Why Is Construction Cost Estimation Important?
Whether a construction project is big or small, there is only one objective: to complete the project and achieve all the goals. But setting the goals is a different task, examining the real-world factors that can make or break your goals are another. To understand these factors and mitigate a proper way to complete the project, you need accurate construction cost estimation.
Let’s take a look at the necessity of construction cost estimation and using a construction estimator for the job.
The Purpose of Construction Cost Estimation
Irrespective of the project type: new project, add-on, or renovation of an existing site, construction cost estimation provides your clients with a precise picture of the complete expenditure required to complete the project.
All construction projects contain diverging costs that sometimes stretch beyond the grasp of construction managers, employees, and materials required for completion. But the United States Census Bureau affirms that construction cost estimating software is competent in accurately estimating every cost. It does so by collecting data based on various factors that include labor, materials, location, machinery, building codes, and even the type of soil. These factors help the software create data points and accurately project the end cost. If the construction site is located somewhere that experiences erratic weather, the clients will experience unforeseen cost overruns and project delays.
On top of these, an estimator has to consider other factors, like provisions containing fuel, water, electricity, drainage, and specific material needed to complete the project. Even the availability of materials plays a vital role in project completion since not all materials are available at the same time.
Construction Cost Estimation Techniques
Different estimation techniques that cost estimators use depending on the speed and accuracy rate. Some of them are:
- Joint Cost Allocation: To allocate different costs that are tough to assign to single project elements, estimators use distinct mathematical formulas.
- Empirical Cost Deductions: The following technique uses regression inspection to connect the construction cost and an estimator’s model. The method accuracy heavily depends on the quality of the predictive model used. Hence, estimators must be familiar with each aspect of total construction costs.
- Production Function: This particular technique connects the output of the project (build completed so far) with the input (labor and materials). So, to define a certain output (particular square feet built), you need to define the most favorable input values.
- Stick Estimation: The method is highly accurate but equally time-consuming. It is an estimation practice used to determine the total cost by listing the cost of each job. With so many factors to add and consider, human-errors are common since so much time engagement causes loss of focus and carelessness.
- Unit Cost Estimating: In layman terms. Unit cost estimation connects unit costs with every assembly included in the construction process. It is a comparatively quick estimation technique with high accuracy, especially if the estimator has previous experience of using assemblies.
Common Difficulties Encountered During Construction Cost Estimation
To get accurate cost estimations and avoid difficulties, all you need to do is stick to the standard procedures consistently, and most experienced estimators will concur with it. A common problem that experts often suggest is failing to read the documents carefully. Such failure often leads to dramatic errors in the project scope and cost estimation. Another problem includes mathematical inaccuracies that either include incorrect data entry or failing to integrate costs during the estimation process.
Other bigger faults consist of failing to visit the construction site and inability to comprehend the prevailing conditions. There are even instances of some estimators use previous cost data without adjusting them to current conditions. Or, they will make random adjustments without using old data. In both cases, slight miscalculations result in wrong estimations even causing project shut-down.
Final Words
Project designers and construction managers must realize that there while construction cost is a major component in the overall capital, other cost elements are vital too. For an owner/investor, apart from the construction cost, they must consider the operation and maintenance cost that will follow after project completion. Ultimately, construction cost estimation software can relieve the burden of common errors and time-consumption easily.
