ESTIMATION

ESTIMATION

 

      Estimate is a calculation of various items of an engineering works so as to know its approximate cost and quantities of various kinds of materials required with labor involved for its satisfactory completion.

         Estimate is the anticipated or probable cost of work and is usually prepared before the construction is taken.

         Enable owner / client, knowledge of the cost involved in proposed work or projects.

         Enables him to arrange funds in addition to taking a basic managerial decision as to whether the work is to be undertaken at all or the proposed work needs to be modified.

         This is done from plans other drawings, specifications etc. on based this, internal approvals mainly administration and financial are obtained.

 

Purpose of Estimating

1)  To ascertain the necessary amount of money required by the owner to complete the proposed work. 

2)  For public construction works, estimates are required in order to obtain administrative approval, allotment of funds and technical sanction.

3)  To ascertain quantities of materials required in order to program their timely procurement.

4)  To calculate the number of different categories of workers those are to be employed to complete the work within the scheduled time of completion.

5)  To assess the requirements of Tools, Plants and Equipment required completing the work according to the program.

6)  To fix up the completion period from the volume of works involve in the estimate.

7)  To draw up a construction schedule and program and also to arrange the funds required according to the programming.

8)  To justify the investment from benefit cost ratio. (For ideal investment, this ratio should be more than one).

9)  To invite tenders and prepare bills for payment.

10) An estimate for an existing property is required for valuation.

 

DATA FOR ESTIMATE

 

v  DRAWINGS

 

v  SPECIFICATION

 

v  RATES

 

DRAWING

 

v  Fully dimensioned and to the scale drawings are required for finding dimensions while doing measurements

 

v  Following drawings are required

 

Ø        PLAN   

                     AT A SCALE OF      1 CM = 1 METRE

 

Ø        ELEVATION AND SECTIONAL ELEVATION

                     AT A SCALE OF       1 CM = 1 METRE

 

Ø        DETAILED DRAWINGS

                    AT A SCALE OF         1 CM = 20 CM

 

 

      SPECIFICATION

 

• GENERAL SPECIFICATIONS

• DETAILED SPECIFICATIONS

 

      RATES

 

v  Rates per unit of various items of work include

          a. The rate of various materials which are used in construction

          b. Labour wages and categories

          c. Location of work its distance from source of material and cost of transport

 

v  Rates can be obtained from P.W.D. schedule of rate book or can be calculated by “Analysis of Rates” method.

 

 

 

 

 

 

TYPES OF ESTIMATE

                                     

• A preliminary or approximate or rough Estimate
• Detailed Estimate
• Revised Estimate
• Supplementary Estimate
• Combination of Revised and Supplementary Estimate
• Annual Maintenance or Repair Estimate (A.R. or A.M. Estimate)

 

                                     

Detailed Estimate 

          This includes the detailed particulars for the quantities, rates and costs of all the items involved for satisfactory completion of a project.

          Quantities of all items of work are calculated from their respective dimensions on the drawings on a measurement sheet.

          Multiplying these quantities by their respective rates in a separate sheet, the cost of all items of work are worked out individually and then summarized, i.e., abstracted (which is the detailed actual estimated cost of work)                                      

Such a detailed estimate is prepared for

1) Technical sanction.

2) Administrative approval

3) Execution of a contract with the contractor.

 

How to prepare a detailed Estimate:

The unit-quantity method is followed to prepare a detailed estimate.

In this method the rates per unit work of one item (viz., one cu. m. concrete, one cu. m. brickwork etc.) including profit are considered first and the total cost for the item is found by multiplying  the cost per unit of the rate by the number of units.

The procedure for the preparation of a detailed estimate is divided into two parts.

(a) Detail of measurement and calculation of quantities is the first part. Respective measurements for dimensions of all individual items involved in the whole work arc taken off from the drawing of the work and entered in the respective  columns of a standard Measurement Form as shown below.

 

Item            Description        No.       Length      Breadth      Height      Qty

No             or Particulars

 

 

Abstract of Estimated Cost is the second part in the preparation of a detailed estimate. The cost of each and every individual item of work is calculated by multiplying the quantity computed in the  Measurement Form with the specified rate in a tabular form known as ‘Abstract form' as shown below

 

S. No          Description       Quantity     Unit       Rate      Unit of rate   Amount

                   or Particulars

 

This estimated cost is increased by 3% to 5% for all unforeseen expenditure and is called contingency Fund.

