Week 8

Project Cost Estimating (1)

457.657 Civil and Environmental Project Management
Department of Civil and Environmental Engineering
Seoul National University

Prof. Seokho Chi

shchi@snu.ac.kr
건설환경공학부 35동 304호
Estimating Construction Costs
• Approaches to estimating
• Conceptual / Detailed estimating
• RS Means data and examples

• Estimates
– Necessary to guide decisions, budgets
– Hard to do well
– Are performed by several actors
• Owners
• Designers
• Contractors
• Subcontractors
Bid Estimate
Construction Cost Material Cost
(순 공사원가) (재료비)

Labor Cost
(노무비)

Total Project Cost Overhead

(총 공사원가) (일반관리비)

Accounting/Admin fees,
Expenses
Advertising, Insurance, (경비)
Interest, Legal fees, Rent, Construction‐related expenses:
Repairs, Taxes, Telephone Equipment, Maintenance, Electricity,
bills, Travels, etc. Transportation, Waste control, Consulting,
5‐6% of construction cost R&D cost, Testing, Inventory, etc.

Profit Maximum 15% of Sum(Labor cost, Expenses, Overhead)

(이윤)
 Context: Project Timeline
Need (desire) Detailed Estimating
Assemblies
Feasibility Analysis = per WBS component cost, +/‐ 10%
e.g., foundation (excavation, formwork,
Design reinforcing, concrete, etc.)

Procurement Quantity Take‐Off

= per unit cost, +/‐ <5%
Construction
ROM (Rough‐Order of Magnitude)
= cost per unit of capacity, +/‐ 20% Turnover
e.g., # of beds in a hospital, (Handover)
# of rooms in a hotel
Square Foot/Cubic Foot
= cost per sq/cf of building type, +/‐15% Operations &
Maintenance

Conceptual Estimating Disposal

(Reuse)
Design
Program‐
ming

Schematic
70% complete
ROM Design development 100% complete

Use costs to Construction documents

iterate design
concepts SF/CF

Assemblies Unit Pricing

Predict final costs
Cost Estimating
• Preparation Time X Accuracy
Conceptual Estimating
• Guide decisions regarding: location, scope, feasibility.
• Very little project information is available
• Size of the project is generally known, although it may
be described in terms of capacity (e.g.: number of beds,
megawatts)
• Short preparation time
• Estimates prepared for many different program options
Detailed Estimating
• Based on a (near) complete set of documents
• Owner team prepares an estimate to negotiate
• Contractors prepare an estimate to bid (or negotiate)
• Price given by contractors for different work packages
may be based on bids from pre-qualified subcontractors
Conceptual Estimating
• Consideration
– Building type
– Location
– Rough size
– Material type
– Time
• Compare to historical data (similar buildings)
– Apply modifiers as needed
Bid Estimate
• Resources for Estimate
– U.S.
• RS Means Building Construction Cost Data
• RS Means Assemblies Cost Data
• RS Means Square Foot Costs
– Australia
• Rawlinsons Construction Cost Guide
– Korea
• 표준품셈 (대한건설협회): provide quantity information of activities
• 실적공사비 (한국건설기술연구원): provide historical database
Building Costs
RS Means Building Data
• Compiles info
• Good starting point
• Firm data often better (why?)

