Introduction
A project is a project in the world of construction, right? Not quite. Although both new construction and renovations work require the translation of plans into tangible buildings, it can be stated that it is two distinctly different fields when it comes to estimating and risk management. A new-build expert that accepts a historic renovation can be financially singed by unexpected issues, and a renovation expert can underestimate the pace and magnitude of a new commercial construction.
Knowing the peculiarities of challenges and risks of each type of project as well as the strategy of estimating it is crucial in case a contractor wants to create a flexible and strong business. Considering them equal is a sure way of making erroneous proposals, unhappy customers, and disappearing profit margins.
In this masterclass, the key differences between estimating new construction and renovations will be broken down. We will discuss the certainty of the blank slate of a new construction against the Pandora Box of a remodel and give you the strategic position of crafting correct, profitable bids regardless of the type of project.
What is Construction Estimating (And Why is it So Critical)?
Construction estimating, at its basic form, is a procedure of computing all the expenses involved in a construction project. This consists of a breakdown of costs in materials, labor, equipment and subcontractors and soft costs such as permit costs and the overhead and profit of the contractor himself.
The criticality of the correct estimate is hard to overestimate:
- For the Client: It is the foundation of their budget and financing. A precise estimate develops confidence and provides expectation.
- For the Contractor: It is the distinction between profit and loss. An overhigh bid will cost the job. A low ball bid will capture a project that is bound to lose money, this will cause stress and can spoil the reputation of your company.
- For the Project: It is a financial blue print. It assists in resource planning, procurement of materials and scheduling, which makes the project smooth towards the end.
The Primary Types of Construction Estimates
Estimates are not all the same. The nature of the estimate that you develop is based upon the project life cycle and the amount of details that you have.
Conceptual Estimates (The Ballpark)
This is also called a Rough Order of Magnitude (ROM) estimate, and is performed very early in the life of a project, sometimes when no detailed plans are yet available. It is applied to ascertain the preliminary viability of a project. The estimator may rely on the past experience and cost-per-square-foot prototypes to provide the client with the wide range of the budget (e.g. “$250-$300 per square foot for a new office building”). This form of estimate is good at the early stage planning, but it is too inaccurate to be used in a formal contract.
Detailed Estimates (The Bid)
It is the most popular and the most important estimate. It is developed based on a full or almost full set of construction documents (blueprints and specifications). An advanced estimate has a precise material takeoff where all the individual components of the project are measured. It is an estimate on which the contractors base their formal bid and sign a contract. Its precision is of the utmost.
The Estimating Process by Construction Phase (CSI Divisions)
A detailed estimate will be arranged by the usual stages of a construction process, usually by the CSI MasterFormat divisions, which is a standard produced by the Construction Specifications Institute. The following is a division of how to estimate the major trades.
Division 03-09: Sitework & Concrete
This is the foundation of the project.
- Sitework: This takeoff entails determining the amount of soil that needs to be removed or brought in (in cubic yards), the linear feet of trenching utilities, as well as the square footage of asphalt or landscape.
- Concrete: The estimator determines the quantity of concrete required in footings, foundation walls and slabs (cubic yards). They should also determine the quantity of the rebar, formwork materials, and labour force that will be needed to place and finish the concrete.
Division 04-09: Structure & Exterior (Framing & Roofing)
This phase creates the building’s skeleton and shell.
- Framing: This is where all the studs, joists, rafters and beams are counted. It also involves the measurement of the square footage of sheathing (such as OSB or plywood) and all of the hardware.
- Roofing: The estimator calculates the total “squares” (100-square-foot areas) of roofing material needed, accounting for a waste factor. This takeoff should consist of underlayment, flashing, ventilation and any specialty items.
Division 21-23: Mechanical, Electrical, and Plumbing (MEP)
MEP estimating is highly specialized and requires deep technical knowledge.
- Plumbing: This entails a takeoff of all piping by type and size, all fittings and valves, and all fixtures. It is a complicated procedure and minor errors can accumulate fast.
- HVAC: The estimator measures the linear feet of duct work, the quantity and size of diffusers and grilles, and the price of the main air handling units, furnaces, and condensers.
- Electrical: This requires counting / tallying each and every outlet, switch, light fixture, and junction box; and linear feet of conduit and wire of various sizes.
Division 09: Finishes
This stage involves the architectural and aesthetic elements, which clients view and feel on daily basis.
- Drywall & Painting: This is priced by the total amount of square footage of wall and ceiling areas. The estimate shall consider the degree of drywall finish and coats of paint to be applied. You can learn the specifics in our Guide to Estimating Paint Jobs for Profit.
- Flooring & Tile: This takeoff is calculated by the square foot and should not only factor in the finish material but underlayment, adhesives, grout, and sealant.
- Cabinetry & Fixtures: The most finish-intensive rooms of any project are kitchens and bathrooms. The estimate has to be immensely comprehensive addressing such items as the linear footage of cabinets as well as the separate price of faucets and hardware.
A different mindset is needed to handle the risks of renovations, where much of these finishes are changed, which we explain in our comparison of New Build vs. Renovation Estimating.
The Role of Technology in Modern Construction Estimating
The days of paper blueprints, rulers, and manual spreadsheets are fading. The advanced estimating is supported by robust technology that enhances quickness and eradicates inaccuracy that is caused by people.
