Overview

I made this guide taking notes and using current popular texts, videos and online resources while learning the fundamental principles, processes, and best practices used in construction estimating. Understanding these concepts is essential for creating accurate, comprehensive, and timely estimates. AI helped me structure, spell-check and format the content.

I have also created a narrated audio summary using an AI text-to-speech reader, which will be available for download soon, for $1.

Study Tips for Test Success

1. Understand the Hierarchy of Estimates

  • Memorize the four levels: Order of Magnitude → Conceptual → Design Development → Construction Document
  • Know the % completion requirements for each level
  • Understand when each type is used

2. Know the Four Systematic Approach Principles

  • Accuracy – Precise calculations
  • Comprehensiveness – All work included
  • Consistency – Standard procedures
  • Timeliness – Current documents

3. Master the Variables

Use the acronym “PLMLOSE-BV”:

  • Project Location
  • Labor Availability/Productivity
  • Material Availability/Pricing
  • Scheduling
  • Overhead Expenses
  • Environmental Factors
  • Building Codes
  • Value Engineering

4. Understand Reference Data Types

  • Component costs (windows, doors, etc.)
  • Unit prices (per square foot, linear foot)
  • Equipment rates
  • Labor rates
  • Cost indexes
  • Assembly costs

5. Know the Federal Agencies

  • OSHA – Worker safety
  • EPA – Environmental protection
  • OFCCP – Equal employment opportunity

Construction Estimating Study Guide:

What is an Estimating Practice?

An estimating practice is a systematic method used to integrate all parts of the estimating process in a cohesive, consistent, and reliable manner to ensure an accurate final bid.

Types of Estimates

Interim Estimates

  • Prepared as the design process progresses toward completion
  • Used to determine project feasibility under various financial scenarios and design options
  • Prepared at different stages from concept to design completion

Final Estimates

  • Prepared when all construction documents (detail drawings and specifications) are completed
  • Most accurate type of estimate
  • Used prior to the final bid

Levels of Final Estimates

1. Order of Magnitude Estimates

  • Created when initial concept/design is 5-40% complete
  • Developed with various options and pricing to allow owner to make realistic determinations
  • Can include extremely high levels of sustainable construction practices
  • Options are compared to project budget to determine appropriate design and components
  • Purpose: Balance available financing with desired project functionality

2. Conceptual Estimates (Schematic/Model Estimates)

  • Based on building function or functional area of the building
  • More common for design-build projects
  • Priced based on company historical records of costs per square foot
  • Can be prepared for all types of construction delivery systems
  • Require minimal information (function, size, height, location, construction system)
  • Should be created when design is 5-40% complete
  • Based on incomplete construction documents

3. Design Development Estimates

  • Require completion of majority of construction documents
  • Confirm overall project costs as design nears completion
  • Good construction practices would be the final point to make significant design/function changes
  • Minimum 25% of construction documents should be completed before beginning
  • Best created when 40-50% complete
  • Can be completed after construction has started for certain project portions

4. Construction Document Estimates

  • Prepared when construction documents are more than 90% complete
  • Most accurate cost estimates prepared prior to final bid
  • Require great deal of effort to produce
  • Owners commonly compare costs at this level with bids from contractors/subcontractors
  • Variances in pricing are discussed and reviewed before project is awarded

2. ESTIMATING PROCESS

Three Factors to Consider Before Starting

A. Bid Determination and Strategy

  • Estimating and bidding can be time-consuming and expensive
  • Initial cost incurred even before entering into agreement
  • Type of construction matters (e.g., contractors may specialize in healthcare vs. movie theaters)
  • Company capacity and market conditions are crucial
  • Must balance backlog with projects to estimate and bid on

B. Market Conditions

  • Laws of supply and demand apply
  • Large supply of projects + few contractors = higher profit margins and estimates
  • Many contractors bidding on limited projects = lower profit margins
  • Market conditions affect general contractors, subcontractors, and suppliers

C. Company Capacity

  • Construction companies manage firms by maintaining appropriate backlog
  • Number of labor, equipment, and management staff resources must be balanced
  • Too few projects in backlog → seek additional projects
  • Too many projects → estimating department may seek additional work to maintain company operations

Prebid Meeting

Definition: A bid is an offer from a contractor, subcontractor, or supplier to perform construction work, provide service, or provide materials/supplies at a stated price.

