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For the contractor who is new in the construction business, the decision whether to rent or purchase equipment is usually quite easy to make because, lacking surplus cash and without a well-established credit rating, the only viable alternative is renting.

For the older, more mature construction business, the decision may be a great deal more difficult. This contractor, who is more likely to be in a position in which funds and credit sources are available for equipment investments, has to determine if such investments are justified. Buying construction equipment is justified only where the investment promises net benefits in comparison with the alternative of renting equipment and investing the cash elsewhere.

A contractor does not necessarily have to own any construction equipment in order to carry on business. In most parts of the country there are many companies in the construction equipment rental business offering competitive rental rates on a large selection of equipment. There can be distinct advantages to renting equipment, including:

1. The contractor does not have to maintain a large inventory of specialized plant and equipment where individual items are used infrequently.
2. The contractor has continuous access to the newest and most efficient items of equipment available.
3. There is little or no need for equipment warehouse and storage facilities.
4. There is a reduced need for the contractor to employ maintenance staff and operate facilities for their use.
5. Accounting for equipment costs can be simpler when equipment is rented.
6. There may be significant savings on company insurance premiums when a contractor is not maintaining a inventory of plant and equipment.

However, when the construction operations of a contractor generate a steady demand for the use of certain items of equipment or plant, there can be distinct financial benefits gained by owning equipment. There can also be a marketing advantage to the contractors who own their own equipment due to the perception that these contractors are more financially stable and committed than others who own no equipment. In fact, some owners require contractors who bid on their projects to list on the bid the company-owned equipment they propose to use in the work. This information is utilized in the owner’s assessment of the bidder.

Where a comparison of equipment ownership with the rental alternative strictly on the basis of cost is needed, the full cost per unit of time of owning an item of equipment has to be determined. To estimate the full ownership cost, the following aspects of equipment ownership have to be considered:

1. Depreciation expense
2. Maintenance and repair costs
3. Financing expenses
4. Taxes
5. Insurance costs
6. Storage costs
7. Fuel and lubrication costs

Depreciation

In everyday usage the term “depreciation” refers to the decline in market value of an asset. To accountants the term has a more narrow meaning having to do with allocating the acquisition cost of an item of plant over the useful life of that asset. The way this allocation of cost is calculated may or may not reflect the loss of market value; more often than not it does not. Also, the allocation of depreciation costs considered here is not related in any way to tax considerations. For tax purposes a completely different depreciation schedule may be adopted.

The process of allocating the cost of the item over its useful life is known as “amortization,” and there are several depreciation methods available to calculate amortization of an asset. Here we will consider three methods:
1. The straight-line method
2. The declining-balance method
3. The production or use method

Maintenance and Repair Costs

The costs of maintenance and repairs of plant and equipment comprise a factor that cannot be ignored when considering ownership costs. Equipment owners will agree that good maintenance, including periodic wear measurement, timely attention to recommended service, and daily cleaning when conditions warrant it, can extend the life of equipment and actually reduce the operating costs by minimizing the effects of adverse conditions. All items of plant and equipment used by a construction contractor will require maintenance and probably also some repairs during the course of their useful life. The contractor who owns equipment usually sets up facilities with workers qualified to perform the necessary maintenance operations on equipment. It is the cost of operating this setup that we have to consider and include in the total ownership charges applied to items of plant and equipment.

Construction operations can subject equipment to considerable wear and tear, but the amount of wear varies enormously between different items of equipment used and between different job conditions. The rates used in the following examples are based on the average costs of maintenance and repair, but since these costs can vary so much, the contractor formulating equipment operating prices should adjust the rates for maintenance and repairs according to the conditions the equipment is to work under. Again, as in many places in estimating, good records of previous costs in this area will much improve the quality of the estimator’s assessment of probable maintenance costs.

Maintenance and repair costs are calculated as a percentage of the annual depreciation costs for each item of equipment. When depreciation is calculated using the straight-line method, as in the examples 6 and 7 that follow, the result is a constant amount being charged yearly for depreciation and then a second constant amount is allowed for maintenance and repairs. Realistically, depreciation will be high in the early years of ownership, while actual maintenance and repair costs in these years should be low. The relative values of yearly depreciation and maintenance costs will gradually reverse until, in the later years, low depreciation will be accompanied by high maintenance and repair bills. Using a constant amount yearly for these two expenses, therefore, would seem reasonable as the variance of one factor is offset by the countervariance of the other factor.

