SPECIFICATION AND ESTIMATION
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This document discusses various methods of construction cost estimation, including preliminary estimates, plinth area method, cubical contents method, unit base method, abstract estimates, detailed estimates, bottom up method, and square foot estimates. It also discusses factors that influence specification, rate analysis, and final estimates. Preliminary estimates provide early project costs but have low accuracy of 20-30%. Detailed estimates use quantities, rates, and specifications to determine costs more accurately. The bottom up method aggregates task estimates to determine total project costs.
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SPECIFICATION AND ESTIMATION
- 1. SPECIFICATION AND ESTIMATION INNOVATIVE WORK NAVEEN KUMAR S ACE10UAR021 4th yr,SEM 8 ACE,HOSUR
- 2. TYPES OF ESTIMATON? 1. Preliminary or approximate estimate. 2. Plinth area method 3. Cubical contents methods 4. Unit base method 5. Abstract Estimate 6. Detailed estimate 7. BOTTOM UP METHOD 8. SQUARE FOOT ESTIMATES 9. Final Estimate or Annual repair PRELIMINARY OR APPROXIMATE ESTIMATE: Early in the planning stages of a project, both owners and designers need, and often demand, an indication of the cost of the project at completion. Since the project has not yet been designed, estimates prepared at this time have a low expectation of accuracy. Names sometimes used to describe such estimates include preliminary, ballpark, blue sky, seat-of-the-pants, and order of magnitude. One of the important purposes of these preliminary estimates is to provide information to an owner or client so that a decision can be made to proceed with the project. Preliminary estimates are often made in less than two hours. The expected accuracy is no better than within 20-30%.Project comparison is a method of preparing preliminary estimates when cost data for comparable completed projects is available. Preliminary or approximate estimate is required for studies of various aspects of work of project and for its administrative approval. It can decide, incase of commercial projects, whether the net income earned justifies the amount invested or not. The approximate estimate is prepared from the practical knowledge and cost of similar works. The estimate is accompanied by a report duel explaining necessity and utility of the project and with a site or layout plan. A percentage 5 to 10% is allowed for contingencies. The following are the methods used for preparation of approximate estimates. a) Plinth area method b) Cubical contents methods c) Unit base method.
- 3. a) Plinth area method: The cost of construction is determined by multiplying plinth area with plinth area rate. The area is obtained by multiplying length and breadth (outer dimensions of building). In fixing the plinth area rate, careful observation and necessary enquiries are made in respect of quality and quantity aspect of materials and labor, type of foundation, height of building, roof, wood work, fixtures, number of stores etc., As per IS 3861-1966, the following areas include while calculating the plinth area of building. • Area of walls at floor level. • Internal shafts of sanitary installations not exceeding 2.sm, lifts, air- conditioning ducts etc., • Area of barsati at terrace level: • Barsati means any covered space open on one side constructed on one side constructed on terraced roof which is used as shelter during rainy season. • Porches of non-cantilever type. • Areas which are not to include • Area of lofts. • Unenclosed balconies. • Architectural bands, cornices etc., • Domes, towers projecting above terrace level. • Box louvers and vertical sun breakers. b) Cubical Contents Method: This method is generally used for multistoried buildings. It is more accurate that the other two methods viz., plinth area method and unit base method. The cost of a structure is calculated approximately as the total cubical contents (Volume of buildings) multiplied by Local Cubic Rate. The volume of building is obtained by Length x breadth x depth or height. The length and breadth are measured out to out of walls excluding the plinth off set. The cost of string course, cornice, corbelling etc., is neglected. The cost of building= volume of buildings x rate/ unit volume. c) Unit Base Method: According to this method the cost of structure is determined by multiplying the total number of units with unit rate of each item. In case schools and colleges, the unit considered to be as 'one student' and in case of
- 4. hospital, the unit is 'one bed'. The unit rate is calculated by dividing the actual expenditure incurred or cost of similar building in the nearby locality by the number of units. ABSTRACT ESTIMATE: The cost of each item of work is worked out from the quantities that already computed in the details measurement form at workable rate. But the total cost is worked out in the prescribed form is known as abstract of estimated form. 4%of estimated Cost is allowed for Petty Supervision, contingencies and Unforeseen items DETAILED ESTIMATE: The detailed estimate should accompanied with i) Report ii) Specification iii) Drawings (plans, elevation, sections) iv) Design charts and calculations v) Standard schedule of rates. Factors to be considered While Preparing Detailed Estimate: i) Quantity and transportation of materials: For bigger project, the requirement of materials is more. Such bulk volume of materials will be purchased and transported definitely at cheaper rate. ii) Location of site: The site of work is selected, such that it should reduce Damage or in transit during loading, unloading, stocking of materials. iii) Local labor charges: The skill, suitability and wages of local labors are considered while preparing the detailed estimate. BOTTOM UP METHOD: The bottom-up method is considered to be the most accurate method for generating project estimates. It is used to determine budget or definitive estimates during the planning phase and at the start of each project stage. The method uses the Work Breakdown Structure (WBS) developed during the planning stage of the project. Estimates are created for all tasks at the lowest level of the WBS and then these are accumulated to determine the estimates for the whole project.