Prebid meeting is a conference where all interested parties review the project and ask questions.

Typical Attendees:

  • Estimator
  • Architect or owner
  • Project manager
  • Engineers
  • Contractors

Purpose:

  • Meet with owners and future occupants
  • Understand entire scope of work
  • Share information necessary to understand enterprise scope
  • Acquire names of plan holders and obtain information about potential bidders
  • Discuss problems with bidding documents

Key Activities:

  • Prebid meetings with owners, estimators, and future occupants
  • General contractor and subcontractor representatives attend
  • Information shared to better understand project
  • In some cases, attendance required to submit bid

Bid Proposal

Components:

  • Prices and costs for completing a construction project
  • Includes pricing, performance criteria, scheduling, and staffing information
  • Must be presented in clear and comprehensible format

The Bid Generated by Estimator:

  • Covers section of specifications
  • Includes all estimated and priced items
  • Subcontractors contacted for bids on portions of work
  • Estimated by estimator for comparison

Quantity Takeoff: Practice of reviewing construction contract documents to determine quantities of materials to be included in a bid.

Process:

  • Bids requested from subcontractors through personal contact, written requests
  • Note work to be performed, project schedule, time when bids are due
  • When preparing estimate, representatives may visit job site to determine working and building conditions
  • Additional costs identified during job-site visit

Take a break and watch a video on construction estimating by Plan&Spec (2024):

https://youtu.be/cLBn8876T5s?si=HngznPlwPo_E7rMB

3. SYSTEMATIC APPROACH (Four Key Principles)

A. Accuracy

  • Includes precise calculations of all labor, materials, and equipment quantities and costs
  • Mathematical and printreading skills are essential
  • Accurate interpretation of print symbols, abbreviations, and dimensions required
  • Accurate totals required as items are counted or calculated from drawings and specifications
  • Estimators commonly markup drawings and specifications to ensure all items are counted and no items are counted twice

B. Comprehensiveness

  • Ensures all portions of proposed work are included in estimate
  • Care must be taken when reviewing specifications and drawings
  • Some items may be indicated in specifications and not on drawings, or indicated on drawings and not in specifications
  • Marking up both drawings and specifications ensures all items are counted and no items are overlooked
  • Complete review of specifications and addenda for all items that may be in the estimate is required
  • Items may be described in several portions of drawings and specifications

C. Consistency

  • Consistent estimating practices include common procedures used by company or individual
  • Allows for quick reference to items in estimate
  • Patterns and habits should be developed for consistent good estimates
  • While procedures used by individuals vary, standard steps or procedures are followed

Common Standard Procedure for Creating Accurate and Consistent Estimate:

  1. Review the specifications
  2. Review the detail drawings
  3. Set up the bidding sheets or database (ledger-based or computer-based)
  4. Perform the quantity takeoff for self-performed work
  5. Determine the price of materials, equipment, and labor for self-performed work
  6. Obtain estimates for subcontracted work
  7. Review the final estimate
  8. Double-check for accuracy

After initial process complete:

  • All items are priced and double-checked
  • Profit, overhead, and taxes are added
  • Job is ready for final review and definitive bid
  • Estimators should track last-minute items that could cause problems on final bid day
  • Anticipate possible actions and solutions

D. Timeliness

  • A timely estimating process requires using most current construction documents (detail drawings and specifications) for bidding process
  • After initial plans released, architect or owner may make changes in form of addenda

Addenda may include:

  • Changes to specifications and detail drawings
  • Estimators must monitor design process and maintain awareness of any addenda up to time of submission of final bid

Important: Lack of knowledge about an addenda can create a situation where bid is developed based on outdated project information. Estimator should contact architect a few days prior to final bid submission to ensure all addenda have been taken into account in preparing the bid.

