Methodology for calculating the estimated cost of construction. Methods for determining construction costs. Types of estimate documentation
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14.Methods for determining construction costs and composition estimate documentation to projects.
In order to simplify the determination of construction costs, four special methods have been developed:
The basic compensation method is that it is determined by basic prices, taking into account the fact that prices and tariffs may change, and already at the time of start construction work they are updated depending on how prices and tariffs change.
Estimating the cost of a project scares many people. They don't know how much something will cost, but they know the value it brings will be passed on to him by his manager. The challenge with estimation is that it always involves some uncertainty.
Experience with similar projects: The less experience you have with similar projects, the greater the uncertainty. If you manage similar projects, you will be able to better estimate the cost of the project. Planning horizon: The longer the planning horizon, the greater the uncertainty. The planning horizon you are considering could be for the entire project or just a specific one. Either way, you will be able to better estimate costs closer to the present time of the project. At the beginning of a project, you may not even know the specific people who will be involved in the project, which will increase the uncertainty of your cost estimates. Project duration: The longer the project, the greater the uncertainty. . Fortunately, there are some tools and techniques used professional managers projects that you can use to develop more accurate cost estimates.
The resource method is a special calculation of all forecast prices and elements of construction costs. Using this method, all costs for products and materials, the costs of the necessary time for operating devices and machines, the costs of employee work are established only in natural terms, all prices are accepted at the time calculation of estimates, current.
Using some of these tools and techniques as you plan your project can help with yours. For construction projects a range of materials are required, from labor to various types materials and tools. Identifying the exact cost of all resources for specific jobs can be challenging task. Costing methods in construction management require onboarding of workers and reliable record keeping. Activity-oriented costing and costing methods can be especially useful for construction project managers to track their overall job costs.
The resource-index method, which combines the price index system and the resource method for construction. The price index means the ratio of base prices to current prices (the number of working days in order to determine the amount of wages employee payments, which perform certain work for maintenance construction machines; the time during which machines were used in construction; the number of materials, products, parts, and structures used).
Write a list of all the resources and materials that go into performing each activity on a specific task. Examples of construction project resources include materials such as tile and wood, fixtures such as sinks and toilets, and items such as nails and screws.
Write down the cost of each resource. Consult your purchase receipts to determine the actual cost of materials for a specific job, or to calculate an average cost based on purchase receipts over a period of time. Select a common measurable unit of each resource and calculate the cost per unit.
The basis-index method, which uses current and forecast prices in comparison with the value that is determined at the previous period level or reference level. Compared to the resource method, all expenses are not determined using natural indicators. Reduction to prices is carried out by multiplying the base cost by certain indices.
Write a list of the activities performed during each job and determine how much of each resource is consumed by each activity. Multiply the unit cost of each material by the quantity of each material used in the job to determine the total material cost. Add direct labor and overhead costs to determine the total cost of the job. Overhead includes all rent, car payments, office salaries, and other expenses that do not directly contribute to the completion of the job.
These construction cost estimation methods are selected depending on the terms of the contract or agreement and the overall economic situation. The most commonly used are resource and resource-index methods, but currently the basis-index method is used.
The composition allows you to determine the estimated cost of various types of construction products: construction and installation work, construction projects, construction in general and, if necessary, the launch complexes and construction phases included in them.
Review labor time data or other labor hour records to determine labor costs for a particular job. Calculate the effective wages of subcontractors and contract workers by dividing their wages or contract price by the number of hours spent on the job in Multiply the time each employee worked on a particular job by its effective wages to calculate the exact salary expense.
Assign direct and indirect material costs to a specific job. Classify materials such as wood, steel, and electrical wiring as direct materials; classify materials such as nails, screws and caulk as indirect materials. Keep track of all materials used on any given job and use purchase order receipts to determine the cost of all materials used on the job.
With two-stage design, the full composition of the estimate documentation is developed at the first stage - feasibility study (project) in the form of estimate calculations and can be clarified at the stage working documentation by drawing up local and site estimates, if this is provided for in the contract for design work. At the detailed design stage, local and site estimates and a summary estimate of the cost of construction are drawn up.
Calculate your overhead costs for each job. Define a standard rate that can be used to assign overhead costs to individual jobs. Since overhead does not directly contribute to specific jobs, it is necessary to approximate cost.
Add the costs of materials, labor and overhead together to determine the total cost of the job. Employee records. . As a small business owner, Ingram regularly faces modern problems in management, marketing, finance and commercial law. He received a Bachelor of Arts degree in management from Walsh University.
