Baking a cake without knowing the recipe can lead to a burnt and half-baked cake. The same is the case with construction projects. Pre-construction planning is essential, and estimation should be focused on during this phase. It minimizes errors and maximizes project efficiency while optimizing resource utilization and construction budget plans.
If you want to know its importance, uncover the role of estimation in pre-construction planning in this blog!
What is Pre-Construction Planning?
Let’s understand pre-construction planning before moving towards the blog’s main topic!
It involves meticulously planning:
- Construction drawings
- Required resources
- Funding, budget, and timelines.
During pre-construction planning, an expert keeps an eye on the following aspects of the project:
- Permits and approvals
- Project goals, objectives, and limitations.
- Timelines
- Architectural plans
- Site assessment
- Potential risk
- Stakeholders involvement
What is Construction Estimation?
Constructing an estimate involves determining the entire cost of a building project after considering all potential expenses. Accurate estimation is essential for developing and maintaining a sustainable project budget. It covers direct expenses, including:
- Labor
- Materials
- Equipment
As well as indirect costs, like:
- Overheads, which include permits and fees
- Equipment mobilization
- Insurance
Estimating is doing a cost study to get an accurate price for a construction project as part of the bidding process. Construction Estimating Companies‘ experts start by evaluating the bid package and completing quantity takeoff.
A bid package describes the client’s expected requirements, containing construction specifications, contract agreements, and processes to account for all known costs. Takeoff determines the dimensions and quantities of materials, labor, and other resources.
Importance of Estimating the Project Costs During Pre-construction Planning
- It helps you get a precise budget so you don’t encounter unforeseen expenses later.
- It also lets you identify costly parts early and use value engineering strategies to reduce the costs, saving time and resources.
- You can know the right amount of materials and labor, which helps avoid waste and shortages.
- An early cost check gives time to change the design to match the budget.
- Clients feel happy when they see proper planning and simple cost reports.
- A strong and accurate estimate helps you win more bids by showing clients that you understand the project perfectly.
Key Features of Pre-Construction Cost Estimation
Before buying any tools for estimating, it is essential to know what a pre-construction estimate should include.
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Direct Costs
Direct costs are the main items you need for the project. This includes materials. Their rates fluctuate often, depending on demand and supply. Labor is another key part. You must pay workers based on their length of working time and the local wage rate. Also, don’t forget the equipment costs. Whether you rent or own machines, things like fuel, repair, and upkeep matter.
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Indirect Costs
Expenses like permit fees, zoning approvals, site inspections, and safety checks are indirectly connected to the construction project budget. Besides, utilities, staff salaries, and legal matters are also included in the indirect expenses.
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Contingency Budget
Add some extra budget just in case things don’t go as planned. Estimators consider 5-10% for contingencies in Construction Estimating Services.Examples include too much rain, late material arrival, and labor shortages.
Top Methods to Estimate the Pre-Planning Budget
All construction projects differ from each other, having distinguishing features. Hence, they demand one of the most suitable estimating methods for tailored results. Here are some of the most common methods professionals use for construction estimation.
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Analogous Estimating
This method involves using the cost of a similar past project to estimate the budget of a new one. It works best when both jobs are almost the same size and scope. It’s a quick way to plan a budget early, but it may miss some aspects (uncommon features).
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Parametric Estimating
This method uses specific project units/features to determine the overall project budget. It works by checking how much it usually costs to build one part and then applying that to the whole project. It’s useful when the job has repeated items.
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Updated Square-Foot Estimating
Instead of general methods like parametric estimating, this method focuses on recent costs per square foot in your area. It includes changes in materials, labor, and local fees. It’s more precise than outdated formulas and works well if the design is simple and the size is known.
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Bottom-Up Estimating
This approach adds to the price of each part of the job. First, estimators list everything needed and then calculate the total. It’s very accurate but time-consuming and is best used for bigger jobs where details matter and missing something can significantly affect the budget.
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Expert Judgment Estimating
It depends on what experienced contractors and estimators say. If someone has done similar jobs for years, like 20, they can give a rough idea (close to an accurate budget) based on past results. This method is best if you have less time to estimate the construction project cost.
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Rule-of-Thumb Estimating
This method uses simple rules like “$X per room” or “$X per mile of pipe.” It is fast and easy but does not give reliable numbers for complex jobs. One must combine it with another estimating method to deal with complex tasks.
Challenges of Estimators in Pre-Construction Planning
Estimators face a lot of challenges while calculating the construction project cost. Some of them are discussed here.
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Incomplete Project Details
At the early stage, project details are not fully shared. Designs are missing or unclear. Without proper drawings, estimators must assume many things. These guesses may be wrong. It leads to incorrect cost planning and can hurt the budget later. Full information is needed for a good estimate.
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Changing Material Prices
Material prices are never fixed. They go up or down due to supply and demand. Sometimes, materials become hard to find. Estimators use current rates, but they may change soon. It creates a big problem when planning the project budget early. It can cause budget issues later.
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Labor Uncertainty
Labor is a big part of the budget. It takes 40-50% of the project’s total budget, depending on how many workers you need and for how long. But it’s hard to predict this early. Sometimes, skilled workers are not available. Local wages also fluctuate. All these factors make early labor cost estimation very difficult.
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Scope Creep and Design Changes
Clients often make changes after planning begins. They add more work or ask for upgrades. It changes the total project cost. Estimators have to redo the calculations. It delays planning and wastes time. These changes should be controlled to avoid trouble during the construction stages.
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Lack of Historical Data
Many estimators depend on past project records to estimate the project budget. But if a company doesn’t have this data, they have to guess, which is risky. It can lead to wrong numbers. With no record of past costs, making an accurate estimate becomes harder and may affect project success.
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Technology & Tools
Some contractors and estimators still use paper and basic spreadsheets for estimation. It takes longer and often causes human errors. Good software helps make quick, correct budget estimates. Without these tools, estimators struggle. They work slowly and miss details. Technology makes a big difference in how fast and how well estimates are done.
Conclusion
Good planning at the start of a project is essential. A CAD Drafter makes precise drawings that show every part of the work. These drawings help the estimator understand what is needed for the job. When the plan is clear, there are fewer mistakes. Estimators can give better cost ideas, and accurate estimates at the beginning help the project go smoothly. It also keeps the work on time and within the budget. Therefore, early planning matters.
FAQs
What is the purpose of using pre-construction estimating software?
The software helps by using past project data and current material prices. It follows a clear format, so nothing important is missed. This means the budget is more exact, and financial surprises during construction are less likely. It helps contractors plan projects better and avoid mistakes in cost calculations.
What are the benefits of cloud-based pre-construction cost estimation software?
You can use it from anywhere with the internet. Your team can work together at the same time. It helps everyone talk and share data efficiently. You can make faster changes using the software. Everyone will see the latest updates right away.
