DR SHAIFUL AMRI

FKA UTM SKUDAI

1
Principles of Analytical Estimating
To analyse something is to break it down into its
constituent parts and study each part in detail.
Therefore analytical estimating involves the
analysis and costing of construction resources to
produce an estimate.
The production of an estimate normally involves
the calculation of unit rates i.e. the cost of a
square metre of brickwork, a cubic metre of
concrete or a metre of skirting (as found in a Bill
of Quantities).
DR SHAIFUL AMRI
FKA UTM SKUDAI
2
Analytical estimating is therefore the most
accurate form of estimating as each resource
and unit rate is analysed and costed
individually. This form of estimating is used for
pricing contracts with bills of quantities,
specifications and drawings or where the
contractor has measured and prepared their
own quantities of work.
DR SHAIFUL AMRI
FKA UTM SKUDAI
3
Tukang
Skilled workers; craftmen; highly paid per hour
Kepala (Mandur)
Leader in the subcontracted work
General labour
Angkatap buruh
Rate of doing certain type of work (e.g. hour per
meter
3

requires determining the number of labor
hours to do a specific task and then applying a
wage rate.
1 labor hour = 1 labor working 1 hour
requires knowing the quantity of work to be
placed and the productivity rate for the
specific crew.
The productivity rate is often expressed as a
number of labor hours per unit of work.
DR SHAIFUL AMRI
FKA UTM SKUDAI
4
The productivity rates can come from a
number of sources, but the most reliable
source is historical data. The advantage of
historical data is that it reflects how a
particular companys personnel perform the
tasks.

Productivity rate = Labor hours Quantity of work
Example of good historical data:

Type of work 8'' 8'' 16'' Concrete Masonry Units
(CMUs)
Quantity of work1,700 square feet
Labor costRM6,987
Labor hours170 labor hours
Productivity rate = 170 labor hours 1,700 ft
2

= 0.1 labor hours per sf

DR SHAIFUL AMRI
FKA UTM SKUDAI
5
How to apply?

Labor hours = Quantity takeoff x Productivity rate

The productivity rate derived from historical data is for the
average or standard conditions
On many occasions, the project that is being bid deviates from
these standard conditions.

Adjusted labor hours = Labor hours x Productivity factor
Variables for Productivity Factor
Availability and Productivity of Workers
Number & skill factors
Climatic Conditions
Cold, hot, winds, rain, snow, etc.
Working Conditions
working space, storage space, high-rise etc.
Efficiency
averaged 30 to 50 minutes per hour
DR SHAIFUL AMRI
FKA UTM SKUDAI
6
Once the average crew wage rate has been
found, it can be multiplied by the number of
labor hours to determine the labor costs

Labor cost = Adjusted labor hours x Weighted average
burdened wage rate
In addition to the actual cost of the material the
estimator must also consider:
Transportation costs
Unloading and Stacking costs
Materials movement on site
Extra Materials to compensate for:
Wastage; Allowance in BQ; Loss in consolidation,
shrinkage etc.
DR SHAIFUL AMRI
FKA UTM SKUDAI
7
The equipment must pay for itself.
If the cost can be charged off to one project or
other proposed uses of the equipment, it will
pay for itself and should be purchased.
For example, if a piece of equipment costing
$15,000 but will save $20,000 on a project, it
should be purchased
For idling plants (a few weeks):
1. What will be done with it?
2. Will it be returned to the storage/garage?
3. Is there room to store it on the project?
4. If rented, will it be returned so that the rental
charge will be saved?
DR SHAIFUL AMRI
FKA UTM SKUDAI
8
Non-Mechanical Plant
Basic items of plant including wheel-barrows,
hosepipes, spades, trestles, scaffolding, small
powered hand tools etc
With the exception of scaffolding and one or two
other items it is virtually impossible to allocate the
cost of non-mechanical plant items to a contract,
let alone to a specific unit rate (e.g. mostly may be
used on several contracts in its lifetime).
Non-Mechanical Plant
The cost may be included in overhead charges as a
percentage, as a lump sum in the preliminaries bill
or, more accurately, on longer contracts a list of
non-mechanical plant items is prepared, costed
and included in the contract sum.
DR SHAIFUL AMRI
FKA UTM SKUDAI
9
Non-Mechanical Plant
Peranca (scaffolding)
Kain terpal (trapauline)
Kotak pengukur (gauge boxes)
Tangga (ladders)
Kereta sorong (wheel barrows)
Perkakas (tools)
Pelentur besi (bending machine)
Mechanical Plant
Equipment that is required throughout the project
is included under equipment expenses, because it
cannot be charged to any particular item of work.
(e.g. material-handling JCB and forklifts.)
Mechanical plant such as excavators, lorries,
dumpers, mixers, etc. can be very expensive.
Contractors may buy, hire or lease.
The purchase of plant must be viewed as an
investment on which a return is required.
DR SHAIFUL AMRI
FKA UTM SKUDAI
10
Mechanical Plants
Lorry
Excavator
Bulldozer
Concrete mixer
Vibrators
Compressors
Rollers
Possible costs
cost of hiring or depreciation
maintenance & repair
fuel
operator & labor costs

DR SHAIFUL AMRI
FKA UTM SKUDAI
11
The amount of money added to the total
estimated cost of the project.
Determined by a number of factors largely
outside the remit of an estimator. However, in
larger companies the senior or managing
estimator may be a member of the
management team. In smaller companies, the
estimator may be a director. In both cases
they may make commercial decisions
regarding profit margins.
DR SHAIFUL AMRI
FKA UTM SKUDAI
12
Factors affecting profit levels are:
Market forces of supply and demand
Amount of competition
Who the competitors are
Size / Value of contract
Risk involved in contract
Interest rates.
A few typical approaches are listed as follows:
1. Add a percentage of profit to each item as it is
estimated, allowing varying amounts for the
different items; for example, 8 to 15% for
concrete work, but only 3 to 5% for work
subcontracted out.
DR SHAIFUL AMRI
FKA UTM SKUDAI
13
A few typical approaches are listed as follows:
2. Add a percentage of profit to the total price
tabulated for materials, labor, overhead, and
equipment. The percentage would vary from
small jobs to larger jobs (perhaps 20 to 25%
on a small job and 5 to 10% on a larger one),
taking into account the accuracy of the takeoff
and pricing procedures used in the estimate.

Look at the profit then discuss the risks.
It is far better to bid high enough to cover the
risks than to neglect the risks, bid low, and
lose money. Sometimes a tendency to need
or want a job so badly that risks are
completely ignored. If a project entails
substantial risk and profit is questionable, do
not bid.
Remember, construction is a business..