Cost Estimation is a process of identifying the sum of the amount required to accomplish those planned tasks or activities before actually executing them. The process of Cost Estimation starts with identifying a list of components followed by quantity take-off, rate analysis, overheads, risks & Contingencies, Profit, etc (based on the type of work).
Let’s talk about the basic and most important parts, for now, they are
Also Read about the Roles and Responsibilities of a Quantity Surveyor.
It is always important for a cost manager or quantity surveyor to identify all different types of activities and works involved in a given task. At the end of this activity, the cost manager/quantity surveyor will have a list of activities whose cost is to be estimated to get the total cost of the project. The next step is to know how much quantity is to be executed for each activity.
Quantity take-off is nothing but calculating the extent of application in terms of measurable units such as length, area, & volume. There are two types of quantity take-offs (i) Drawing Quantity take-off (ii) Material quantity take-off.
- Drawing quantity take-off: This is calculating the quantities of different items of work such as RCC, Blockwork, Plastering, Tiles Laying, etc… This can be calculated either using a manual approach or a contemporary approach. This will help us in answering the following type of questions
- How much quantity of RCC is required to execute?
- How much quantity of Blockwork should be done?
- Material quantity take-off: This is the process of calculating the number of materials and quantities required to perform a certain task. For example, this material take-off answers the following type of questions
- How much quantity of cement is required to cast 2000 Sqm of the slab?
- How many bricks are required to complete 50000 Sqm of blockwork?
- How many 600mmx600mm tiles are required for a 120 Sqm room?
It is the process of analyzing the sum of money required to accomplish a unit quantity of work. This process answers the following type of questions
- What is the cost for executing a unit or 1 m3 of concrete on the Ground floor?
- What is the cost for executing a unit or 1 m3 of concrete on the 10th floor?
- What is the cost of executing 1 m3 of blockwork?
These are the three basic processes to be done to perform cost estimation. All the data is then taken into a well-formatted document called the Bill of Quantities (BOQ).
Read about Overheads, Risks & Contingencies at ‘Nature of Costs in a Construction Project’.