To maintain additional supervising staff at the work site and called the ‘Work charged' establishment a  amount of 2.5% is directly charged to the estimate prepared from the item of work

For big projects an amount 1% to 1.5% of the estimated cost is also provided to purchase special Tools and Plants for specific purposes.

    The detailed estimate is generally accompanied

(1) Report.

(2) Specifications (for departmental works, departmental specifications followed)

(3) Drawings consisting of (a) Plans, sections and elevations, (b) Site plan or layout plan or Index plan.

(4) Design charts and calculations.

(5) Particulars of rates. In schedule of departmental rates this is mentioned otherwise the analysis of rate is required.

 

Function of Abstract

(1) The total estimated cost and the different items of works required to complete a project can be known.

(2) This is the basis on which percentage rate tenders are called after excluding the amounts for contingency and work-charged establishment.

(3) This is a part of a tender document and a contractor can arrive at his own rates from the schedule of work described in the description column-

(4) This is the basis on which bills are prepared for payment.

(5) Comparative costs of different items of works can be known

 

Factors to be considered during preparation of a detailed Estimate:-

(a) Quantity of materials –

(b) Availability of materials –

(c) Transportation of Materials –

(d) Location of site –

(e) Local labor charges –

 

Taking Out Quantities

The procedure by which quantities of the various items in a particular structure are worked out is known as taking out quantities.

The quantities are obtained by studying in detail the drawings of the structure.

 

Methods of taking out

English method

PWD method

 

English method of taking out quantities

(1) Taking off;

(2)Grouping

(3) Billing

Thus, the quantities of the various items are worked out an a measurement or dimension form and then quantities of identical items are grouped together and written on an abstract form. 

The measurement form or the taking – off sheet or the dimension sheet is a full – sized paper, double ruled.

 

 

 

Column (1) is called the timesing column.Column (2) is called dimension column. Column (3) is called the squaring column.Column (4) is called the description column, in which, the brief description of the item is written.  The right-hand side of this column is used for rough work and is known as the waste.

In the dimension column, the length, the breadth or width and the height or depth are written in sequence in vertical direction.  The multiplication giving the final quantity is then entered in the squaring column.

 

(1)	(2)	(3)	(4)
	4.0   3.0   2.0   4.0   3.0   4.0   5.0   No.5   5	24.0     12.0   4.0	This indicates 24 cubical content     This indicates 12 superficial contents   This indicates linear measurements   This indicates no.

The following column is used to indicate the number by which the measurements are to be multiplied.  It should be remembered that an item timesed can be timesed again as shown below.

 

3/         2/5/3	4.0   3.0   2.0     4.0 3.0 2.0	72.00         720.00	This indicates the cubical contents are to be multiplied by 3.       This indicates the cubical contents are to be multiplied by 3x5x2= 30

When the measurement is to be added and not to be multiplied, the process known as dotting on is adopted.  A dot below a figure in the timesing column indicates an addition.

 

2 . 3   2      3          .         2   3     3      2         .      .        2      1

4.0   3.0   2.0               4.0   3.0   2.0     4.0   3.0

120.00       240.00       540.00

This indicates that the cubical contents are to be multiplied by 3+2 = 5     This indicates that the cubical measurements are to be multiplied by (3+2) x 2= 10   This indicates that the superficial measurements are to be multiplied by (2+1)x(3+2)x3 = 45

After working out the quantities of various items an abstract is prepared in which the items are classified, grouped and arranged accordingly

The abstract form is commonly known as the bill of quantities and the process of writing the bill of quantities is called the billing.Thus, a bill of quantities indicates a document which lists all the items necessary for the complete construction of the project. 

Each item of the bill of quantities includes a brief description of every item together with its estimated quantity.Thus the main function of bill of quantities is to provide a basis on which tenders can be obtained from the prospective contractors and the bill of the quantities can be used to assess the value of work as executed and they help in preparing the revised estimate, if found necessary.

 

Features of the English method

(1) The quantities are found out in the sequence of measurements irrespective of items of work and sequence of execution.

(2) The grouping is a separate process and it is followed along with the process of billing on the abstract form.

(3) The chances of omitting any measurements are reduced.

(4) The method is lengthy and it requires more time.

 

P.W.D. method of taking out quantities

The three processes namely, taking off, grouping and billing, are also involved in this method.  

1) But the first and second processes of taking off and grouping are carried out on the quantity sheet. 

2) The measurements are recorded item wise and the items are arranged in the sequence of execution.

