As a former business owner, I know that owners don’t like surprises… at least when it comes to items that cost more than anticipated. That’s why, as chief estimator at The Hagerman Group, I’m passionate about providing our clients with a realistic anticipated cost of construction. A good estimate upfront sets your project up for success. Here are some best practices that help owners get quality estimates from their contractors.
Consider the past, but don’t rely on it.
Historical data on project costs can give you a high-level reference point but should be taken with a proverbial grain of salt, knowing that no two buildings are exactly alike. The most important aspect of creating an estimate is through accurate quantity take-offs—detailed measurements of the labor and materials needed for the project, as well as filling in the gaps for missing scope items the estimator knows will be required.
The more information, the better.
That reliance on quantity of materials means the more data estimators have upfront, the more accurate our results will be. can be challenging at the schematic level, when design details are limited. As a result, designers and contractors may need to spend more time at each phase adjusting the design and recalculating costs. A good estimator asks a lot of questions on the front end, in the interest of creating a quality estimate.
Involve contractors in the budgeting phase.
Another strategy that can be helpful to owners and designers is to engage a general contractor in the very early stages of a project. This provides a good gut check on pricing before establishing an anticipated construction budget.
Understand the domino effect of conditions and decisions.
Certain choices or situations can have a profound effect on project costs, taking some owners by surprise. For example, the geometry of a building plays an important role—two designs may have the same square footage, but their dimensions will affect costs. Differences in wall densities and floor-to-floor heights can also result in additional expenses that quickly add up. Site selection is critical, as it can affect the amount of earthwork that needs to be done. Phase 1 studies provide information on soil quality that can impact the budget, as well.
Plan for needs versus wants.
In a perfect world, we’d have all of our information upfront, but we know that’s not realistic. That’s why it’s important to outline what owners want versus what they need in their new or improved facilities. There are certain non-negotiables, code and life safety elements. Beyond that, is there flexibility in material choices or other special features? Prioritizing and including alternates can mean more streamlined decision making down the road.
Technology enhances the process, but doesn’t replace it.
We’ve come a long way with technology in construction, but unfortunately, there’s still no easy button in estimating. While many processes have gotten more efficient and we have more tools to take advantage of, it still takes a certain number of hours to estimate a project accurately. Depending on its complexity, a good estimate can take 10-30 hours of estimating work per million dollars of value.
Given the current state of technology and the immediate gratification possible in many facets of life, it’s easy to assume that speed translates to the construction industry. Yet all these factors underscore the importance of providing your estimator with the right amount of time and information to prepare a quality estimate, which results in a better process and a more predictable cost outcome.