Introduction to Construction Estimating The use of computers on estimating and bidding Introd

							                                          Introduction to
                               Construction Estimating

                     The use of computers on estimating and bidding




Introduction to Construction Estimating                               Marcos Bastian
               In the business of design and construction,
             profitability is based on accurate and complete
                               cost estimation


                        “Cost estimating is employed as one of the main tools of
                         successful cost management. Once an initial budget has
                       been established, it is important to test its assumptions by
                        employing a series of increasingly precise cost estimating
                           techniques that coincide with further development of
                                     design and construction details.”
                                National Institute of Building Sciences. (http://www.wbdg.org)




Introduction to Construction Estimating                                                          Marcos Bastian
                                          Estimating requires a talent to
                                          predict or avoid the
                                          unexpected.


                                          A good estimator understands
                                          construction materials,
                                          methods and systems, as well
                                          as the labor and equipment
                                          required to complete all tasks
                                          in their correct sequence, on
                                          time and on budget.




Introduction to Construction Estimating                            Marcos Bastian
       The structure of an estimate

       Estimates are typically organized in a work-breakdown structure (WBS).
       A work breakdown structure (WBS) is a hierarchical system used to define and
       group discrete tasks or elements, covering the work scope of the project.


       100% Rule:
       A WBS must include 100% of the work defined by the project scope and
       capture all deliverables – internal, external and interim.
       The rule applies at all levels within the hierarchy: the sum of the work at the
       “child” level must equal 100% of the work represented by the “parent” and the
       WBS cannot include more than 100% of the project’s scope.


       The Construction Specification Institute‟s (CSI) has created the "de facto"
       standard for the Construction Industry (known as MasterFormat).
       The CIS has also created the UniFormat, a new design-based structure
       focusing on early stages of a project planning.



Introduction to Construction Estimating                                          Marcos Bastian
       MasterFormat
       (also referred as the CSI Format)


       - Created by the Construction Specification Institute CSI, 1961
       - Used by nearly every business, in specifications and pricing
       - Focus on materials and methods (construction approach)
       - Contains 49 divisions (as of 2008)
       - Better suited for pricing & construction


       Example:
           DIVISION 05 – METALS
                05 00 00     METALS
                05 01 00     Maintenance of Metals
                05 10 00     STRUCTURAL METAL FRAMING
                05 12 00     Structural Steel Framing


       For more information
       http://www.csinet.org/s_csi/sec.asp?CID=1377&DID=11339


Introduction to Construction Estimating                                  Marcos Bastian
       Uniformat

       - First introduced in 1998, Guiding Principles established in 2007
       - Functional elements of a project (design approach)
       - Organized in nine categories
       - Better for conceptual understanding of a building
       - Provides a way to compare major components of different projects


           A Substructure
           B Shell
           C Interiors
           D Services
           E Equipment & Furnishings
           F Special Construction
             & Demolition
           G Building Sitework
           Z General



Introduction to Construction Estimating                                     Marcos Bastian
       Uniformat                    (cont.)


       UniFormat is an arrangement of construction information based on physical parts of a facility called
       systems and assemblies. These systems and assemblies are characterized by their function without
       identifying the products that compose them. Systems and assemblies render a view of a constructed
       facility different from the view rendered by a breakdown of building materials, products, and activities
       such as MasterFormat. UniFormat is intended to complement MasterFormat.
       CSI – (www.csinet.org)




       The purpose of UniFormat is to:
       - achieve consistency in economic evaluation of projects
       - enhance reporting of design program information; and
       - promote consistency in filing information for facilities management, drawing
       details and construction market data.



       For more information:
       http://www.csinet.org/s_csi/sec.asp?TRACKID=&CID=1379&DID=11342


Introduction to Construction Estimating                                                                   Marcos Bastian
       Types of estimates

       ROM (Rough Order of Magnitude) Estimates
       - Used in strategic or preliminary planning, proforma analyses
       - Used to assist go/no-go decisions
       - Low level of accuracy, general in scope

       Detailed Costs Estimates
       - Increased accuracy
       - Used to define tasks and schedules
       - Based on assemblies & systems


       National Institute of Building Sciences Classification
       - Preliminary estimates
       - Intermediate estimates
       - Final estimates

Introduction to Construction Estimating                                 Marcos Bastian
       Preliminary estimates (20% - 25% margin of error)
       - Early planning stages
       - Systems-based WBS (eg. Uniformat)
       - May also be based on other metrics
              cost/parking space, cost/hospital bed
              may be referred to as “guesstimates" of “ballpark numbers”
       - Feasibility focus
       - Large contingency values (low confidence)


