Key Terms to Know
- Estimating method – Approach used by an estimator to perform project analysis, quantity takeoff, and pricing in a consistent and organized manner
- Traditional estimating method – Method in which quantities are calculated and entered into ledger sheets for pricing
- Digital estimating method – Method in which takeoff and pricing is accomplished using computer spreadsheets and integrated database systems
- Plan markup – Color-coding or marking off of items during quantity takeoff process
- Ledger sheet – Grid consisting of rows and columns for entering descriptions, locations, quantities, and costs
- General conditions – Written agreements describing building components and construction procedures
- MasterFormat® – Uniform system of numbers and titles for organizing construction information
- Spreadsheet – Computer program using cells in rows and columns to perform calculations
- Database transfer – Direct transfer of stored information from database to spreadsheet
- Assembly – Collection of items needed to complete a particular unit of work
- Digitizer – Digital input device that converts analog data to digital data
- Building Information Modeling (BIM) – Methodology using coordinated, consistent formats for digital design, construction, and product information
- Job cost analysis – Study of final costs of building a project compared to original estimate
- Overhead costs – Expenses not attributable to any one specific operation
- Profit – Monetary benefit realized at completion of building process
- CAD and BIM compatibility – Ability to directly transfer quantity takeoff information from CAD-generated drawings
Study Tips for Test Success
1. Understand the Estimating Process Flow
- Starts with drawings and specifications
- Plan markup for quantity takeoff
- Calculate quantities
- Multiply by unit costs
- Add overhead and profit
- Determine final price
2. Compare Traditional vs. Digital Methods
Traditional:
- Manual calculations
- Ledger sheets
- Paper plan markup
- More time-consuming
- Prone to mathematical errors
Digital:
- Computerized spreadsheets
- Database integration
- Digital plan markup
- Faster estimates
- Easier to incorporate changes
- Better consistency
3. Know the Advantages of Digital Estimating
Memorize the 10+ advantages listed, especially:
- Speed
- Accuracy
- Information sharing
- Integration capabilities
- Standardization
4. Understand BIM’s Role
- 3D digital format
- Coordination of all trades
- Clash detection
- Prefabrication opportunities
- 4th dimension: quantity takeoff/estimating
- 5th dimension: scheduling/planning
5. Review Key Components
- General conditions
- Specifications
- MasterFormat® codes
- Standard assemblies
- Database management
- Cross-referencing
6. Practice Questions
Review the Section Review questions at the end of each section. Key questions include:
- Why are specifications reviewed?
- What are general conditions?
- Purpose of plan markup
- What is a ledger sheet?
- Advantages of digital methods
- What is a spreadsheet?
- Benefits of BIM
- Why integrate with job cost analysis?
Test-Taking Strategy
Focus on “why” – not just “what” but why certain methods are used
Overview
Read questions carefully – distinguish between traditional and digital methods
Know definitions – many questions will test vocabulary
Understand processes – be able to explain the flow of estimating
Recognize advantages/disadvantages – especially for digital methods
Think practically – consider real-world applications of concepts
Review figures – understand what each figure demonstrates
Estimating methods are systematic approaches used by estimators to perform project analysis, quantity takeoff, and pricing in a consistent and organized manner. This chapter covers both traditional (manual) and digital estimating methods.
SECTION 2.1: ESTIMATING METHODS
Key Concepts
What is an Estimating Method? An estimating method is an approach used to perform project analysis, quantity takeoff, and pricing in a consistent and organized manner. Estimators use various methods for quantity takeoff and pricing of construction projects.