Financing Expenses

Whether the owner of construction equipment purchases the equipment using cash or whether the purchase is financed by a loan from a lending institution, there is going to be an interest expense involved. The interest expense is the cost of using capital; where cash is used, it is the amount that would have been earned had the money been invested elsewhere, that is, the forgone interest revenue. Where the purchase is financed by a loan, the interest expense is the interest charged on the loan. In both cases the interest expense can be calculated by applying an interest rate to the owner’s average annual investment in the unit. The average annual investment is approximately midway between the total initial cost of the unit and its salvage value.
Thus:
average annual Investment = (Total Initial Cost + Salvage Value)/2

The interest rate used to calculate the financing expense will vary from time to time, from place to place and also from one company to another depending mostly on its credit rating and how good a deal it can get from the lending institution. In the examples that follow, we will use a rate of 6%.

Taxes, Insurance, and Storage Costs

Just as with investment expenses, significant variations can be expected in the cost of the annual taxes, insurance premiums, and storage costs together with fees for licenses required and other fees expended on an item of equipment. Where these expenses are known, they should be added into the calculation of the annual ownership costs of the equipment. In the case where information on these costs is not available, they may be calculated as a percentage of the average annual investment cost of the piece of equipment. The interest expense rate and the rate for taxes, insurance, and storage costs are often combined to give a total equipment overhead rate. Below we will use an equipment overhead rate of 11%, which comprises 6% for the investment rate and 5% to cover taxes, insurance, and storage costs.

Fuel and Lubrication Costs

Fuel consumption and the consumption of lubrication oil can be closely monitored in the field. Data from these field observations will enable the estimator to quite accurately predict future rates of consumption under similar working conditions. However, if there is no access to this information, consumption can be predicted where the size and type of engine are known and the likely engine operating factor is estimated. This operating factor is an assessment of the load under which the engine is operating. An engine continually producing full-rated horsepower is operating at a factor of 100%. Construction equipment never operates at this level for extended periods, so the operating factor used in calculating overall fuel consumption is always a value less than 100%. The operating factor is yet another variable with a wide range of possible values responding to the many different conditions that might be encountered when the equipment under consideration is used. In the examples that follow, the specific operating factors used can be no more than averages reflecting normal work conditions. Again, there is no good substitute for hard data carefully obtained in the observation of actual operations in progress.

When operating under normal conditions, namely, at a barometric pressure of 29.9 in. of mercury and at a temperature of 60ºF, a gasoline engine will consume approximately 0.06 gallons of fuel for each horsepower-hour developed. A diesel engine is slightly more efficient at 0.04 gal. of fuel for each horsepower-hour developed.

Equipment Operator Costs

Whether a contractor decides to rent or own the equipment used on its projects, the cost of operating the equipment has to be considered. In some situations rentals may be available that include an operating engineer as part of the rental agreement. This variety of rental agreement is sometimes available for excavation equipment, and it can be a preferred alternative when the rental company offers a high-caliber equipment operator who is familiar with the particular excavation unit and is capable of high productivity.

More often than not, however, equipment is rented without an operator. So, just as in the case in which the contractor is using company-owned equipment, the labor costs for operating the equipment have to be calculated and added to the estimate. The usual way to price these costs is to apply an operating engineer’s hourly wage alongside the equipment hourly rate and then use the expected productivity of the equipment to determine a price per measured unit for labor and a price per measured unit for equipment. Example 5 illustrates this method of pricing equipment and operator’s costs. Note that the unit prices for labor and for equipment should always be considered separately as the labor prices have to be included in the total labor content of the estimate so that “add-ons” can be applied to this amount at the close of the bid.

Example:

Where the hourly cost of an excavator is $172.00, the wage of an operator for this equipment is $40.00 per hour, and the expected productivity of the excavator is 50 cu. yd. per hour, the unit prices for labor and equipment would be calculated thus:
Labor
$40.00/50 cu. yd.
= $ 0.80 per cu. yd.

Equipment

$172.00/50 cu. yd.

= $ 3.44 per cu. yd.
These unit prices can now be applied to the total quantity of excavation that this equipment is expected to perform in accordance with the takeoff.

