ESTIMATION AND COSTING Presented by hari priya enni.

INTRODUCTION Estimation is the most important of the practical aspects of construction management, and the subject deserves the closest attention of one aspiring to a career in the profession. It is a comparatively simple subject to understand; however, as it brings one up against practical work, methods and procedure, knowledge of it cannot be acquired without close application.

Definition An estimate is a calculation of the quantities of various items of work, and the expenses likely to be incurred thereon. The total of these probable expenses to be incurred on the work is known as estimated cost of the work. The estimated cost of a work is a close approximation of its actual cost. The agreement of the estimated cost with the actual cost will depend on accurate use of estimating methods and correct visualization of the work, as it will be done. Importance of correct estimating is obvious.

OBJECTIVE Purpose of Estimating: An estimate is necessary to give the owner a reasonably accurate idea of the cost to help him decide whether the works can be undertaken as proposed or needs to be curtailed or abandoned, depending upon the availability of funds and prospective direct and indirect benefits. For government works proper sanction has to be obtained for allocating the required amount. Works are often let on a lump sum basis, in which case the Estimator must be in a position to know exactly how much expenditure he is going to incur on them.

1. Estimating Materials  From the estimate of a work it is possible to determine what materials and in what quantities will be required for the works so that the arrangements to procure them can be made.  2. Estimating Labor The number and kind of workers of different categories who will have to be employed to complete the work in the specified time can be found from the estimate.  3. Estimating Plant An estimate will help in determining amount and kind of equipment needed to complete the work.  4. Estimating Time The estimate of a work and the past experience enable one to estimate quite closely the length of time required to complete an item of work or the work as a whole.  Whereas the importance of knowing the probable cost needs no emphasis, estimating materials, labor, plant and time is immensely useful in planning and execution of any work.

FEATURES Important activity in engineering design and production It is forecasting the future cost Cost estimating and process planning are prominent activities in the manufacturing system It considers all the expenditures involved like engineering, administration etc. It requires high technical knowledge  

COMPONENTS OF ESTIMATION AND COSTING Design cost: Design cost of the product is estimated by ascertaining the expected time for the desing of that product. Estimated design cost =Estimated design time x salary of the designer per unit time Design time can be estimated on the basis of similar products already designed. If design done by outside agency, the total amount paid-gives the cost of design.

Drafting cost: When the design completed, the drawing will be prepared by the draftsman  Drafting cost= Estimated draft time x salary of the draftsman per unit time Research and development cost: Considerable time and money has to be spent on research and developmental work The estimated cost and time on it are decided by the judgement or the past experience

Material cost: Following steps involved Prepare the list of all materials required to manufacture the product Estimate the weight of all the materials expected (the allowance for the material wastage,spoilage and scrap are also added  Estimated material cost = estimated weight of each part x estimated future price. Finally, the estimated cost of all the parts is added to get the total estimated material cost of the product.

 Labour cost: Following steps involved to estimate the labour cost, the estimator should have the knowledge of various operations, machines ,sequence , tools and labour to be used. Labour cost =Estimated labour time needed to the product x cost of labour per hour Inspection cost: During this stage, the estimator should consider the cost of inspection equipments ,gauges and wages to the inspectors.

Cost of tools,jigs,fixtures,etc: During this stage ,includes the estimated cost and maintenance charges for the tools ,jigs ,fixtures ,etc required for production. It considers their present prices , market trend and the number of times a particular tool can be used during its life time.   Total cost per unit produced = Estimated cost Number of jobs Overhead cost: This can not be charged directly All expenses other than direct cost are known as overhead cost or indirect expenses Ex: Administrative expenses ,selling and distribution expenses , etc. It can be estimated by referring the previous records

Approximate construction cost estimation Preliminary or approximate construction cost estimation is required for studies of various aspects of work of project and for its administrative approval. It can decide, in case of commercial projects, whether the net income earned justifies the amount invested or not. The approximate estimate is prepared from the practical knowledge and cost of similar works. The estimate is accompanied by a report duly explaining necessity and utility of the project and with a site or layout plan. A percentage 5 to 10% is allowed for contingencies.  