Example:
Library ‐ 6,500 sf
RS Means ‐ $97.30/sf
Estimated cost : $632,450

If ¼, 25% of that type of

building costs less than the
indicated price and 75%
costs more
Location Indices

100 = National Average

MAT: Material Cost, INST: Labor Cost
(1) ROM Estimate
• 100-bed dormitory (low rise); median quality; 2003
data; in Nashville, TN; Jan 2003 construction start
– Total cost = Number of units × Unit cost
= 100 units × 36,300 per unit
= $3,630,000 (without adjustments)
• Location Adjustment
– National average city index = 100
– Adjusted cost for a city = Estimated cost × City index / 100
– For Nashville: 86.2
– Adjusted total cost = $3,630,000 × 86.2 / 100
= $3,129,060
(2) SF Estimate – Modeled
• 19,386 ft2 fire station; face brick with concrete
block back-up; steel joists; 2003 data; in Austin;
January 2005 construction start; 2.5% projected
increase per year.
– Total cost = Size in ft2 × Cost/ft2
= 19,386 ft2 × $97.95/ft2 (approximately)
= $1,898,858 (without adjustments)
(2) SF Estimate – Modeled (Cont’d)
• Add-on Features:
– Combination range, refrigerator, sink, microwave oven &
icemaker (quantity = 1) = 1 × $5,275
– Steel lockers, single tier, 72” (8 openings) = 8 × $200
• Cost with add-on features = $ 1,905,733
• Key point
– Estimates can mix level of detail
• If you find, you can add now
– Danger is to double count
• You need to figure out which one has been included already through
itemized building code
• Clearly determine included/not-included items
(2) SF Estimate – Modeled (Cont’d)
• Location Adjustment
– National average city index = 100
– Adjusted cost for a city = Estimated cost × City index / 100
– For Austin
• Adjusted Austin cost = $ 1,905,733 × 79.7 / 100
= $1,518,869
(2) SF Estimate – Modeled (Cont’d)
• Time Adjustment
– 2003 data used for 2005 construction
– Time adjusted cost = (1 + % projected yearly increase)n ×
Adjusted Cost
= (1 + 0.025)2 * $1,518,869
= $1,595,761
Detailed Estimating
• Scope definition
– Dimensions, specified quality, construction methodology, potential
problems and solutions
• Quantity take off
– Packaging of project components’ scope into units that can be
priced
• Pricing
– Applying marketplace labor, material, and equipment costing to the
quantities
– Factors such as schedule, construction process, productivity, labor
agreements, and resource allocation should be considered
• Overhead and profit issues
– Overhead, profit, sales taxes, labor benefits, bond, and contingency
Scope Definition
• Contract documents
– Drawings
– Specifications
– Technical references
– Addenda
• Site analysis
– Soil
– Utilities
– Access
– Neighbors
– Existing structures
• New construction vs. Repair and remodeling
• Bonding and insurance requirements
Basic Detailed Process
• Estimated Cost =
Quantity × Price (material + installation) per unit
• Quantity: by counting
• Price: by time, materials, and crew cost
– Materials: vendor data
– Crew cost: varies by composition of junior and senior members
as well as size; also equipment
– Time (duration): by productivity per unit
» Can vary a lot by method, crew size
Estimate Setup
• Format
• Organization of cost items
} Typically by CSI codes

• Separation of subcontractors from in-house work

• Adjustments
• Overhead and profit (markup) summary
• Estimate summary
Quantity Take Off
• Break a project down into work packages (e.g.,
excavate for spread footings, place concrete for
spread footings)
– This can be really hard!
• Determine quantity for work package
– Requires a strong understanding of the work involved
– Be careful with details, scales, and units
– Take advantage of repeated project elements
– Make sure you don’t quantify the same element twice
– Account for waste, shrinkage, swell, equipment wear
Unit Pricing
• Sources of pricing information
– Publications
– In-house data
– Material suppliers
– Equipment rental companies
– Subcontractors
– Unions
– Government offices
– Insurance and bonding providers
Unit Pricing (Cont’d)
• Material Costs:
– Specifications (e.g.: model number, color, finish)
– Price valid until delivery time
– Delivery
– Warranties and guarantees
– Lead time to delivery
– Supplier’s stock
– Supplier’s reputation
– Payment terms Important to control to prevent negative cash flow!
Unit Pricing (Cont’d) *Total Fringe: Health + Pension + Apprentice
FICA: Federal Insurance Contributions Act

Washington State Journeyman

• Labor Costs: Carpenters (sample)
Regular Time & a
– Wage rate Time Half

Rate $27.95 $41.93

• Trade
Health 2.90 2.90
• Union vs. Non-Union Pension 3.87 3.87

• Project location Apprentice 0.35 0.35

Total Fringe 7.12 7.12
• Fringe
Taxable Wage Rate 35.07 49.05
– Productivity FICA @ 7.65% 2.14 3.21
State Unem. @ 5.42% 1.51 2.27
• Crew efficiency
Fed. Unem. @ 0.8% 0.22 0.34
• Concurrent work Workers Comp @ 2.09 2.09
$2.0859/hr
• Weather conditions
Total Payroll Taxes & 5.96 7.91
• Workspace Insurance
Labor Burden (fringe + tax 13.08 15.03
• Regular vs. overtime & ins)
Total Labor Rate 41.03 56.96
Unit Pricing (Cont’d)
• Equipment Costs
– Cost of ownership, lease, or rental
• Interest
• Storage
• Insurance
• License
• Taxes
– Operation
• Gasoline/oil
• Maintenance
• Transportation
• Mobilization
• Operator (may be included with labor)
• Item-by-item basis vs. project basis
Overhead and Profit
• Job organization • Permits
• Travel expenses • Temporary roads
• Engineering support • Insurance and bonds
• Marketing, legal, and • Clean up
accounting fees • Safety
• Testing devices/signs/barricades
• Equipment (project basis) • Photographs
• Field office • Taxes (other than direct
• Temporary utilities costs)
In Class Exercise
• In Austin:
1. Find the estimated cost of putting in place 500 lf of 10’
high large columns

2. Find the estimated installation cost of 10 25’x25’ waffle slab

bays with a 75 psf load

3. Find the cost of elevated floors on a 5 story (5 stories with

4 elevated floors and a roof) apartment block with
10,000sf/floor. Slab on grade construction.
RS Means
In Class Exercise
1. Find the estimated total cost of precast concrete
500 lf (linear foot = regular feet) of 12’ high large columns
In Class Exercise
2. Find the estimated installation cost of 10 25’x25’
cast in place waffle slab bays with a 75 psf load
In Class Exercise
3. Find the cost of elevated floors on a 5 story (5
stories with 4 elevated floors and a roof) apartment
block with 10K sf·floor. Slab on grade construction.

