CONSTRUCTION COST MANAGEMENT

Cost Consulting Project Management Scheduling BACK TO  HOME PAGE	Can we help you? Construction Cost Management can save you money, reduce your risk, and give you more control over your costs. THIS PAGE GIVES INFORMATION ABOUT DIFFERENT TYPES OF  ESTIMATES AND THE ART OF ESTIMATING
	Building Owners need an estimate when a construction project is in the planning stage, before any commitment is made. Budgetary estimating is an essential tool.
	Architects use estimating during design to stay on budget and to make value-based decisions. Cost models, budgetary, schematic, and design development estimates all have a useful role.
	The most crucial estimates for all contractors are the detailed ones based on plans and specifications, a prediction of the cost of labor and materials. They also show overheads and profit margin.
	Cost Management is a way of using estimates and other tools to their full to predict and control construction costs, reducing risks and providing an intelligent way to analyze value.
	Below we explain some of the different types of estimates
	Contractors' estimates which lead to the "contract sum", the agreed cost of construction, are made up from detailed subcontractor estimates and some informed assumptions. In Bid Day we see how..
	Trained and registered as an architect, the principal of this company has an all around knowledge of the techniques of construction - and has completed over 1,000 estimates.
Links to Other  Informative Sites

EXAMPLES OF PRE-CONSTRUCTION ESTIMATES FROM ACTUAL RECENT PROJECTS

	This is a Budgetary Estimate; it could also serve as a Cost Model. This estimate was completed before the developer had purchased the site. It was based on block diagrams by the architect. With it the developer can make sure the project will be viable. Obviously it is crucial for the developer and owner to see if rents or property re-sale value will pay for the construction of the proposed amount of accommodation at a certain standard. In this case several alternative estimates were generated to compare different solutions.
	Once the development scenario has been agreed, this estimate can be a pro-formal proposal for the commitment of loans. It can also serve as a cost model during early design, showing the architect what systems and finishes had been budgeted for. If the designer wishes -or is obliged - to exceed the budget in one area he or she can find compensating savings.  By waiting until the drawings are advanced enough for traditional pricing by contractors, there is a risk that design time and effort will have been wasted .
	This an example of the summary page of a Schematic design phase estimate. This is a vital tool for the architects as they finish the first stage of design, where the major aspects of the building - size and shape, structure, finish materials, extent and type of air conditioning - have been determined, but no detailed drawings have been begun. At this point it is still easy to make changes to the building design should it be necessary, and the owner can be presented with a clear picture of cost parameters.
	The Design Development estimate allows a great deal of detailed information about the proposed construction to be analyzed and priced, usually to a good degree of accuracy.  At this stage most of the types of construction - walls and partitions, windows and doors, finishes etc - have been decided on; however if estimated costs are not in line with the budget, it is still fairly easy to make changes. The structure and HAVC (Heating Ventilating and Air Conditioning) systems for example may have been sized enough to allow take off.
	This is a sample of the back up pages of the Design Development estimate, showing the quantities for many line items. Although most parts of the building have been decided on as far as design is concerned, details showing exact construction are not ready, and nor are the specifications. Most specialty subcontractors and their estimators are not prepared to give firm costs at this point.
	Example of the summary sheet for a CD (Construction Document) estimate. At this point the project is close to being bid or having final pricing performed, and most construction details are drawn. Specifications are normally available in at least draft form. Note that in most cases the documents ace not totally complete since time is needed in advance of completion to prepare this estimate. In this case the project is a "separate primes" one, where major portions of the construction are bid directly to separate contractors. Thus for example the Plumbing is not under the control of the General Construction contractor, as is usually the case. Some public agencies prefer to bid projects this way, believing that it reduces overhead , giving them lower prices and more control.
	This is a sample of a detailed back-up page of the CD Estimate. Although a great deal of information is available, making for a very complete estimate, unit prices are still shown. Detailed labor and material pricing can be generated but for the purpose of price checking and budget control they are unnecessarily complicated and tedious to look at.
Examples of detailed contractor estimates	To see examples of labor and material estimates as generated by sub-contractors for firm pricing, see the CONTRACTORS Page

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