Construction projects require extensive planning and preparation before the ground is ever broken. A crucial part of this early process is developing a preliminary estimate of the project’s costs. While some view preliminary estimating as an unnecessary expense, it actually provides many valuable benefits for builders and project owners alike. This article will explore the key advantages of enlisting professional preliminary estimating services.
Construction cost estimation is a complex process that requires specialized expertise. Estimators analyze project plans and specifications to calculate the likely costs for equipment, materials, labor, and other direct expenses. They also factor in essential indirect costs like overhead, insurance, and contingencies.
Preliminary estimating provides an initial assessment of these costs in a project’s early phases, before final designs are complete. It helps planners determine high-level budgets and feasibility. As the project advances, more-detailed estimates are developed.
Estimating rigorously and accurately takes significant time, resources, and knowledge. While some builders attempt to handle this in-house, many turn to specialized estimating firms. Professional preliminary estimating services offer experience, expertise, and objectivity. Engaging estimators early on provides major advantages throughout the construction process.
- More accurate early budgeting
One key benefit of professional preliminary estimating is developing more accurate budgets earlier in design. Construction budgets are largely determined by a project’s estimated costs. Underestimating leads to cost overruns, while overestimating can cause valuable features to be value-engineered out.
During early planning, many details are undecided and quantities are approximated. Nonetheless, a skilled estimator can provide budgetary numbers precise enough for setting project scope, schedules, and contingencies. Their familiarity with costs, materials, and methods prevents major surprises down the road.
Preliminary estimates provide vital guidance to designers as plans progress. If estimates exceed expectations, designers can modify designs proactively to realign costs. They can also flag expensive aspects for priority value engineering.
- Better design decision-making
Preliminary estimating doesn’t just influence budgets. It also informs smarter design decisions by illuminating the cost implications of different options.
Material costs vary widely, and estimators are familiar with relative prices for the full range of building products and systems. They can quickly calculate comparative costs for proposed materials like alternative framing types, facade finishes, or MEP systems. Their input makes selecting the most cost-effective options easy.
Similarly, estimators can compare the labor costs of different construction techniques or phasing approaches. Designers can then select appropriate methods for the budget. The constructor’s perspective also highlights potential schedule impacts and construction challenges inherent in some designs.
By partnering with an estimator early, designers gain invaluable insights to create optimized, constructible plans within budget constraints. Eliminating expensive late changes saves time and money.
- Enhanced risk management
Another benefit of preliminary estimating is that it provides data to enhance risk management. While estimates represent the most likely costs, projects also contend with many uncertainties.
Professional estimators draw on historical data and industry experience to realistically assess contingencies for unknowns. They know typical ranges of cost overruns for different project types and can build appropriate contingencies. Their familiarity with local conditions helps gauge market uncertainty and cost escalations as well.
Owners can then finance projects more conservatively to mitigate risks. Updated estimates in later phases also reveal if contingencies are adequate as more details become finalized. Estimators can recommend adjusting contingencies and budgets accordingly.
Proper contingency allocation prevents unexpected cost overruns. It also avoids tying up capital unnecessarily due to excessive contingencies. Accurate knowledge of risks enables prudent financial planning.
- Streamlined bid processing
For contracted projects, preliminary estimating also greatly improves bid solicitation and analysis. When owners have reliable preliminary estimates, they can establish accurate bid expectations. Contractors also benefit from proper scope definition and established reference budgets when preparing bids.
By first engaging estimators directly, owners need not await bids to know approximate costs. They can issue bid packages with appropriate specifications, budgets, and contingencies already aligned. When bids are received, comparing them to the preliminary estimate quickly reveals excessive bids.
Estimators can even evaluate if bids seem unreasonable based on their extensive cost data. They may recommend rejecting outlier bids to avoid awarding contracts that ultimately lose money. Owners avoid selecting underqualified low bidders or overpaying for work.
Streamlined bid processing saves time and money while attracting reasonable proposals. Owners obtain the best project value for their budget and can expedite contracting.
- Enhanced Project Planning
Finally, early expert estimating provides invaluable support for overall project planning and delivery decisions. Realistic cost projections help guide important choices like procurement methods, phasing, or financing options long before construction.
For example, recognizing that costs exceed budgets spurs reevaluating the scope or targeting value engineering. Costly or complex projects can be segmented into multiple contracts or phases if warranted. Evaluating cost estimates for different scheduling approaches can reveal the most prudent durations.
Owners also depend on accurate cost data to secure financing, plan cash flows, and obtain permits and insurance. Professional estimators supply reliable numbers to support critical processes and avoid delays. Including estimators as trusted advisors in early planning results in smart, informed project decisions.
- Better Documentation for Future Projects
Professional preliminary estimating also provides well-documented cost data that benefits future projects. Detailed cost models and records of pricing assumptions create a knowledge base for organizations to draw upon.
Estimators develop extensive material, labor, steel takeoff and equipment cost libraries by continually tracking and analyzing data. Formal estimating reports detail calculation methodologies, quotes, allowances, and productivity rates used.
With this documented cost history in hand, estimators can produce increasingly accurate and consistent estimates across multiple projects. Future estimates rely on real pricing rather than guesswork.
The preliminary estimating services provide significant benefits for construction projects beyond simply forecasting costs. Enlisting an experienced, professional estimator early on equips planners and designers with invaluable insights that improve project quality, efficiency, and outcomes. Their specialized knowledge helps optimize budgeting, enhance decision-making, control risks, and streamline contracting.
Ultimately, investing in rigorous preliminary estimating is proven to save time, money, and headaches throughout design and construction. When delivered by a respected firm like Remote Estimation, expert preliminary estimating services will pay dividends across your next building project and contribute greatly to its success.