors

• Weather
• Regulations
• Statutory undertakes ( water, gas, etc..)

10 of 10