The Fundamentals of Estimating a Construction Project

A construction project database is generated in several ways. Direct Costs of a project are the cost of materials and labor which are taken from the plans and specifications of a project. The quality and quantities of the materials are taken from the plans and specification and then a price is fixed by an estimator. Another cost is the transportation cost of delivering materials to the job site. The storage of materials must also be included in the project’s cost. The materials may be stored in a container which has a weekly or monthly rental fee. The labor cost is derived from the installation of materials by a worker and that trades person’s hourly rate of pay is fixed by an estimator. Both material and labor costs make up the project cost estimate.
Indirect Cost are additional costs of a construction project that are also included in the total cost of a project. A job site overhead cost is the cost of renting a temporary office on the job site such as an office trailer including temporary utilities, water, and portable toilets. The superintendent or construction manager’s salary who manages the projects is also an indirect cost and must also be included in the job site cost.
Another overhead cost that must be included is the cost of maintaining a contractor’s business office. The business office cost includes rent or mortgage, utilities, office supplies, and administrative employee’s salaries. All of these costs should be documented and held in a database in the contractor’s business office. (Dykstra, 2018). An estimator needs to have a complete schedule in order to have a complete estimate of a construction project because the schedule will reveal additional costs. In addition to material cost and labor cost, the schedule may show the storage of materials. The materials may be secured in a trailer that is rented. Other costs may be a security guard or cameras and the security guard's salary. The security cameras cost may be a daily or weekly charge. Temporary fencing may also be needed and may incur a daily or weekly rental fee.
Heavy equipment needed on the job may also be rented by the hour or by the day. A temporary office trailer rental and temporary utilities for the office trailer cost must also be accounted for which may be a weekly or a monthly fee. Portable toilets rental cost which may by be charged by the week or the month must also be included in the estimate. Construction waste containers and removal cost which may be weekly or monthly cost must be accounted for as well. All of these additional costs can be identified from the project’s schedule. (Dykstra, 2018).
To learn more about the fundamentals of estimating a construction project, get a copy of the book, Nail Your Numbers: A Path to Skilled Construction Estimating and Bidding. using the following link:
John Muhammad, is  the President/Owner of Nation’s Builders, Host of the Business Building Blocks Podcast, Graduate Student of the University of Texas at El Paso majoring in Construction Management, M.S., B.S Degree from Texas Southern University, former Site Health and Safety Specialist for the renovation of the Administration Building of the Johnson Space Center at NASA and former Superintendent for semi-custom home builder, Emerald Homes.
Dykstra, A. (2018). Construction Project Management A Complete Introduction.
Kirshner Publishing Company.