- 5. The consensus technique* is usually used to obtain task estimates for the low level tasks on the WBS, because as well as producing reliable estimates it also builds active involvement, cooperation and commitment. Experts with the skills required to perform the work should be included in the estimating process. One disadvantage of the bottom-up method is that it is much more time-consuming than other methods. SQUARE FOOT ESTIMATES: Square foot estimating is another method of developing a preliminary estimate based on historical data. This technique is effective in preparing advanced preliminary estimates when features of the proposed project are known, but not yet designed. To use this method, it is only necessary to know the type of building or facility and the proposed number of square feet. Other unit measures such as the number of beds for a hospital, or number of spaces for a parking garage are sometimes used instead of square feet, but the basic method for determining these estimates is the same. Annual cost data books are published that provide square foot and other unit costs for a variety of buildings. FINAL ESTIMATE TYPES: Final detailed estimates can be prepared when the design and contract documents have been completed, or are essentially complete. Generally two types of final estimates are prepared; one by the contractor intending to bid the project, and the other for the owner's use in preparing budgets and evaluating bids for the project. The estimate prepared for the owner is called the Engineer's Estimate when the owner is a public agency, and is almost always required for bid comparisons. The owner's estimate is optional for privately funded projects. The major difference between a contractor's bid estimate and an engineer's estimate lies in the information the two estimators have at their disposal. The Estimator contact or contractor’s estimator normally has much more detailed information at his disposal. The engineer's estimator is forced to rely on more general information, since he does not know which contractor will receive the award and construct the project. In either case, the final estimate must be as accurate as possible, since it represents the money that will be received or spent when the project is actually constructed.
- 6. FACTORS INFLUENCING (OR TO BE CONSIDERED) SPECIAFICATION & METHOD? The major factor which is influencing the specification is as follows designers: – structure by discipline, e.g. acoustics, fire, lighting – structure parallel to Approved Documents • building control officers: – structure parallel to Approved Documents – limit to statutory scope, e.g. not aesthetics • estimators & tenderers: – two-part structure: separate standard content from project variables, e.g. NBS Domestic – elemental structure: cost data is elemental, e.g. BCIS • contractors: – disassembly: compliance, subcontracting – compliance: separate tests, inspections, samples – subcontracting: hence work sections, small sections – mark up: wide margins • subcontractors: – on-site: simple English, simple structure – separate products & execution – general technical requirements • contract administrators: – dealing with compliance (see slide 11) • courts: – don’t blur obligations – don’t address those outside the contract – consider precedence • facility managers – record specification – 100% brands – locational structure – specifications often cover O&M manuals, H&S files, spares etc • project managers: – specification is key to quality management – communications nexus
- 7. FACTORS INFLUENCING RATE ANALYSIS? Rate analysis is the study of principal role played by various constituents, elements of construction such as equipment, cost of labor, number of equipment etc. Factors affecting rate of an item : • Locality and situation. • Size and extent of work. • Nature of project. • Height/Level of work at which it is being executed. • Environmental and climatic conditions. Size: The smaller the project in terms of scope or the number of square feet, the more it will cost per square foot. Contractors have a set of basic “start-up costs.” These start up costs remain about the same in real dollars for every project. Thus for a very large and expensiove project, the start up costs will be a small percentage of the total construction cost. For a small project, since start-up costs remain stable, they will constitute a large percentage of the total construction budget. If the cost of start up for any project is $4,500.00, and the total cost of the project is $450,000.00, the total start-up costs are 1%. However, if the total project cost is $30,000.00 then the start-up is 15% of the total cost. Start-up becomes a major cost factor when estimating construction costs for small to medium sized projects. Special Construction: Complexity can greatly increase the cost of the project. These conditions may include renovations, heavy loading, i.e. large quantities of files or a library, hazardous materials, etc. Renovation, especially if it requires altering or moving structural components, can be costly because it necessitates demolition as well as building. Quantities of files and books are heavy so the flooring may require additional structural support. Special construction may also be necessary to shield surrounding spaces from noise, fire and other hazards. Project accessibility: Sites may be difficult to access, either geographically or because the space is used during business hours, requiring that the project be scheduled for
- 8. off hours. This can be a problem when adjacent spaces have sensitive equipment, or when construction materials containing hazardous chemicals are used in the construction process. (You will be surprised how many construction materials do in fact contain hazardous chemicals. This presents a unique problem which has yet to be adequately addressed, because even if the area under renovation can be physically isolated from other areas of the building, very often the HVAC system has not been readjusted, and these chemicals are often circulated throughout the area or building, creating hazards for occupants. This situation is especially critical in permanently enclosed office buildings (those whose windows are non-operating, i.e. they don’t open) since chemicals can linger for long periods of time. The most frequent culprits in terms of hazardous chemicals are glues, paint removers, mastics, carpet backings, and synthetically produced building materials. Be alert for these chemicals: toulene, xylene, formaldehyde, mineral spirits, naphtha, and other kinds of organic solvents. In summary, these factors can increase the time and effort needed by the contractor and result in an increased cost of construction: isolating areas under renovation providing physical access to move materials, equipment, and construction personnel to the site Ensuring periods of work when construction will not disrupt the on-going operation of the company Project Difficulty: Other factors can also raise costs: The project schedule may be tight, e.g. the client’s current lease is expiring and the work must be completed by a specified date so that the client can move in to their new space. Sub- contractors may have to work over time or neglect other projects in order to finish work on time. This will raise the contractors price for the work because many people will need to devote more hours in a short period of time to the work, increasing the stress on workers, removing them from other projects on which the contractor is working, making coordination of trades more difficult, and finally presenting the possibility of needing to pay ‘time and a half’ to union laborers (which most construction trades are in many states). Level of detail may also make the project more difficult and costly.