The Estimating Process The estimating process begins with:
- Detailed drawings and specifications – reviewed to determine types and amounts of work
- Document review – applicable portions of specifications are highlighted, drawings marked for quantity takeoff
- Quantity calculations – material quantities calculated and entered into ledger sheets or digital spreadsheets
- Cost multiplication – quantities multiplied by appropriate unit costs
- Final totaling – overhead, profit, and other costs included to determine final project price
Specifications Review
Role of Specifications:
- Specifications are reviewed to determine types and amounts of work in a project
- With paper documents, applicable portions are highlighted
- Drawings are marked for quantity takeoff
- Digital methods use on-screen review
General Conditions: Written agreements describing building components and construction procedures included in specifications. They include:
- Relationships between parties to the construction contract
- Rights and responsibilities of all parties
- Bidding requirements, procurement, and contracting information
- General requirements for every aspect of construction
Items NOT on Drawings: General conditions include items that affect a project but don’t appear on drawings:
- Weather protection requirements
- Sustainability goals
- Modification procedures
- Bonding and insurance requirements
Estimate-Related Specifications:
- Materials, equipment, labor, overhead, and profit
- Material quantities calculated based on material type
- Equipment: power equipment (earthmoving, hauling, lifting), temporary job-site equipment, communication equipment
- Labor pricing determined based on labor hours and cost per hour
- Overhead costs: expenses not attributable to any one specific operation
- Profit: monetary benefit realized at completion of building process
Owner Requirements for Reporting
Estimators must be attentive to owner requirements for:
- Reporting and recordkeeping
- Collecting, documenting, and distributing necessary construction information in proper format
- May require additional time and resources throughout the job
- Must account for all portions of general conditions and specifications when calculating overall job costs
- Architect and owner may include list of standard bid categories
- Estimator can review listing to organize quantity takeoff and pricing
Project Type Considerations: A decision is made by a contractor to bid on a project if it includes the type of work the contractor can perform. Contractors must determine if a particular project includes any interior finish system installation (example given).
SECTION 2.2: TRADITIONAL ESTIMATING METHODS
Overview
The traditional estimating method is one in which material quantities are calculated and entered onto ledger sheets for pricing. Quantities are multiplied by appropriate unit costs to determine total material costs. Material costs are then added to determine final material cost. Material quantities may also be used as the multiplier when using unit labor costs to calculate total labor costs.
Plan Markup
Definition: Plan markup is the color-coding or marking off of items on actual plan documents during the quantity takeoff process.
Purpose:
- For most construction projects, it’s difficult to remember sections taken off and quantities determined without a visual reminder
- Estimator studies and reviews plans
- Uses several colored markers to indicate each type of material as it’s taken off the plans
Accuracy: An estimator must have printreading skills to mark and take off portions of plans that pertain to the work being bid. For example, an estimator working with plans to determine the number of light standards in a parking lot may mark each light standard with a red “X” or colored number to indicate it has been included in total calculations. Mistaking drains for light standards would lead to an inaccurate bid.
Comprehensiveness: After plans are marked and quantities listed on a ledger sheet, the estimator reviews all specifications and plans a final time to ensure all applicable items have been taken off. The final review should include:
- Review of entire project, including general conditions
- Detail drawings
- Portions of drawings that may not appear to apply to work being bid
This ensures all items have been included in plan markup and quantity takeoff.
Mathematical Requirements: In addition to materials, a variety of general conditions, permitting requirements, and other overhead costs must be included in a comprehensive bid. Estimators should pay special attention to:
- Scheduling of construction on the job
- Any other items that may affect the overall bid
Estimating requires proficiency with many types of mathematical calculations. Estimators must:
- Add quantities and linear totals
- Multiply quantities by costs per unit and labor costs to determine pricing
- Calculate costs
- Calculate areas and volumes to determine square feet, square yards, and various cubic measurements
- Familiarity with common formulas speeds the process of bid preparation and ensures a high level of accuracy
Ledger Sheets
Definition: A ledger sheet is a grid consisting of rows and columns on a sheet of paper into which item descriptions, locations, code numbers, quantities, and costs are manually entered.
Purpose: As prints and specifications are marked up and quantities determined, the estimator enters these quantities on a ledger sheet. Estimators should use standard categories on ledger sheets to ensure consistency and to present information in a format familiar to others in the construction process.
Key Features from Figure 2-2 (Quantity Sheet): The ledger sheet shown includes columns for:
- Description (Phase/Section/Item No.)
- Quantity
- Unit
- Total Material Cost
- Total Labor Cost
- Total Equipment Cost
This well-designed ledger sheet can be cross-referenced to other portions of the bid and used in other estimating calculations. Skill in mathematical calculations reduces the amount of time required for final tabulation of material quantities.
Categories
Definition: The general conditions section of specifications commonly contains a list of bid categories. Companies that bid on a project must submit their estimates according to a format provided by the architect and owner.
Figure 2-3 shows standardized bid categories that commonly appear in general conditions, providing consistency of bids from all bidding companies. Individual ledger sheets may be developed for each type of work.
Example from Figure 2-3: “ARTICLE 5 – PROPOSALS AND BIDDING PROCEDURE” shows:
- Standardized bid items listed
- State Project No. 30-336-00-0015 (B)
- Turner Student Activity Center
- Includes various bid sections and details about how proposals should be submitted
Numerical Codes: MasterFormat®
Definition: The MasterFormat® is a uniform system of numbers and titles for organizing information about construction requirements, products, and activities into a standard sequence.
