Marketplace

Construction Cost Estimation

Construction cost estimation is a major step in the construction project, as the contractor estimates the amount it will cost to build a project, with costs for employees, construction equipment, insurance and permitting included.

Construction cost estimation can be an in-depth, complex process as it requires a complete overview of all costs related to a project.

Construction cost estimation is done an estimator or accountant assigned by a general contractor to a specific project. No two estimates are the same, as requirements differ from one project to another.

During the traditional bid process, construction cost estimation covers the amount it would cost a general contractor to build a project, pay its employees and make a small percentage of profit. The estimate covers the cost of items like concrete for the foundation, cables for electrical wiring, flooring, plumbing, carpentry and HVAC (heating, ventilation and air conditioning). In this case, the construction cost estimation does not cover the cost of project design, as an architect has been hired by the property owner through a separate contract process.

In the design-build process, construction cost estimation is more involved. In this process, an architect and general contractor combine as a team and present a building or project design and construction contractor services in one proposal. The design-build process is used by those who believe an architect-contactor team with a past history of working together would be more efficient and, as a result, cheaper than an architect and contractor working together for the first time.

Construction cost estimation as part of a construction manager at-risk (CM at-risk) project falls in between the two. The architect is hired separately from the general contractor, but the contractor is involved in the project from the pre-construction process all the way through completion. The estimate comes in the form of a guaranteed maximum price, which covers all services rendered from pre-construction through the building process.

Construction cost estimation work is now largely done by computer programs, which are able to complete the process more quickly and efficiently than a human estimator operating alone. There are a number of programs that can break down cost estimates into subsections, as well as delivering the overall total price.

Leave a Comment

Roughneck Definition

Roughneck Definition Exxonmobil

ExxonMobil is an American gas, and oil company. It became a company in late 1999 when two oil companies merged into one. Exxon and Mobil. The company descended from the former Standard Oil company founded by John D Rockefeller. The merger of Exxon and Mobil to...

read entire definition