Some crucial factors for developing exact construction cost estimation
The procedures become very complicated for developing the proper estimate for construction cost. Several variable factors are included in the cost estimating method. In order to work out complete project cost of construction, each variable must be computed precisely on the basis of accurate research and previous experience to find out the total project cost of construction.
Given below some crucial factors which have an effect on the construction cost as well as project cost:
1) Same Construction Projects: To create perfect construction estimate, the greatest suggestion is identical construction projects. By obtaining the final cost of those identical projects, it becomes easier to estimate the project cost of new construction project. The final cost of previous project needs to be clarified with the existing construction cost index.
2) Construction Material Costs: Construction material cost includes relevant material cost, shipping charges and taxes. When the construction material cost will be calculated, all these variations must be taken into consideration.
3) Labor Wage Rates: Labor wages differs from place to place. Therefore, while making estimation, consider local wage rate. If the project commences after a long period of computing the project cost, the feasible variation in wage rates should be included in the estimation.
4) Job Site Conditions: The conditions of the jobsite can enhance the costs of the construction. Site conditions like pitiable soil conditions, wetlands, polluted materials, inconsistent utilities (buried pipe, cables, overhead lines, etc.), ecologically sensitivity area, ground water, river or stream crossings, congested traffic, buried storage tanks, archaic sites, hazardous species habitat and same type of existing conditions etc. can raise the project cost throughout construction stage if these variations are not taken at the time of estimation.
5) Inflation Factor: A construction project can go on for long time before it gets finished. Throughout the construction phase, the cost of materials, tools, labors, equipments etc. may differ from time to time. While estimating cost, these deviations with the prices, must be taken into consideration.
6) Project Schedule: The extent of construction project has an effect on the cost. If the project runs for a longer period, the project cost is raised because of hiking in indirect costs and at the same time cutback in construction cost also raises the project cost by reason of rising in direct costs. So, construction project schedule is a crucial factor for project cost estimation.
7) Quality of Plans & Specifications: The concise construction plans and specifications minimizes the construction time by accomplishing the task perfectly at jobsite right away. Any blurred wording or badly drawn plan will not only create confusion, but also puts hesitation in the contractor's mind which generally cause a higher construction cost.
8) Reputation of Engineer: If a construction project runs uninterruptedly, it can be finished in scheduled time. If a contractor is able to work with a particular engineer or engineering firm smoothly, the project continues well and so it will be more profitable.
9) Regulatory Requirements: Sanctions from regulatory agencies may sometimes be expensive. These costs also should be taken into consideration all through cost estimate.
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