What is estimating?
Estimating is collecting all of the available information relating to a scope of work and the expected resources to undertake and complete the scope, including future changes in resources costs.
Estimating is also a mental process of visualisation of a construction methodology. It is not expected to carry a high degree of accuracy because little information is known. As the design progresses, more information is known and the accuracy should improve.
The Estimator reviews all available detail plans, drawings, specifications, reports, contract documentation, government regulations and owner requirements.
What is an estimate?
The estimate or “estimated cost” refers to a calculation the final total construction cost of the project calculated using resource data. That is, the expected labour, material and equipment effort that will be expended in order to perform a series of activities or tasks.
This definition requires two important facts:
- The estimate is an approximate calculation
- The estimate contains uncertainties
The accuracy of cost estimates depends on the available or existing information at the time the estimate is prepared.
The definition of an estimate
Dictionary or Google definitions:
- To calculate approximately the amount, extent, magnitude, position or value of something.
- An approximate calculation or judgement of the value, number, quantity or extent of something.
- Educated / informed guess, approximate value.
- Informal – guesstimate
Engineer definition:
- The art of forecasting the total effort required to perform tasks.
- Forecasting the future cost of an engineered construction project, prepared in a systematic manner appropriate to the size and complexity of the project and to a level of accuracy commensurate with the available information and the intended use of the information developed.
Basic elements of estimating
- Direct costs – labour, material (temporary or permanent), plant and subcontractor costs
- Indirect costs – mobilisation, running costs, demobilisation, including management costs
- Other costs – risk & opportunity, contingency, overhead and margin
These elements will be discussed in a lot of detail in future blogs.