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22 May 2024

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Construction Cost Estimating Fundamentals: 8 Basic Aspects to Take into Account

Construction Cost Estimating Fundamentals: 8 Basic Aspects to Take into Account 

Cost estimating in construction is far from an easy task. This is a complicated process with its own fundamentals and nuances. The skillful construction estimator will always answer that there is a long way between the estimating background and the final bid proposal that comes to the potential client. To be successful with these tasks and pretend on high-profit orders, you should know all the basics of the costing procedure and form a win-win strategy for your company.

For example, some contractors opt for construction procurement software and consider digital-friendliness the center of the tactic to win all the bidding rounds in the local arenas. Automation of costing, estimating, and bidding routine tasks is a great idea. But do not forget about fundamentals to find the best-matching software for your business goals and needs.

8 Fundamental Aspects of the Construction Cost Estimating Process

To find the most optimal costing or procurement software, it is necessary to start with the exploration of fundamentals. For example, find out more about reviewing construction drawings as the main stage of the pre-construction phase and estimating in general. While dipping into the matter, you can understand which options in the context of automation and digitization you need for this very point.

By the way, there is 8 basic cost estimating steps to undertake not to miss any detail. Among them are:

  1. Choosing the most optimal competence area for bidding – it means that you’d better bid on those projects you specialize in (for instance, building small commercial premises and other non-living objects with small footage area);
  2. Reviewing construction specifications – this is an essential stage to take into consideration. Collect all the technical and physical parameters to understand which insights you have concerning your potential order (square footage, available machinery, rental costs in this location, available suppliers and subcontractors in the area, etc.);
  3. Reviewing designed drawings – your architects and designers should represent their drawings and explain the main idea of the exterior, interior, functionality, and other insights. You need to analyze all the given data entries to start performing a takeoff and preparing estimating reports.
  4. Performing a takeoff – all the raw costs and expenditures are gathered to realize the starting point of your budget plan. Perform your construction takeoff with the help of all the information you have at the moment. Then, you can continue with your estimating reports.
  5. Getting ready with construction estimates – analyze the most critically important costs like supply, labor, rental, equipment, and permit costs. When you understand how much materials and money for payments you need and realize the scope of your work for proper scheduling, the risk of errors and imperfections in your reports will decrease.
  6. Determining your profit margins together with your project overhead – everyone would like to realize all the benefits and revenue potentials when it comes to orders, projects, and business in general. That is why the analytical research of your profits and outcomes should take place at this point. Try to be accurate with all your estimates and calculations.
  7. Picking sides with your bidding proposal – just take a look at the insights you managed to gather together with your team. Your estimating, bidding, and costing routine tasks come to an end. That is why it is high time to take a closer look at the bidding proposal you share with potential clients. It should attract even the most exacting customers while highlighting your strengths as a contractor.
  8. Exploration of the construction contract basics – while everything is getting ready with the proposal and your estimating background, make everything clear with the agreement. You should understand all the contract basics. Do not sign an agreement that is far from your interests. Find those points that need corrections and improvements.

Remember that everything can be discussed and changed if you want to do this. Starting with the supply costs and the construction takeoff that you can improve with the help of different activities on the site and office arrangements and finishing with the contract basics to negotiate about with your potential customers – these are your policies and topics for discussion. Do not panic and keep silent. Just try to control and enhance each cost estimating process like others in the pre-construction phase.

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