4. VARIABLES

Full Consideration of Variables Required from Beginning of Estimating Process

Estimators analyze entire project, paying special attention to unusual or highly specialized items. Work on estimating or obtaining subcontractor/supplier bids should begin early to minimize delays.

Key Principle: No two projects or estimates are the same. Conditions change involving weather, job-site conditions, employees, architectural drawings, subcontractors, suppliers, local government agencies, and variety of other items.

Major Variables

A. Project Location

Access to Job Site:

  • Greatly impacts material hauling costs
  • Job-site storage area for delivery of materials may or may not be available
  • Some materials required by architectural design may not be available without high shipping costs
  • Labor markets always changing based on employment levels in local construction industry and other industries

Overhead Expenses:

  • Vary based on job-site location
  • Include taxes, insurance, permits, and other location-specific expenses
  • Variety of building code requirements, permitting processes, and legislative rules apply
  • Different for various structures depending on location

Material Availability and Pricing:

  • Material availability refers to availability of material items needed for a project
  • Developments in new designs and properties provide wide variety of material options for structural engineers and architects
  • Exchange of information between engineers, product designers, and manufacturers, building owners, architects, and estimators required
  • Catalogs and websites that describe latest developments in construction materials can be helpful resource

Potential Fluctuations in Future Costs:

  • Must be taken into account
  • Potential fluctuations in future costs of materials and products must be taken into account
  • Lengthy delivery times for scarce materials may also affect project completion date
  • Proper planning for material pricing and ordering essential to avoid costly penalties for projects with financial penalties for time overruns
  • Material pricing checked at project location prior to pricing

Cost Breakdowns:

  • Estimators must examine bid documents to determine if bid with alternative materials or products is allowed
  • Some owners and architects may require cost breakdowns to be included in final bid proposal
  • Material pricing tracked more carefully and divided into individual categories when cost breakdowns are required
  • Additional staffing may be required at time of final bid preparation if cost breakdowns are required

B. Material Availability and Pricing

(See details under Project Location section above)

C. Labor Availability and Productivity

Labor is a high-risk item in an estimate.

Issues:

  • Labor availability and productivity comprise large portion of final estimate and bid
  • Labor availability refers to availability of skilled labor required on specific project

Considerations:

  • Estimators should consider employment and unemployment levels in construction market
  • Assess impact levels may have on labor resources
  • In some situations, tradesworkers may be temporarily moved from another labor market to increase labor availability for a project
  • Results in additional housing and travel costs and premium compensation
  • Availability of various types of skilled labor in area must be assessed when pricing job and developing bid

Labor Productivity:

  • Another labor component that estimators need to take into consideration when developing estimate
  • New construction materials and methods have greatly changed skills that laborers involved in construction need to have
  • Automation and prefabrication playing large role in building process
  • New tools and procedures have increased skill levels required by tradesworkers on job site
  • Labor contracts with particular work rules may also have impact on labor productivity factors
  • Trade associations or other contractors may be able to provide information regarding labor productivity in given market

Cost Resources:

  • Variety of resources used to price labor in an estimate
  • For established companies, company historical records are most reliable source of labor cost data
  • By tracking costs on completed projects, companies develop labor costs for various types of construction processes and projects
  • These labor costs can be utilized for future estimates
  • For newer companies, standard labor-rate information for various construction markets and various types of construction is available for purchase from industry information sources

Working Conditions and Wage Rates:

  • Working conditions at job site impact work productivity
  • Cramped working conditions, limited equipment and supply storage, and difficult delivery situations usually result in lower work productivity
  • For example, small job site may create congestion of workers and materials, thereby lowering work productivity and increasing labor costs
  • Extremely large job site may also lower work productivity and increase labor costs because of extra time necessary to reach various areas of site
  • This can apply to both vertical and horizontal distances

Wage Rates:

  • Refer to costs of worker wages and benefits
  • Working conditions and wage rates vary significantly from project to project
  • Factors affecting working conditions and wage rates include:
    • Project location
    • Time of year
    • Material storage space
    • Field performing a given construction operation
    • Existence of a building trade union
    • Any contract agreements that may exist

Benefits for Tradesworkers:

  • For example, benefits for tradesworker covered by union labor agreement are different than tradesworkers who are not covered by such an agreement
  • Jurisdictional claims by various trade unions must also be taken into account in preparing labor costs
  • Labor costs for various material installations may vary depending on trade performing the installation and wage and benefit rates

Training:

  • Labor training includes skill development programs such as vocational education programs, apprenticeships, and journeyman upgrade courses and programs
  • Quality of work performed by tradesworkers can vary greatly from area to area and from trade to trade
  • Estimator should contact industry sources in area of construction project to determine if significant quality issues due to untrained construction labor exist

D. Scheduling

Impact on Costs:

  • Project scheduling affects estimated costs for materials, labor, and overhead
  • Material costs may be higher or lower at various times of year or during various market cycles
  • For example, concrete costs may be higher during winter months in cold climates due to inclusion of required admixtures in concrete that inhibit freezing and assist concrete in developing a quick set
  • Construction projects that require quick turnaround may demand overtime or shift work for tradesworkers
  • Overhead may be affected by time necessary to complete a project, number of tradesworkers required for completion, and penalties for not completing project on specific schedule

Liquidated Damages:

  • Penalties assessed against contractor or subcontractor for failure to complete work within specified period of time
  • Estimators should check specifications for inclusion of liquidated damages to ensure that estimate takes project schedule into consideration

Bid Schedule and Location:

  • Estimator should consult general conditions of specifications to determine date, time, and location for submission of final bid
  • Day of week, potential holiday schedules, staffing availability on bid day, and conflicts with other construction projects that may be bidding at the time should be taken into consideration
  • Bids due early in morning require scheduling considerations to be made prior to bidding
  • Location for delivery of the bid must be considered in order to leave adequate amount of time to properly prepare the final bid documents and deliver them to bid location

E. Overhead Expenses

Overhead is any business expense that is not chargeable to a particular part of a construction project.

Types:

  • Home-office overhead cannot be readily charged to specific project
  • Includes office employee salaries, office expenses, travel, professional services, and taxes and fees
  • Sales taxes for materials must be determined to ensure proper material pricing
  • For example, some materials on construction projects for not-for-profit entities may be exempt from local or state sales taxes depending on local and state legislation

Mobilization:

  • Costs vary based on location of construction site
  • Determined by visiting or viewing job site
  • Mobilization is the process of moving the required construction equipment and support systems to the current construction site
  • Mobilization costs include items such as:
    • Installation of temporary electrical service
    • Job-site office and storage trailer transportation and rental
    • Creation and removal of temporary access roads if required

Job Overhead:

  • Includes all costs associated with a specific project that cannot be assigned to a specific item in the project
  • Fees for permits must be submitted to each municipality and government agency responsible for building permits and inspections

Permitting Fees:

  • To properly determine costs for permitting fees, estimator must contact all applicable permitting agencies for a particular locality and determine types of permits required for all types of construction and their individual costs
  • In some instances, multiple copies of construction documents may be provided to the permitting agency for their review, resulting in additional overhead costs for printing and delivery

Insurance Rates:

  • For a project vary depending on contractor experience, security of the area surrounding the project, type of project, and insurance industry cost trends
  • Estimator must carefully assess insurance costs for each project
  • Location of project in dangerous or unsecured area may require addition of security patrols, alarms, or security systems

