Construction Estimating Software is
computer software designed for contractors to estimate construction costs for a
specific project. An estimator will typically use estimating software to
estimate their bid price for a project, which will ultimately become part of a
resulting construction contract. Some architects, engineers, construction
managers, and others may also use estimating software to prepare cost estimates
for purposes other than bidding.
History
Traditional methods
Construction contractors usually prepare
bids or tenders to compete for a contract award for a project. To prepare the
bid, first a cost estimate is prepared to determine the costs and then
establish the price(s). This involves reviewing the project's plans and
specifications to produce a take off or quantity survey, which is a listing all
the materials and items of work required for a construction project by the construction
documents. Together with prices for these components, the measured quantities
are the basis for calculation of the direct cost. Indirect costs and profit are
added to arrive at a total amount
Spreadsheets
Estimators used columnar sheets of paper
to organize the take off and the estimate itself into rows of items and columns
containing the description, quantity and the pricing components. Some of these
were similar to accounting ledger paper. They became known as green sheets or
spreadsheets.
With the advent of computers in business,
estimators began using spreadsheet applications like VisiCalc,Lotus 1-2-3, and
Microsoft Excel to duplicate the traditional tabular format, while automating
redundant mathematical formulas
Many construction cost estimators (over
55%) continue to rely primarily upon manual methods, hard copy documents,
and/or electronic spreadsheets such as Microsoft Excel. While spreadsheets are
relatively easy to master and provide a means to create and report a
construction cost estimate and or cost models, their benefit comes largely from
their ability to partially relieve estimators of mundane calculations.
Accuracy, however, is not necessarily improved and productivity is not
maximized. For example, data entry remains tedious and prone to error, formula
errors are common, and collaboration and information sharing are limited
Commercial Estimating Software
As more and more estimators came to rely
on spreadsheets, and the formulas within the spreadsheets became more complex,
spreadsheet errors became more frequent.These were typically formula errors
and cell-reference errors. Hard-coded formulas in estimating applications were
originally created to overcome these errors. The applications also made use of
reference databases for costs and other data. As these applications became more
and more popular over the years, additional features, such as saving data for
reuse and trade-specific calculations, have become available.
Many of these software applications are
specific to different construction markets, such as commercial drywall,
residential building, remodeling, masonry, electrical, and heavy construction.
For example, programs that are designed for building construction, include libraries
and program features for traditional builders. In sharp contrast, programs that
are designed for civil construction, include libraries and program features for
roadway, utility, and bridge builders. In some instances, applications are
provided without included resource databases. This requires that the user
develop their own resource library; including discipline-specific resources (as
an example: for civil infrastructure, mining, mechanical and electrical).
Sophisticated, Cost estimating and
Efficient Project Delivery Software systems are also available to integrate
various construction delivery methods such as Integrated Project Delivery, Job
Order Contracting, and others (IDIQ, JOC, SABER...) simultaneously and
securely. These newer Cost estimating and Efficient Project Delivery Software
systems, enable estimators and project managers to collaboratively work with
multiple projects, multiple estimates, and multiple contracts. A 'short list'
of additional capabilities includes the ability to work with multiple cost
books/guides/UPBs, track project status, automatically compare estimates,
easily copy/paste, clone, and reuse estimates, integrated sophisticated visual
estimating and quantity take-off (QTO) tools, including pattern search,
automatically link specifications to estimates. Owners, Contractors, and AEs
are moving to advanced cost estimating and management systems, and many
oversight groups such are beginning to require their use. The level of
collaboration, transparency, and information re-use enabled by Cost Estimating
and Efficient Project Delivery Software drives 15-25%+ reductions in
procurement cycles, six to ten times faster estimating, reduce overall project
times, as a significant reduction in change orders and the virtual elimination
of contract related legal disputes.
Typical features
Three functions prove to be the most
critical when buying cost estimating software:
§ Takeoff software - this provides for
measurement from paper or electronic plans
§
Built-in cost databases - this provides reference cost data which may be
your own or may come from a commercial source, such as RS Means
§ Estimating worksheets - these are the
spreadsheets where the real work takes place, supported by calculations and
other features
Other typical features include:
§
Item or Activity List: All estimating software applications will include
a main project window
that outlines the various items or
activities that will be required to complete the specified project. More
advanced programs are capable of breaking an item up into sub-tasks, or
sub-levels. An outline view of all of the top-level and sub-level items provides
a quick and easy way to view and navigate through the project.
§
Resource Costs: Resources consist of labor, equipment, materials,
subcontractors, trucking, and any other cost detail items. Labor and equipment
costs are internal crew costs, whereas all other resource costs are received
from vendors, such as material suppliers, subcontractors, and trucking
companies. Labor costs are usually calculated from wages,benefits, burden, and
workers compensation. Equipment costs are calculated from purchase price,
taxes, fuel consumption, and other operating expenses.
§
Item or Activity Detail: The detail to each item includes all of the
resources required to complete each activity, as well as their associated
costs.Production rates will automatically determine required crew costs.
§
Calculations: Most estimating programs have built-in calculations
ranging from simple length, area, and volume calculations to complex
industry-specific calculations, such as electrical calculations, utility trench
calculations, and earthwork cut and fill calculations.
§
Markups: Every program will allow for cost mark-ups ranging from flat
overall mark-ups to resource specific mark-ups, mark-ups for general
administrative costs, and bonding costs.
§
Detailed Overhead: Indirect costs, such as permits, fees, and any other
overall project costs can be spread to billable project items.
§
Closeout Window: Many estimating programs include a screen for manually
adjusting bid prices from their calculated values.
§
Reporting: Project reports typically include proposals, detail reports,
cost breakdown reports, and various charts and graphs.
§
Exporting: Most software programs can export project data to other
applications, such as spreadsheets, accounting software, and project management
software.
§
Job History: Storing past projects is a standard feature in most
estimating programs.
It is widely confused the terminology
between estimators and accountants on the term Margin. In
estimating, margin is expressed as the
profit over the total costs of an estimate. This, in financial terms
is often referred to as markup, with
margin being expressed as a percentage of the sales value.
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