Estimating in the construction industry is the critical process of determining the expected costs and quantities of materials, labor, and equipment needed for a project. It involves projecting, as accurately as possible, the total cost of the project along with the required resources for its completion. The American Institute of Architects defines estimating as the construction and services required by the Contract Documents, including all labor, materials, equipment, and services provided by the Contractor to fulfill the Contractor’s obligations. This encompasses the entire scope of work involved in the project.
Why is Estimating Important?
Accurate estimates are essential for the success of construction companies. They play a vital role in:
- Bidding Competitively: Competitive bids rely on accurate estimates to ensure the company can secure projects while maintaining a healthy profit margin.
- Financial Stability: Overly high estimates can lead to a lack of work, while underestimates can result in financial losses and even bankruptcy.
The Estimator’s Challenge
Construction estimators constantly navigate a delicate balance between bidding too low and too high. Striking this balance is crucial for the company’s financial well-being and its ability to compete effectively in the construction industry.
Who Creates Construction Estimates?
Estimating professionals, often called estimators, are responsible for preparing the cost estimates for construction projects. The structure of the company typically dictates who creates these estimates:
- Large Companies: Typically have a dedicated estimating department with one or more full-time estimators.
- Smaller Companies: Project managers or even the company owner may take on the estimating responsibilities.
Regardless of their title, anyone creating construction cost estimates is an estimator. Their primary objectives include:
- Accurately determining the quantities of materials, labor, and equipment needed.
- Calculating the costs associated with completing the project’s scope of work.
- Factoring in a reasonable profit while remaining competitive in the market.
Skills of a Successful Estimator
- Construction Expertise: Understanding construction methods, materials, and skilled labor capacities.
- Specialization: Often specialize in specific areas like subcontractor trades or construction types.
- Market Knowledge: Familiarity with the specific market’s construction methods, preferred materials, and labor skill levels.
- Quantity Take-Off Skills: Involves reading blueprints, comprehending the design intent, and calculating the required materials, labor, and equipment quantities.
- Communication Skills: Obtaining pricing from vendors and subcontractors, communicating project requirements, and preparing contracts and proposals.
- Computer Skills: Utilizing software like Excel, takeoff software, and estimating packages.
Personal Qualities
- Detail-Oriented: Accuracy is paramount in estimating, as even minor mistakes can significantly impact project profitability.
- Decision-Making Under Pressure: Bid days are fast-paced, requiring quick analysis and decisions based on limited information.
- Commitment to Continuous Learning: Staying updated with industry trends and best practices through professional organizations and ongoing education.
The Art of Estimating
Estimating is often considered an art due to the inherent uncertainties in construction costs. Continuous practice and honing good estimating skills are essential for success, similar to mastering an instrument.
Developing Your Estimating Skills
- Thorough Chapter Review: Grasping the fundamental principles of estimating.
- Verifying Calculations: Practicing and solidifying understanding through example problems.
- Method Mastery: Understanding and applying the five quantity takeoff methods.
- Real-World Application: Practicing with project drawings to gain practical experience.
- Software Exploration: Completing computer exercises and sidebars to enhance software proficiency.
- Problem-Solving Practice: Completing chapter-end problems to test and refine skills.
- Project Estimating: Preparing complete estimates for sample projects to gain comprehensive experience.
