Construction Estimation: Techniques, Types, and Advantages

What Is Estimate?

The estimated or anticipated cost of the project is an estimate that is commonly calculated well before the project is taken up. It is important to understand its probable cost, which would be achieved or inferred by calculating, before undertaking any project or scheme.

To obtain the expense likely to be expended in the construction of the job or structure, the calculation is prepared by computing or estimating the amounts required and then calculating the cost at reasonable rates. The main goal of estimation is to encourage us to always understand the cost of work prior. The exact cost is only known from the account of the full work after the conclusion of the work.

There would be no difference between the expected cost and the actual cost if the calculation is properly and accurately planned. The estimators should be experienced and thoroughly acquainted with the design techniques for reliable estimation.

The estimate can be provided roughly by various strategies as a preliminary estimate without getting through specifics of the different work items, to know the estimated cost or rough cost. Appropriate estimation is planned by detailed estimation in specific item wise.

The work is separated into various items of work for a thorough calculation, and the amounts from every item are measured out and also an analysis of the estimated expense is developed at reasonable prices. In the budget, allowance towards contingencies, 3 percent to 5 percent of the total expense, is designed to accommodate miscellaneous minor costs that are not part of any work item.

Provision is also rendered at 1.5 percent to 2 percent of the expected expense in the work-charged establishment budget. The amounts of different materials and labor needed can also be estimated from a detailed estimate. The estimate also indicates a time needed for all the work to be done.

To invite tenders and to plan contracts and manage the expenditure during implementation, an estimation is also mandatory.

In addition to the total expense of the various products of the main work, the cost of the preliminary works and assessments, the cost of land and the cost of purchase, the cost of leveling and dressing the land, and the cost of other external resources must be included in the calculation for the full estimate of a project.

To achieve the total expense of the whole project, 5 percent to 10 percent of the estimated cost is often paid for supervision or departmental costs.

Requirement Data for Estimation:

The following data is important to build an estimation for a task.

1. Drawings (Plans, Sections, etc.).
2. Specifications.
3. Rates.

#1. Drawings:

Planning, sectional elevations, and accurate scale drawings are needed, completely dimensioned. Typically the plan, elevation and sectional elevations are drawn to a scale of 1cm = 1m and accurate drawings are planned for scales of 1cm = 10cm to 1cm = 29cm

#2. Specification:

There are two types of specifications. As follows

1. General Specifications:
2. Detailed Specifications:

#a. General Specifications:

1. In general terms, these give the design, efficiency, and class of 1 work and materials to be used in the different sections of the work.
2. General requirements help to shape a general concept of the whole building or structure and are helpful in the planning of detailed details.

#b. Detailed Specifications:

1. This includes a comprehensive explanation of the different work products that specify the amount and consistency of components, their proportions, the process of planning, workmanship, and work efficiency.
2. Detailed descriptions define each item job individually, in detail, and are useful for the various task items to be performed.

#3. Rates:

For the preparation of estimates, the costs per unit of different work products, the prices of different materials to be used in construction, and the salaries of different labor groups, skilled or unqualified as a mason, carpenter, mazdoor, bhishti, etc., are available.

It is necessary to know the location of the job and its distance from the source of materials and the cost of transport. These prices can be derived from the rate book’s PWD schedule or the rates can be figured out using the “analysis of rate method”, method.

Types of Estimate:

The following are the different types of estimate:

1. Preliminary Estimate | Approximate | Abstract Estimate | Rough Cost Estimate.
2. Plinth Area Estimate
3. Cube Rate Estimate | Cubical Content Estimate.
4. Approximate Quantity Method Estimate.
5. Detailed Estimate | Item Rate Estimate.
6. Revised Estimate.
7. Supplementary Estimate.
8. Supplementary And Revised Estimate.
9. Annual Repair | Maintenance Estimate.

#1. Preliminary Estimate | Approximate | Abstract Estimate | Rough Cost Estimate:

For preliminary studies of different aspects of a work or scheme, a preliminary estimation or an approximate or abstract estimate is necessary to assess the financial status and strategy of the competent administrative authority for administrative penalties.

In the case of commercial projects such as irrigation projects, residential construction projects, and related projects that receive income, the probable revenue can be estimated and the projected expense can be known from the preliminary calculation and so it can be seen whether or not the investment in the project is justified.

For non-commercial projects or projects with no direct return, until the final decision is made, their need, utility, availability of funds, etc., must be taken into account.

The estimated calculation is prepared to show the approximate cost of all essential work items individually, such as cost of land, cost of each house, cost of roads, the water supply of sanitary works, electrification, etc. The estimate is followed by a concise summary describing the project’s necessity and usefulness and showing how the cost of separate items has been met.

This is often followed by a plan or layout plan for the site. The contingencies are applied to a ratio of around 5 percent to 10 percent. The preliminary estimate may be prepared in various ways for different structures and works

1. Buildings
   1. Per Unit Basis
   2. Plinth Area Basis
   3. Cubic Content Basis
   4. Approximate Quantity Method
2. Road and Highways
3. Irrigation Channels
   1. Per Kilometer
   2. Area of Land Commanded Ie.,
4. Brides and Culverts.
5. Sewerage Project and Water Supply Project.
6. Overhead Water Tank.

#2. Plinth Area Estimate For Building:

This is prepared based on the design area of the plinth, the rate being deducted from the expense of comparable buildings in the locality with similar measurements, heights, and construction.

The estimation of the plinth area is determined by finding the building’s plinth area and multiplying the plinth area rate. For the covering area, the plinth area should be measured by taking the building’s exterior measurements at the level of the earth.

In the plinth area, courtyards, and other open areas should not be included. To know the estimated cost beforehand, the Plinth area calculation is just approximate and is a provisional estimate.

If the plan of the building is not ready or available, at the beginning just prepare a proposal, floor area of rooms, etc may be determined from the requirement and 30 to 40 percent of the total area thus found may be added for walls, circulation, and waste to get the approximate total plinth area which multiplied by the plinth area rate gives the approximate cost of the building

For storeyed building, the plinth area estimate is prepared for each story separately.

#3. Cube Rate Estimate For Building:

The estimation of the cube rate is a preliminary estimate or an estimated estimate that is prepared based on the cubical content of the cube rate building that is deducted in the locality from the expense of the same building with similar specifications and design. This is determined by finding the building’s cubical content, length x breadth x height, and multiplied by the rate of the cube.

The widths of the buildings at the floor level should be taken as the external measurements and the height should be taken from the level of the floor to the top of the roof. The height can be taken from the floor level of one storey to the top of the next higher floor for storey development. In finding the cubic material, the base and the plinth, and the parapet above the roof are not taken into account.

#4. Approximate Quantity Method Estimate:

The approximate total wall length is found in running meters in this system and this total length compounded by the rate per running meter of the wall provides a reasonably reliable expense. For this approach, the structure may be split into two parts i.e., the base including plinth and superstructure.

The cost of running meters for the base and superstructure should be measured first and the overall length of the walls should be multiplied by these running meters.

The estimated amounts of items such as excavation, base, brickwork up to plinth, and damp proof course are measured per running meter to find the running meter average for foundation, and the price or cost per running meter is determined by calculating the prices of these items.

The price or rate per running meter is equally calculated for superstructure from the estimated amounts of brickwork, woodwork, roof, floor finishing, etc. The plan or line plan of the structure should be available for this technique.

#5. Detailed Estimate | Item Rate Estimate:

The detailed estimation is an accurate calculation that consists of the amount and cost of any item of work being carried out. Each item’s proportions, length, width, and height are accurately taken from the drawing and the quantities of each item are measured, and abstracting and billing are carried out.

In two steps, the detailed calculation is prepared.

1. Measurement Details and Quantity Estimation.
2. Abstract of the Estimated Cost.

#a. Measurement Details and Quantity Estimation.

The calculation descriptions of each work item are accurately extracted from the schedule and the drawings and the amounts under each item are computed or estimated in a tabular form named as the details of measurement form

#b. Abstract of the Estimated Cost.

1. The cost of an item of work is estimated from the amounts already calculated in tabular form and the cumulative cost is calculated in the abstract form of the calculation.
2. The prices of various work items are taken for completed work items according to the sequence of rates or actual workable rates or analyzed rates.

To make contingencies for miscellaneous minor items that do not fall under any classified head of work items, a percentage of 3 percent of the total expense is typically applied and a percentage of around 2 percent is given for work-charged institutions. The approximate cost of work is given by the total so collected.

The detailed estimation is normally prepared job-wise, under each such work as the main house, servant quarters, garage, boundary walls, etc.

The detailed estimate is accompanied with

1. Report.
2. General specifications.
3. Detailed specifications.
4. Drawings (plan, elevation, sectional elevations, detailed drawings, site plan or layout plan or index plan ).
5. Calculation and designs- designs of foundation, beam, slab, lintel, design of channel in case of irrigation channel, design of thickness of metal crust in case of the road, etc.
6. Analysis of rates, if rates are not as per the schedule of rates or for the non-scheduled items.

Detailed calculations are prepared for the technical sanctions of the responsible authority, the contractual conditions, and the performance of the task.

#6. Revised Estimate:

A revised estimation is a systematic estimate which must be prepared under any of the following conditions.

1. If more than 5 percent of the initial authorized forecast is surpassed or is likely to surpass.
2. If the spending on a job approaches or is likely to surpass more than 10 percent of the administrative penalty total.
3. If there is a material difference from the initial plan, even though the expense of the sanctioned sum will be met.

A comparative statement showing the differences of and piece of work, the number, rate, and expense under the original and updated, side by side, the surplus or saving, and the explanation for difference should be followed by the revised estimate.

#7. Supplementary Estimate:

The supplementary estimate is indeed a detailed estimate that is produced when additional works are needed to complement the initial works, or when further improvement during the advancement of the work is required. Besides the initial calculation, this is a modern detailed estimate of the added works.