Purpose: Numerical codes are given to each item. For building construction, these codes are commonly based on the numbered divisions of the MasterFormat®, published by the Construction Specifications Institute (CSI).
Structure from Figure 2-4: The MasterFormat® is entered in the left column of a ledger sheet. Internal company codes may be entered in an adjoining column. A description column is created on the ledger sheet indicating material taken off (such as gravel, concrete, or carpet). A takeoff quantity column is included to indicate the numerical quantity and units used (such as square feet or cubic yards). Additional columns include material and labor pricing information and total cost for each item.
Applications: For road, bridge, and highway construction, numerical codes are commonly developed by each state department of transportation. Categories make it easier to locate individual items and make necessary changes when project requirements shift due to addenda, value engineering adjustments, or material and labor price changes.
Standard BID ITEMS shown in Figure 2-5 include examples such as:
- Pipe Underdrain Wrapped 10-Inch
- Pipe Underdrain Wrapped 16-Inch
- Multiple entries for various construction items with specific codes
Cross-References
Purpose: As an estimate is developed, columns from various ledger sheets may be cross-referenced to each other. For example, there may be a certain type and number of steel reinforcing bars required in concrete formation walls, sidewalks, and roof decks.
Benefits: Cross-referencing across various portions of the ledger sheet allows for a total number of reinforcing bars to be calculated and one total price to be listed for all one grade rather than three orders submitted separately, costing additional ordering and shipping fees.
SECTION 2.3: DIGITAL ESTIMATING METHODS
Overview
The digital estimating method is an estimating method in which takeoff and pricing calculation is accomplished using computer spreadsheets and integrated database systems. Digital estimating methods have had a tremendous effect on the estimating process.
Digital estimating methods include:
- Computerized spreadsheet
- Estimating programs
Advantages of Digital Estimating
- Faster estimates
- Ease of incorporating last-minute changes into the bid
- Information sharing across a larger estimating team
- Assistance in reducing mathematical errors or missed bid items
- Standardization throughout a large construction company
- Integration with other company departments (accounting, scheduling, job costing operations)
- Possible integration with subcontractor and supplier bid information
- Flexibility of final bid reporting
- Easy import and utilize information from previous bids in new bids
- Easy conversion from English to metric measurements (some programs)
Advanced features include:
- Database interactivity
- Use of standard assemblies and standardized preset formulas
- Ability to interface with drawings created on computer-aided drafting (CAD) or building information modeling (BIM) systems
- Detail drawings scanned into computer
- Ability to output variety of final reports and forms
Spreadsheets
Definition: A spreadsheet is a computer program that uses cells organized into rows and columns to perform various mathematical calculations when formulas and numbers are entered into them.
Purpose from Figure 2-6: Spreadsheets have streamlined the calculation process by allowing estimators to enter quantities, costs, and standard calculations into individual cells. Estimating programs allow material pricing, labor costs, and quantity takeoff calculations to be determined digitally through the use of a standard item, crew-based, and assembly information that may be entered manually or retrieved from database history files.
Foundation: The foundation of most estimating programs is a computer spreadsheet. Spreadsheets are designed with a standardized column format for entry of:
- Material quantities and descriptions
- Labor costs and material prices
- Other items required by the estimator
Quality: The quality of the final bid is determined by the accuracy of the calculation information entered into spreadsheet cells.
Key Features:
- Column: vertical organization in spreadsheet
- Row: horizontal organization
- Formula: calculations performed automatically
- Cells: intersection of rows and columns where data is entered
Care must be taken by the estimator to verify that the spreadsheet is performing the proper mathematical calculation for the proper range of cells. Estimators can purchase software or digital templates with preformatted cell calculations that can be copied into an existing spreadsheet.
Standardized Formats
Estimating programs vary from estimator-created spreadsheets to estimating programs that include:
- Descriptions
- Material quantities
- Labor costs
- Totals
Standard row and column formats are common in all estimating programs. The features available depend on the sophistication of the software.
Database Transfer
Definition: Database transfer is the direct transfer by an estimating program of stored information from a database to a spreadsheet.
Purpose: One of the most time-saving features of sophisticated estimating programs is their ability to correlate quantity takeoff amounts with material and labor unit pricing information to quickly calculate costs.
