Importance of cost estimation for any construction project
In construction project management, cost estimation plays an important role. The objective of Cost estimation is to build the bottom line of the project in different development stages of the project. With the support of construction cost software or construction cost calculator, the construction cost estimator prepares the cost from the existing data for the individual at a certain stage of the project. The cost that is associated with the erected building contains two types of costs like initial capital cost and the subsequent maintenance and operation cost. Both of these cost categories comprise of numerous cost elements.
Elements of the forms of cost: The capital cost for a production venture involves all the expenses associated with the initial establishment as given below:-
The engineering and the architectural designs.
Insurance and taxes for the period of construction.
Planning and viability study.
Inspection, assessment and testing
Land acquirement and improvement.
The maintenance and operation cost comprises of the following expenses:
Construction including building materials, labors and equipments.
Maintenance and repair.
Periodic renewal and renovation.
Land rental fee (if applicable).
Other expenses of the owner.
The expanse of these price components are entirely based on the volume, position and natural environments of the project along with the executive association. So, the owner should employ a construction cost estimator so that the expenses can be minimized.
Categories of Construction Cost Estimates: Generally, the construction cost is segregated in three different categories- a) Design estimates, b) Control estimates and c) Bid estimates.
Design Estimates: The progression of the designs throughout the design and planning phases of the project is dependent on the design estimate. This estimate includes:-
1. Preliminary or conceptual estimates.
2. Comprehensive or definitive estimates.
3. Screening estimates.
4. Estimates based on plans and stipulations.
Control Estimates: A control estimate is usually performed for supervising the project in order that both the contractor and the owner can efficiently manage the cost flow throughout construction.
Download Construction Cost Estimating Spreadsheet in Excel format
A control estimate is the outcome of the accessible information to arrange:-
1. Budget estimate that is useful for financing.
2. Workout cost for finishing the project.
Bid Estimates: A bid estimate is a significant part of construction cost estimation and it is normally prepared by the contractor to the owner for negotiation.
It comprises of construction rate along with the field supervision charges as well as the overhead profit price.