The value of the initial calculation and the cumulative amount, plus the extra amount on which a suspension is sought, should be displayed in the abstract.

#8. Supplementary And Revised Estimate:

The value of the initial estimate shall be updated by a relevant authority when the work is substantially stopped and the cost estimate of a work required is less than 95 percent of the original accepted estimate, or if there are material deviations and improvements in the design that could result in significant savings in the estimate.

A supplementary and revised estimate then is produced and the responsible authority receives new technical approval. Unless the initial estimate is determined to be unreasonable at any time, whether before the actual execution of the original job, then the divisional officer will approve a revised estimate of the decreased sum.

When awarding such a penalty, the general accountant and other authorities are informed.

#9. Annual Repair | Maintenance Estimate:

A comprehensive calculation is a yearly repair or annual maintenance estimate which is ready to keep the structure or function in good order and stable condition. For construction, which entails white washing, color washing, painting, small maintenance, etc. The annual reconstruction estimate for road works accounts for patch repair, renewals, bridge and culvert repairs, etc.

Advantage of Estimate:

1. When practice continues, estimates (i.e. schedule, timeline, etc.) become more practical since important problems are found sooner.
2. It is more capable of dealing with the (almost inevitable) improvements that usually require the development of software.
3. Engineers may get their hands down and begin to work sooner on a project.
4. It encourages a company to find the most productive method of applying capital.
5. You will set the norm using effective use.
6. Operation monitoring is carried out by matching real findings with anticipated outcomes.
7. More reliable predictions contribute to easier project execution.
8. Converting more bids.
9. Projects are done sooner and cheaper.
10. Job quick Work easy.
11. Customer partnerships achieve a strength of loyalty and continuity as you execute quality projects more efficiently and at reduced costs.
12. Be flexible.
13. Work collaboratively.

Disadvantage of Estimate:

1. This isn’t an efficient operation.
2. Significant variation from the exact value.
3. This is not built on drawings or specifications.
4. Extremely customizable re-usability constraints.
5. Interpreted inconsistently with each order.
6. Chance of not satisfying the budget or schedule.
7. Using it is pricey since it requires professionals.
8. It is not efficient for certain kinds of overhead costs to be managed.
9. In non-manufacturing operations, it is not easy to implement because the relationship between cost and production cannot be calculated.

FAQs on Construction Estimation

What Is an Estimate in Construction?

An estimate in construction is the anticipated cost of a project, calculated before the project begins. It helps in understanding the probable cost by estimating the quantities required and calculating the cost at reasonable rates.

Why Is It Important to Have an Estimate Before Starting a Construction Project?

Having an estimate is crucial as it helps in understanding the cost of work prior to starting the project. It aids in budget planning, inviting tenders, planning contracts, and managing expenditure during implementation.

How Is an Estimate Prepared?

An estimate is prepared by computing or estimating the quantities required for the project and then calculating the cost at reasonable rates. It involves detailed estimation of various work items and their costs.

What Data Is Required for Preparing an Estimate?

The data required for preparing an estimate includes drawings (plans, sections), specifications (general and detailed), and rates of materials and labor.

What Are the Different Types of Estimates?

The different types of estimates include:

1. Preliminary Estimate or Rough Cost Estimate
2. Plinth Area Estimate
3. Cube Rate Estimate
4. Approximate Quantity Method Estimate
5. Detailed Estimate or Item Rate Estimate
6. Revised Estimate
7. Supplementary Estimate
8. Supplementary and Revised Estimate
9. Annual Repair or Maintenance Estimate

What Is a Preliminary Estimate?

A Preliminary Estimate, also known as an Approximate or Abstract Estimate, is prepared for preliminary studies of different aspects of a project to assess the financial status and strategy before administrative approval.

What Is a Detailed Estimate?

A Detailed Estimate, also known as an Item Rate Estimate, is an accurate calculation that includes the quantity and cost of each item of work. It is prepared in two steps: measurement details and quantity estimation, and an abstract of the estimated cost.

What Is the Purpose of a Revised Estimate?

A Revised Estimate is prepared when the actual cost exceeds the initially authorized estimate by more than 5% or when there are significant changes in the original plan. It helps in obtaining new technical sanction from the competent authority.

What Is an Annual Repair or Maintenance Estimate?

An Annual Repair or Maintenance Estimate is prepared annually to keep the structure or project in good condition. It includes costs for activities like whitewashing, painting, minor repairs, patch repair for roads, etc.

What Are the Advantages of Construction Estimation?

Advantages of construction estimation include:

1. Identifying important issues earlier
2. Efficient resource allocation
3. Improved project execution
4. Better client relationships
5. Flexibility and collaborative work

What Are the Disadvantages of Construction Estimation?

Disadvantages of construction estimation include:

1. It is not an efficient operation
2. Significant variation from the exact value
3. High costs due to the need for professionals
4. Difficulty in managing certain overhead costs
5. Not easy to implement in non-manufacturing operations