Company Overhead Costs

Where the equipment ownership costs calculated in accordance with this chapter are to be used as a basis of rental rates charged by the contractor to others for the use of the contractor’s equipment, the full rental rates should include an amount for company overhead costs and amount for profit. Company overhead costs are basically the fixed costs associated with running a business. They may include the cost of maintaining a furnished office, office equipment, and personnel together with all the other costs of business operation. Since the rental rate quoted by a contractor to another party for the use of the contractor’s equipment is, in a sense, a kind of bid, the same considerations should be applied to the markup on the rental rate as are applied to markup on any of a contractor’s bids.

Preparing a quantity takeoff of concrete work requires the estimator to measure a combination of items—some of which are shown on the drawings, while others are to be inferred from the drawings. When drawings are well prepared, items of concrete such as footings, walls, and columns are clearly shown, but nowhere on the drawings will the estimator find details of the formwork required for this work. The assessment of formwork requirements will be based on the estimator’s knowledge of what is required for each of the different concrete components.

Because the concrete is detailed on the drawings, it makes sense to begin the takeoff by measuring the volume of concrete in an item. Then, after the concrete dimensions are defined, consider the formwork requirements, followed by the finishes that are needed and so on. Also, in accordance with the basic principles previously discussed regarding taking off by assembly, a good practice is to measure all work associated with one concrete assembly before passing on to consider the next assembly.

For example, if there are concrete footings, walls, and columns to consider on a project, we would begin with the footings. First we would ascertain the dimensions of footing concrete from the drawings, then reuse these dimensions to calculate the area of formwork and the length of keyway required and conclude this assembly by measuring anything else associated with the footings. After the work on the footings is measured, we would turn our attention to the walls and measure all the items associated with them. Finally, we would deal with the columns in the same way.
 

This approach allows the estimator to focus on one piece of work at a time and fully understand all of its requirements before moving on to the next item. Alternative approaches such as measuring all the concrete volumes and then all the formwork areas require the estimator to be constantly jumping about from one type of item to another. He or she may have to come back to footings three or four times with this method, which is not an efficient way to proceed.

Concrete Measuring Notes

In general:
1. Concrete shall be measured in cubic yards net in place. Calculate the volume of concrete from the dimensions given on the drawings with no adjustment for “add-on” factors. Additional material required because of spillage, expanding forms, and wastage will be accounted for later in the pricing process by means of a waste factor added to concrete items.

One exception to this general rule applies to the situation where concrete is placed on rock or shale. In this case, the “overbreak” in the excavation is generally required to be filled with concrete and, as this volume will not be indicated, the estimator will have to add an assessed amount to the quantity of concrete to allow for this “overbreak.”

2. Do not adjust the quantity of concrete for reinforcing steel and insets which displace concrete. Also, do not deduct for openings in the concrete that are less than one cubic foot (0.05 cubic meters) of volume.
 

3. Classify concrete and measure separately in the following categories:

a. Underpinning
b. Pile caps
c. Isolated footings
d. Continuous footing
e. Retaining walls
f. Grade beams
g. Columns and pedestals

h. Beams
i. Slabs on grade

j. Suspended slabs

k. Floor toppings

l. Stairs and landings

m. Curbs

n. Manholes

o. Equipment bases

p. Roads

q. Sidewalks

r. Other structures not listed

4. If different mixes of concrete are used in any of the categories listed in item 3, measure each mix separately. For instance, where different strengths of concrete are specified for columns on a project, separately calculate the quantity of concrete for each type of concrete in columns (Figure 1). Often on a project all the concrete for a certain use, for example footings, is specified as the same mix, in which case there is no need to note the mix on the takeoff as it will not have to be considered until the recap and
pricing stage is reached.
 

Mixes are further complicated by the different types of cement that could be specified. For instance, concrete in contact with soil may have to be made with type V, sulfate- resisting cement. Furthermore, air entrainment may or may not be required, to say nothing of super- plasticizers. The many combinations of variables result in a multitude of possible concrete mixes. To simplify the pricing of concrete, the items listed on the recap are priced  for the cost of placing (labor and equipment) only. A separate list of the amounts of the various mixes is prepared, and against each item on this list the price of the particular mix of concrete is entered.

