5 Top Reasons For Estimating Construction Costs
Estimating construction costs is critical to the construction industry, not only for keeping a lid on the costs.
Estimating building costs is only part of the whole spectrum of cost estimating in any construction project.
Estimating is the first step that must contractors take when they want to BID for a project. An estimator (yes, there is such a person among contractors) does an ocular site inspection and gathers information on the construction site specifically on: its accessibility, availability of utilities services, and land’s topography and drainage.
It is from this visit that the estimator does a quantity survey and determines the quantity of construction materials to be used as well as the labor needed to complete constructions. This process requires for an estimator to fill in estimating forms. The estimator will also decide on what equipment to use and the sequence of construction phases like filling, laying the foundation, etc. Factors that affect the cost price of a building include the materials used; the design, features, and size of the building; and the quality and quantity of the materials being used. After this quantity survey, the cost estimator will then prepare a cost summary. The contractor will then submit a bid to the project owner. A bid, aside from a cost estimate on the labor, equipment, materials used, and the sub contractors, will also include a costing for taxes, insurance, and all the other factors that affect costs in building construction. It is common practice for a project owner to solicit bids from at least three contractors. The reason why a bid is such an important matter in the construction industry can be summarized into five words: best prices, cutting costs, budgeting, fair profit and survival. Without any costing, it would be hard for project owners to get fair prices from contractors. Imagine just one contractor bidding on a project. A project owner would not know if the bid is overpriced or not unless, of course, if he researches on the costs himself. But then, that would take time. It would also be difficult for a project owner to know where they can actually cut on costs if they do not have a bid in his hands. Bids will typically contain an exhaustive costing on sometimes fancy materials on a building project; and it is up to the owner to scrutinize and determine on what materials they can do without, or downgrade. A winning bid actually serves as a budget for any construction project. Estimators have even been known to check construction works-in-progress, i.e., if they are on schedule, within budget and within the specifications of the bid. A bid generally keeps a lid on too much profit-taking or mark-up by the contractor since all costs are tracked. It is always good practice for project owners to read and track items on a winning bid to prevent any waste of resource. Without any thought to costing, the construction industry would not survive. Money does make the world go round, and spending it thoughtlessly could mean the end of your business. Project owners can get an initial, although limited, costing of their building project by looking up the Internet for electronic building calculators. Internet-based building calculators typically ask you a series of questions related to specifications before giving you a cost estimate.
Construction Cost
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