What Are Common Mistakes in Construction Cost Estimating?

Mistakes in Construction Cost Estimating can threaten the course of the project. The purpose of an accurate budget is to streamline the construction project. An inaccurate financial plan will increase the chances of cost overruns resulting in unnecessary expenses and poor project management.

A poorly created budget is the worst thing that can happen in a construction project. It will not only increase money but also cause time delays. In this article, we are going to discuss some common challenges and mistakes in construction cost estimating.

Challenges in Construction Estimation

Let’s get into some of the common Challenges in Construction Estimation. Most of the contractors, subcontractors, or estimators go through it at least once.

Limited availability of data
Evaluating scope
Complex buildings
Large scale
Small time frames
Limited resources
Fluctuating market prices
Evolving technology
Competitive bidding environment
Collaborating with stakeholders
Coordination

Mistakes in Construction Cost Estimating

1) Relying Too Much on Historical Data

One of the most common yet avoidable mistakes in construction cost estimating is depending entirely on historical data. Although evaluating past projects is a good technique to assess cost one should not rely on it too much. It should be used as a baseline or a benchmark. Contractors should keep in mind that prices can change over time.

Solution

In addition to using historical data, perform your calculation as well. Double-check the facts and figures to make sure they are correct.

2) Failing to Include Contingencies

A contingency plan is a necessity for every construction project. Almost all of the big cost estimating firms such as Bidding Estimate include contingency plans as part of the standard procedure. So even if you have thoroughly evaluated all the risks there still could be some unforeseen expenses.

Solution

Make a contingency plan that includes 15-20% of the total budget. It will safeguard the project from going over the budget.

3) Taking Shortcuts

One of the most dire mistakes that shows the incompetence of a calculator is taking shortcuts. It is certain that no two projects are similar in nature. Every project has its own unique characteristics. If some strategies for a past project were a success, it does not mean that they will work on the next project. Sometimes, to save time and resources, past strategies are implemented without conducting a detailed examination of the scope.

Solution

Make sure to analyze the complete scope of a project. Thus, covering all the aspects involved to attain the most favorable outcomes. This can be done by using construction software which makes the work easy and prompt.

Such as:

PlanSwift
Bluebeam
Xactimate
Quest Estimating
On Screen takeoff
Trimble
Fast Pipe
Fast Duct
RS Means

4) Inaccurate Calculation of Labor Cost

The most common mistake in Construction Cost estimation is the Inaccurate evaluation of labour cost. It is worth noting that labour costs comprise about 20-30% of the total budget. That is why even a minor mistake can have drastic effects on the estimation process.

Solution

Assess the number of tasks and their complexity level. Predict the timeframe for completion of the project. Make sure to include indirect expenses of labour as well such as benefits, insurance etc. This will enable an estimator to understand how much labour is needed and what must be their level of skill.

5) Failing to Keep Up with Market Trends

While performing cost estimation, it is necessary to keep up with all the construction-related trends and variations.

Whether it is related to:

Material
Labour
Equipment
Standards, regulations, or codes for a construction project

Solution

An expert must keep himself up to date not only on the present trends but also ensure that he has knowledge of all the past market variations as well. This will enable an expert to get a better grip on future market trends or variations. Construction Cost Estimating Services such as Bidding Estimates use pricing guides, such as RS Means as well. It provides real-time pricing which enables them to create accurate estimates.

Final Words

To wrap it all up, Mistakes in Construction Cost Estimating can set a project back further away from its objectives. An estimator must be experienced enough to tackle, avoid, and prevent any possible mistakes beforehand. It is unfortunate that even being vigilant sometimes mistakes happen. If not catered properly, these mistakes can cause inaccuracies thus leading to failure. In this article, some of the most common mistakes have been discussed in detail along with their solutions.