Definition :

Preliminary estimating is the estimated work to determine the cost of a project which
involves the calculation based on the drawings and technical information that analyzed
together

What is important is that the estimates must be as accurate as possible to guide the
developer in preparing the amount money or capital to continue the project.

2.2 THE PURPOSE OF PRELIMINARY ESTIMATING

2.2.1 Knowing the Financial Provisions Of The Employers

Employers will at least get to know the financial provision should be made available to
finance the proposed project. With a cost estimation, the employer can know whether its
financial position needed them to obtain loans with the financial institutions or using
their own capital.

2.2.2 Entering Tender for Contractor

Each contractor organization must have a clear knowledge and a logical approach toassess
the cost banguanan. Which they estimate cost is the price they ask for atender . Apart from
obtaining work, the estimate is to make sure that the contractor will get the profit.

2.2.3 Member of Consultant in Building Designing

Members of the consultant such as architect, Quantity surveyor, engineers and others will work to ensure
that the design and the price is always controlled and balanced. This will ensure that employers will make
a profitable investment in terms of design and expense.

2.2.4 Knowing The Investment Return to Developers

The developer that planning a project typically want to know the rate of investment return must
exceed the costs. The rate of return must excess 25% to be considered as a viable project

2.2.5 As a Guidance to the Financial Institutions

Financial institutions usually want to know the estimated cost of the project will be funded by them. The
Financial institutions will only finance the projects that are viable .Therefore the estimated cost and
returns are the subjects that will be analyzed for all projects to be funded.

2,2.6 Entering Tender By Sub Contractor to the Main Contractor

The main contractors often submit some work for small contractors to fully implement its work on the
site. Therefore the small contractors should also have the knowledge to estimate the cost of the
building like the main contractor does.

2.2.7 Knowing The Percentage and Fraction of prices for Building Work Element

The cost of the building is a combination of fraction cost that include the cost of materials, labor,
plant and liabilities of the company. All these costs can be split down to the costs, such as the
following elements:
piling
frame
wall
stairs
roofs
Buildings facilities
the out-side building works

2.2.8 Analysis of costs and design for future information

All information obtained can be used as a useful information for estimation work for the future
project.

2.3 UNIT VALUATION METHOD

Unit valuation is the most simple initial estimation , easy and rough, and gives the
price of the least accurate valuation compared to the other methods.

This method takes into account the number of units building content to be built . For
example, school buildings, contents to be considered is the number of chairs, tables, or the
number of students. Hospital to take into account the number of patients beds. Hostels takes
into account the number of beds or number of students. This method is used when a proposed
project known the unit content and the price per unit for buildings that have been completed