Approximate Construction Cost Estimation Methods: The following are the methods used for preparation of approximate construction cost estimates: a) Plinth area method b) Cubical contents method c) Unit base method  

a)Plinth area method: The cost of construction is determined by multiplying plinth area with plinth area rate. The area is obtained by multiplying length and breadth (outer dimensions of building). In fixing the plinth area rate, careful observation and necessary enquiries are made in respect of quality and quantity aspect of materials and labour, type of foundation, height of building, roof, wood work, fixtures, number of storeys etc. As per IS 3861-1966, the following areas include while calculating the plinth area of building:

Types of Estimates: Area of walls at floor level. Internal shafts of sanitary installations not exceeding 2.0 sqm, lifts, air-conditioning ducts etc., Area of barsati at terrace level: Barsati means any covered space open on one side, constructed on one side, constructed on terraced roof which is used as shelter during rainy season. Porches of non-cantilever type. Areas which are not to include Area of lofts. Unenclosed balconies. Architectural bands, cornices etc., Domes, towers projecting above terrace level. Box louvers and vertical sun breakers.

b) Cubical Contents Method: This method is generally used for multi-storeyed buildings. It is more accurate that the other two methods viz., plinth area method and unit base method. The cost of a structure is calculated approximately as the total cubical contents (Volume of buildings) multiplied by Local Cubic Rate. The volume of building is obtained by Length x breadth x depth or height. The length and breadth are measured out to out of walls excluding the plinth off set. The cost of string course, cornice, corbelling etc., is neglected. The cost of building = volume of buildings x rate/ unit volume.  

c) Unit Base Method: According to this method the cost of structure is determined by multiplying the total number of units with unit rate of each item. In case schools and colleges, the unit considered to be as ‘one student’ and in case of hospital, the unit is ‘one bed’. The unit rate is calculated by dividing the actual expenditure incurred or cost of similar building in the nearby locality by the number of units.

Detailed construction cost estimation  The preparations of detailed estimate consist of working out quantities of various items of work and then determine the cost of each item. This is prepared in two stages. a) Details of measurements and calculation of quantities: The complete work is divided into various items of work such as earth work concreting, brick work, R.C.C. Plastering etc., The details of measurements are taken from drawings and entered in respective columns of prescribed proforma. The quantities are calculated by multiplying the values that are in numbers column to Depth column as shown below:

Details of measurements form

b) Abstract of Estimated Cost: The cost of each item of work is worked out from the quantities that already computed in the details measurement form at workable rate. But the total cost is worked out in the prescribed form is known as abstract of estimated form. 4%of estimated Cost is allowed for Petty Supervision, contingencies and unforeseen items.  Abstract of Estimate Form  

The detailed estimate should be accompanied with: i) Report ii) Specification iii) Drawings (plans, elevation, sections) iv) Design charts and calculations v) Standard schedule of rates.   Factors to be considered while Preparing Detailed Estimate: i) Quantity and transportation of materials: For bigger project, the requirement of materials is more. Such bulk volume of materials will be purchased and transported definitely at cheaper rate. ii) Location of site: The site of work is selected, such that it should reduce damage or in transit during loading, unloading, stocking of materials. iii) Local labour charges: The skill, suitability and wages of local laboures are considered while preparing the detailed estimate.

Fixing of Rate per Unit of an Item: Data for detailed estimate: The process of working out the cost or rate per unit of each item is called as Data. In preparation of Data, the rates of materials and labour are obtained from current standard scheduled of rates and while the quantities of materials and labour required for one unit of item are taken from Standard Data Book (S.D.B). Fixing of Rate per Unit of an Item: The rate per unit of an item includes the following: i) Quantity of materials & cost: The requirement of materials is taken strictly in accordance with standard data book (S.D.B). The cost of these includes first cost, freight, insurance and transportation charges. ii) Cost of labour: The exact number of labourers required for unit of work and the multiplied by the wages/ day to get of labour for unit item work. iii) Cost of equipment (T&P): Some works need special type of equipment, tools and plant. In such case, an amount of 1 to 2% of estimated cost is provided. iv) Overhead charges: To meet expenses of office rent, depreciation of equipment salaries of staff postage, lighting an amount of 4% of estimate cost is allocated.  

Example Rate Amount Item Description of items Unit Quantity 1. Earthwork in excavation in foundation as per specification m3 225 2. C.C. M-100 (1:3:6) in foundation 4.10 3. Supplying and laying SPIGOT R.C.C. pipe f 300 mm Class S each L = 2.44 m pc 40 4. R.C.C. M-150 (1:2:4) in monk structures and harvesting box 21.5 5. Formwork m2 240 6. Steel reinforcement bars in outlets, harvesting box and precast foot planks kg 890 7. 4 in thick cement block lining in 1:3 CT mortar in harvesting box 11.6 8. C.C. M-150 (1:2:4) in bed protection 10 9. Precast R.C. M-150 (1:2:4) foot planks a) 2.50×0.25×0.10 2 b) 1.00×0.25×0.10 18 10. Prefab concrete M-150 (1:2:4) slabs (40×50×8 cm) to harvesting box 50 11. Stop logs measuring 59×25 cm 170 12. Screens measuring 590×500 mm 13. Refilling foundation pits as per specification 155 TOTAL