How it Works: The database for the estimating program stores standard unit costs and formulas for:
- Material
- Equipment
- Labor
- Other items
Figure 2-7 (Item Pricebook) shows database information stored. When a quantity for an item is entered, material unit costs and labor cost information per unit are automatically transferred from the database to the spreadsheet. The estimator can make final adjustments in the spreadsheet calculations without changing or disturbing the database source information.
Consistency Benefits: One of the biggest advantages of estimating programs is consistency of data within the database. Information concerning labor and material pricing and formulas are stored in the database for reuse. This feature produces consistent costs and formulas for all estimators on a large project or for companies with several estimators when managed properly.
Database Maintenance: Care should be taken by the lead estimator on a project to ensure that the database pricing is both current and applicable to the project being bid. Estimators should make any necessary adjustments to the database pricing for the specific project. Even when using standard information from a database, estimators must be aware that no two projects are exactly alike and modifications to database information may be required to produce an accurate final estimate.
Assemblies
Definition: An assembly is a collection of items needed to complete a particular unit of work.
Purpose: Standard construction assemblies are entered into the database as a standard material, equipment, and labor quantity and cost per standard unit of measure. For example, a common wall assembly includes cost information for:
- Material
- Equipment
- Labor based on the number of linear feet of wall
Figure 2-8 shows: Standard assemblies enable an estimator using an estimating program to calculate several items concurrently. The example shows quantities and costs for:
- Materials
- Equipment
- Labor for structural framing, interior finish, and possibly door and window openings
Digital Plan Markup
Definition: Digital plan markup is becoming more widely used for estimating. Digital plan markup can be performed:
- With a digitizer on paper prints
- With an interface for CAD drawings
- Using digital image formats (such as jpg or pdf)
Digitizer: A digitizer is a digital input device that converts analog data into digital data. A digitizer is used with an estimating program to input drawing coordinates directly into the program, reducing the need to enter quantities and dimensions using the computer keyboard. The estimating program reads coordinates for various points on the prints and determines linear feet, square feet, and other measurements depending on the drawing scale.
CAD Integration (Figure 2-9): For CAD drawings, a quantity takeoff is performed on the computer screen. Care must be taken not to change or manipulate various components of the drawings. Architects often attach specific information codes or tags to individual components of CAD drawings to interface with BIM or estimating programs.
Transfer Process: The CAD drawings are transferred into the estimating software with quantity calculations made during the transfer. Some CAD systems allow drawings that are scanned into the computer to be marked with various colors on the computer screen. As with the traditional estimating method, in some instances, marking the components as they are being entered into the estimating program is required to avoid duplication and ensure all required items are accurately and completely included in the estimate.
Building Information Modeling (BIM)
Definition: Building information modeling (BIM) is a methodology that uses coordinated, consistent formats for digital design, construction, and product information to optimize planning and construction of a project.
Purpose: As design and construction information become increasingly available in digital format, integration of design and construction data becomes more important to the entire construction process. BIM is a methodology that uses coordinated, consistent formats for digital design, construction, and product information to optimize planning and construction of a project.
BIM Model Development: Use of a BIM system creates a design and construction process where owners, architects, engineers, estimators, contractors, subcontractors, and suppliers utilize digital information in a consistent format to identify the best construction practices and costly overruns.
Key Features: The estimator must review the specifications to determine if the owner requires that a specific type of BIM model or software system be included for the project.
A BIM model is developed and presented in a digital three-dimensional (3D) format. All members of the construction team on a BIM project provide their specific individual documents in an intelligent BIM format. The BIM model allows for integration of:
- Structural
- Mechanical
- Electrical
- All other applicable building systems
The coordination and collaboration of all of the various digital components from architects, engineers, contractors, and subcontractors creates a complete building model. This model is then utilized to produce views of buildings and building systems for review and modification as needed prior to construction. Modifications can be made in instances where construction conflicts are identified and clash detection occurs.
Clash Detection (Figure 2-10 and Tech Fact): For example, when HVAC and electrical systems are added into the BIM model, a clash detection analysis may indicate that both an air duct and an electrical conduit are intended for the same location. The BIM model will indicate this potential clash. Both the HVAC subcontractor and electrical subcontractor can revisit their documents and make the necessary adjustments prior to construction. In many instances, this will reduce job-site conflicts and the need to redesign various construction elements in the field.
TECH FACT: “An accurate and complete BIM model allows a total design review. Design modifications can resolve any identified construction conflicts and detected clashes of systems.”
