CE156ConstProjMgntLecture07 - CE156(Construction Project...

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CE156 (Construction Project Management) LECTURE NO. 7 - CONSTRUCTION ESTIMATING INTRODUCTION  TO  ESTIMATING  1. Definition : Basic estimating is the analysis of the work to be performed, including the type and quantity of the work, the type and size of equipment to be used during construction, production rates of labor and equipment to install the work and other job site conditions that are unique to the project and that can impact the time and cost of construction 2. Purposes of Estimates : To determine the quantities of labor, material and equipment for a given project and to apply proper unit cost to these items to determine the forecast cost required to complete the project in accordance with the contract plans and specifications. 3. Types of Estimates : There are many estimates and re-estimates for a project, based on the stage of project development. Estimates are performed throughout the life of the project beginning with the first estimate and extending through the various phases of design and in to construction. Initial estimates form the basis to which all future estimates are compared. Future estimates are often expected to agree with (i.e. be equal to or less than) the initial estimate. However, too often the project cost exceed the initial estimate. d8d8469b30bbcaedc0109c3e069fe56c73ddbfb 5.doc Page 1 of 20
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Although each project is unique, generally three parties are involved, the owner, the designer and the contractor. Each has responsibility for estimating cost during the various phases of the project Early   in   the   project,   prior   to   the   design,   the   owner   may   wish   to   know   the approximate cost of the project before making the decision to construct it. As the design of the project progresses, the designer must determine the cost of the various design alternatives to finalize the design to satisfy the owner’s budget and desired use of the project. The contractor must know the cost required to perform all the work in accordance with the final contract documents and specifications. Cost estimates can be divided into at least two different types.  a. APPROXIMATE   ESTIMATES   (sometimes   called   feasibility,   screening, authorization, preliminary, conceptual, order-of-magnitude, equipment factored or budget estimates) An Approximate Estimate is sufficiently accurate for the following purposes d8d8469b30bbcaedc0109c3e069fe56c73ddbfb 5.doc Page 2 of 20 FEASIBILITY STUDY DETAILED ENGG PROCUREMENT CONSTRUCTION PRELIM ENGG INITIAL ESTIMATE RE-ESTIMATE RE-ESTIMATE BID ESTIMATE
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a. The prospective owner of a private construction project will generally conduct a feasibility study during the developmental phase of the project.
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