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Estimate
Cambridge International Dictionary of English, 1995 - an approximate calculation or judgment of the size, value, amount, cost, etc. of something. Pulver J. E. - a calculation process of quantity and various items cost in construction works. Approximate cost : Prediction cost & not an actual cost.

Cost Estimating

Estimate
A process to determine the building cost value and also very important to the client during preparing the budget allocation and, as a control system for the company cash flow.

Cost Estimating
Is the area of construction or engineering practice where personal experience and judgment are utilized in the application of scientific principles and techniques problems of cost estimating, cost control, business planning and management science.

Cost Estimating
Final cost data Price = cost + profit

Purposes of Estimating
Basic to construction prediction cost at the early stage and will influence the client decision. To ensure that the development cost is not exceed the client budget allocation. To obtain approximate project cost during tender process.

Eperience
Based on role of thumb

Judgment
Shall be a good judgment

Scientific Knowledge
Cost operation Construction/building components/elements operation

Management Science
Planning & scheduling

Business plan

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Preparing the Estimate

Estimate - A quantitative assessment of the likely amount or outcome. Usually applied to project costs, resources, effort, and durations and is usually preceded by a modifier (i.e. preliminary, conceptual, order of- magnitude, etc.). It should always include some indication of accuracy (e.g. + x percent). (Source: PMBOK Third Edition) Cost Estimate - A prediction of quantities, cost, and/or price of resources required by the scope of an asset investment option, activity, or project. As a prediction, an estimate must address risks and uncertainties. Estimates are used primarily as inputs for budgeting, cost or value analysis, decision making in business, asset and project planning, or for project cost and schedule control processes. Cost estimates are determined using experience and calculating and forecasting the future cost of resources, methods, and management within a scheduled time frame. (Source: Copyright 2007, AACE International, Inc., AACE International Recommended Practices, Number 10S-90)

Preparing the Estimate

Important Criteria in Estimation.
Allocation of time Estimate precision depend on the estimate purpose Obtained information Experience

Procedures
1. Based on drawings refer and query 2. Site visit surrounding area 3. Quotation for materials rate from supplies

Methods of estimating
Unit Evaluation Volumetric Floor Area Approximate Value Quantity Bills of Quantities Elemental Cost Analysis

Unit Evaluation
The simplest method Less of accuracy Application
Determine the standard unit for each type of the building and multiply with the cost rate per unit. Hospital

Unit Evaluation
Type of Building Standard Unit The number of patient bed The number of parking lot The number of room The number of student The number of seating

Parking Space Hotel School Cinema

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Example
The hotel construction client needs 200 rooms Construction cost for the approximate number and area of room is RM50,000,000 with 275 rooms. So, cost for each hotel room: = RM50,000,000 / 275 = RM181,818.18 per room Therefore, cost for 200 hotel rooms which are needed by client: = 200 x RM181,818.18 = RM36,363,636.36

Measurement method
Total Unit x Cost per unit = Project Cost Estimate

Advantages
Fast and simplest estimating. Suitable for initial stage before drawings are prepared.

Disadvantages
Do not display the actual shape of the building. No consideration on location, project size, construction method, etc.. Not suitable for the building with an unique design.

Volume
Usually used:
Time to prepare the estimate is limited

Volume Method Formula

Length x Width x Height Gross Cost Estimate obtained by multiplying the building volume with building cost rate per m3.

Example
The building cost rate depends design, type, function, etc.. Different usage of room need to be separately measured. The length and width dimension must be measured from the outer surface of the brickwall (plus the brickwall thickness). In drawing, any dimension always appear at center-to-center = c/c. All dimensions in C/C. Science Lab Drawing Brickwall thickness = 336mm. Cost rate for the similar science lab = RM145/m3

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Example

Volume
Length (l) x Width (w) x Height (h) =[10+2(0.168)] x [42+2(0.168)] x [1.20+4.00+1/2(3)] = 10.336 x 42.336 x 6.700 = 2931.818 m3

3000

10000

4000

42000
1200

10000

Cost Estimating
Volume x cost per meter cubic (m3) = 2931.818 m3 x RM145/m3 = RM425,113.61

The Usage
At the scheme drawing stage. Need to be compared with other methods.