       Intermediate estimates (10% - 15% margin of error)
       -   SDs & DDs
       -   Focus on systems, alternatives & comparisons
       -   Begin migration from „systems' to „materials & labor„
       -   Frequent updates, refinement with design
       -   Gradual reduction of contingency


       Final estimates (2% - 3% margin of error)
       -   For bidding, construction & control
       -   Multiple bidders, comparisons by major tasks/systems
       -   Very detailed take-offs and specifications
       -   Contingency reduced or eliminated
       -   Once construction is completed, data can be used for future projects


Introduction to Construction Estimating                                           Marcos Bastian
       Time and Accuracy Relationship in Estimates




                                          Data based on John D. Bledsoe’s - Concept to Bid…Successful Estimating Methods



Introduction to Construction Estimating                                                                       Marcos Bastian
     Major elements of an estimate

     -Direct costs (may be grouped in systems or assemblies)
        Materials
        Labor
        Equipment


     - Indirect costs
        Taxes
        Insurance
        Bonds
        Operating costs


     - Overhead, profit, other markups
     - Contingency
     - Time & escalation
     - Phasing & mobilization costs
     - Geographic index

Introduction to Construction Estimating                        Marcos Bastian
       The use of computers
       “Years ago we created estimates using a calculator and a yellow tablet.You sat down, counted the parts
       and pieces, added them up and that was the cost for a job.”
       Mac Crawford, Crawford Construction. Lexington KY


       - The practice of cost estimating precedes the use of computers
       - Because of this legacy, many of its original methods persisted even after
       computers were introduced
       - Computers are today an intrinsic part of the business, used not only in actual
       calculations, but also in the storage, organization, retrieval and reporting of
       data, as well as a collaboration tool between different disciplines
       - As a result, estimates are now much more accurate and detailed, and the
       industry‟s requirements have also increased accordingly
       - There are thousands of software packages on the market, ranging from
       simple “excel-like” spreadsheet programs to complete corporate solutions.
       Pricing also varies widely with the complexity of the software
       - One of the greatest challenges is to migrate „field knowledge‟ to the
       computer. Experienced field professionals often rely on others to operate
       estimating software.


Introduction to Construction Estimating                                                                Marcos Bastian
       Common estimating options

       - Spreadsheets and manual takeoffs
         “Excel is still the king”
       - CAD and digital takeoff systems
       - Online databases and services
           BNI
           R.S. Means
       - Corporate software (modular systems)
       - Building Information Modeling (BIM)




Introduction to Construction Estimating         Marcos Bastian
       Estimating Software -                   Desirable Features


       - Must be able to handle multiple projects (!)
       - Hierarchical/WBS organization
       - Detailed view per item
       - Take-off system (screen-based or digitizing devices)
       - Handling of complex systems and assemblies
       - Items linked to cost of products & resources
         (labor, materials, subcontractors, etc)
       - Automated calculations
       - Indirect costs, markup & overhead




Introduction to Construction Estimating                             Marcos Bastian
       Estimating Software -                    Desirable Features (cont.)


       - Purchasing & contracting
       - Cost comparisons (between different systems &/or providers)
       - Closeout capabilities, (Manual overrides & customization)
       - Reporting (links to scheduling)
       - Import/export capability
       - Database storage vs. flat-file structure
       - Online updates and subscription
         (cost data, specs.)
       - Archival, backup & historic data
       - * GOOD SUPPORT & DOCUMENTATION




Introduction to Construction Estimating                                      Marcos Bastian
       To Be or not to Be(IM)
       BIM Advantages
       - Better coordination
       - Problems identified earlier
       - Hidden conflicts are discovered more easily (Structural vs MEP)
       - Reduction of RFIs
       - 2D Drawings are an output of model
       - Produce takeoffs (debateable)

       -BIM Challenges:
       - Heavy requirements (processing power, storage, net traffic)
       - Adoption of same technology across
         different disciplines
       - Existing legacy of 2D CAD
       - No standards to date
       - Does not replace knowledge of materials & systems
       - Misconception that BIM will do the work for you

       For more information: http://bim.arch.gatech.edu/?id=402


Introduction to Construction Estimating                                    Marcos Bastian
       Conclusion

       How have computers changed estimating?


       - Level of detail (depth of work)
       - Accuracy (takeoffs, calculations)
       - Better WBS structure
       - Ease of navigation (from general view to individual tasks)
       - Automated recalculations (less chance for error)
       - Cascading updates
       - Online pricing and specification databases
       - Systems integration (design, documentation specifications, estimates,
       construction)
       - * Field experience vs. computer literacy



Introduction to Construction Estimating                                          Marcos Bastian
       Questions




Introduction to Construction Estimating   Marcos Bastian
       Thank You!




Introduction to Construction Estimating   Marcos Bastian
Introduction to Construction Estimating   Marcos Bastian