- Digital Takeoff Software: Programs like Planswift, Bluebeam, and ProEst allow estimators to upload digital blueprints and perform takeoffs directly on the screen. They can trace piping, measure walls, and count fixtures with a few clicks, and the software automatically calculates quantities and transfers them to an estimate sheet.
- 3D Modeling (BIM): Building Information Modeling (BIM) creates a 3D digital model of the entire project. This model contains vast amounts of data, and estimators can use it to automatically generate highly accurate quantity takeoffs and detect clashes between different trades (e.g., a pipe running through a steel beam) before construction begins.
- Cost Databases: Services like RSMeans provide constantly updated, localized databases of material and labor costs, allowing for more accurate pricing.
Fusion Assist Spotlight: Your Full-Service Estimating Partner
As you may have observed, making a single and general estimate of an entire construction project is a monstrous task which involves profound knowledge of all trades. To a busy General Contractor, this is a huge operation to manage internally. This is what Fusion Assist can step in as an invisible extension of your team.
We are not a one-trade shop. We are a construction estimating service that is full-service and has specialized estimators in each CSI division.
How We Create a Complete General Contractor Bid
- You Send Us the Full Plan Set: You upload the complete architectural, structural, and MEP drawings for your project.
- Our Teams Go to Work: Our sitework estimator does the excavation takeoff. Our concrete specialist estimates the foundation. MEP team that we have describes the plumbing and electrical systems, and our finishes specialist quantifies drywall, paint, and flooring.
- We Deliver an Integrated, Comprehensive Bid: You get one bid that is integrated and comprehensive and very, very detailed covering all parts of the project. It is divided by trade and stage of construction so you can add your own overhead and profit on it and send it to your client.
By managing the entire takeoff process, we release your time to concentrate on what you best do; manage client relationships, plan your bid, and how you will execute the project.
Case Study: A Complete Commercial Building Estimate
Client
A General Contractor in the middle size range in bidding a new two story medical office building.
Challenge
The GC possessed a lean in-house staff and did not have a full-time estimator on each trade. The bid date was two weeks away, and there was no way to manually takeoff the entire project, with its complicated MEP and interior medical fit-out scopes, within the necessary time.
Fusion Assist Solution
The GC had posted the entire 150-pages of the construction documents on our portal. Our plans were straight away allocated to our dedicated estimators. Our professionals did the detailed takeoffs on all divisions in parallel, including site utilities, concrete foundation, steel structure, exterior envelope, roofing, all MEP systems, and the entire interior finish package within the following week.
Result
We submitted a final, integrated bid package to the GC ten days after submission in a clean Excel format. It had thousands of line items and all were carefully quantified and categorized. Instead of spending the last days of the bid period trying to figure out the numbers, the GC had time to obtain quotes form the subcontractors they wanted to work with and perfect their approach. They had put in a competitive bid that was very professional and they got the project worth 5.2 million dollars. They have mentioned that our service has saved them more than 100 hours of estimating time and helped them win the bid.
Conclusion: The Estimate as the Cornerstone of Success
The estimator is the composer of the complex orchestra of construction. The estimate score will be the one that will be followed by all the players, including the client, the subcontractors, and the project manager. A properly written estimate brings about a balanced profitable project. And a bad one results in pandemonium and loss of money.
With the right knowledge, attitude and alliances you can turn your estimating process, a necessary evil, into your greatest competitive weapon. The great estimate is the real foundation of all the successful construction projects.
Build your next project on a foundation of certainty. Whether you need a takeoff for a single trade or a complete estimate for a general contract, Fusion Assist is your trusted partner. Contact us today.
FAQs : Construction Estimating
What is the difference between a takeoff and an estimate?
A takeoff (or quantity takeoff) is the measuring and counting of all the materials and components of a set of plans. The outcome is a list of quantities (e.g. 500 cubic yards of concrete, 10,000 linear feet of piping). An estimate is an estimate that uses that takeoff and puts costs against it, material prices, labor rates, equipment costs, to come up with a total cost of the project.
How long does it take to create a detailed construction estimate?
This is totally dependent on the size and complexity of the project. The estimation of a basic house renovation can consume 10-20 hours. A big commercial structure may consume several hundreds of hours of a group of estimators. Professional services, such as Fusion Assist, employ teams and technology to shrink this time, down to a matter of days.
What is CSI MasterFormat and why is it important?
CSI MasterFormat is the construction-standard method of dividing construction specifications and information into a sequence of numbered divisions and sections (e.g., Division 03 is Concrete, Division 09 is Finishes). By formatting your estimates in this way you will find that they are simpler to read and follow by other contractors, architects and engineers.
What are the biggest risks in construction estimating?
The greatest risks are omitted scope in the plans, mathematical mistake in the takeoff, out-of-date pricing, and unforeseen conditions. That is why it is so important to have the multi-step review process and to use the professional software. The failure to plan for risk is one of the biggest silent budget killers in construction.
Should I use a construction estimating software or a service?
When you employ an estimator who is committed and trained, then you can invest in professional software such as Planswift or Bluebeam. Are you a business owner and you currently do the estimating yourself? Then a service such as Fusion Assist can be a more economical alternative, not only does it save you the cost of the software but more importantly it can save you hundreds of hours of your own valuable time.
