What type of estimate do you need to prepare?
There are different phases to a construction process. An estimator is essential in the initial stages of project planning to help gather or to use the information to provide a cost estimate for the planned project
Preconstruction phases and estimate classes
The phases before construction begin, include :
- the planning process
- creating a budget for your project
- creating plans
- site acquisition
- obtaining permits
- begin building
The job of a quantity surveyor is to create estimates or produce project costs at different stages in the preconstruction phase. There are 3 types of estimates classes that are commonly used during the pre-construction phase, they are:
- Order of magnitude or feasibility estimate
- Preliminary Budget
- Definitive Quotation
As you would imagine, the estimates get more accurate as you move from class 1 to 3, in this description. The American Society of Professional Estimators (ASPE) and The U.S. Department of Energy both use a 5 class system to define estimates. The ASPE uses level 1 as the least accurate estimate class to level 5 which is the most precise pricing that you will produce or receive for a project.
Creating estimates at each phase
Just to clarify, there is a difference between estimates and quotations!
An estimate is an estimated guess. You will use the information that you have, to come up with the best-estimated cost for the project.
A quotation is an accurate calculation of all the details provided in the specs and the drawings. A quotation can be legally binding and you can face consequences for providing inaccurate quotations.
Planning Process/Feasibility Estimate
An estimator will ask, gather or use historical data During the planning phase to come up with an estimate for the project. This is an art and a skill, you have to understand the construction process and have a way of researching or gathering information on similar projects to come up with your estimate.
The preliminary phase/Budget Estimate
During the preliminary phase, a quantity surveyor will be closer to the construction phase and will need to produce a more accurate estimate or quotation. The specifications and drawings may not be finalized or updated with all the information required to prepare a detailed quotation for the project at this phase.
This type of estimate will use a combination of real data and historical data to come up with your project cost. You will use information like the cost to prepare permits, staff required to complete the project, and the acquisition cost of the building intended for use. This estimate will be your budget and this is what may be used to obtain initial funding from partners or investors.
Building Phase/Definitive Quotation
The definitive phase is where you have all the information needed to prepare an accurate quotation for the project. This phase is where the specs and drawings are completed and can be sent out in packages to contractors and subcontractors so that they can provide quotes for their scope of work.
This is no longer an estimate at this phase, this is now a quotation that needs to be accurate for legal reasons. Putting together costs at this phase usually includes both general contractors and subcontractors in order to come up with the final project cost. This quotation will be used to manage the cost of the project and track the progress of the project with the quotes costs.
Essential tasks of a construction estimator
Being a quantity surveyor includes tasks such as:
- Obtaining project documents
- Reading and reviewing specifications
- Completing quantity take-offs
- Working with suppliers
- Working with subcontractors
- Understanding Labor productivity and crew rates
- Determine profit, overhead, and mark-ups
- Putting together accurate estimates and quotes
Your company and your role will determine what types of estimates you usually work on. A general contractor may be involved in the construction process from the planning phases all the way through to the building phase. Quantity surveyors that work with general contractors will usually work with subcontractors to complete the project, so the estimators’ duties will be more geared to compiling costs from subcontractors to create the final quotation.
A subcontractor will be more involved during the definitive phase, to help prepare the quotation. A subcontractor will have to contact their material suppliers, use the labour rated and productivity rates to come up with their quote. A subcontractor quote should be accurate, mistakes can have negative effects on completing the project successfully.
Subcontractors should have a process to filter through projects to select the best ones for the company, a process for estimating, and a process for running and closing the project.
Your role as an estimator will vary based on where you work. The role of a construction estimator consists of compiling the necessary budget and resources to come up with an estimate or a quotation. Having a good understanding of the pre-construction phase and the types of estimates to use at each phase is essential to move from planning to budgeting to building.
You will be required to negotiate and work with others during the estimating phases. Consistently improving your organization skills, improving your processes, and being resourcefulness are desirable qualities to have as an estimator and these qualities and skills will make you a good quantity surveyor.
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Different classes of estimates
Information gathered from Wikipedia
The American Society of Professional Estimators (ASPE) defines estimate levels as
Level 1 – Order (Range) of Magnitude,
Level 2 – Schematic/Conceptual Design,
Level 3- Design Development,
Level 4 – Construction Document, and
Level 5 – Bid
The U.S. Department of Energy uses a five classes system:
Class 5 - Order of Magnitude Screening or Feasibility 0% to 2%
Class 4 Intermediate Concept Study or Feasibility 1% to 15%
Class 3 Preliminary Budget, Authorization, or
Control 10% to 40%
Class 2 Substantive Control or Bid/Tender 30% to 70%
Class 1 Definitive Check Estimate or Bid/Tender 50% to 100%