Construction cost estimating really is an art, and one of the most important elements of any construction project. If a project isn’t properly estimated, and construction prices end up being higher than originally thought, it could result in a firm undercharging for their services. It also can lead to unhappy clients who were expecting a lower final price.
A good construction estimator is worth their weight in gold, but even the pros can make a mistake. Here are some of the most common mistakes we’ve seen in estimating construction costs.
- Underestimating how long tasks will take. If you estimate a task will take one person an hour to complete, but it really takes three, that won’t make or break a project. But if you consistently underestimate multiple tasks, you could quickly find your project over budget.
- Lack of transparency. Estimates shouldn’t be top-secret, but rather a collaborative process. By inviting multiple project stakeholders to view the estimate, you can often catch errors before they become issues. It’s critical to review early concept and schematic estimates with the architect, engineer and owner/users and incorporate design and assumption feedback. Often owners set budgets, secure funding and grants based on early estimating so it is imperative that all design requests are discussed with the team and addressed in the estimate.
- Neglecting the details. Making sure that your project take-off (a count of how much material will need to go into a project) is accurate and detailed is the foundation to your estimate. You can’t estimate what you don’t know. Using a construction take-off software such as On-Center or Stack can ensure that you “nail” your estimate.
- Current Market Conditions. Now this is a big one! Understanding the current market trends is critical for developing your construction estimate. If you’re not staying up-to-date with cost of materials, current labor pool, escalation along with new policies/regulations and even new technology your project estimate could suffer. It is crucial that you track, research and understand the present state of the market in order to budget your project accurately.
- Commonly Missed Line Items. No estimate is 100% accurate, however there are areas that are commonly overlooked when an estimate is developed. For some tips on some of the most frequently missed line items check out PCM’s blog here.
Food for thought…
“There are two numbers the owner hears and remembers, the first and the last”
Meaning the owner will remember the schematic level budget and the final bid, therefore it is important that you get your initial estimate as close to the final results as much as possible.
As you can see, to keep projects on budget, it’s important to work with accurate estimates. At Preferred Construction Management, we have more than 20 years of experience and have provided estimates for hundreds of clients. Give us a call today to talk about how we can help you with your next project.