Construction cost estimating is important when starting a new construction project. It helps in making estimates for the cost of services and the overall project. It is important when doing the analysis in terms of money and hence, provides a better understanding for the owner of the project. However, many common mistakes must be avoided when doing estimating in order to make it more accurate and practical. In order to make the most of the construction estimating services, contractors and owners must keep an eye for these mistakes that include the lack of contingency plans and inaccurate takeoffs. It is said that to err is human and hence we cannot expect to fully eliminate the mistakes but we can look for the possible solutions and how we can reduce the risk factor associated with these mistakes. Here in this piece of writing our focus is to make you understand the importance of small factors and their overall impact. So stay tuned.
Do all three-points estimation:
When doing estimating, the focus generally shifts. Some do only optimistic estimating and some do only the pessimistic. This results in the biased and improbable estimates that result in the damage to the overall project. This approach must be avoided and the estimators and contractors must keep in mind that in order to meet the timelines and expectations, three-points estimating must be practiced.
Imbalanced estimating:
Another common mistake that is practiced while doing the process of estimation is the imbalanced estimating. Both underestimating and overestimating are dangerous and must be avoided. Underestimating translates into mitigating the already thin margin for profit. Whereas, overestimating can result in the high bids that can eventually lead to the loss of jobs. Another common mistake is that labor costs are not often added or estimated properly. Labor costs are difficult to estimate and require the comparison of previous project with the new one for a detailed analysis. Detailed information is required and this can be done through the detailed comparison of similar projects.
Missing site details:
If you are missing on important site details, you are harming the growth of your project. Unknown site conditions can translate into unexpected and costly issues. It is better to visit the site on your own to gain the perspective for needs of the project. Site visits can help you in understanding the equipment needs, transportation means, topography and the accessibility factor of the site. You can analyze all the additional costs that you are going to face during the construction process.
Ignoring the audit process:
Review and audit processes are important for keeping a check of expenses as well as opportunities. As a result of lack of review and audit, you will not be able to track the inconsistencies in the project. It can prove to be costly without the comparison of previous projects. It is important to keep track of the project. Keep catalogs of previous estimates to catch errors by comparing with the current projects. This helps in improving efficiency and accuracy.
Lack of contingency plan:
Risk assessment of a construction site and construction project is important. As we analyze the risks in the project, we can look for the ways to resolves these or find a solution for the problems. However, these are the risks that we know of and can resolve on time. What about the risks that are not evident and pose threat of damage later on. For those threats, there must be a contingency plan in place. Absence of contingencies can prove be harmful and detrimental. This can result in the losses that are beyond control and containment. This puts a question on the efficiency of the team that is handling construction. The hurdles can seriously hamper the growth of the project. In order to avoid the unfortunate circumstances, you must have contingencies in place for your construction project.
Guessing the cost for bidding:
Bidding is not done through guessing. It is not practical and professional. Bidding takes a lot of calculations and costs analysis and comparison. Guessing the costs of services and resources in order to design bids for a construction job is highly unprofessional. It also indicates the lack of knowledge of the construction site and processes. Uninformed and uneducated guesses can result in the loss of the project. You need to update the data for the current project and keep track of the job costs. Keeping a track helps in identifying the difference of costs and prices from site to site. In order to make accurate estimates of the costs, you must include soft costs for permits and also the site inspections. This is how you can avoid the losses in terms of money as well as the credibility.
Incorrect resources allocation:
Another common mistakes made by owners, contractors and estimators while estimating the project costs is the incorrect allocation of resources. First, let us clear the meaning of resources. Resources are not only financial. These comprise of human resources, time resources as well as technical resources. It is important to commit equal resources to every area of construction. Time allocation is important. You cannot ignore one area and commit most of your time to another one. There must be equal footing for all the construction related areas. Every unit must be given due attention in order to have a credible strength.
Lack of transparency:
Lack of transparency is a grave issue and originates from the power dynamics. In construction processes, it is important for the whole team to know the details of processes and the plans must be made clear for all. Cost estimation processes are also important to understand by the whole team and all the stakeholders involved. This calls for collaboration and shared practice among the teammates and the stakeholders. Sharing of data and practice is what ensures the best possible solution for the problems since the whole team has the same level of technical knowledge.
These are some of the most common mistakes that happen around the process of cost estimating and construction takeoff services. It is important to address them in order to build a reputation as well as credibility. To deliver the quality work and to ensure that the construction process goes smoothly, you must pay heed to resolving these mistakes if you see them in your company as well.
