THE PNG UNIVERSITY OF TECHNOLOGY

DEPARTMENT OF ARCHITECTURE AND CONSTRUCTION MANAGEMENT

CM 324 Construction Economics III
Topic 1 Approximate Estimating
1.1 Purpose and form of approximate estimating techniques
Purpose
The primary function of approximate or preliminary estimating is to produce a forecast of
the probable cost of a future project, before the building has to be designed in detail and
contract particulars prepared. In this way the building client is made aware of his/her likely
financial commitments before extensive design work is undertaken.
Types of Approximate Estimating Techniques methods
These are the type of approximate estimating methods used in construction industry.
1. UNIT METHOD
2. CUBE METHOD
3. SUPERFICIAL OR FLOOR AREA METHOD
4. STOREY-ENCLOSURE METHOD
5. APPROXIMATE QUANTITIES
6. ELEMENTAL COST ANALYSES
7. COMPARATIVE ESTIMATES
8. INTERPOLATION METHOD

1. UNIT METHOD
The unit method of approximate estimating seeks to allocate a cost to each accommodation
unit of the particular building, be it persons, seats, beds, car spaces or whatever. The total
estimated cost of the proposed building is then determined by multiplying the total number
of units accommodated in the building by the unit rate.
The unit method estimating consists of choosing a standard unit of accommodation and multiplying
an approximate cost per unit. Estimate the building cost base on the depends on the population
unit. The unit cost method of estimation is used for project design estimates and bid estimates.

Hence although the method has the great merit of speed of application, it suffers from the
major disadvantage of lack of precision and at best can only be a rather blunt tool for
establishing general guidelines, more particularly for budgetary estimating on a rolling
programme covering a three to five-year period ahead. Because of the lack of precision, it is
advisable to express costs in ranges, with more precise costs to be determined at a later
stage by more reliable estimating methods when much more detailed information is
available. The following 1994-unit rates are given as a general illustration of the application
of the method to specific classes of building and are subject to all the limitations previously
described.
Hospital ward accommodation K6, 623 to K7, 478 per bed
Church hall K1,966 to K2,393 per seat
Primary school K6, 837 to K8, 119 per place
Secondary school K12,829 to K13, 461 per place
Multistorey car park K11, 965 to K19, 230 per car space
The main weaknesses of the method lie in its lack of precision, the difficulty of making
allowance for a whole range of factors, from shape and size of building to constructional
methods, materials, finishings and fittings, and it is not sufficiently accurate for the majority
of purposes. It does, however, serve a limited number of uses such as establishing an overall
target for a cost plan or calculating a sum for investment purposes, in cases where the
building client or his professional advisers have considerable experience of the construction
and cost of similar buildings, such as hospitals and schools. Even under these circumstances

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it is necessary to use this method with the greatest care and skill and with a full appreciation
of its limitations.

Example
Case: Proposed cost for building a school for 500 students
Solution: Refer to cost of past school projects ie. K500, 000.00 for 400 students

Unit Rate = Total Cost (past project)

No. of students (past project)
= K500, 000.00
400 students (places)
= K1250.00/student (places)

Approximate Cost for new school = 500 students x K1250.00/student (places)

= K625, 000.00
Approximate Range of Cost = K600, 000.00 – K650, 000.00

Exercises 1:

Provide approximate cost of the following;

Case 1: A new school for 500 students is being planned for Markham District for next year in
which you have been asked to do an approximate estimate for this project. You have recently
completed a school for 400 students worth K850, 000.00. Provide an approximate cost estimate
to the board chairman of Markham School.

Case 2: The ANGAU Hospital needs a new double storey ward for 30 beds each. You have
done a similar project in Madang Hospital for a single storey building that has a capacity for
25 beds which cost K56, 000.00. Provide an approximate cost estimate to the ANGAU Board
of Directors.

Case 3: The Principal of Lae Secondary School wants an approximate cost for the new car park
for 20 vehicles. You have done a similar project for Papindo in Ramu for K78, 000.00 for 25
cars. Calculate the approximate cost for Lae Secondary School new car park to the Principal.

Case 4: The HoD of Architecture and Construction management Dept wants to have a new
Computer Lab to have 30 seats. You have done a similar project/building in Bugandi
Secondary H. School which is a double storey building with 25 seats each costing
K120 000.00. Calculate the approximate cost for a new computer lab to the HOD.

2. CUBE METHOD

The cube method of approximate estimating was used quite extensively between the wars but has
since been largely superseded by the superficial or floor area method. The cubic content of the
building is obtained by the use of rules prescribed by the Royal Institute of British Architects (1954)
which provide for multiplying the length, width and height (external dimensions) of each part of the
building, with the volume expressed in cubic metres. The method of determining the height varies
according to the type of roof and whether or not the roof space is occupied.

The cube method is used to multiply the length, width and height (external dimensions) of each
part of the building, with the volume expressed in cubic metres. The method of determining
the height varies according to the type of roof whether or not the roof spaces is occupied. For
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a normal dwelling with an unoccupied pitched roof, the height dimension is taken from the top
of the concrete foundation to a point midway between the apex of the roof and the intersection
of wall and roof (half the height of the roof). If the roof is to be occupied, then the height
measurement is taken three-quarters of the way up the roof slope, and with mansard roof it is
usual to measure the whole of the cubic contents. With flat roofs, the height dimension is taken
600mm above roof level except where the roof is surrounded by a parapet wall which has a
height in access of 600mm, then the height will be measured to the top of the parapet wall. If
the height of the parapet wall is less tan 600mm, then the minimum height of 600mm will be
taken. The main weakness of this method is the difficulty in assessing the unit rate on the
account of large variables which have to be considered. Other weakness is that the cubic content
does not give any indication to the building client of the amount of usable floor area and it
cannot assist the architect in his design of a building.