Roof
5

Elevated Floor
4
3
2
1
Slab on Grade
Bid Estimate
• 표준품셈
– Provide material quantity, labor hour information for given
construction activities in standard construction environment
– Yearly updated by 50 review committees

Civil 6‐1‐2 Mortar (m3당)

Mixing Ratio (배합용적비) Cement (시멘트, kg) Sand (모래, m3) Labor (인부, 인)
1:1 1,093 0.78 1.0
1:3 510 1.10 1.0
1:5 320 1.15 0.9
Bid Estimate
• 일위대가 (Itemized Unit Cost)
– Quantity identified from 표준품셈 X Cost from 일위대가
Mortar 1:1 Mixing Ratio (m3당)
Material Cost Labor Cost Expenses Total
Item Size Unit Quantity Others
Unit \ \ Unit \ \ Unit \ \ \
Cement KG 1,093 80 87,440
Sand ㎡ 0.78 11,000 8,580
Labor Person 1 57,820 57,820
Total 96,020 57,820 153,840

• Estimate (공사비 내역서) (단위: 원)

Activity Quantity Material Cost Labor Cost Expenses Total
Type Unit
(공종) (물량) Unit \ \ Unit \ \ Unit \ \ Unit \ \
Mortar 1:1 ㎥ 10 96,020 960,200 57,820 578,200 - - 153,840 1,538,400
~
Total 000 000
Bid Estimate
• 일위대가 (Itemized Unit Cost)
– Material cost: Government cost info + Market cost info
(조달청 발행 가격정보, 물가자료 또는 물가정보)
– Labor cost: Construction Association of Korea yearly
collects labor cost information from 50-60 construction sites
and announces standardized labor cost every 1st of January
(대한건설협회 고시 노임단가, 50-60개 현장을 대상으로 년1회 실사 후
매년 1월1일 공표)
 원가계산방식 vs 실적공사비

직 재료비 • 품셈재료량 × 단위당가격

공종별
접 직접노무비 • 품셈노무량 × 시중노임
비 [공종수량×실적단가]
직접공사경비 • 품셈소요량 × 단위당가격

간접노무비 • 직접노무비 × 요율
간 산재보험료 • 노무비 × 요율
각 항목별
고용보험료 • 직접노무비 × 요율
접 [직접공사비 × 요율]
퇴직공제부금 • 직접노무비 × 요율
비 안전관리비 • (재+직노+관급자재) × 요율 (공사규모,종류 구분)
기타경비 • (재료비+노무비) × 요율

이윤 • (노무비+경비+일반관리비) × 요율 (재+노+경+일반관리)×요율

출처: “국내 건설 적산 제도” (한국건설산업연구원 최석인 연구위원)

 원가계산방식 vs 실적공사비
원가계산방식 실적단가방식
측구 30m 철근1.990kg/m

Conc 0.410㎥/m 거푸집 1.4㎡/m

측구 30m
각종조사 현장실사 계약서

철 근
(人) 노무비 조사
50

40

30

◎재료비 : 0.00198t × 300,972원 = 613.8 계약 A 계약 A 계약 A

등

(A공사) (B공사) (C공사)

20

10
◎노무비 : 0.00198t × 415,397원 = 826.6 ● ● ●

0
◎경 비 : 0.00198t × 2,962원 = 5.8
)

~6,000

~9,000

~12,000

~15,000

~18,000

~21,000

~24,000

~27,000

~30,000

~33,000

소계 : 1,446.2원
(

(원)

재료 조사
6

거푸집
5

실적DATA DB
4

◎재료비 : 1.4 ㎡ × 5,158원 = 11,553.9

2
/

-
◎노무비 : 1.4 ㎡× 16,057원 = 35,967.6
~3,050

~3,100

~3,150

~3,200

~3,250

~3,300

~3,350

소계 : 47,521.5원
59,508원/m
단가(원/m3)

품셈 조사
40

콘크리트
35
면담

30
/

25

20

◎재료비 : 0.410㎥ × 33,136원 = 13,420 30mⅩ59,508원/m

15

10

◎노무비 : 0.410㎥ × 4,903원 = 1,985.7

5

0
~1人

~2人

~3人

~4人

~5人
~1.5人

~2.5人

~3.5人

~4.5人

◎경 비 : 0.410㎥ × 6,751원 = 2,734

소계 : 18,139.8원
합계 1,785,240 원
합계 1,785,240 원

출처: “국내 건설 적산 제도” (한국건설산업연구원 최석인 연구위원)