When it comes to estimating the cost of material for construction projects, think back to the famous quote that states – “sometimes we need education in the obvious more than the investigation of the obscure”.
Material cost estimation is a practice as old as construction itself. While construction practice has changed and evolved over centuries, principles of cost estimation have more or less remained the same. Despite time being spent down the generations perfecting the art and science behind it, estimation remains a part of the process that has the propensity to go wrong and the potential to stall a project.
How is it that in today’s world, where we envisage a world of automation and robotics, that estimators still struggle to estimate material costs, for even small projects, resulting in incorrect estimations? Most of the time this leads to inadequate and sometimes excess product supply, both of which can cause project delays and financial losses.
The most likely reason behind this is that the accuracy of a material cost estimation in construction projects, is to a large extent, still dependent on the information received and the people processing it. A slip up in either and you can see funds slipping away throughout the life cycle of a project. Both people and information are key.
The vital role of the estimator
Consider the first key requirement for accurate cost estimates: the estimator him or herself.
An estimator, whether based at a construction company’s or supplier’s office, or a remote worker pulled in by either the builder or supplier, must have certain key traits.
One of these traits, and probably the most important one, is that he or she should have real experience of how a construction project comes to fruition or if it is pertaining a specific product, then knowledge of how that product is installed and will eventually be used once the project is completed. This knowledge is vital. Without it the estimator is just someone trying to see the task from the up high without understanding the real purpose or goal of it. This prevents him or her from anticipating potential issues that might surface while the project is being implemented.
Often, when the time comes to install the products on a construction site, the reality varies from the plan, triggering the need to re-estimate. If the estimator understands the project and the products in question, and has the ability to ask questions, he or she can anticipate potential issues and alter the estimation accordingly, avoiding a break in the construction process.
While it is the desired state, it is extremely challenging to find people with the required knowledge, experience and attitude, willing to choose the estimator role over a more lucrative role like project manager or site manager. In most cases, companies tend to employ talent that have some of the desired attributes but not all of them. This leaves the possibility of gaps in estimates more frequently than not.
The vital role of information
Consider the second key requirement for accurate cost estimates: the information itself.
For the majority of projects that have gone awry, incorrect information or worse, the lack of it, has been the reason for estimates to go haywire, resulting in project disruptions and stalling progress. As an estimator sits down to go through construction plans, pouring through drawings, it’s vital that he or she continues to access all available and unavailable sources of information that can help him or her understand stakeholder expectations, industry standards, safety regulations and product application better.
When it comes to product estimates, the usual information to seek would be:
- Which are the specified products?
- What are the product sizes, quantities and locations?
- Fit of specified products – are the specified products suitable for their location or purpose?
- Are there alternative products that meet the desired outcomes as well as or better than the specified products?
- What are the benefits of using the alternative products?
- What could be the detriments of using the alternative products?
- Does the product application require any unusual e.g. after-hours access, staggered staging, and so on?
- Do the products specified or the alternatives available meet relevant building codes and standards?
- Are the products readily available, and if not, are they specials that require lead times that need to be considered?
- Do the suppliers have the manpower/stock to complete the supply and install in the required time frame?
The most missed queries are usually around the:
- Installation times
- Probable site access issues
- Substrate details
Any of these queries, if missed during the estimation process, have the potential to result in time and cost blow-outs. They can have a negative financial impact to clients and to the estimator involved as well as damaging the estimator’s reputation and resulting in lost opportunities for further repeat business and referrals.
Estimation is critical. Being thorough is essential.