3) The third process of billing is done on the abstract form as in case of the English method. 

4) Thus in this method, the grouping will appear on measurements form as well as on the abstract form.

 

 

Features of P.W.D. method are as follows

(1) The quantities are found out in the sequence of execution, irrespective of the sequence of measurements.

(2) The grouping process is eliminated in the sense that the measurements are directly grouped on the quantity sheet.

(3) There are chances of missing some measurements.

(4) The method is easy and it requires less time.

 

Quantities are worked out by any one of the Methods

1) Short Wall long wall method

2) Center line method

                                                           

Analysis of rate

 

Purpose of rate analysis

To determine the current rate per unit of an item at the locality

To examine the viability of rates offered by contractors

To calculate the quality of materials and labor strength required for project planning

To fix up labor contract rates

 

Fixing rate per unit of an item

Quantity of material and cost

Labor costs

Cost of equipments or tools and plants

Overhead or establishment charges

Profit

 

Quantity of materials and cost

Quantities of materials are those required per unit rate of work delivered at work site and its cost include first cost, freight, transportation, sales tax and insurance charges as arises in question.

In case when materials like cement and, steel, stone chips and bitumen are supplied departmentally then profit on the cost of materials are not allowed, but cost of carriage from godown to work site shall be added.

 

Labor costs

To obtain labor costs the number and wages of different categories of laborers, skilled and unskilled namely mason, mazdoor etc required for each unit of work should be known and this number is to be multiplied by the respective wage per day.

 

Cost of equipments, tools and plants

Wherever possible the cost of equipments and ordinary T and P those required for general use should be allocated to specific item of rate.

 

For example the cost of operating a concrete mixer should be spread over those items of rate for which it is used.

For certain tools and plants it is difficult to allocate their use to an individual item of rates and it is therefore suggested to add costs in such cases of expenditure to overhead ie establishment charges.

 

Special tools and plants

For big projects it becomes necessary to use special type of tools and plants ie special type of concrete mixing machines like batching plants and special type of mixed concrete transport vehicle named tripping wagon or dumper, cranes etc in use.

In order to purchase such types of special equipments an amount 1 to 11/2 % of the estimated cost is provided in the estimate

 

Overhead or establishment charges;

This includes such items as office rent and depreciation of its equipment , salaries of office staff, postage , lighting, traveling, telephone account, plan and specifications etc.

Small tools, planks, ladders, ropes and such hand tools as the contractor provides for his workman should also be included in the overhead charge as suggested in cost of equipments.

This is usually 21/2% of the net cost of a unit rate and may rise up to 5 %.

Overhead charge increases if the progress of a project is delayed.

Overhead charges may be divided under two categories:

 

A) General overheads and B) Job overheads

 

 

General overheads

 

Salaries of office staff

Purchase of stationery articles, printings, postages, repairs etc

Office rent

Telephone and electric bills

Traveling etc and all such expenses required to the run the office.

    General overhead is a recurring known expenditure and does not depend on the volume of work under execution.

    This account is spread proportionately on all work in a year.

    A construction firm has to bear such expenditure even though there is no work in hand.                   

    For a big firm general overhead is high.

    On the other hand small firms require nominal general overhead.

    Any amount for such expenses cannot be recovered from the work. Volumes of work can be executed with proportionally low general overhead establishment.

 

 

Job overheads

Salaries of all personnel (technical or non technical) engaged for the work

Temporary sheds or house and godowns rents for the work

Small tools, planks, ladders, ropes and hand tools as the contractor provides for his workmen

Repairs and depreciation for tools and plant

Lighting at site

Mobilization of establishments, tools and plant

Public relations

Labor welfare and safety measures

Workmen’s compensation, insurance etc

Interest on investment

Theft or loss etc.

 

Job overhead is not a known expense, depends on the volume of work under execution.

When there be no work no expense is required. In case there be idle labor or maintenance due to owners fault recovery of expenses for such part of job overhead becomes possible

 

Profit

Generally a profit of 10% should be considered reasonable for ordinary contracts after allocating all charges of establishments equipments, etc. Fro small jobs 15% profit and for large jobs 8% profit should be considered as reasonable.

 

Water Charges:

For drinking purpose of the workers and for the work, arrangement of water either by sinking tube well or by taking temporary water connection from the corporation or Municipality becomes necessary.

In order to meet up the expenses an amount 1% of the total cost of materials and labor has been provided in the analysis of Rate as per provision made in the standard analysis of rates.

