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What Is A Commercial Construction Cost Estimator?

Providing an accurate forecast for upcoming project expenditures is crucial to the survival of any business or organization considering future construction. Cost estimators develop the cost information that business owners, managers, professional design team members, and construction contractors require to make budgetary and feasibility determinations.

From an owner’s perspective, a cost estimate may be used for a number of different reasons, from determining the project scope to whether or not the project should proceed. The construction contractor’s cost estimate will determine the construction bid or if the company will bid on the construction contract.

Cost estimators collect and analyze data in order to determine the time, money, materials, and labor required to manufacture a product, construct a building, or provide a service. They generally specialize in a particular product or industry. Additionally, most cost estimators need a bachelor’s degree, although some workers with several years of experience in construction may qualify without a bachelor’s degree.

Achieving the Cost Estimating Trifecta

Construction cost estimating is essentially about three things:

  • Money: You calculate your cost, apply your markup, and present the total to your customer.
  • Accuracy: Your business will only prosper if your estimate is accurate, so you make a profit without giving your customers any unpleasant surprises between a pre-construction estimate and the final amount to be paid.
  • Speed: Customers want their estimates rapidly. For commercial and industrial projects, customers are unlikely to wait weeks for your cost estimate. For private building projects such as house renovations and extensions, customers may even simply accept the first estimate they get, as long as it looks reasonable to them.

To meet all three criteria simultaneously, you might need a small army of estimators – or a suitable tool, such as construction estimating software. Please click here for more details.

Construction Cost Estimating Explained | ProEst

Elements Of A Cost Estimate

Quantity Takeoff

The foundation for a successful estimate relies upon reliable identification (takeoff) of the quantities of the various materials involved in the project.

Labor Hours

Labor hour amounts can be developed by crew analysis or applied on a unit man-hour basis. The use of a labor dollar per unit of work (ex: $15 per cubic yard for grade beams or $20 per cubic yard for walls) is only applicable when the cost history supports the data being used. The estimator must make allowance for the varying production capability that will occur based upon the complexity of a project.

Labor Rates

The labor rate is the cost per hour for the craftsmen on the project. To determine any craft rate, whether union or open shop, the estimator starts with the basic wages and fringe benefits.

  • To the wages and fringe benefits, the estimator must add payroll burdens. These are FICA (Social Security), FUI (Federal Unemployment Insurance), SUI (State Unemployment Insurance), WC (Worker Compensation), and others mandated by legislation and/or company operations. These burdens, plus the base wages and fringe benefits, determine the hourly cost of a craft classification (i.e., carpenter, pipefitter, etc.).
  • The hourly rate can also involve a mixed crew were a mix of different crafts for a work crew for the performance of the work.
  • Overtime or the lack of overtime is another consideration in determining the calculation of the hourly rates. A project that is scheduled for completion using a forty-hour workweek (Some areas may have a standard 35-hour week) will have a modest amount of overtime costs required in the estimate. A project that is scheduled for extended 50, 60, or even 70-hour workweeks will have a substantial amount included for overtime and loss of productivity.

Material Prices

Material prices, especially in today’s current market, fluctuate up and down. The estimator must both understand and anticipate the frequency and extent of the price variations and the timing of the buying cycle. Material prices may be affected by:

  • purchase at a peak or slack time of the year for the manufacturer
  • material availability
  • the size of the order
  • the delivery timeframe requirement
  • physical requirements for delivery, such as distance, road size, or site access
  • payment terms and history on previous purchases
  • sole-source items
  • exchange rates (if the material will be imported into the U.S.)

Equipment Costs

Equipment rates depend on the project conditions to determine the correct size or capacity of equipment required to perform the work. When interfacing with other equipment, cycle times and equipment capacity control the costs on the project. Costs will also differ if the equipment is owned by the contractor as opposed to rented.

Construction Estimating Service Area

Freelance Construction Estimating for Florida Builders and Contractors
Need a freelance construction estimator in Florida for a project bidding in one of these markets: Pensacola, Tallahassee, Jacksonville, Gainesville, Ocala, Daytona, Orlando, Lakeland, Tampa, Clearwater, Bradenton, Sarasota, Ft. Myers, Naples, West Palm Beach, Pompano Beach, Ft. Lauderdale, Hollywood, and Miami.