Advantages
Fast and Easy to use. Precisely accurate if we using the 100% in all aspects similar project - the cost/m3.

Disadvantages
Factors such as techniques of construction, building design, materials not been considered during estimating. Data must be similar in term of the building characteristics if not, cost estimate must be reviewed. The building storey is also not been considered. Cost/m3 will give inaccurate cost data to the client cost estimate.

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Floor Area
Practically used in Malaysia. Example of project cost must be similar in terms of design and construction method.
Total cost = Floor Area (m2) x RM/m2

Floor Area
PWD stages for floor area method
1. Preliminary Detailed Abstract (PDA) 2. As Tendered Detail Abstract (ATDA) 3. As Completed Detailed Abstract (ACDA)

To measure
Measure the length and width of the floor. Cost per meter square could be different for each floor area. Lift area, staircase and other voids will not be deducted during the floor area measurement. Area formula

Example
= Length (l) x Width (w)

Area:
= [10+2(0.168)] x [42+2(0.168)] = 10.336 x 42.336 = 437.58 m

Cost Estimate
Area x Cost/m2 = 437.588m x RM145/m = RM63,450.26

Advantages
Precise and fast doing. Cost reference for architect to create next design. Easy to understand and have the interrelationship with the building design components.

Disadvantages
Have difficulty during cost adjustment - building shape and height. Data shall be referred to a very similar building type. The building height is not been considered.

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Approximate Quantity
Work components will be abstracted from drawing and evaluate based on each material price. To complete the measurement and estimating, all work components cost will be added together.

Measurement
Measurement Guidelines: a) Identify all construction items.

b) Small items stated as allowances.

e) Combination of items with a similar quantity.

c) Measure to the nearest 100mm. d) State all the measured items to ensure that all items cost have been considered.

-Brickwall brickwall, plastering and painting.

-Floor valuate in m2 including concrete slab, water proof layer, finishes, rebar and formwork.

The usage
f) Item unit in number (No/Nos) such as door, frame and ironmongery.

Cost estimate is prepared and used after tender drawings are completed by an Architect. In tender drawings, all materials were been identified and as major reference to other design teams.

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Advantages
Better method all items have been identified. All factors been considered shape, size, height and specification.

Disadvantages
Based on data volume. Need a longer time to prepare the estimating.

BQ
Very accurate method All item of works is gathered with the cost rates. Take a longer time in preparing the BQ.
Item

Example
Huraian (Description) Unit Kuantiti (Qty.) Kadar Harga (Rate) (RM) 2.00 Jumlah (Amount) (RM) 800.00

A More discussion in Quantity Measurement Topic.

Pengorekan peparit untuk kerja asas jalur tidak melebihi 1.50m dari aras tanah hingga ke aras laras, tanah selebihnya dibuang daripada tapak bina.

m3

400

Building Elements
Substructure
Piling Work Below Lowest Floor Finish (WBLFF)

Finishes
Internal Wall Finishes Internal Floor Finishes Internal Ceiling Finishes External Finishes

Superstructure
Frame Upper Floor Roof Stairs External Wall Windows and External Doors Internal Wall and Partitions Internal Doors

Fittings and Furnishings Services

Sanitary Appliances Plumbing Installations Air Conditioning System Electrical Installation etc.

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Elemental Cost Analysis

External Work
Earthwork Drainage Road Works Parking Landscaping etc.

Based on project elements Applied by JKR, ISM, CIDB and etc..

ECA Definition
as a systematic breakdown of the cost of a building to a Client into various building/construction elements in terms which are meaningful to both the Client and the members of the Design Team. (ISM)

Aims of the ECA H. Seeley

To enable the Design Team to determine how much had been spent on each building element. To assess whether a balanced distribution of costs have been achieved amongst the various elements of the building To provide comparison of costs of the same elements that may be used in different buildings To obtain cost data for use in the cost planning for other projects.