Construction Estimating Errors

Construction Estimating Errors can be very expensive and embarrassing. The worst type of error in construction cost estimating is leaving out an item of work. On a lump sum bid and contract, the contractor is obligated to do all of the work, even if costs for part of the project are omitted in the estimate bid and contract to build.

Ensuring that all items have been included in the takeoff portion of the estimate is perhaps the most difficult part of the estimate thus it requires careful attention. Any items that may be difficult or unusual in any way should be underlined, checked or circled. Planswift has many tools that help eliminate errors. But most people still do it the old fashion way. Here are some common Construction Estimating Errors.

1. Mistakes in arithmetic are one of the most common Construction Estimating Errors: Estimates made on construction projects that require arithmetical calculations of quantities and cost of materials and labor costs to install materials or perform various operations. In order to avoid errors in arithmetic, the estimator should use an electronic calculator with a recording tape, have the calculations checked by another person, and attach the tape to the estimate sheet for backup with plenty of notes and dates of those notes. Construction Estimating Software can eliminate this problem.

2. Wrong Measurements from Plans and Specs: Construction Estimating Errors in measurements and dimensions taken from plans, drawings, and specs result in corresponding mistakes in the cost of construction items based on those measurements.

3. Using the Wrong Wage Rates for Labor: Hourly labor wages for construction workers vary countrywide. You should consistently verify current wage rates and fringe benefits for the building trades involved through local union offices, other contractors, supply yards, and other reliable sources. Overtime rates are generally 1-1/2 to 2 times regular rates depending on labor agreements and or union rules. If a job has a high labor demand, higher wages may have to be calculated in order to quickly find enough employees to complete the job on schedule.

4. Insufficient or Excessive Allowances for Labor: Frequent Construction Estimating Errors are allowing too much or too little for labor to do the job. Thus loosing the job, or accidentally getting the job.

5. Materials Improperly Priced: Always be sure that building materials and supplies are correctly described as to kind, quality, size, and dimensions. Also confirm that they are priced competitively. Split corner block can easily be miscalculated as the usually come with a special setup fee.

6. Using Incorrect Units of Measure: Using a wrong unit of measure can result in substantial cost increases or decreases. For example, be careful not to record lineal feet for lineal yards, square feet for square yards or cubic feet for cubic yards, and so forth.

7. Including Poorly Maintained Machinery or Equipment: Machinery or equipment to be used in construction, and included in the estimate or bid, must always be checked for efficient serviceability. Preparing an estimate on a construction project and contemplating the use of poorly maintained machinery or equipment is unwise. Forklifts are prone for leaking oil on concrete floors or slabs. Breakdown, repairs, and idle time can be costly, delayed completion of the project can invite penalties, or liquidated damages.

8. Failure to Visit the Project Site: This error might well be number one on the list because of its importance in the early stages of cost estimating. Visiting the proposed site of the project enables the cost estimator to inspect topography, check for overhead power lines, inaccessible areas etc. If existing structures have to be demolished or removed from the premises, the estimator is able to properly determine the probable cost, if needing to work around these kinds of other trades such as demolition etc.

9. Overlooking or Miscalculating Transporting Costs: The cost of hauling materials, supplies, machinery, and equipment to a project can be a very expensive item in an estimate. Access to the job site may be difficult because of poor roads or no roads, heavy traffic to and from supply sources, or the requirement to obtain permits, and so forth.

10. Failure to Review Building Codes, Permits, and Inspections: Cost estimates and bids on construction projects are subject to local, state and federal building codes, permits, and inspections.

11. Failure to Consider Quality of Workmanship Required: A contractor who is accustomed to working on projects that require high quality workmanship may not be set up to bid or estimate projects of mediocre, low grade workmanship. Conversely, a contractor who usually works on cheap structures is frequently at a disadvantage when it comes to bidding on the construction of upscale residences or commercial buildings where only the finest quality of workmanship is acceptable. Failure to give proper consideration to the quality of workmanship a project warrants can lead to overestimating or underestimating.

12. Omitting Items the Cost Estimator Considers to be Minor: Sometimes items such as scaffolding, ramps, and guardrails, are left out of an estimate on the assumption that their cost is relatively minor and can be absorbed in the overall bid. On small projects a contractor may gamble on his workers handling such items routinely. This can be a costly error.

13. Construction Estimating Errors Include Overlooking Items: The typical causes of overlooking items when preparing an estimate or bid.

  1. Lack of attention to details.
  2. In too great of a hurry to complete the cost estimate.
  3. Too heavy a workload.
  4. Basic lack of experience.
  5. Delegating part of the estimate to others.
  6. Failure to use a reliable checklist.

An important safeguard against overlooking items is to have another person independently review and double check the cost estimate before sending it out to the owner or general contractor.

14. Construction Estimating Errors in taking short cuts: Taking shortcuts when making an estimate can be risky. Sometimes there is a temptation to take shortcuts when under the pressure of time-limit in which to complete the cost estimate on time or because of a heavy backlog of work. Shortcuts take the form of guesstimating, using square feet or cubic foot costs in place of details, and using lump sum figures picked out of the air, all of which have great risks. This is generally when the estimator says, "we got that job? What did I miss?"

15. Not Allowing for Realistic Contingencies: Some construction projects may have inherent and unusual problems that should be recognized when the cost estimate is being prepared. Failure to make the allowances or contingencies may result in not getting the contract or losing money if awarded the contract. These contingencies include severe winter weather conditions, or extremely hot and humid climates. The project may be located in an area of the country subject to heavy rainfall. Justifications for a realistic contingency include anticipated labor troubles, material shortages, or political problems. Although it is poor policy to make flat allowances for contingencies without good reasons, particularly when competition is high. Keep it realistic.

16. Inadequate or Excessive Overhead Charges are common Construction Estimating Errors:

This one job may not be sufficient to take care of the whole company and its overhead. A good way to eliminate this problem is to simply look at the job you are dealing with and compare what the overhead would be to other contractors bidding on the job big or small. 

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I really like this software and so do my employees. We have all benefited a whole lot since using Planswift, and the takeoffs are so easy to do. At first, my guys were somewhat hesitant about whether or not they wanted to make the transition of going digital. Most of us around here are not computer geniuses. Now, however, we are all happy we made the switch from paper, to digital. Even if you have no computer skills, you can still easily figure out how to use this program. This program is sure to pay for itself within no time. It has freed up time for our employees and customer service is always there for us whenever we have questions. I highly recommend Planswift to anyone in the Construction industry. Steve Driscoll