Summary estimate of the cost of construction (major repairs)
Cost Summary
Object estimate calculation (object estimate)
Local estimate calculation (local estimate)
Local resource statement
Local resource estimate (local resource estimate)
Statement estimated cost construction of facilities included in the launch complex
Determining architectural fees is a mystery to most people, including architects. As a group, architects tend to collaborate in their work with clients, which can lead to concerns about charging professional fees. For many design professionals, sending an invoice to a client is tantamount to poor taste. Additionally, tracking scope and recognizing when our efforts should be credited additional services, causes confusion for almost every project.
Finally, pricing development services are complex due to the number of complex variables that exist in each project. Site restrictions, jurisdictional requirements, building type and complexity, and local factors environment contribute to the determination of fees.
Statement of the estimated cost of objects and work on environmental protection natural environment
Local estimates (budget calculations) are primary estimate documents and are compiled for certain types of work and costs for buildings and structures or for general site work.
Object estimates (budget calculations) determine the estimated cost of construction of an object by combining data from local estimates (budget calculations).
Methods for determining the cost of construction and the composition of estimate documentation for projects
To keep things really interesting, the mixture of several of these platforms can be kept to a minimum. Okay, keep reading, it's getting worse. For us this represents the most clear system payments for our clients. But even with these straightforward structures, complications and misunderstandings always arise. Percentage of construction cost.
Types of estimate documentation
The cost approach percentage has proven to be a consistent indicator of how much effort is required in the construction and construction of a building. We've learned that the cost of a project is a more accurate measure than just its size. For example, a small condominium may have much more elements, which make it more expensive than a project that can cover large area, for example, a multi-compartment garage. The percentages we use vary, but typically fall in the range of 6%-8% for permitted building envelope drawings and 8% to 15% for full service which includes everything finishing options.
Consolidated estimates of the cost of construction of enterprises, buildings and structures (or their queues) are compiled on the basis of site estimates (estimates), local estimates for general site work and estimates for individual types of costs.
A summary of costs is compiled in the case when the construction site includes objects for industrial, housing, civil and other purposes, the cost of which is determined by independent summary estimates.
While the percentage cost approach is our preferred method of determining our fees, one area that causes confusion is which parts of the project are part of the construction cost. A good rule of thumb is to include any area where architectural coordination is required. For example, we do not charge a fee for coordinating the work of other consultants, although we spend a significant amount of time and energy incorporating input from these consultants into our construction documents, coordinating their work with our design and construction intentions.
In cases where during the construction of an enterprise, building and structure it is planned to carry out environmental protection measures, a statement of the estimated cost of objects and work to protect the natural environment is compiled.
Installation work
Based on MDS 81-35.2004 clause 3.27, the estimated cost is determined:
We also do not charge for items from high cost specialty, because the cost of the device has no relation to the amount of effort we spent to make sure that it was designed for junction box in a certain place. However, this is not the case when it comes to kitchen cabinets, although at first glance they do not seem the same to you as my chandelier analogy.
A significant amount of time is spent detailing and reviewing the cabinetry that surrounds the fixtures and the specific finishes and conditions they represent. Some projects may have a fixed fee. This is usually a negotiation fee between the architect and the client and can be determined in several ways. Under this fee structure, the architect receives the paid amount for the duration of the project. The only time we use this format is when the scope of work is not very comprehensive or with an existing client who prefers this billing method.
1. Based on the index method (BIM).
2. Resource index method (RIM).
3. Resource method.
4. Method based on enlarged estimate standards, including a data bank on previously constructed or designed analogue facilities.
In the local estimate it is calculated estimated cost individual species construction and installation works (CEM). The estimated cost is calculated at the base, current and forecast price levels.
This fee structure is exactly as it sounds, but generally speaking, this type of billing only benefits customers who know what they want and accept quick solutions. Most people don't like to be paid an hourly rate for fear of getting a surprise when the final bill arrives. As a result, when work is billed on an hourly basis, we try to alleviate our client's concerns by identifying financial milestones that indicate progress along the way. We also use different hourly rates for different levels.
Basic price level (BLP) - this is the cost calculated according to the current estimated standards and prices (estimated normative base 2001, resource prices accepted as of 01/01/2000).
Current price level (TUP) - value at the current time.
Forecast price level (PLP) - cost for the forecast period of time.