5. Where columns and walls extend between the floors of a building, measure these components from the top of the slab below up to the under surface of the slab or beam above.

6. Beams may be measured separately from slabs, but if they are to be poured monolithically with the slabs, the quantity of concrete in the beams should be added to the slab concrete for pricing.

 

Certainly the fastest, and probably the most accurate, way to calculate volumes of cut and fill over a site, when true scale drawings are available, is to use an electronic digitizer in conjunction with a software program specifically for this type of application. Here we consider an alternative “manual” method of obtaining the quantities of cut and fill called the “grid method.”
 

From here on, cut calculations are separate from fill calculations. To figure the volume of cut at an intersection point, the depth of cut at this point is multiplied by the area “covered” by that intersection point. Then, adding together all the individual cut volumes computed in this way will give the total volume of cut on the site. Following the same process using the fill depths will establish the individual and total fill volumes for the site. The area “covered” by an intersection point means the area that point applies to, as shown in Figure 1.
 

The accuracy of this method of calculating cut and fill volumes depends on the grid spacing; generally, the closer the grid spacing, the more accurate the results are.

Detailed Discussion

The use of the “grid method” to calculate volumes of cut and fill requires the estimator to consider the depth of cut or fill at each point where the grid lines intersect (station) on the survey grid and then determine the “area covered” by that station.

At each station on the grid, the elevation of the existing grade obtained from the site survey is noted in the top right quadrant. The elevation of the required new grade is noted in the top left quadrant. The difference between these grades gives the depth of fill or cut at this location. If it is a fill, the depth is noted in the bottom right quadrant; if a cut, the depth is noted in the bottom left quadrant.
 

Consider the accompanying survey grid. If the areas formed by the grid lines are “A” square feet, the “area covered” by point 1-A is one quarter of area “A,” but point 1-B applies to two areas so the “area covered” by this point is two quarters of area “A,” and so on as shown. The number of quarters of area “A” that the station point applies to is labeled the “frequency” when tabulating this data.

However, a closer grid spacing leads to more calculations and a longer processing time. As this process is very repetitive, the processing time can be much reduced by using a computer program to perform the calculations. Please see Figure 2 for a complete calculation of volumes of cut and fill over a site using this “grid method” with a computer spreadsheet program.

The method presented in this article can also be performed very effectively in MS Excel program.

The formwork operations involve a number of activities including fabricating and erecting the forms, stripping, moving, and cleaning and oiling the forms for reuse. All of these activities and the materials involved are allowed for in the pricing of the forms. The estimator measures the surface area of the concrete that comes into contact with the forms; this is known as the contact area.

Because only the area of formwork is measured, the estimator does not have to be concerned about the design of the forms at the time of the takeoff. All that needs to be established is which surfaces of the concrete require forms. In the past, estimators have agonized over such things as whether the bottom of an opening or the sloped top surface of a wall needs to be formed. If discussion with your colleagues does not provide an answer, the prudent estimator will always exercise caution and allow the forms.

Generally:

1. Formwork shall be measured in square feet of contact area; that is, the actual surface of formwork that is in contact with the concrete.

2. Formwork is classified in the same categories as those listed for concrete. As an illustration, consider a project with concrete footings, walls and columns, forms to footings; forms to walls and forms to columns would each be described and measured separately. There are, however, a number of factors which may have no effect on the price of the concreting operations but do affect the price of formwork and, therefore, should be noted. For example, the volume of concrete in all walls, whether they are straight or curved, will have the same price but the price of forms to curved walls will differ from the price of straight walls, so the forms to curved surfaces must be kept separate.

3. Bulkheads and edge forms shall be measured separately within these categories, so if there are construction joints required for long lengths of walls, the area of bulkheads to form these construction joints would be measured separately from the wall forms. Similarly, if there are pilasters projecting from the walls, the area of the pilasters would be calculated and noted separately from the wall forms. See Figure 1 for different categories of formwork in a wall system.

4. Forms to slab edges are measured separately from forms to beams and forms to walls, even where the edge forms may be extensions of beam or wall forms (see Figure 2).

5. Where there is an opening in a form system, no deduction is made from the total area of the forms if the size of the opening is less than 100 square feet (10 square meters). Examples of such openings would include openings for windows in walls, stairway openings, or elevator shaft openings in suspended slabs. The estimator must distinguish between what are openings and what are cut outs. Openings less than 100 square feet (10 m2) are not deducted but all cut outs would be deducted (see Figure 3).
 

