As the construction industry continues to grow, contractors need to develop a dependable estimating process. This involves a combination of job costing data from previous projects and detailed understanding of indirect field costs and overhead to create estimates that are competitive and profitable. This article will discuss how these processes work together to bring clarity, assurance and peace of mind to large and complex projects during the preconstruction phase.
Why is construction takeoff important?
Estimating services are available from a variety of construction takeoff service providers, including architects, engineering firms and quantity surveyors. Their experience with construction estimating techniques and methodologies enable them to produce highly accurate building estimate reports. These are based on the project’s technical specifications, and grouped into work packages that are later assigned to specialty contractors. In addition, the estimator will visit the construction site to make observations and take photos in order to understand what the actual conditions are going to be like on-site.
During this process, estimators must consider rate information, such as per-hour or unit labor rates and equipment rental fees. They also consider the cost of materials and equipment (owned, leased or rented) as well as the duration of their use on the project. Often, these items will need to be tracked for their depreciation and maintenance expenses. Indirect field costs and overhead costs, such as clerical, administration and general office expenses, are considered as well.
Once the estimator has a complete and detailed understanding of all direct and indirect costs, he or she will add an appropriate profit margin to the sales price of the project. This percentage varies across the industry depending on a company’s financial goals, growth expectations and the amount of risk in each particular project. Most construction businesses will add anywhere from 5-10% of the total sales price to their estimate as contingency.