 

Factors effecting Rate analysis:-

 

Specifications of the item which indicates the quality and proportion of materials, the method of construction and protection of works

The present rate of materials for the item of work up to the work site

Daily wages of different categories of laborers at the locality with their respective outputs

The range of lead and lift required for deposition of materials to carry out the item of work

Percentage charge for overheads which includes insurance and the possibility of theft or loss

The range of profit and availability of water in connection with the construction work.

 

Besides these the site condition, site organization and cost control during execution etc should be considered as these factors affect the cost per unit of work done at site.

 

 

Description	Unit	Qty	Rate	Cost Remarks
Cement Concrete 1:1:2 ( 1 cement: 1 coarse Sand: 2 graded stone aggregate of 20 mm nominal size) Materials : Stone aggregates 20mm Stone aggregates 12mm Generally one part of 12 mm graded aggregate is mixed to 3 parts of 20 mm graded aggregate. However, it should be as per the direction of Engg- in- charge. Cement Coarse Sand Carriage: Coarse sand Stone aggregate Cement Labour: Foreman Beldar (M) Coolie (F) Mason Waterman Add cost of hire & running charges of mixer, vibrator, water pump etc, @ 1.15% Add for Sundries & Contingencies @ 3% Add for Water Charges & Electricity @ 1.5 % Add for Oh & CP @ 15% VAT 4% Cost of 1 cum Cement Concrete Rate per cum	Cum Cum       q Cum     Cum Cum t   Each Each Each Each Each	0.675 0.225       6.1 0.45     0.45 0.90 0.61   0.05 0.70 0.70 0.125 0.125	290 290       460 530     350 190 60   250 120 90 250 120	Rs196/- Rs 65/-       Rs 2806/- Rs239/-     Rs 158/- Rs171/- Rs 37/-   Rs 13/- Rs 84/- Rs 63/- Rs 32/- Rs 15/- Rs45/- Rs 116/- Rs 58/- Rs 582/- Rs132/-   Rs 4812/-

 

 

 

 

 

 

 

 

 

 

 

 

Description	Unit	Qty	Rate	Cost
Cement Concrete 1:2:4 ( 1 cement: 2 coarse Sand: 4 graded stone aggregate of 20 mm nominal size) Materials : Stone aggregates 20mm Stone aggregates 12mm Cement Coarse Sand Carriage: Coarse sand Coarse aggregate Cement Labour: Foreman Beldar (M) Coolie (F) Mason Waterman   Add cost of machinery etc @ 1.75% Add for Sundries & Contingencies @ 3% Add for Water Charges & Electricity @ 1.5 % Add for Oh & CP @ 15% VAT 4% Cost of 1 cum Cement Concrete Rate per cum	Cum Cum q Cum   Cum Cum t   Each Each Each Each Each	0.705 0.235 3.2 0.47   0.47 0.94 0.32   0.05 0.70 0.70 0.125 0.125	290 290 460 530   350 190 60   250 120 90 250 120	204/- 68/- 1472/- 25/-   165/- 178/- 19/-   12/- 84/- 63/- 31/- 15/-   40/- 70/- 35/- 350/- 70/- Rs 2900/-
Description	Unit	Qty	Rate	Cost
Cement Concrete 1:2:4 ( 1 cement: 2 coarse Sand: 4 graded stone aggregate of 40 mm nominal size) Materials : Stone aggregates 40mm Stone aggregates 20mm Stone aggregates 12mm Cement Coarse Sand Carriage: Coarse sand Stone aggregates 40mm Stone aggregates 20mm & 12mm Cement Labour: Foreman Beldar (M) Coolie (F) Mason Waterman Add cost of machinery etc @ 1.75% Add for Sundries & Contingencies @ 3% Add for Water Charges & Electricity @ 1.5 % Add for Oh & CP @ 15% VAT 4% Cost of 1 cum Cement Concrete	Cum Cum Cum q Cum   Cum Cum Cum t   Each Each Each Each Each	0.544 0.241 0.126 3.2 0.47   0.47 0.544 0.367 0.32   0.08 0.80 0.80 0.125 0.125	290 290 290 460 530   350 190 190 60   250 120 90 250 120	157/- 70/- 36/- 1472/- 249/-   164/- 103/- 70/- 19/-   20/- 96/- 72/- 31/- 15/- 45/- 77/- 38/- 380/- 80/- Rs 3194/-

 

COST ESTIMATION

 

A cost estimate establishes the base line of the project cost at different stages of development of the project.

