How Estimation Accuracy Determines the Success of Construction Projects

The estimation of construction projects is a critical factor that affects the success of the construction job. Accurate estimates help contractors and project managers to plan and estimate the costs, and time it will take to complete a project. If not checked, estimating inaccurately results in project delays, cost overruns, change orders, and in some cases, project failure.

To this end, in this article, we will highlight the significance of accurate estimations in construction and the effect it has on the success of projects. We will also consider the Construction Estimator in the preparation of estimates and some of the guidelines for the preparation of good estimates.

The Role of the Construction Estimators

Thus, the construction estimators play a significant role in the pre-construction stage. By using the drawings, project specifications, and other documents, the estimator arrives at the total expected costs of the job and the amount of materials and labor required to accomplish the job.

The estimator may do quantity takeoffs of materials and then look up the cost from vendors and subcontractors. They include contingencies for waste, productivity factors for labor, equipment cost, etc The last number will give the project team the baseline budget that defines project feasibility.

Construction estimators with massive experience use prior data, reason, and expertise to make a cost estimate. However estimating has its natural variability, which has to be taken into consideration.

Why Estimating Accuracy Matters

Inaccuracies in early project estimates can propagate through the entire project lifecycle: 

• Budgeting Problems – If the estimate is too low, it means that the project will not make a profit or may go over the estimated budget. If set at a very high level, the client may opt to buy from other companies instead of engaging our company.
• Resource Management – Inaccurate estimates result in wrong proportions of the labor, material, and equipment required for a project. This has implications for project timelines and expenses.
• Bid Awards – It should be noted that most construction projects are awarded to the lowest bidder. This is because contractors may lose some bids due to inaccurate estimates.
• Change Orders – Due to underestimation of costs, there are always costs that arise during construction that were not foreseen and therefore need to be addressed through change orders. Another drawback of having too many change requests is the impact they have on the client.
• Reputational Damage – Organizations that systematically fail to manage their project budgets and schedules end up suffering from reputational damage because clients do not award them future projects.

Best Practices for Accurate Construction Estimating

While estimates will always contain uncertainty, following best practices helps minimize inaccuracy: 

• Allow Plenty of Time – One of the biggest mistakes that people make is when they time estimate, which is always the result of hurried work.
• Follow Consistent Methodology – The standard procedures of quantity takeoff and pricing lead to improved consistency. Develop checklists and templates.
• Use of Historical Data – To the extent possible, incorporate the bid and cost history of previous similar projects where available.
• Add Contingent Amounts – This involves factoring in the estimated unknowns and risks through contingencies.
• Implement Quality Control – It is recommended that the estimates of different estimators should be checked and verified before they are approved.
• By the Way – Create best/worst/most likely scenarios for the comparison of the cost estimates.
• Update Estimates as Needed – This means that early estimates should be adjusted gradually as more information is gathered before the construction phase.

The Role of Construction Estimation Services

Some construction firms outsource estimating to specialty estimating consultants as seen in Construction Estimating Services estimator. These estimating services rely on industry-standard best practices and employ professional modeling tools and databases to generate estimates.

They use full-time, very experienced estimators who are dedicated exclusively to generating estimates for various projects. This makes it possible for them to come up with very exact forecasts that the contractors can use in their bidding. Also, estimators make sure they have the most current information on the cost of labor, materials, and equipment. They also provide independent and unbiased estimation.

Conclusion

One of the most important aspects of construction projects is the generation of early project estimates. This results in costs exceeding budgets, time delays, tensions in relations with clients, and reduced profits.

The approach to CAD Drafting Services’ best practices indicated below assists in reducing the impact of such inaccuracies. Further, the utilization of outside construction estimating brings in more professionals and outside perspectives into the process.

Applying funds to accurate project estimates immediately means that more projects get delivered on time and within budget. This increases contractor reputation and secures more business. In conclusion, it can be said that the accuracy of the estimates is one of the most vital factors that define the success of construction projects.