Cost estimation of a undertaking is the process of forecasting the probable cost for the due fulfillment of the undertaking objectives, to the prescribed workmanship covered by specifications for various items of works and to the stipulated time schedule. For a given undertaking fully described by drawings and specifications, estimating involves quantity take off for various items of work, rate analysis and costing.
Construction cost estimates are the forecast of the cost of construction of a project. In any construction activity, two basic things are involved, namely, the quantity aspect and the standard aspect. Estimating the cost of construction projects is the first step for any project administration.
The quantity aspect covers the quantum of works involved in and estimation of the materials and labors needed for construction. The quantity aspect is governed by the study and analysis of drawings which are prepared with respect to the design of the undertaking. The quality aspect is governed by the specifications for the materials and workmanship.
These two aspects lead to an estimate for a work or a undertaking. Thus an estimate is a instrument for planning and controlling the construction activities of any undertaking with regard to standard, quantity, time and costs.
In general, construction cost estimates can be broadly divided into two categories- detailed and approximate or preliminary. Strictly speaking, all estimates are more or less approximate as the very name implies, and the actual cost of construction would only be known when a work has been completed in all respects and all costs allocated.
Detailed construction cost estimates are prepared on the basis of detailed drawings supported by specifications in accordance with established norms of measurements using unit of costs for the different items of work arrived at by rate analysis.
Thus, a detailed cost estimate gives a realistic estimate of final cost and is generally required for obtaining sanction/approval of sponsor of the undertaking or competent authority in respect of public bodies like govt. organizations. It is also used in the course of the execution of the work to control progress and costs.The detailed Cost Estimates Comprises
An approximate or preliminary estimate, or an abstract estimate as it is sometimes referred to, is prepared before a detailed estimate is taken in hands for one of the following reasons:
In such cases, the cost involved in preparing a detailed estimate may not be justified or the time involved would be substantial or data may not be available or preparation of a detailed estimate may not be otherwise justified.
The unit costs are updated using cost indices published by government bodies or reputed bureaus. The approximate costs are prepared based on unit costs of major sub-works established by a survey of costs of similar completed sub-works. The actual costs are known for a particular year from records, then the current costs would be determined using the appropriate indices. For instance, the Central Public Works Department has prescribed cost indices for various cities based on 100 for a particular base year for buildings.
Some normal practices employed for preliminary cost estimates are given below are explained through examples.
Cost of construction of a classroom – US $2000
Total number of classroom planned – 12
Therefore, Cost of primary school building -$24000/-
Cost of one furnished room in a 3-star hotel- Rs. 3 Lakhs
Total number of rooms – 100
Cost of hotel – Rs.3 crore
Cost of hospital, fully equipped per square feet of floor area- US $100
Total floor area – 30000 square feet
Cost of hospital – $100 x 30000 = $3000000 = USD 3 Millions
Cost of a 30m railway B.G. girder bridge (2 panels)- steel work
Steel work weight= 60×2= 120 tonnes
Cost of supply, fabrication and erection per tonne- US $300
Cost of steel work – $300 x 120 = $36000.
Also Read: Design , build and control cost estimates in construction
Different countries follow different procedures for taking out quantities. The processes generally involved in construction quantity takeoffs are:
The takeoff and grouping are carried out on the quantity sheet. The measurements are recorded item wise and the items are arranged in the sequence of execution.
Billing is done in an abstract form known as Bill of Quantities (BOQ) where costing is done.
The unit of measurement of a particular work of construction activity depends upon its nature, size and shape. The general principles for selection of measurement unit of construction works are as follows:
The process of determining the rate of an item is termed as rate analysis. A rate analysis should take into account: