The building cost estimates can be classified in many ways. The three major and substantial ways in which the building cost estimates can be classified are:
The initial classification of construction estimates based on the degree of undertaking definition is completely based on the percentage of completion of the architectural and the engineering drawings. This estimate will provide the estimator the correct and the available input information.
The second classification of the building cost estimates are based on the end use of the estimate, which is conducted based on the availability of the data progress. This covers the conceptual estimates for the feasibility of the investment.
The classification provides the funding authorization, the budget, the detail estimates by the contractor for the lump sum bidding.
The third classification of building estimates based on the estimate generating methodology involves the process that are carried out to determine and forecast the building costs that are stochastic and deterministic.
The stochastic approach, the base followed for the cost estimation is the quantity of work units installed. This is measured in square meters of tiles, the number of windows and the type of windows, etc.
This base for the cost estimation is either meter square of the constructed construction or based on the number of units like the number of cars in the parking lot or the number of students in the high school or the number of beds in a hospital.
The stochastic approach makes use of many variables which are considered as parameters for the cost estimation as given by the experienced estimators. These variables in most of the cases will not be well defined.
When deterministic approach is carried out on a undertaking that is well defined in nature. Here the estimators consider two variables. One of them is the quantity of a specific work category and the second variable is the estimated unit price to complete one unit of work.
The unit price is considered as a variable function that will be dependent on the location, the time and the experience of the contractor as well as his administration skills.
The expected accuracy is defined as an indication of the degree or the extent to which the final or the true cost of the building varies from the initially prepared estimation.
When dealing with various types of construction estimates, the owner or the contractor must relate the work to the “expected accuracy range”. This accuracy is expressed either positively or negatively with an estimated future cost.
The table-1 shows the various expected accuracy for different cost estimates.
Table.1: Classification of construction Cost Estimates with Respective Expected Accuracy Range (%)
It is observed that the total project cost is higher when compared to the engineering and the project cost. This is because the project cost also includes the cost that are used for the acquisition of the land, to study the environment, the cost of financing and the market study.
To control the cost, the scope and the schedule of the project is to focus on control of the design procedure. This is one of the critical element that must be taken control off to reduce the project cost.
Any sort of failure in the control and the administration of the design procedure results in the delays and the increased building cost of the undertaking.
These are issued at required intervals. The project beginning must have a clear idea on how many project submittals are key and must be prepared. The design phase requires the submittals of the design review and the status drawings.
This must be clearly planned by the supervisor. These frequencies are mainly at the 30, 60…. The frequency of the design review will change with the complexity of the project.
It is considered that the best time for review of the design of the project is at 30 or 40% phase of the design cycle. This level has many critical decisions that must be considered and decided. This includes the major machinery type, the process, the construction footprint and other related documents.
The first engineering estimate has 30% of the design submittals that is based on the drawings. This level helps the estimator to develop the work quantities and the actual unit price.
The second engineering estimate have 60% of the submittals that will serve the following:
The complete set of bid documents conforms to 90% submittals. This is the last review chance and the owner must analyze completely that all his requirements are met and achieved.
Estimate Bid Price-Tender Cost of Construction undertaking
Preparation of Approximate Construction Cost Estimate
Cost Estimation of Construction undertaking
Factors Affecting Construction Cost Estimate