6. Describe items of formwork that are linear in nature, stating their size and measuring their length in feet (meters). Grooves, chases, keyways, chamfers, and narrow strips of formwork less than 1 foot wide are measured in this fashion.
 

7. Describe forms to circular columns giving the diameter and measure in feet (meters) to the height of the column. Where columns widen at the top to form capitals, describe and enumerate these features. It can be useful to draw small sketches of complex items such as capitals to clarify exactly what is being measured. Include these sketches with the other takeoff notes.

The methods  of construction estimating can easily be integrated with the latest technology available to obtain soaring productivity; it is a method of estimating that offers extensive review and control capabilities because it is consistent with the basic procedures followed by professional estimators and quantity surveyors in the construction industry.

What Is an Estimate?

An estimate in its essence is an assessment of the probable total cost of some future activity. We put together estimates all the time in our everyday lives, often with little or no calculating. For example, we might say, “If I drive into town today it will cost $12 to park” or “I’m going to have to come up with more than $1,000 if I have to replace that computer.” Estimating also occurs in all industries and government agencies for two purposes that cover a variety of possibilities:

Unlike the everyday situations, these two examples generally involve some analysis and calculation. To estimate the cost of the new coffee station, for instance, you would probably first identify what tasks have to be completed in order to get the new facility up and running. Second, you would try to measure in some way the size of these tasks, which would help you with the last step: assessing the cost of the tasks. This basic approach is exactly how we prepare an estimate for a construction project:

Estimates serve a number of different functions in the construction process (see Figure 1). In the early stages of a construction program, the owner needs an estimate of the probable cost of construction to assess the financial feasibility of the project. This conceptual estimate has to be prepared from a minimum amount of information because it is required at a time when the project is often little more than a vague idea in the mind of the owner. There will be few if any design details at this stage because the design process will not begin until the owner is satisfied that the cost of proceeding with it is justified.

Once the design of the project is underway, budget amounts can be established for the various elements of the project using procedures for a preliminary estimate. These cost budgets are compiled in a cost plan that is a summary of all anticipated project expenditures. The budget amounts contained in the cost plan are verified from time to time during the design phase using more accurate estimating methods based on the specific design details that emerge in this phase of the project. This cost management process also includes estimating the cost of alternative designs so that informed decisions can be made on what to include in the design. When the design is completed, a final prebid estimate can be compiled to anticipate the contractor’s bid price for the work. If this estimate is accurate, the bid prices obtained will be within the owner’s budget for the project. 

Most contracts that transpire in the construction industry result from competing bids from contractors to supply goods and services to meet certain specifications for a stipulated sum of money. The sum of money specified in such a bid represents the total amount that the contractor will receive for performing the work described in the contract; clearly, an accurate forecast of the cost of the work is necessary if the contractor is to profit from his or her endeavors and also be competitive. Providing this cost forecast is the prime function of the contractor’s bid estimate prepared from the drawings and specifications supplied by the owner to define the scope of the contract work.

Estimates are also required after work starts on the project. In cost control programs, estimating is required to facilitate the control of expenditure of funds on a project. Contractors set cost targets based on their estimates of the cost of each component of the work, and then they compare the actual cost of work against these target amounts to discover where corrective action is needed to bring productivity up to required levels. Often during construction operations the owner or the designer asks the contractor to quote prices for proposed changes in the scope of work. Each of these quotes amounts to a mini- bid that involves an estimate of the full cost of the change followed by an offer to make the change for the price quoted to the owner.

Conceptual Estimates

Even though there may still be owners who proceed with a project on the basis of no more than the feeling that it will succeed, most of the people and organizations that decide to build come to this decision after careful analysis of two primary factors:

The value of a proposed facility can be appraised from the profits that are expected to flow after its construction, or, if the concept of profits is not applicable to the venture, it can be based on an assessment of the benefits that are expected to materialize from the completion of the project. In either case an attempt will be made to quantify the utility of the proposed development in terms of a monetary value. As costs and benefits are usually extended over a number of years, monetary value will normally be determined by means of “present worth” analysis or other “time value of money” concepts.

