We provide conceptual cost estimate as well as actual take offs. The cost estimate is prepared by breaking down the items of work using a standard format and determining the cost of each item from experience and a database of current construction cost information. Project budget includes total cost estimate plus soft costs.
Our cost estimates fall into two groups: conceptual estimates and detailed estimates. Each can be broadly defined as follows: 1. Conceptual Estimate: Conceptual estimating or parametric estimating is the process of establishing a project’s cost, often before any graphical representation of a facility has been developed. 2. Detailed Estimate: The detailed construction estimate is the product of a process whereby the cost of a proposed construction project is predicted. The estimate is prepared by breaking down the items of work in an orderly and logical basis, determining the cost of each item from experience, and summarizing the total.
Prior to the commencement of programming and/or design, the cost estimator prepares a cost model and budget cost plan for the project. The cost model establishes a construction budget and defines how the project budget is to be allocated among various building systems. The cost model also confirms the project scope and identifies any costs or work to be funded separately.
The cost estimator works as an integral member of the design team to evaluate design decisions made throughout the design phases against the pre-established cost model. This approach allows the cost management team to provide an integrated value engineering process throughout the design phase. At the end of the schematic design and design development stages, the cost estimator produces a comprehensive cost estimate. The estimate is compared against the cost model developed during the pre-design phase of the project.
Cost estimates are upgraded upon completion of the 50% and 100% construction stages. The cost estimate is based on the measurement and pricing of quantities wherever information is provided and/or reasonable assumptions for other work not specifically covered in the drawings or specifications. Unit rates are based on historical data and discussions with contractors and subcontractors. The unit rates reflect current bid costs in the area. All unit rates relevant to subcontractor work include the subcontractors’ overhead and profit unless otherwise stated. The mark-ups cover the costs of field overhead, home office overhead, and profit and range from 15% to 25% of the cost for a particular item of work. Pricing reflects probable construction costs obtainable in the project locality on the date of cost estimate of probable costs. This estimate is a determination of fair market value for the construction of the project. It is not a prediction of low bid. Pricing assumes competitive bidding for every portion of the construction work for all subcontractors and general contractors, with a minimum of three bids for all items of subcontracted work and six to seven general contractor bids. Experience indicates that a fewer number of bidders may result in higher bids conversely an increased number of bidders may result in more competitive bids.
Since the cost estimator has no control over the cost of labor, material, equipment, the contractor’s method of determining prices, or the competitive bidding or market conditions at the time of bid, the cost estimate of probable construction cost is based on industry practice and the estimator’s professional experience in the construction industry, and represents the professional cost estimator’s best judgment. The accuracy clearly is dependent on various external factors, but it is typically expected to be within 5% of the average bid.