Estimating CE-147 Week 2

Estimate Types Concept Detailed Definitive

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)

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 –Add in indirect cost –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

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

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 Wage Premiums – Overtime 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