Project Start-up and Close-out Costs:

  • May be included in overhead expenses
  • Printing multiple sets of prints and specifications for members of construction team may be required
  • Installation and maintenance of job-site signage and protective fencing may also be part of job overhead costs

Final Preparation:

  • When construction is concluded, final preparation of building site for usage includes removal of many of the temporary structures and facilities that were needed only during construction process
  • In addition, owners may require a set of as-built construction documents in either printed or digital format that include all changes made to the project during construction resulting from change orders or other programmatic issues
  • Owners may also require information for ongoing maintenance of building systems such as heating, ventilating, and air conditioning (HVAC) or electrical controls
  • All of these close-out costs are included in overhead expenses

F. Building Codes

Overview:

  • Individual municipalities and governmental agencies have adopted various building codes
  • Many locations throughout United States have adopted International Building Code (IBC) for commercial construction and International Residential Code (IRC) for one- and two-family dwellings
  • Variety of other codes and regulatory agencies’ rules are used for various portions of building process such as structural installation and fire protection

Local Variations:

  • Even though standard building codes exist, local building and zoning commissions may adopt and modify codes to address needs of their residents
  • Building codes and legal requirements may vary from city to city, state to state, and country to country, sometimes in an overlapping manner for various agencies
  • Estimators must remain up-to-date on latest codes and legislation to conform to these requirements

G. Environmental Factors

Climatic Requirements:

  • Protection of surrounding environment are two variables estimators must make allowances for in bidding process
  • Specifications may describe certain climatic requirements that must exist for placement of concrete, masonry, or other materials that may be affected by extremely hot, cold, wet, or dry conditions

Protection from Elements:

  • Protection from elements and/or heated enclosures may be required to allow project to stay on schedule and for building work to continue during inclement weather

Regulatory Agencies:

  • Several United States agencies regulate construction site activities including:
    • Occupational Safety and Health Administration (OSHA): Federal agency established under Occupational Safety and Health Act of 1970 that requires employers to provide a safe environment for their employees. Reviews and monitors safety conditions on construction job sites.
    • Environmental Protection Agency (EPA): Federal government agency established in 1970 to control and reduce pollution in areas of air, water, solid waste, pesticides, radiation, and toxic substances. Monitors effects of project on environment.
    • Office of Federal Contract Compliance Programs (OFCCP): Federal government agency whose mandate is to promote affirmative action and equal employment opportunity on behalf of minorities, women, the physically challenged, and veterans. Monitors federally funded projects to ensure that civil rights laws are being followed.

Cost Inclusions:

  • Estimators must include costs of environmental protection in bids
  • Costs incurred associated with OFCCP recordkeeping, recruitment, and training must be included in job overhead of project being bid

Site Protection:

  • Protection of environment surrounding a construction project may also be noted in specifications
  • For example, silt fence may be required around job site to retain topsoil so it does not erode into stormwater drainage system
  • Job-site visit beneficial for observing conditions that exist and how they might affect work progress and scheduling
  • Additional work may be required to protect environment around work area
  • This additional work could affect work schedules

Governmental Factors:

  • Variety of local, state, and national organizations have developed legislative and industry requirements that affect construction site practices and scheduling
  • Local building codes or ordinances may contain specific limits on various job-site activities
  • State codes may allow work to proceed only when certain conditions exist related to environmental factors
  • For example, many state transportation departments allow certain types of paving to be placed only within certain temperature limits
  • Noise ordinances may exist that restrict high decibel levels during certain times of day or night

H. Value Engineering

Definition: Process whereby owner and contractor agree on changes to original design documents that will result in a comparable finished construction project with some substitutions and cost savings.