A cost estimate at a given stage of project development represents a prediction provided by the cost engineer or estimator on the basis of available data.

Cost estimation is also necessary to evaluate profit measures and survivability.

For construction industry cost estimation becomes even more important due to its being a long time process and estimating cost over a time includes other temporal factors also.

 

The capital cost for a construction project includes the expenses related to the initial establishment of the facility:

1. Land acquisition, including assembly, holding and improvement

2. Planning and feasibility studies

3. Architectural and engineering design

4. Construction, including materials, equipment and labor

5. Field supervision of construction

6. Construction financing

7. Insurance and taxes during construction

8. Owner's general office overhead

9. Equipment and furnishings not included in construction

10. Inspection and testing

 

The operation and maintenance cost in subsequent years over the project life cycle includes the following expenses:

1. Land rent, if applicable

2. Operating staff

3. Labor and material for maintenance and repairs

4. Periodic renovations

5. Insurance and taxes

6. Financing costs

7. Utilities  

8. Owner's other expenses

 

The magnitude of each of these cost components depends on the nature, size and location of the project as well as the management organization, among many considerations. The owner is interested in achieving the lowest possible overall project cost that is consistent with its investment objectives.

In cost estimation for construction companies they include allowance for contingencies or unexpected costs occurring during construction. According to past trends company may have costs components for the following in estimate: -

 

1. Design development changes,

2. Schedule adjustments,

3. General administration changes (such as wage rates),

4. Differing site conditions for those expected, and

5. Third party requirements imposed during construction, such as new permits.

All cost estimation is performed according to one or some combination of the following basic approaches: -

 

Production function

In construction, the production function may be expressed by the relationship between the volume of construction and a factor of production such as labor or capital.

A production function relates the amount or volume of output to the various inputs of labor, material and equipment.

 

For example, the amount of output Q may be derived as a function of various input factors x1, x2, ..., xn by means of mathematical and/or statistical methods. Thus, for a specified level of output, we may attempt to find a set of values for the input factors so as to minimize the production cost.

 

The relationship between the size of a building project (expressed in square feet) to the input labor (expressed in labor hours per square foot) is an example of a production function for construction.

 

Empirical cost inference

Empirical estimation of cost functions requires statistical techniques which relate the cost of constructing or operating a facility to a few important characteristics or attributes of the system.

The role of statistical inference is to estimate the best parameter values or constants in an assumed cost function.

Usually, this is accomplished by means of regression analysis techniques.

 

Unit costs for bill of quantities

A unit cost is assigned to each of the facility components or tasks as represented by the bill of quantities.

The total cost is the summation of the products of the quantities multiplied by the corresponding unit costs.

The unit cost method is straightforward in principle but quite laborious in application.

The initial step is to break down or disaggregate a process into a number of tasks.

Collectively, these tasks must be completed for the construction of a facility.

Once these tasks are defined and quantities representing these tasks are assessed, a unit cost is assigned to each and then the total cost is determined by summing the costs incurred in each task.

The level of detail in decomposing into tasks will vary considerably from one estimate to another.

 

Allocation of joint costs

Allocations of cost from existing accounts may be used to develop a cost function of an operation.

The basic idea in this method is that each expenditure item can be assigned to particular characteristics of the operation.

Ideally, the allocation of joint costs should be causally related to the category of basic costs in an allocation process.

In many instances, however, a causal relationship between the allocation factor and the cost item cannot be identified or may not exist.

For example, in construction projects, the accounts

for basic costs may be classified according to (1) labor, (2) material, (3) construction equipment, (4) construction supervision, and (5) general office overhead. These basic costs may then be allocated proportionally to various tasks which are subdivisions of a project.

 

Bar Bending Schedule

 

This gives the complete information regarding the bars to be cut, bent & bundled and enables the location of the bars on site.

This helps in avoiding wastages that could occur as the entire cutting schedule is planned catering to the standard length of bars and lengths as desired.

It consists of giving dimension lengths of bottom bars used as reinforcement.

Top bars and cranking of bars as required.

Stirrup lengths

Now a days it is seen instead of cranking of bars, cut lengths are provided for hogging moments since this sometimes leads to congestion and in proper compaction.

These cut lengths then have to be adequately monitored since this cutting may result in increase of wastages, hence proper planning is necessary to reduce wastages and cost management.