What is Construction Cost Estimate?

A
A cost
There
problem
are
estimate
different
with a
is cost
the
types
approximation
overrun
of estimators,
can beof
the
avoided
whose
costtitle
of
with
amay
program,
a credible,
be preceded
project,
reliable,
by
oraand
operation.
accurate cost
modifier,
suchestimate.
as building estimator, or
electrical estimator, or chief estimator.

osts Associated with Constructed Facilitie

The costs of a constructed facility

to the owner include both the
initial capital cost and the
subsequent operation and
maintenance costs.

The capital cost for a

construction project includes
the expenses related to the
initial establishment of the
facility:
Construction,
Land acquisition,
Insurance
and
taxes
including
during
and
including
furnishings
materials,
not
Architectural
Equipment

Field
Planning
Construction
supervision
and
and
feasibility
engineering
of
financing
construction
studies
design
Inspection
Owner's
general
and
office
testing
overhead
assembly,
construction
holding
and
equipment
included in and
construction
labor
improvement

The operation and maintenance

cost in subsequent years over
the project life cycle includes
the following expenses:

LABOR AND MATERIAL FOR

LAND
OPERATING
OTHER
INSURANCE
TAXES
PERIODIC
RENT,
UTILITIES
RENOVATIONS
IFAND
APPLICABLE
STAFF
OWNER'S
EXPENSES
FINANCING
COSTS
MAINTENANCE
AND
REPAIRS

Types of Cost Estimates

1. Design Estimates.
For the owner or its designated
design professionals, the types of
Detailed
Screeningestimates
estimates
estimates
(or
(or
(or
Preliminary
Engineer's
estimates
based
cost estimates
encountered
run
order of magnitude
conceptual
definitive
estimates)
estimates)
onplanning
plans and
specifications
parallel with the
and
estimates)
design as follows:

2. Bid
Estimates.
THE DIRECT COST OF CONSTRUCTION FOR
BID ESTIMATES IS USUALLY DERIVED FROM
A COMBINATION OF THE FOLLOWING
APPROACHES.

CONSTRUCTION
QUANTITY TAKEOFFS
PROCEDURES.
SUBCONTRACTOR
QUOTATIONS

3.Control Estimates.
For monitoring the project during
construction, a control estimate
is derived from available
information to establish
Budget estimate for financing

 Budget estimate
for financing
Budgeted cost after
contracting but
prior to construction
Estimated cost to
completion during
the progress of
construction.

level of
IMPORTANCE that
is placed upon a
function, item or
solution

Value Engineering
is the process of
analyzing the functional
benefits a client requires
from the whole or parts
of the design

OPERATION PHASE

OPERATO
R,
USER

Project
Cycle

identify the required function

and then compares and
selects from the various
options

CONSTRUCT
OR
OWN
ER

DESIGN
ER

CONCEPT
DEFINITION

to produce
the owners
BEST value
requirement
s

IMPLEMENTATION

HOW TO ATTAIN BEST VALUES?

>Remove unnecessary cost
any unnecessarySPECIFIC CAUSES OF
cost is eliminatedUNNECESSARY COST
from the proposed
design
1. Cost of unnecessary attributes

2.Cost of unnecessary specification

3. Unnecessary life-cycle cost

4. Unnecessary opportunity cost

INFORMATION PHASE
Clearly identify the
problems to be solved
and gather information
on the background,
functions and
requirements of the
process or system.

SPECULATION PHASE

they have a
brainstorming session
and consider
alternative methods
of providing the same
function

EVALUATION PHASE
which the proposed
alternative solutions
to providing the
function are analyzed
to determine the
viability of each one

PROPOSAL PHASE
It involves
requirement
analysis and
partnership
relation.

INFORMATI
ON
PHASE

SPECULATIO
N
PHASE

PROPOSAL
PHASE

EVALUATION
PHASE

Case
Study:
The
Scottish
Parliament
Building

ITEM

POTENTIA DECISION
L SAVING OF THE
SPCB

ACTUAL
SAVING

Reduce car
parking
provision from
129-50

750,000 1,500,000

Reduce to
65 spaces

667,000

Rationalize
bar/lounge/
restaurant

In excess of
1 million

----

Delete washhand basin in

MSP rooms

210,000

Maintain
existing
provision
Agreed to
be deleted

Reduce
standard of
media
accommodatio
n fit out

235,000

Agreed

209,160
236,140