Prefabrication Benefits: An accurate BIM model will also allow for the prefabrication of larger building components. Where the BIM model indicates all potential clashes have been eliminated, the use of prefabrication can reduce overall labor costs at the project site, thereby requiring the estimator to make the necessary adjustments in transportation and rigging expenses and on-site labor requirements. Coordination of this opportunity to use prefabrication must be done with the appropriate members of the building team during development of the estimate. When opportunities for prefabrication savings are determined during the project, value engineering discussions may be made.
Fourth and Fifth Dimensions: BIM models may also provide fourth and fifth “dimensions,” with the fourth dimension being quantity takeoff and estimating, and the fifth dimension being project scheduling and planning. When construction projects utilizing BIM are designed, intelligent model objects have data attached to them. In some instances, the object data is collected by the BIM software to generate quantity takeoff information and estimates in conjunction with estimating information databases and/or be used to develop a schedule for the project.
Integration with Job Site Management Systems
Purpose: Use of estimating programs allows for the material quantity, labor, equipment, and overhead information to be used by others on the construction project team. Project managers can compare accounting information to the bid information to track job costs throughout a construction project.
Benefits: Other computer programs that assist in construction scheduling can interface with an estimating program to track material quantities and labor use throughout the course of a project. Digital job tracking systems can be used to enter actual labor hours and identify the hours using cost codes. Radio frequency identification (RFID) or bar scanning technology may be utilized to track various materials as they are delivered and invoiced at a job site and to track with estimates throughout the construction process.
CAD and BIM Integration: The compatibility of estimating programs with CAD and BIM programs and scheduling and tracking programs affects the estimating process by enabling the automatic calculation of quantities and costs. Architectural CAD and BIM programs that are compatible with estimating programs enable material quantities and job cost tracking to be calculated from a CAD drawing by the estimating program and entered into the spreadsheet automatically.
Estimating Program Internet Capability
Purpose: Some estimating programs have the ability to link to the Internet and transfer information to the program. Prints can be digitized or scanned into a digital format, or CAD drawings can be uploaded and made available to estimators through the Internet.
Digital Plan Rooms: Autodesk® Revit® is a commonly utilized program for BIM model development and integration. Digital “plan rooms” are provided by a variety of local and national associations and construction information firms. After obtaining a password, members of digital plan rooms can search through specifications and prints on a computer screen. When projects or items are found that can be bid by a company, the specifications and plans can be digitally retrieved for use with the estimating program.
e-Builder™: In some cases, these plans can be marked up on the computer screen to facilitate quantity takeoff. For example, e-Builder™ is an Internet-based communication tool designed to enhance the exchange of information and collaboration among construction project participants. In addition, Autodesk® Buzzsaw® is a project management system that assists in the planning, construction, and operation phases of a building. Buzzsaw helps to ensure that accurate information is always available to everyone involved in the creation and management of a construction project.
Job Cost Analysis
Definition: Job cost analysis is the study of the final costs of building a project as compared to the original estimate.
Purpose: As a construction project proceeds, the owner, architect, and project managers for various contractors need to ensure that the costs of the project are staying within the estimated amounts.
Benefits: Integration of estimating programs with job cost analysis programs can indicate areas where savings or cost overruns may have occurred. This integration allows for quick, timely information availability to assist in decisions concerning the remainder of the project. At the completion of the project, the information obtained concerning the initial estimate and the final job cost can be integrated into company historical cost records to improve the accuracy of that database, which will be utilized for future estimates.
Scheduling and Progress Tracking (Figure 2-11)
Definition: Construction scheduling includes information concerning material delivery times, work start and completion times, and subcontractor start and completion times.
Purpose: Several computer programs are available for the specific purpose of scheduling construction projects and keeping track of various work phases. Integration of estimating programs with scheduling programs allows for ongoing analysis of areas where changes in scheduling or estimated materials and/or labor may be necessary.
Benefits: As with job cost information, this information can be integrated into company historical data for future use. The figure shows how a job scheduling program can interface with an estimating program to create an integrated project management system.
CAD and BIM Compatibility
Definition: CAD and BIM compatibility is the ability of an estimating program to directly transfer quantity takeoff information from CAD-generated drawings or BIM systems.
Benefits: This allows estimating programs to automatically develop quantity takeoffs based on intelligent object codes embedded in the digital plan documents. As labor unit prices and material costs are added to an integrated database, a single program may be used to produce the drawings, as well as develop material and labor quantities and costs.
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