# Estimates by liuhongmei

VIEWS: 15 PAGES: 29

• pg 1
```									Estimating

CTC-415
Estimate Types
• Concept
• Detailed
• Definitive
Example
• You want to buy a car
• ROM - \$14000 -\$16000 or monthly payment
• New or Used
– Find Car
• Detail - what options, which model \$15,595
• Definitive - tags, tax, bank charges \$16,750
Concept or Preliminary
• Little data to work with
• Rough order of magnitude
– Is the project a go? Or too pricey
• Time referenced cost indices
– Can be based on resources or final product cost
– Limited to
• How similar is current job to indiced jobs
• Factors included in price (land, financing)
Concept
• Time referenced cost indices
– Can be based on resources or final product cost
– Limited to
• How similar is current job to indiced jobs
• Factors included in price (land, financing)
Example – Time Indices
• Wise to keep records of costs to use in
determining cost of current project
– Can use inflation to increase costs of similar projects to
current costs
•   Cost-Capacity Factor
•   Look at cost/unit of product (or size)
•   C2 = C1(Q2/Q1) x
•   x is an Empirical Factor based on documented
records for different types of projects
– x = 0.6 for some types of plants
Example
•   C1 = 4,200,000
•   Q2 = 150,000, Q1 = 120,000
•   x = 0.8
•   C2= 4,200,000 (150,000/120,000)0.8 =
5,000,000

• Does not look at time difference
Example 2
• C2 = C1(I2/I1) (Q2/Q1) x
• I2, I1 are cost indices for the project years
• Usually reflect change in CPI from base
year
• C2 = \$4.2 M (4.04/2.48)(150/120)x
• C2= \$8.2 M
Component Ratios
• Once design has started and major components
have been spec’d – can determine cost using
• Equip – Install – Cost ratio or plant cost ratios
– (EQUIP \$)/(EQUIP & INSTALL \$) = RATIO FROM
HISTORICAL DATA
• Plant Cost
– MAJOR EQUIP \$/ PLANT COST = RATIO
– OR FACTOR EACH PIECE AND ADD TOGETHER
Parameter Costs
Relate costs to a few parameters (SF or bldg)
• Usually does not include land or cost of
bringing in utilities
Detailed Estimate
• After concept design and most of detail
work
• Requires
– Quantity take-offs
– Costs/unit
• Needs to be done carefully – so that margin
of error is low (don’t eat into profits)
• Can also find errors
Detailed Estimate
• In addition to quantity and prices,
• to get total price
–   Plant and equip
–   Home-office OH
–   Profit
–   Escalation
–   Contingency
Labor Productivity
•   Need to Evaluate
•   Effect of local practices
•   Market competitiveness
•   Weather
•   Completeness of plans and specs
•   Can lead to big differences in final price
•   Union or non-Union?
Fair Cost Estimate
• Prepared from bid doc.
• Can serve as final check of plans before
releasing for bid
• Used for
– Determining measured job progress
– For scheduling and cost control
• Done by Engineer/designer to check bids
submitted
Contractors’ Bid Estimate
• May be less detailed than FCE is
• 30-80% of project often is sub’d
• Contractor does not need to detail sub bid
unless doing cost and work
Definitive Estimate
• More refined and accurate than bid
• Estimate gives final project cost with small margin
of error
• Separate projects into 4 broad categories
• 1) Unit price projects
• Prices set – quantities vary
• May do definite estimate at bid
Definitive Estimate
•   Lump sum
•   Guaranteed max price, cost and low bid = definitive estimate
•   Definitive estimate done before all drawings are done
•   Has contingency fee
•   Cost + - same as GMP
Definitive Estimate
• 3) Design Construction
– Lump sum
– Chance for owner since he may get contract
finished without desired product
– GMP
– Cost + - since designer is constructing
– Can get cost estimate sooner without all design
completed
Definitive Estimate
• 4) Professional Construction Management
– Definitive est can be completed early due to
interaction between PC – designer – contractor
• Contingency factor – Experience factor to
remaining work
• Monthly summary
Estimating and Controlling Labor
Costs
• Hard to estimate labor
• 2 components to labor cost
– Price in \$ terms (wages, fringe, payroll,
insurance, taxes)
– Productivity (work/time period)
• Hard to determine
• Can fluctuate due to weather, learning time, etc.
• Need to know how well labor works
•   p = Price of money elements (\$/hour0
•   q = Productivity (units/hr)
•   Unit labor = p/q = \$/unit
•   1/q = W (worker – hours/unit of output)
Hrs/Acre
•   Unit Labor = P x W \$/unit
•   Total cost = Q x P/q = Q x P x W
•   Gives total labor cost for quantity Q
•   Hard to find q, P, W
Est and controlling \$ Component
• \$ depends on craft structure or Union
• Regional and local autonomy of labor and
employer
• Collective bargaining units
• Wage rates, fringe, insurance, work rules and
exceptions
• Federal, state and local taxes and laws
• Wage and price control
• Can estimate all hourly or direct – indirect
Basic Wages
• Vary by location, craft, work within craft,
experience
• Need to know
– Location and labor agreements
– Types of crafts or perform work
– Craft grades to do work and wage rate
• Contractor has no control over wages but needs to know
cheapest person to do work
– unemployment ins.
Basic Wages
– Fringe benefits
• Contractor wants to watch what the fringes are and
not overpay
• Insurance based on payroll
• Workman’s Comp (WC)
• FICA
• SDI – state disability and unemployment ins.
• Public Liability (PL)
• Property Damage (PC)
Basic Wages
• WC, PL, PC = rate/100 straight time equiv.
Payroll \$2-\$40/\$100
– WC, PL, PC depend on accident history or contractor
– Vary widely depending on classification of work
• FICA and SDI = % of gross wages
• Taxes based on Payroll – Federal and state
withholding taxes
• Contractor can have huge effect on \$ by watching
Overtime
Basic Wages
• Controlling Productivity
– Productivity much more difficult to estimate
– Factors influencing productivity – Qualitative
• Regional Variations
– Training and experience and skill or labor pool
– Work rules
– Need basic productivity levels for various crafts then
use multipliers to go from region to region
– Training and experience cannot be forecast but good
supers can hire and fire to improve productivity
• Environmental Effects
– Effects of productivity
– Ht above grade, heat, noise, light,
constructions, stability of work-station, dust,
etc., weather
– Effects can be minimized by planning around
seasons and using enclosures
Basic Wages
• Learning Curves
– Skill and productivity  with experience and practice
– Should try and do all units at once to avoid unlearning
curve
• Work Schedule
– How job can be done
– No OT, scheduled OT
– OT production is lower than 40 hr week production
• Importance of Worker Hours
– Since wages vary, worker hours provide a look at how
long a job takes
Est different types of Const
• Building Construction
– Means
– Contractor’s may use Means for plus prices
– Fair Cost est.
• Industrial Const.
– No Means – must use own Database for labor
• Heavy Const.
– Treat each bid item as separate entity
– To find production = max production x job efficiency
factor x swing and depth factor x bucket load factor

```
To top