To know in advance the expected

cost in varying degree of accuracy,

at different phases of the project.


1. Making investment decision in
the conceptual stage.
2. Negotiate and finalize the
contract at the implementation
phase.
3. To implement cost control
measures.


1. Determine project cost and
profit.
2. To Implement cost control
measure.
3. To develop data base for that
can be used for future project.


1. Provide the owner with
probable estimate.
2.

Evaluate alternatives.

Contractors Estimator
Determines actual cost
of project for bidding
purposes.
Has detailed company
cost data for labor and
equipment.
Knows which
construction methods
are to be used.
Has knowledge of actual
materials suppliers to
be used and quantity
discount prices.

Engineers Estimator
Determines expected
cost.
Does not know who will
receive award, therefore
does not know
contractors exact
resource costs. Does not
know actual labor rates.
Must assume probable
construction methods to
be used.
Does not know who
project supplier will be.
Must use local list prices.


1. Preliminary
2. Unit price
3. Assembly or Conceptual Cost
4. Detailed estimate
2 Million dollars building
Accuracy
within
20%
15%

Preliminary
Unit Price

10%
5%

Assembly
Detailed
Time

5min 1hour 1day

3 weeks

Each phase of a project life cycle requires a

different type of estimate--each estimate
requires different types of information.

A cost prediction based solely on size

and/or capacity of a proposed project.
Before any engineering or design is
completed.
Rely on broad data from already
executed similar project
relate cost in dollar to the main
capacity/size parameter
number of beds in hospital
square feet of office space
number of students in school


Advantageous
Allows a quick determination of the
feasibility of a project
A quick screening on alternatives, etc. (e.g.,
should it be a concrete building or a steel
building !).

Purpose:
1. Ranking alternatives
2. Evaluate economics and financial feasibility
3. As a check on more detailed estimates


Parking Garage
$15.0/sq. ft or $4500/parking space

High School
$80 to 110/sq. ft or $40,000/ student
seat

Medical Centers
$90 to 130/sq. ft


Unit prices are obtained from data on
projects already performed.
Cost of labor, material, and equipment for
all units of work are added together and
divided by the number of units involved.

___________________________________________________________
_
Work Item
Estimated Quantity Unit Price
Total
___________________________________________________________
_
Site Preparation
50,000 sq. yd
$7
$ 350,000
Earth Excavation
100,000 cu.yd.
$ 12
$ 1,200,000
Paving
50,000 sq.yd.
$8
$
400,000
Total bid price
$
1,950,000
___________________________________________________________


Performed when conceptual design decisions
are being made.
Work package concept can be used to
determine the element or assembly to be
studied
We need a breakdown of cost of a completed
project into its functional elements to:
1. Find the relationship between element cost and project
cost
2. Distribution of cost between constituent elements (sq.
feet of _____)

Elemental Estimate Analysis

Gross floor Area = 250,000 ft2


Prepared after drawings and
specification are completed.
Requires a complete quantity takeoff
based on drawing and the complete
set of contract documents
Need information on labor rate
"productivity", material cost, cost of
renting or purchasing equipment

1. Time
We base our estimate on the cost of existing
projects that were built in the past
Price-level changes over time
We need to project costs of future projects
Many organizations publish construction cost
data on regular basis:

US Department of Commerce
US Department of Labor
ENR
Turner Construction Company
Handy-Whitman Utilities


Cost Indices
Published by R.S. Means and ENR
Used to update old cost information
Uses
1. To update known historical costs for new estimates
2. To estimate replacement cost for specific assets
3. To provide for contract escalation

Limitations
1. They represent composite data, average of many
projects.
2. They fail to recognize technological changes.
3. There is a reporting time log.

To update old cost information to current date

new cost
cost of new facility = cost of old facility
x index
old cost index
To predict future cost
n
F = P (1 + i)
F = future cost
P = present cost
i = predicted rate of cost escalation per
period
n = number of periods (years)


Some factors affecting cost in
different locations are:
1. Transport cost
2. Taxes
3. Labor supply and local
productivity
4. Codes and local inspection
Construction costs also vary in
different regions of the USA.
ENR and Means publishes periodically
the indices of local construction costs
in the major cities.


ENR Regional Index
City

Cost Index

Boston
1120
Chicago 1400
New York 1700


As the quantity built increases, the
unit cost decreases,
Size

Proposed Size
FactorComparison
=
Size

UCM = Unit Cost Multiplier

E-1

UCM = SF

Use This Side for

Unit Cost Multipliers
(UCM Method)

Buildings
1.175
1.128
1.096
1.072
1.052
1.036
1.023
1.011
1.000
0.991
0.982
0.974
0.967
0.960
0.954
0.948
0.943
0.938
0.933
0.928
0.924
0.920
0.916
0.912
0.909
0.905
0.902
0.899
0.896
0.893
0.890
0.887
0.885
0.882
0.880
0.877
0.875
0.873
0.871

Complex
Projects
1.904
1.619
1.443
1.320
1.227
1.153
1.093
1.043
1.000
0.963
0.930
0.900
0.874
0.850
0.829
0.809
0.780
0.774
0.758
0.743
0.730
0.717
0.705
0.693
0.682
0.872
0.662
0.653
0.644
0.636
0.628
0.620
0.613
0.606
0.599
0.593
0.586
0.580
0.574

Use This Side for

Total Cost Multipliers
(TCM Method)
Project
Size
Factor
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
2.0
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
3.0
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
4.0

Buildings
0.235
0.338
0.438
0.536
0.631
0.725
0.881
0.910
1.000
1.090
1.178
1.266
1.354
1.440
1.527
1.612
1.697
1.782
1.866
1.950
2.033
2.116
2.199
2.281
2.363
2.445
2.526
2.607
2.688
2.768
2.849
2.929
3.008
3.088
3.167
3.246
3.325
3.404
3.482

Complex
Projects
0.381
0.486
0.577
0.660
0.736
0.807
0.875
0.939
1.000
1.059
1.116
1.170
1.224
1.275
1.326
1.375
1.423
1.470
1.516
1.561
1.605
1.648
1.691
1.733
1.774
1.815
1.855
1.894
1.933
1.972
2.010
2.047
2.084
2.121
2.157
2.192
2.228
2.263
2.297


Unit Price Cost Multiplier
(UCM)

2.000
1.500
1.000
0.500
0.000
0.1

1.0
Size Factor
Buildings

Complex Projects

10.0

Total Project Cost Multiplier

(TCM)

4.000
3.500
3.000
2.500
2.000
1.500
1.000
0.500
0.000
0.1

1.0
Size Factor
Buildings

Complex Projects

10.0


40
Bldg B
Area
=1500ft2
Perimeter
=
150ft
15
15
10

30

Bldg A
Area
= 15ooft2
Perimeter
= 160ft

40

50

Wall height = $10 x 160 x 10

= $10.00 of floor area
Bldg. A
Wall cost = $10 x 160 x 10
= $10.00 of floor area
Bldg B
Wall cost = $10 x 180 x 10
= $11.25 of floor area

= $16,000

= $16,000

= $18,000


Increased productivity by doing
repeated work.
Detailed analysis will be discussed
later.


Hard to quantify but should be
evaluated
Quality
Soil condition
Weather Condition
Competition
Productivity