How It Works:

  • Allowances defined in construction contract allow for contractor to share in portion of financial benefits derived from their suggested changes to project
  • Changes intended to deliver same results to owner as presented in original documents but through less expensive or more productive method
  • Value engineering allows architects and estimators to work together and design components of structure that may be more efficient and economical
  • Also allows all members of construction team to share in financial gains resulting from agreed-to changes

Design Features:

  • Design features may be changed based on estimator input in value engineering
  • For example, contractor with experience in building retaining walls may review a retaining wall design on particular project and recommend that it could be built with precast concrete sections rather than as cast-in-place concrete
  • Precast sections could be installed more quickly and at lower cost than cast-in-place wall, yet provide same structural benefits
  • Contractor and architect would meet to review potential design changes and cost savings related to this value-engineered change in the design

Timing:

  • Value engineering can be utilized prior to beginning construction or during construction process
  • After contractor selected by owner, design and construction teams will meet prior to beginning construction and review value engineering changes proposed by contractor
  • In some instances, additional value engineering recommendations may be made by contractor during construction process as additional elements of project take place

5. REFERENCE DATA

Overview

Estimators use a vast library of standardized information in the pricing and bidding of materials, equipment, and labor.

Sources

Private Vendors:

  • Many private vendors collect market information and publish reference materials
  • These reference materials include material, labor, and equipment costs that can be combined with quantity takeoff for pricing

Industry Associations:

  • Associations such as American Institute of Architects (AIA) and Construction Specifications Institute (CSI) provide variety of reference materials for building standards and specifications
  • Contractors who have been in business for several years often accumulate their own historical reference data
  • Contractors analyze previously constructed projects to determine costs for labor, materials, equipment, and overhead
  • Historical or third-party reference data may be available and stored digitally or in print form

Printed and Digital References

Content:

  • Many printed and digital references containing tables, charts, and various cost information are available for use by estimator
  • References organized to allow estimator to quickly determine material, equipment, and labor costs in relation to quantity takeoff

Component Costs:

  • Costs priced based on square, cubic, or linear measure, and standard labor rates may be obtained from reference charts and tables
  • Items counted from set of prints can be priced according to component costs
  • For example, structure may contain five Type A windows in west wall
  • Estimator can locate Type A windows in reference material and determine cost per window including material and installation labor
  • Component costs are available for variety of materials such as doors, windows, special fixtures, louvers, and other individual items shown on drawings

Computers in Estimating:

  • Most reference tables and databases are available through Internet
  • Reference tables and databases containing material, equipment, and labor costs can be purchased and integrated into various estimating software packages or spreadsheets
  • Experienced contractors may develop their own digital databases of costs based on historical data obtained through their job-site experiences

Unit Prices

Definition: Unit (crew-based) pricing is calculation of material, equipment, and labor prices in single step based on specific quantity of construction put in place.

How It Works:

  • Labor rates calculated based on standard material quantities, and judgments are made about production levels of labor per material quantity unit based on historical data
  • Items such as concrete flatwork, painting, gypsum board, and flooring are priced according to square foot or square yard

Example:

  • Standard concrete driveway estimate developed by calculating number of square feet of driveway to be placed and finished
  • Area of driveway directly affects material costs for amount of concrete and reinforcement and labor costs for placing and finishing concrete
  • Labor cost for concrete finishing based on number of square feet to be finished is included in reference tables or databases
  • Other materials are unit-priced for labor and materials based on linear feet or other unit-price measures

Databases:

  • Contain similar information for unit pricing as printed references
  • When estimating with computerized system, digital information concerning unit pricing may be calculated automatically by entering dimensions and types of material to be bid

Equipment Rates

Definition: Costs for rental, maintenance, and operations of construction equipment.

