6 level of estimating
Owner’s estimate
1. Conceptual
2. Alternative design
3. Owner/engineers
Contractor’s estimate
4. Contractor’s bid (most detailed)
5. Alternative construction method
6. Change order/claim
Horizontal format items
- L (Labor)
- RL (Repair and Service labor)
- PM (Permanant materials)
- EM (Expendable materials)
- S (Sub-contractors)
- EOE (Equipment
- Operating Expense)
- R (Rental)
Horizontal format risk rank
L, RL
EM
EOE, R
S, PM
Vertical format items
- Direct/indirect cost
- Escalation
- Interest
- Contingency
- Markup
- Bond fee
3 identified contingencies
- Productivity hedge
- Soft subs
- Special risk event
1 unidentified contingency
Markup
3 types of escalations
Labor
Material
Equipment
3 methods for calculating markups
- total cost %
- labor %
- broad based
2 types of bid
- Lump sum
- Schedule of bid items (more restricted)
EOE includes;
- F.O.G: Fuel Oil Grease
- Tires
- small repair parts
- 3rd party over haul
Ex of direct cost
- Raw material
- Labor
- Equipment
Ex of indirect cost
- Salary
- Overhead expenses
- Insurance/taxes
Why is the direct cost done before indirect cost?
Indirect cost depends on time which is affected by direct cost.
What is soft sub?
Subcontractor not covered by performance bond
What is escalation?
Increase in price of equipment, labor and material over time
What is takeoff quantity?
Estimated quantity by your crew
What is bid quantity?
Estimated quantity by owner’s engineer
What is prorate factor?
Total bid item / Total takeoff
Differences between crew and indiv. method
Crew
Sum vertical columns x cost by hrs
Indiv.
Calc each items then times w/ time. -> sum
How to calculate interest
(net revenue - outlay) x interest rate
What is the purpose of calculating prorate factor?
- Fairness in distribution of time, cost and resources
- Show the effects of changes and delays
Rank from high to low risk construction
TBTESH
