Uncertainties around the cost of a construction project can lead to budget overshoots and carry significant financial impact. Engaging professional cost estimating services is essential to the planning of any construction project, whether residential, commercial, or industrial. Accurate estimating services benefit not just the project owner, but also the contractors, developers, and investors involved in the project. In general, understanding the costs of a project is one of the most obvious and important steps to ensure a project achieves the desired results. Knowing the parameters of professional cost estimating services will help you better understand the services and benefits you will receive.

Understanding Professional Cost Estimating Services

The goal of professional cost estimating services is not to provide a final estimating figure, but to offer an in-depth and structured approach to the estimation and analysis of the significant cost contributors to a construction project. Professional cost estimators seek to understand and analyze the details of a project’s plans and specifications, the materials and labor needed to complete the project, and the costs of the required equipment and ancillary services. Ultimately, these detailed estimates serve to support the budgeting and financial planning and decision services required to proceed and complete a construction project.

Detailed Project Expense Breakdown

One significant advantage of using professional cost estimating services is the detailed breakdown of project costs. Instead of providing a single total price, a professional cost estimating service uses categories such as:

Material Costs

Labor Costs

Cost of Equipment and Machinery

Site Preparation

Subcontractor Costs

Costs of Permits and Regulatory Fees

Contingency Allowance

Providing costs in this manner helps project stakeholders see how the project funds will be spent and where costs might be minimized.

Quantities Taken Off Accurately

This part of cost estimating is referred to as a quantity takeoff. It is the professional cost estimator's job to determine the correct quantity of materials that will be required to complete a construction project. Professional estimators will look at the architectural drawings, the engineering plans, and the project specifications to determine the quantities of concrete, steel, lumber, drywall, roofing, and all the other components and finishing materials that will be required to complete the project. Takeoffs that are accurate will limit the shortages of materials, limit the waste of materials, and aid the efficiency of the procurement of the materials.

Labor Costs that are Realistic

Labor costs are one of the largest costs associated with a construction project. Professional cost estimating services take the size and complexity of a project, and the location and other scheduling factors, into consideration when assessing labor costs. They also take into account the costs of the available workforce and labor productivity, as well as the skills required, so that a realistic labor unit cost is developed which will limit the possibility of cost overruns on the construction project.

Cost Estimate Services Improves Budget Planning

A project owner will not give the go ahead for a project until they are confident that the budget for the project will accomplish their goals. Professional cost estimating services provide accurate costs which assist in planning a budget.

With precise estimations, stakeholders are empowered to:

• Obtain financing with greater certainty

• Utilize resources with greater effectiveness

• Identify priorities

• Eliminate lost costs

• Develop flexible plans

• A well-drafted budget strengthens project execution

Cost Control and Risk Management

The construction industry is beset by uncertainties, including variability in the marketplace, costs of inputs, labor scarcity, and unknown site conditions. These and other issues can threaten the success of a construction project. The most skilled estimators identify these issues and the costs that will most likely be at risk during the earliest stages of the project. When potential risky conditions are detected prior to the construction phase, project teams can create and implement risk-reduction plans and place funds in the project budget to cover the most likely financial risks.

Advantage in Bidding

When potential contracts are being evaluated, construction cost estimating services are critical for generating a profitable bid that will be successful. A cost estimate that provides the information for a contractor to submit a bid that is low, but not too low, is the goal of a bid estimate.

Improvement in the Quality of Decisions

Added professional services estimating costs supply quality information to facilitate the consideration of cost relative to the different design and material and construction method options available to the professional team. Cost estimates also enable informed choices that determine the contract's balance of cost and quality of the finished project.

Conclusion

The inclusion of expert cost estimators is essential for a successful project. Cost estimators provide detailed calculations of the cost of resources, quantify resources, analyze the necessary labor, and perform a full scope construction cost analysis prior to the commencement of construction. The use of professional estimating services by project stakeholders and builders provides a greater understanding of the finances, diminishes risk, and ultimately improves the efficiency of the project. The accurate estimation of the cost of construction provides confidence that construction will be commenced and the project will be delivered successfully.