Factors:

  • Included in various printed and digital references
  • Rates vary according to equipment availability, volume of construction work in an area, and equipment required
  • These rates can be entered into databases or spreadsheets where necessary

Labor Rates

Sources:

  • Many government organizations and trade associations provide labor rates for various geographic regions
  • Estimators use these resources to determine costs per hour for various construction tradesworkers

Process:

  • After estimator has determined number of work hours required for particular unit price of material from reference tables, wage rates can be added to calculations to determine total labor costs

Example:

  • Reference table may indicate amount of time necessary for carpenter to hang a 3′-0″ metal swinging door in metal frame is 45 min
  • Another reference table is accessed to determine wage and benefit costs for carpenter per hour
  • Multiplication of these two numbers provides labor cost based on these reference tables

Digital Access:

  • Wide range of labor rate information available in digital databases
  • Various services available to download wage rates for different tradesworkers in various locations
  • Adds accuracy to estimate and may be tied directly to estimate spreadsheet or estimating software

Cost Indexes

Definition: A cost index is a compilation of a number of cost items from various sources in a common reference table.

Purpose:

  • Estimators consult cost indexes to obtain information related to current prices and potential changes in construction cost trends
  • A cost index factor is assigned to the cost items so estimator can make necessary adjustments to an estimate to account for potential cost changes

Example:

  • A building may have been constructed in early 2000s
  • When bidding on new building of similar size and construction, original cost of $6.2 million is multiplied by cost index factor to determine approximate cost of similar building today

Categories:

  • Cost indexes divided into broad range of categories including:
    • Construction type (residential, commercial, industrial, etc.)
    • Labor
    • Material
    • Equipment
    • Geographic location

Sources:

  • Sources of cost indexes include various public agencies such as Bureau of Reclamation and U.S. Department of Commerce
  • Many private sources specializing in specific cost indexes such as for industrial buildings, chemical processing plants, reinforced concrete buildings, and other specialty structures

Assembly Costs

Definition: An assembly cost is the price of a number of common construction materials combined into a unit assembly such as wall constructed of studs, top and bottom plates, headers, and strap bracing.

Benefits:

  • Common construction assemblies may be included in databases of estimating software
  • Items such as wall assemblies, floor assemblies and coverings, or ceiling finishes may be taken off and priced as assemblies

Example:

  • Construction assembly may consist of 2×6 studs spaced 16″ on center (OC) with 2×6 top and bottom plates and braced with metal strap bracing
  • Number of linear feet of this wall type is determined by estimator
  • In conjunction with the database, estimating software will automatically determine number of studs, plates, amount of blocking and bracing materials, and labor costs related to each item
  • This greatly simplifies bidding process for standard assemblies

Key Terms to Know

  1. Estimating – The computation of construction costs of a project
  2. Addendum – A change to the originally issued construction contract documents
  3. Bid – An offer to perform construction work at a stated price
  4. Prebid meeting – A conference in which all interested parties in a construction project review the project, ask questions of the architect or owner concerning methods for accomplishing the work, and share information necessary to understand the entire scope of the work
  5. Overhead – Any business expense that is not chargeable to a particular part of a construction project
  6. Cost index – A compilation of a number of cost items from various sources in a common reference table
  7. Estimating practice – The system used to integrate all parts of the estimating process in a cohesive, consistent, and reliable manner to ensure an accurate final bid
  8. Quantity takeoff – The practice of reviewing construction contract documents to determine quantities of materials that are included in a bid
  9. Value engineering – A process in which construction personnel employed by the firm developing the bid, such as project managers and engineers, are allowed to recommend changes to the construction contract documents
  10. Crew-based (unit) estimating – An estimating practice in which material quantities, equipment, and labor costs are included in a single calculation based on a specific quantity of construction put in place

Final Study Checklist

  • Can you explain all four levels of estimates and when they’re used?
  • Do you know the four principles of the systematic approach?
  • Can you list and explain all eight major variables?
  • Do you understand the bidding process from prebid meeting to final bid?
  • Can you identify the three U.S. government agencies and their roles?
  • Do you know the different types of reference data and how they’re used?
  • Can you define all key terms?
  • Have you reviewed all figures and their explanations?