Using this analysis, a feasible project can be defined as one in which the anticipated value of all benefits exceeds the estimated total cost of putting the project in place. The cost profile of any project embraces many constituents including the cost of the land required, the cost of financing the project, the legal and general administrative costs, the cost of designing and administrating the work, and, of course, the construction cost of the work. Further costs may also need to be considered such as commissioning costs, operating costs, and, possibly, marketing costs. All of these amounts must be determined by estimate.

Some costs are relatively easy to establish. The costs of land and financing, for instance, are not difficult to determine as current market prices and rates are normally accessible, but the amount of what is most often the major cost component, the construction cost, is far more difficult to ascertain with any certainty. We will see that the most accurate way to predetermine the cost of construction work is by means of a detailed estimate using the methods employed by contractors. However, a detailed estimate requires a defined scope of work, and as we have said, this is generally not available at this stage in the project program.

So a conceptual estimate is normally produced from merely the notion the owner has of what he or she would like to see constructed. If the owner’s analysis has begun with the assessed value of the project, he or she should be in a position to say that the project is viable if it can be built for a certain price, where this price is the maximum amount the owner is willing to pay for obtaining the benefits that are anticipated from the project. Alternatively, analysis may lead an owner to conclude that a certain structure of definite size and scope is necessary to generate the specific benefits that are sought. Typically the owner’s financial situation reveals that there is only a certain amount of funds available to spend on this structure. In this case the obvious question will be “Can I build the structure for this amount?”

In either case the owner needs an estimate of the cost of the work, which, at this stage, is referred to as the conceptual estimate. This estimate, because of the lack of design details, must be prepared using one of the approximate estimating techniques considered in the following, but this is not to say a crude approximation of costs will suffice. The feasibility decision, which may involve thousands, if not millions, of dollars, is of major importance to most owners, so the accuracy of the predicted costs used in the calculations is crucial if the decisions that follow are to be sound.

Preliminary Estimates and Cost Planning

As we have previously suggested, a decision to proceed with the venture signifies that the perceived benefits justify the project cost. The largest component of this cost is often the construction cost established by the conceptual estimate. This estimated sum becomes the construction budget and, if the project is to remain feasible, it is clear that the actual construction cost must not exceed this budget. Cost planning and subsequent cost control are pursued with the objective of meeting the budget.

After the decision to continue the project has been made, the design team will form and begin to prepare a first schematic design of the work. This design consists of preliminary drawings and specifications that depict the general scope of the project including the shape, size, and layout of the design but with little detail at this stage. A number of preliminary estimates can be prepared as the design develops, informing the designers that their proposed design does or does not meet the project budget. The preliminary estimates can also assist the designers by providing cost information about alternative design details so that they can make more informed design decisions. By evaluating the benefits and costs of a proposed design improvement, the designers can use principles of value analysis to determine if the improvements are justified.

In order to facilitate a more detailed evaluation of the benefits and costs of a project and its constituent parts, preliminary estimates can be subdivided into prices for groupings of building components that are common to most buildings. These groupings are referred to as assemblies or elements and include substructure, superstructure, exterior cladding, interior partitions and doors, vertical movement, and so on. The set of prices for these elements is referred to as the cost plan.

In the process of value analysis, the estimated cost of each element in the cost plan is compared with the perceived value of that element to consider if the sum allocated to that component part of the building is justified by the value provided by the component. At the time of the conceptual estimate, the estimator will have made numerous assumptions about these elements based on discussions with the owner and perception of the owner’s needs. For instance, the exterior cladding of the building may have been assumed to be concrete block masonry. During the design stage it might be suggested that the cladding be changed to brick masonry. Cost estimates of the alternatives and the relative benefits of the two systems will be evaluated to determine if the extra cost of the more expensive brick cladding is justified by the increased value of a brick masonry over a concrete block exterior. Then, if a decision to spend the extra amount on exterior cladding is made and the overall budget is still to be maintained, a saving in another element must be found to balance the additional cost of the cladding.

In this fashion the design and accompanying estimates proceed until the design is complete and we have a budget in place that reflects all the key design decisions. There are many possible reasons why this final budget may differ from that prepared at the conceptual stage, but if cost planning has been properly applied, each step in reaching this point will have been made in awareness of its cost implications, and when contractor’s bids are received, there will be no surprises for the owner.

