The preparation of estimates represents one of the most important functions performed in any business enterprise. In the construction industry, the quality of performance of this function is paramount to the success of the parties engaged in the overall management of capital expenditures for construction projects.

The estimating process, in some form, is used as soon as the idea for a project is conceived. Estimates are prepared and updated continually as the project scope and definition develops and, in many cases, throughout construction of the project or facility.

The parties engaged in delivering the project continually ask themselves “What will it cost?” To answer this question, some type of estimate must be developed. Obviously, the precise answer to this question cannot be determined until the project
 is completed. Posing this type of question elicits a finite Answer 
from the estimator. This answer, or estimate, represents only an approximation or expected value for the cost.
The eventual accuracy of this approximation depends on how closely the actual conditions and specific details of the project match the expectations of the estimator.

Extreme care must be exercised by the estimator in the preparation of the estimate to subjectively weigh the potential variations in future conditions. The estimate should convey an assessment of the accuracy and risks.

Estimating is a complex process involving collection of available and pertinent information relating to the scope of a project, expected resource consumption, and future changes in resource costs. The process involves synthesis of this information through a mental process of visualization of the constructing process for the project. This visualization is mentally translated into an approximation of the final cost.

At the outset of a project, the estimate cannot be expected to carry a high degree of accuracy, because little information is known. As the design progresses, more information is known, and accuracy should improve.

Estimating at any stage of the project cycle involves considerable effort to gather information. The estimator must collect and review all of the detailed plans, specifications, available site data, available resource data (labor, materials, and equipment), contract documents, resource cost information, pertinent

government regulations, and applicable owner requirements. Information gathering is a continual process by estimators due to the uniqueness of each project and constant changes in the industry environment.

Unlike the production from a manufacturing facility, each product of a construction firm represents a prototype. Considerable effort in planning is required before a cost estimate can be established. Most of the effort in establishing the estimate revolves around determining the approximation of the cost to produce the one-time product.

The estimator must systematically convert information into a forecast of the component and collective costs that will be incurred in delivering the project or facility. This synthesis of information is accomplished by mentally building the project from the ground up. Each step of the building process should

be accounted for along with the necessary support activities and embedded temporary work items required for completion.

The estimator must have some form of systematic approach to ensure that all cost items have been incorporated and that none have been duplicated. Later in this chapter is a discussion of alternate systematic approaches that are used.

The quality of an estimate depends on the qualifications and abilities of the estimator. In general, an estimator must demonstrate the following capabilities and qualifications:

  •  Extensive knowledge of construction
  •  Knowledge of construction materials and methods
  •  Knowledge of construction practices and contracts
  •  Ability to read and write construction documents
  •  Ability to sketch construction details
  •  Ability to communicate graphically and verbally
  •  Strong background in business and economics
  •  Ability to visualize work items
  •  Broad background in design and code requirements
Obviously, from the qualifications cited, estimators are not born but are developed through years of formal or informal education and experience in the industry. The breadth and depth of the requirements for an estimator lend testimony to the importance and value of the individual in the firm.


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