In the construction industry, estimating is the crucial process of determining the expected costs and quantities of materials, labor, and equipment needed for a project. It essentially involves projecting, as accurately as possible, the total cost of the project, along with the required resources for its completion.
The American Institute of Architects defines estimating as “the construction and services required by the Contract Documents… and includes all other labor, materials, equipment and services provided… by the Contractor to fulfill the Contractor’s obligations.” [1] This encompasses the entire scope of work involved in the project.
Why is Estimating Important?
Accurate estimates are essential for the success of construction companies. They play a vital role in:
- Bidding competitively: Competitive bids rely on accurate estimates to ensure the company can secure projects while maintaining a healthy profit margin.
- Financial stability: Overly high estimates can lead to a lack of work, while underestimates can result in financial losses and even bankruptcy.
The Estimator’s Challenge:
Construction estimators constantly navigate a delicate balance between bidding too low and too high. Striking this balance is crucial for the company’s financial well-being and its ability to compete effectively in the construction industry.
Who Creates Construction Estimates?
Estimating professionals, often called simply estimators, are responsible for preparing the cost estimates for construction projects.
Company Structure:
- Large companies: Typically have a dedicated estimating department with one or more full-time estimators who handle all company estimates.
- Smaller companies: Project managers or even the company owner may take on the estimating responsibilities.
Regardless of their title, anyone creating construction cost estimates is an estimator. Their primary objective is to:
- Accurately determine the quantities of materials, labor, and equipment needed.
- Calculate the costs associated with completing the project’s scope of work.
- Factor in a reasonable profit while remaining competitive in the market.
Balancing these competing needs requires a skilled and experienced estimator.
Skills of a Successful Estimator:
Construction expertise: Understanding construction methods, materials, and skilled labor capacities is crucial.
Specialization: Due to the industry’s vastness, estimators often specialize in specific areas like subcontractor trades (electrical, mechanical) or construction types (residential, commercial).
Market knowledge: Estimators also need to be familiar with the specific market’s construction methods, preferred materials, and labor skill levels.
Quantity take-off skills: This involves reading blueprints, comprehending the design intent, and calculating the required materials, labor, and equipment quantities. Strong math skills are essential.
Communication Skills: Estimators obtain pricing from vendors and subcontractors, communicate project requirements, and prepare contracts and proposals. Effectively presenting estimates to project owners fosters trust and understanding.
Computer Skills: Modern estimating utilizes software like Excel, takeoff software, and estimating packages. Creating contracts, proposals, and other documents is essential.
Personal Qualities:
- Detail-oriented: Accuracy is paramount in estimating, as even minor mistakes can significantly impact project profitability.
- Decision-making under pressure: Bid days are fast-paced, requiring quick analysis and decisions based on limited information.
- Commitment to continuous learning: Staying updated with industry trends and best practices through professional organizations and ongoing education is crucial.
The Art of Estimating:
Estimating is often considered an art, given the inherent uncertainties in construction costs. Continuous practice and honing good estimating skills are essential for success, similar to mastering an instrument.
Developing Your Estimating Skills:
This book offers a roadmap for aspiring estimators, including:
- Thorough chapter review: Grasping the fundamental principles of estimating.
- Verifying calculations: Practicing and solidifying understanding through example problems.
- Method mastery: Understanding and applying the five quantity takeoff methods.
- Real-world application: Practicing with project drawings to gain practical experience.
- Software exploration: Completing computer exercises and sidebars to enhance software proficiency.
- Problem-solving practice: Completing chapter-end problems to test and refine skills.
- Project estimating: Preparing complete estimates for sample projects to gain comprehensive experience.
Remember, consistent practice and a commitment to learning are the cornerstones of becoming a skilled and valuable construction estimator.