It is not the intention of this manual to hold anything new for the top flight general construction estimator whose ability, know-how and knowledge in the Industry is the product of many years of schooling, actual competitive bidding, hard knocks and time-consuming analyses of both good and bad estimates. This type of estimator knows that to prepare an accurate labor estimate in dollar value one must first have a basis or reason for the use of monetary units.

Simply to say that a unit or block of work is worth so many dollars because it cost your company that on a previous project is absurd, ridiculous and tends to show the weakness of the inexperienced estimator, The purpose of this manual is to offer assistance or a basis, in direct labor manhours, for this type estimator.

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The idea for writing a quantity surveyor’s pocket book came to me while reading The Dangerous Book for Boys by Hal Iggulden. For those who are unfamiliar with this book, it is a compendium of everything a boy should know, from how to tie a Staffordshire knot to the discoverer of the planet Pluto. In other words, the basic skills that every self-respecting 6–60-year-old boy needs to know under a single cover.

The quantity surveyor is a uniquely British profession, although during the 160 years or so since the fi rst quantity surveyor trod the planet they have managed to convince other countries and construction industries that they are an indispensable part of the development process. Much maligned and often misunderstood quantity surveyors have demonstrated an ability to shrug off the attempts to consign them to the past and have instead reinvented themselves many times over. In 2008, the UK government took the step of lifting immigration restrictions on non-UK quantity surveyors as the demand for their skills outstripped supply by almost 5:1.

I have in the past written books that concentrate on the new and emerging skills that quantity surveyors are now being required to provide for ever more demanding clients. And yet under the headline services of value management, risk management, the Private Finance Initiative, etc., there is still a great need for the quantity surveyor to be able to provide traditional quantity surveying services. Therefore, this pocket book concentrates on traditional quantity surveyor skills, still so much in demand by clients and contractors alike, but which have, during the past 20 years or so, not had the emphasis in training and education that perhaps they warrant.
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My aims in this book are to introduce a practical approach to estimating and tendering from a contractor’s point of view, and explain the estimator’s role within the construction team. The book therefore differs from previous textbooks in three main ways:

1. In general it is assumed that it is the contractor who prepares estimates because in the majority of cases an estimate is produced to form the basis of a tender.
2. I have introduced many typical forms used by estimators to collate data and report to management. Most of the forms relate to two fictitious projects: a new lifeboat station and the construction of offices for Fast Transport Limited.
3. The pricing examples given in Chapter 11 have been produced using a typical build-up sheet. The items of work to which the prices relate are given at the top of each page. Estimating data are given for each trade so that students will have a source of information for building up rates. I suggest that before pricing exercises are undertaken, the first part of Chapter 11 should be read and an understanding of estimating methods should be gained from Chapter 5.The first pricing example is for a ‘model rate’ that gives a checklist of items
to be included in a unit rate.

The estimating function has changed more in the last 15 years than at any time before. Many estimating duties can now be carried out by assistants using word processors, spreadsheets and computer-aided estimating systems. The estimator manages the process and produces clear reports for review by management. Estimators need to understand the consequences of entering into a contract, which is often defined by a complex combination of conditions and supporting documents.They also need to appreciate the technical requirements of a project from tolerances in floor levels to the design of concrete mixes, and from temporary electrical installations to piling techniques.

The Chartered Institute of Building publishes a series of guides to good practice – the Code of Estimating Practice and its supplements. I have not duplicated their fine work in this book but hope that my explanation and examples show how the guidelines can be used in practice. Contractors now assume an active role in providing financial advice to their clients.The estimator produces financial budgets for this purpose and assembles cost allowances for use during construction. Computers have been introduced by most organizations, with a combination of general purpose and specialist software.

Computers have brought many benefits during the tender period, and are seen as essential for the handover of successful tenders; adjustments can be made quickly, information can be presented clearly, and data can be transferred in a more compact form.
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Estimating is the technique of calculating or Computing the various quantities and the expected Expenditure to be incurred on a particular work or project.
In case the funds avilable are less than the estimated cost the work is done in part or by reducing it or specifications are altered, the following requirement are necessary for preparing an estimate.
a) Drawings like plan, elevation and sections of important points.
b) Detailed specifications about workmenship & properties of materials etc.
c) Standard schedule of rates of the current year.

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