Benefits of Using Production Rates in Construction Cost Estimating
Why use production rate versus unit rate cost estimating? Using production rate cost estimating, also called “bottom-up”, is the very first level of knowledge a cost estimator should acquire. It takes time and consistency, but it is all worth the effort. From my observations in the field of cost estimating and working for various clients, […]
Use of Allowances in a Cost Estimate
Cost Allowances in Detail and Conceptual Cost Estimates If we look at what allowances are and how they are used in a cost estimate prepared for construction contracts, vs. allowances used in conceptual cost estimating we will see that they can be very different. Firstly, let’s define the term “allowance” in the context of cost […]
Capital Cost Estimate – Indirect Costs
In the world of construction contracting, the term “indirect costs” are very well understood. Things can get somehow confusing when the cost estimate needs to include the project capital costs. Partly because there are two different types of indirect costs included in a capital cost estimate: contractor’s indirect costs which are part of construction costs, […]
Capital Cost Estimate – Direct Costs
CAPITAL COST ESTIMATE DIRECT COSTS In the field of cost estimating, the direct costs can be defined, in a simplistic way, as all the costs associated with a construction activity. If we perform the activity, we incur the costs and vice-versa. Only the resources allocated to construction activities are considered direct costs. Let’s say that […]
Quantity Takeoff for Conceptual Cost Estimating
You might wonder, why would someone want to take time out of their day writing about quantity takeoff on a cost estimating blog. Every time the question “how do you do the quantity takeoff” comes up, the answer is invariably about the methods used: manual, or using a software. I will cover the software for […]