- 9. Time of Year Building construction is a seasonal enterprise. There are periods of the year when contractors are busy and can barely keep up and then there are periods of the year when they are likely to be looking for work. From early January to late February or early March, General Contractors will be seeking work to fill their schedule for the following construction season (approximately early April through late October or early November). During this time you are more likely to get a more competitive bid for a project. After this period it is likely that bids will be higher or the contractors who are available will be the less qualified and were not hired for other projects. Labor Rates The general state of the economy will affect the cost of a project so it is important to watch what is happening with the rate of inflation in developing accurate construction estimates. When the economy is booming (like it is now) and the unemployment rate is very low, there may be some wage pressure, particularly in the skilled and labor intensive construction industry. If there are indications of inflationary pressures, you must place some limits on your construction estimate. You should either indicate to the client that the period for which such an estimate is accurate will be relatively brief, or include some budgetary contingency for inflation over the period before bids are ‘let’ and the project is awarded to a contractor. Material Costs The type and availability of a particular material can also affect your approach to a cost estimate. If your client insists upon a particular material or if a particular manufacturer’s product is crucial to the success of a project, the cost of that specific item can drive up the cost of the project. This is essentially a closed specification. If, however you can accept a material of equal or somewhat reduced quality, you will leave room for greater price competition and lower the project cost. (Incidentally, the availability of a product or material can also affect the success of a project relative to the client schedule expectations. When you are selecting products or materials, you should also consider the concerns of “lead time” (the time it will take for an order to be manufactured and delivered).
- 10. METHODS OF VALUATION? Valuation of a building depends on the type of the building, its structure and durability, on the situation, size, shape, frontage, width of roadways, the quality of materials used in the construction and present day prices of materials. Valuation also depends on the height of the building, height of the plinth, thickness of the wall, nature of the floor, roof, doors, windows etc. The valuation of a building is determined on working out its cost of construction at present day rate and allowing a suitable depreciation. Six Methods of Valuation 1. Rental Method of Valuation 2. Direct Comparisons of the capital value 3. Valuation based on the profit 4. Valuation based on the cost 5. Development method of Valuation 6. Depreciation method of Valuation Rental Method of Valuation In this method, the net income by way of rent is found out by deducting all outgoing from the gross rent. A suitable rate of interest as prevailing in the market is assumed and Year’s purchase is calculated. This net income multiplied by Year’s Purchase gives the capitalized value or valuation of the property. This method is applicable only when the rent is known or probable rent is determined by enquiries. Direct comparison with the capital Value This method may be adopted when the rental value is not available from the property concerned, but there are evidences of sale price of properties as a whole. In such cases, the capitalized value of the property is fixed by direct comparison with capitalized value of similar property in the locality. Valuation based on profit This method of Valuation is suitable for buildings like hotels, cinemas, theatres etc for which the capitalized value depends on the profit. In such cases, the net income is worked out after deducting gross income; all possible working expense, outgoings, interest on the capital invested etc. The net profit is multiplied by Year’s Purchase to get the capitalized value. In such cases, the valuation may work out to be high in comparison with the cost of construction.
- 11. Valuation based on cost In this method, the actual cost incurred in constructing the building or in possessing the property is taken as basis to determine the value of property. In such cases, necessary depreciation should be allowed and the points of obsolescence should also be considered. Development Method of Valuation This method of Valuation is used for the properties which are in the underdeveloped stage or partly developed and partly underdeveloped stage. If a large place of land is required to be divided into plots after providing for roads, parks etc., this method of valuation is to be adopted. In such cases, the probable selling price of the divided plots, the area required for roads, parks etc. and other expenditures for development should be known. If a building is required to be renovated by making additional changes, alterations or improvements, the development method of Valuation may be used. Depreciation Method of Valuation According to this method of Valuation, the building should be divided into four parts: 1. Walls 2. Roofs 3. Floors 4. Doors and Windows And the cost of each part should first be worked out on the present day rates by detailed measurements.