Estimation And Costing In Construction?

Estimation and costing are wildly used in construction projects. Let’s know in detail about estimation and costing.

What Is Estimation And Costing In Construction?

Estimation is the technique used to calculate and determine the different quantities and the expected expenditure to be incurred for given work or project.

Estimation is a long strategy, and it absolutely relies on the undertakings.

If the assets accessible are not exactly the assessed cost of the work being done to some extent or by diminishing it or by revising the details, the following requirement is essential for the preparation of the estimate.

1. Tender drawing or shop drawing including plan, elevation, and sections.
2. Detailed specifications contract.
3. Standard schedule of prices of the current year.

Importance Of Estimation And Costing In Construction

Estimating the cost of a construction or engineering project can be a challenging task. Accurate estimation is important to know the approximate size and scope of the project and identify any additional materials or labor that may be necessary.

Civil engineering estimation and costing is a complex process that involves determining the project’s magnitude, selecting appropriate materials, calculating labor costs, and identifying any required construction equipment. This helps in planning and predicting the total cost of the project.

Accurate estimation requires careful consideration and attention to detail. One must have a solid understanding of the project’s scope and requirements and be aware of the various factors involved to develop accurate estimates.

Purpose Of Estimation And Costing

Estimation and costing play critical roles in civil engineering by helping to determine the cost of a construction project through the calculation of various factors such as labor, materials, and equipment.

Accurate cost determination of a project is challenging without estimation, which is crucial in evaluating the project’s feasibility and ensuring that it stays within budget.

Individual work item costs within the project are determined using costing, which complements the estimation process.

Depreciation, which can make cost estimates unreliable, is not considered in cost estimation in civil engineering.

The use of software tools can aid in the estimation and costing process, but contractors should have a basic understanding of these tools before using them on a job site.

Planning ahead, avoiding cost overruns, establishing realistic deadlines, and efficiently allocating resources are some of the benefits of estimation and costing in project management.

Transforming a cost estimate into a budget is possible by dividing the total cost by the number of units needed or produced over time.

Estimation costs include time, materials, labor, and equipment, while costing includes several factors such as capitalization (including interest), operations and maintenance, insurance, taxes, depreciation, and more.

Project managers can determine the necessary funds for completing the job by accurately determining costs through the costing process.

Role Of Estimation And Costing:

1. Estimates give a rough idea about the cost of the work and hence its feasibility can be calculated, i.e. whether or not the project would be enclosed in the 
2. Estimate gives a thought of the time required to complete the task.
3. Estimates are needed to invite tenders and quotations and to set up the contracts.
4. Estimates are also needed to control expenditure during the execution of the job.
5. Estimates determine whether or not the proposed plan matches the available funds.

Methods Of Estimation And Costing:

1. Methods Of Estimation

Estimate concern with the following operations, preparing abstract of the estimate.

• Preparation of detailed estimate.
• Calculating the rate of each item to be executed.
• Item description with respect to the unit rate.
• Set up an abstract of the estimate.

I have described various methods of estimation.

1. Approximate Estimate: This is the most basic type of estimate, which involves a quick calculation of the project’s cost based on a few essential parameters such as the size of the project and the type of construction. It is often used for small-scale projects and can be inaccurate.
2. Plinth Area Estimate: This method is commonly used for residential projects and involves calculating the total area of the building and multiplying it by a fixed cost per square foot.
3. Cubic Content Estimate: This method is used for multi-story buildings and involves calculating the total volume of the building and multiplying it by a fixed cost per cubic foot.
4. Detailed Estimate: This method involves a detailed assessment of all project requirements and is often used for large-scale projects. It is the most accurate and reliable method of estimation, but it is also time-consuming and requires a high level of expertise.

2. Methods Of Costing

There are various methods of costing in construction, including:

1. Unit Cost Method: This method involves the allocation of costs based on a fixed cost per unit of measurement, such as cost per cubic meter of concrete or cost per square meter of plastering.
2. Percentage Cost Method: This method involves the allocation of costs based on the percentage of the total cost of the project. For example, if the cost of materials is 30% of the total project cost, then 30% of the total cost is allocated to the materials.
3. Direct Costing Method: This method involves the allocation of costs directly to the activity or work being carried out. For example, the cost of labor for a particular activity is allocated directly to that activity.
4. Activity-Based Costing Method: This method involves the allocation of costs based on the activities involved in the project. It is a more complex method of costing but provides a more accurate allocation of costs.

Information Required for the Preparation of an Estimate

The information required to prepare an estimate is as follows.

1. IFC or approved shop drawings in detail including plan, elevation, and section.
2. Detailed specifications of the contract.
3. Special conditions, assuming any, for materials or other.
4. Location of the project site.

Popular software for Estimation and Costing

1. MS Excel
2. MS Projects
3. Primavera
4. Off-screen takeoff
5. Autocad

Advantages Of Estimation And Costing

1. Helps in planning: Estimation and costing are important tools in the planning stage of any project. Accurate estimation and costing help project managers plan the project timeline, allocate resources, and determine the project’s feasibility.
2. Facilitates budgeting: Estimation and costing enable project managers to determine the cost of the project, which helps them create a budget. The budget helps in managing project finances and ensures that the project remains within the set financial constraints.
3. Ensures profitability: Estimation and costing enable companies to determine the cost of a project, which helps them ensure that they make a profit. Accurate estimation and costing help companies set prices for their products and services, which ensures profitability.
4. Facilitates decision-making: Estimation and costing provide information that is useful for decision-making. Companies can use this information to decide whether to pursue a project or not.
5. Helps in risk management: Estimation and costing help identify potential risks in a project. By identifying these risks early, project managers can take steps to mitigate them, reducing the likelihood of delays, cost overruns, and other problems.
6. Enables resource allocation: Estimation and costing help project managers determine the resources required for a project. This includes materials, labor, equipment, and other resources. Accurate estimation and costing ensure that these resources are available when needed.
7. Increases efficiency: Estimation and costing help project managers plan the project timeline and allocate resources efficiently. This leads to increased efficiency, reducing the likelihood of delays and cost overruns.
8. Provides transparency: Estimation and costing provide transparency in project finances. This ensures that stakeholders are aware of the project’s financial status, which builds trust and increases accountability.
9. Enables benchmarking: Estimation and costing provide data that can be used for benchmarking. This enables companies to compare their projects with similar projects, identifying areas for improvement and best practices.
10. Ensures compliance: Estimation and costing help ensure compliance with regulatory requirements. By accurately estimating and costing a project, companies can ensure that they comply with regulations related to financial reporting, taxation, and other areas.