Despite our assurances that we operate efficiently, some clients remain uncomfortable with what they perceive as an "open check book" for architectural services. In these respects, we try to reduce our clients' concerns by establishing maximum size our fees. Creating a cover provides significant benefits for both the client and the architect. Once the scope of the project has been established, the maximum fee is usually determined using the percentage construction cost method.
The architect is paid hourly up to a maximum amount and the cap is set upper limit which the client is required to pay. The client can realize potential savings if the design process proceeds more efficiently than expected, while the architect is fairly compensated for his time and effort.
Resource method cost determination is a calculation in current (forecast) prices and tariffs of resources (cost elements) necessary for implementation design solution. Calculation is carried out on the basis of the need for materials, products, structures expressed in natural meters, data on distances and methods of their delivery to the construction site, operating time of construction machines and their composition, labor costs of workers. When preparing estimates using the resource method, the collections GESN-2001 (state elemental estimate standards) are used.
Frankly, there are too many moving parts in the design process to assign a fee per square foot to design a building and create documents that can be used for bidding, permitting and construction. The amount of coordination required to place the building, drawing and detailing the shell of the structure, coordination engineering work, filling out schedules and work forms, drawing and detailing finishes, and then coordinating the project once construction has begun cannot be accurately reflected in this pricing method.
Resource index method- provides a combination of the resource method with a system of indexes for resources used in construction. It differs from the resource method in that the cost of resources is determined at the basic price level, and then recalculated to the current (forecast) price level using indices.
Basis-index method determining the cost of construction is based on the use of a system of current (forecast) indices in relation to the cost determined at the base level. The estimated cost is determined on the basis of unit prices FER-2001 (Federal unit prices). Unit price– this is the cost of direct costs determined per unit of measurement of work.
Method based on enlarged estimate standards, including data from analogue objects, is based on the use of aggregated cost indicators (aggregated estimate standards) by type of work or type of construction, and also allows the use of a data bank on the cost of previously constructed or designed similar buildings and structures.
The choice of method for calculating the estimated cost depends on the specific construction conditions, sources of financing, customer preferences, and the relevance of the cost estimate and regulatory framework in the region. Each method has a number of advantages and disadvantages.
Basis-index method
This method requires relatively little labor input from a cost estimate engineer. Distinctive characteristic is the strict certainty of the base cost of resources and the relative stability of the index system.
The main disadvantage is the rather large error in determining the cost due to the use of average norms, prices and indices.
Types of estimate documentation
| Sample No. | Sample name | Sample purpose |
| №1 | Summary estimate calculation of the SSR | The cost of construction as a whole is calculated. The cost of construction is calculated by chapters (12 chapters for new construction, 9 chapters for renovation work). Construction = Construction + Mounting + Equipment + Ref.r The cost of the summary estimate is determined on the basis of object-based estimates. |
| №2 | Cost Summary | An estimate document determining the cost of construction of buildings and structures or their queues in cases where, along with objects industrial purposes is being compiled design and estimate documentation for housing, civil and other purposes. |
| №3 | Object estimate | The cost of building the facility is calculated. This estimate document, on the basis of which the contract price for the object is determined. The object estimate is compiled on the basis of local estimates. Facility = Construction + Installation + Techn.equipment + Ref.r |
| №4 | Local estimates | The cost of certain types of construction and installation work is calculated. Ssmr = PZ + NR + Psm The local estimate is compiled on the basis of a statement of quantities, working drawings, working documentation or other document from which the scope of work can be determined. |
| №5 | Local resource statement | The composition and quantity of resources required to complete the work are determined based on design data. The statement calculates resources: - labor costs of construction workers, man-hour - time of use of machines and mechanisms, machine-hour - material consumption, natural units of measurement |
| №6 | Statement of the estimated cost of construction included in the launch complex | The estimated cost of the objects included in the launch complex, as well as general site work and costs, is calculated. |
| №7 | Statement of estimated cost of objects and work | It is drawn up when during the construction of buildings and structures it is planned to take measures to protect the natural environment. When calculating, the numbering of objects and works adopted in the summary estimate of construction costs is preserved. The statement includes only the estimated cost of objects and work directly related to environmental protection measures. |
| №9 | Cost calculation of materials, products and structures | The cost per unit of measurement of the material is calculated. The calculation is based on the calculation transport costs. |
| №10 | Calculation of transport costs | The cost of transporting 1 ton of cargo from the place of transfer to the consumer to the on-site warehouse or construction site is calculated. |