Estimation, Costing and

Specification
introduction
Estimate
Estimate is a tool for planning and controlling the construction activity of any project with respect to the
quality, time and finance.
Estimate is a forecast of a project’s probable cost.

The process of preparing an estimate is known as estimating.

It includes :
1. Taking out quantities
2. Abstracting or bill of quantities (BOQ).

Factors that complicated the process of estimating

• Advancement in technology
• Bye laws of the local bodies
• Changes in the living standards of people
• Demand for improved services
• Help from financial institutions
• Labour laws
• Market conditions of building materials
• Wide range of building materials.
Factors involved in construction activity
• Quantity aspect – it is attained by the study and analysis of drawings of the particular project
• Quality aspect – it is attained through specifications for materials and workmanship

Quantity survey
• A schedule or a list of all the possible items required for construction of any structure.

Essentials of an estimator
• Good knowledge in mensuration and simple trigonometry
• Thorough knowledge of construction methods and procedures, materials of construction, labour
problems, specifications and local customs
• Ability to read and interrupt drawings accurately and efficiently
• Accuracy in calculations and costs
• Personal qualities like common sense, skill, experience, foresight, good judgement and patience

Requirements of an estimator
• Fully dimensioned detailed drawings
• Cost analysis file of works executed and difficulties experienced
• Detailed specifications of the materials to be used, method of execution, proportions, etc..
• Hand books for reference
• Labour wage records
• Price list of materials
• Scales to measure the missing dimensions
• Schedule of rates of all the items of construction work
Accompaniments of an estimate
1. Cover page mentioning the name of the project, accounting head, division and subdivision of
project, authority framing the project.
2. Report discussing brief history and necessity of the project, outline of the work, arrangement and
allocation of funds, references to the standard specifications and the schedule of rates.
3. Quantity sheets showing quantities of each possible item of construction.
4. Abstract showing the estimated cost of the project.
5. Drawings of the proposed project.
6. Description for special specifications for items not covered in standard specifications.
7. Detailed analysis of rates for items not mentioned in the schedule of rates.
8. Structural calculations for the load bearing members of the project.
9. Statement showing the requirements of materials of different varieties.
10. Statement showing the personnel required for execution and establishment of the project.
11. Financial implications of the project.

Uses of an estimate
For proposed project
1. To ascertain the time for contract.
2. To control expenditure during execution.
3. To estimate of any controlled materials like cement and steel.
4. To frame tender document and arrange for the contract.
5. To manage the finance of the project.
6. To obtain administrative approval and technical sanction for the project.
7. To prepare bills for interim and final payments.
8. To prepare construction schedules and programme.
9. To justify the investment.
10. To select most remunerative or economical alternative.
11. To work out material and labour requirements, etc.
Uses of an estimate
For existing project
1. To advise the client for the fixation of standard rent.
2. To furnish justification for claim in the arbitration proceedings.
3. To prepare tax schedules.
4. To value the property for sale, government taxes, purchase, mortgage, fire or other insurance, etc.

Financial implications
I = (G-E)/C x 100
Where I = Percentage net return
G = Gross annual earnings from the project
E = Annual recurring expenditure
C = Total cost of the project

Cost Planning
The term cost planning is used to indicate the stages in which the total predetermined cost of
construction of the project is to be spread over.
It involves 3 operations:
1. Estimating cost – the target cost of the project is established by employing any
approximate method of costing. It helps the owner to be prepared for the financial
liability.
2. Programme of expenditure – the cost of the project is to be incurred as per the
programme set out for expenditure and thus, the owner is informed about the amount he
has to release at different stages.
3. Checking of cost – as the project proceeds, the engineer should keep a close check on
the amount spent and minor adjustments can be made, if necessary, to complete the
project in the predetermined amount.
Spot Items
There are certain items for which it is not possible for the estimator to fix an amount without seeing
and studying them in detail. Such items are k n own as the spot items or site items.
1. Constructing openings in the existing wall
2. Demolishing existing structures
3. Connecting an old building with a new building
4. Clearing the site
Points to be noted for Spot Items
1. Detailed description
2. Removal of debris
3. Ownership
Prime cost
• Eg: cost of water supply fittings, sanitary fittings, joinery details etc
Provisional Sum
• Eg: cost of electric fittings, lift fittings, air conditioning equipments, etc
Provisional Quantities
• Eg: quantity of earth work, excavation, foundation concrete, brickwork, etc
Day Work
• The term day work is used to denote a procedure of valuing an item based on the materials
used, the actual time taken by the labourers and the equipment employed.
• It is adopted where it is not possible to value the items at the contract rates.
• Day work sheets are maintained where details of hours of each type of labour and the
quantities of various materials are recorded.
• It can be represented in a tender form and it should be clearly mentioned in the specification
that the day work prices quoted by the contractor includes the following:
1. Cost of transport of materials to the site of work
2. Contractor’s supervision
3. Use of the contractor’s ordinary equipment
4. Contractor’s over heard charges
5. Contractor’s profit
Contingencies
• It is the amount for the uncertain and miscellaneous items which cannot be classified under
distinct item of the project or which are overlooked at the time of framing the estimate.
• Its amount varies from 5% to 10% of the total cost.
• The amount to be spent on the supervising staff from the owner side is considered as included in
this item.
Work charged establishment
• Salaries for the work-supervisors, chowkidars, mistries, clerks, etc are paid from the work
charged establishment provided in the estimate.
• Its amount varies from 1.5% to 2% of the total cost of the project.
• The employees under the work charged establishment are temporary staff.
Schedule of Rates
• It is a list of rates of various construction items published by P.W.D. under the name of
‘Schedule of rates’ book.
• The S.O.R. is prepared after detailed analysis of rates including transport of materials, rent
of machineries and equipments used , etc
Estimated cost and Construction Cost
The actual cost of construction may exceed the estimated cost of construction due to the
following reasons:
1. Lack of accuracy in the preparation of estimate.
2. Risk in labour and material rates till the completion of the construction work.
3. Changes in drawings and design during construction
4. Changes in specification of materials during construction work
Water and electric consumption charges
• Cost of water for drinking purpose of workers and curing of the work
• Cost of Electricity for works in the night and to run equipment and machineries
• Its amount is added about 1% to 1.5% of the total cost of materials and labour.
Over head charges
• Includes contractor’s profit
• It varies from 15 to 20%.
• It has 2 categories
1. Expense for the tools, testing, supervision, insurance, amenities at site, power, plant stores,
etc
2. Expense for office establishment such as postage, rent, travelling, stationary, taxes,
telephone, etc.