The Role of Estimation in Reducing Construction Costs

Costs must be estimated well in the construction industry to ensure projects do not go over the planned amounts. Construction estimating has a significant role in controlling construction expenses and offering pricing information throughout the entire process. The Virtual Design And Construction estimate done at this stage may go a long way in determining the success of the construction project. This article focuses on how the process of estimation is central to the management of construction project costs.

Why Estimating is Critical

An estimate is a predicted value of the total money to be spent on a project: materials, labor, equipment, etc. The estimates offer control of the expenses and avoid spending more than planned. An accurate estimate is used as the budget or standard against which costs are controlled and measured. The Construction Estimator is involved in the preparation of the cost estimates with quantity take-offs of all aspects before construction. The accuracy directly impacts construction costs.

Role of Estimators and Construction Estimation Companies

Estimators are cost professionals who provide estimates of costs to construct or repair projects. They have to assess drawings and specifications to quantify and cost the materials and equipment as well as all the labor through conventional mathematical computation or else by applying Construction Estimating software. Construction Estimating Companies hire professional estimators with knowledge of price, construction industry, and computerized estimating systems along with software like estimating Services and others. They help in managing construction costs through accurate estimating services.

Estimation Of Project Lifecycle

Estimating takes place at every phase from planning and design to actual construction: Estimating takes place at every phase from planning and design to actual construction:

• Working Estimates – These estimates are prepared during the preliminary project planning stage with limited information and may be referred to as ‘ballpark’ estimates. It ranges from -0.5 to +1.
• Preliminary Cost – Further refined cost estimates that involve approximate quantities in the early stage of design where the design is emerging. The extent of accuracy varies from -25% to 50%.
• Construction Estimate – Finest and largest scale approximation done from almost complete construction plans and design drawings during the pre-construction phase. Relative accuracy varies between -15% and +30%.
• Change Order Estimates – To be used to identify costs of change or any other contingency that may arise during the construction phase.

As in cost control, having more accurate estimates at each milestone is helpful in the design stages before construction because it has locked in the price.

Areas Where Estimating Reduces Costs

Accurate estimating curbs excessive costs in several important ways: 

1. Budget Setting – A realistic capital budget in the form of advanced estimates is properly earmarked and thus the final cost prediction is more realistic. It provides reasonable contingencies without compromising on the estimates.

2. Design Optimization – This makes pricing of various building shapes, specifications, and materials possible to assist designers in achieving the most efficient and technically correct solutions at a cheaper price. Value engineering is done before construction.

3. Cost Control – Bid cost analysis by bid categories eases reviewing costs compared to the cost budget and determines any variation requiring early action.

4. Bid Analysis – The comparison of the bid results to the estimate allows for the assessment of contractor pricing to allow for the selection of the appropriate contractor. They make the owners aware of bid prices that are relatively higher or lower than the estimated costs.

5. Change Orders – pricing adjustments stemming from alterations or contingencies that occur in the construction process are faster when accurate estimates are used as the basis of a reasonable price.

The use of professional CAD Services and instruments is crucial in the planning and design phase to avoid unnecessary surprises of budget and schedule beyond this phase during the implementation and finishing of the project.

Conclusion

Cost control is a critical factor in construction projects and this makes estimating an important aspect in preventing very large cost overruns. Reliable estimates by construction estimators at every project phase through the use of estimation software translate to significant savings. Accurate construction cost estimates provide a measure of the realistic construction costs and the amount of savings that is achievable to result in overall lower costs in construction without necessarily implying a compromise on the quality of construction. Preconstruction estimating ensures that costs for construction projects are controlled and managed hence increasing efficiency and cost of construction.