Case 1 Pitch Roof Not Occupied

Volume =axbxh

Where h = 1 /2 c + d

Case 2 Pitch Roof Occupied

Volume =axbxh
Where h = 3 /4 c + d

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Case 3 Mansard Roof

Calculation of Volume x = [(b – 2B) x h1] x a

2
y = [b + (b – 2B)] x h2 x a
2
z = a x b x h3

Total Volume = Vol x + Vol y + Vol z

Case 4 Flat Roof

(i) Volume =axbxh

Where h = c + 600

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 (ii) Volume = a x b x h’
Where h = c + c’
Only where c’ is greater than 600mm

(iii) Volume = a x b x c”
Where h” = c + 600
Only where c” is less than 600mm
Note:
In order to calculate the approximate costing using Cube method.
• First is to calculate the Unit cost per cube from the previous project.
• Secondly is to calculate the volume of the proposed project.
• Thirdly is to multiple the Unit cost per volume of the previous project x the total
volume of the proposed project

Exercise 1:
Calculate the approximate cost using the Cube Method from the following data;
a) Pitch Roof - Unoccupied residential Building

Length = 20m c= 1200mm Previous project of 30m x 15m x 3 height and

(a) 1.2m ceiling height costing K250,000
Width = 12m d= 3m
(b)

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b) Pitch Roof -Occupied office building

Length = 30m c= 1500mm Previous project of 20m x 10m x 3 height and

(a) 1.2m ceiling height costing K200,000
Width = 15m d= 3m
(b)

c) Mansard Roof

Length = 20m h 1= 600mm Previous project of 30m x 15m with similar

(a) h2= 1.5m heights and B costing K250,000
h 3= 3.0m
Width = 12m B= 2m
(b)

d) Flat Roof

Length = 20m C’= 600mm Previous project of 30m x 15m x 3m height with
(a) 600mm ceiling height costing K250,000
Width = 12m c= 3m
(b)

Length = 20m C’= 500mm Previous project of 30m x 15m x 3m height with
(a) 600mm ceiling height costing K250,000
Width = 12m c= 3m
(b)

Length = 20m C’= 1000mm Previous project of 30m x 15m x 3m height with
(a) 600mm ceiling height costing K250,000
Width = 12m c= 3m
(b)

Exercise 2

1) Calculate the approximate cost for the following not occupied building
a) The proposed building 30m x 18m wide x 3.6m wall height with 1.5m ceiling
height. The previous project of the similar type is 50m x 20m wide x 3.6m height
with 2.0m ceiling height costing K300,000.
b) If previous project is (a) was constructed in 1992. How much will the proposed
building will cost today.

2) Calculate 1(a) and 1 (b) if the building is an occupied building.

3) Calculate the approximate cost for the following Mansard roof

a) The proposed building 20m x 12m wide with h1=700mm, h2=1.2, h3=4m, with
B=1m. The previous project is 30m x 16mwide with h1=800mm, h2=1.4m and
h3=5m, with B=1.5m costing K500,000 in 1992.
b) How much will the previous project and proposed building cost today?

4) Calculate the approximate cost for the flat roof

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 (a) The proposed building 35m x 18m wide x 3.6m wall height with 600mm ceiling
height. The previous project with 25 x 15m x 3m wall height and 600mm ceiling
costing K450, 000 in 1992.
(b) How much will the proposed building with 40m x 20m x 4m wall height with 500mm
ceiling height will cost today.
(c) How much will the proposed building with 45m x 30m x 6m wall height with 1.2m
ceiling height cost today?

3. SUPERFICIAL OR FLOOR AREA METHOD

In this method the total floor area of the building on all floors is measured between the internal
faces of the enclosing walls, with no deductions for internal walls, partitions, stairs, landings,
lift shafts and passages. A unit rate is then calculated per square metre of floor area and the
probable total cost of the building is obtained by multiplying the total floor area by the calculate
unit rate. This is a popular method of approximate estimating, as it is comparatively easy to
calculate the floor area of the building and the costs are expressed in a way which is readily
understood by the building client. The main weakness is the difficulties in building up unit
rates from known rates for existing buildings due to the need to make allowances for a number
of variables including site conditions, constructional methods, etc. It also cannot take account
of changes in plan shape or total height of the building.

Case 1: Cost of house (already built) K40, 000.00

Area = 15m x 13m
= 195m2

Unit Rate = K40, 000.00

195m2
= K205.13 per square metre

Case 2: Cost of house (to be built)

Area = 15m x 12m
= 180m2

Unit Rate = K205.13 per square metre of house already built

Therefore, Probable Cost = Unit Rate x Area

= K205.13 x 180m2
= K36923.40
Approximate Range of Cost = K36, 000.00 – K40, 000.00

Exercises:

Case 1:
The cost of building a 150m2 single classroom for Buimo Rd School in 2014 was K46500.00.
There are now proposing to build a double classroom of 16m x 12m and the Chairman of the
school wants an approximate estimate of the cost.

Case 2:

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A client wants a proposed cost of a standard L40 house of 12.6m by 5.6m. You have done a
similar house of 13.2m x 6.0m and it costs K39, 580.80. Provide an approximate cost range to
the client.

Case 3:

The Principal of Lae Secondary School wants an approximate cost of the new double triple
classroom of 25.6m x 15.8m. The previous single storey building on the same area cost nearly
K450, 000.00 in 1980. Determine the current approximate range of cost for the new project.

4. STOREY-ENCLOSURE METHOD

This is a new method of single price-rate approximate estimating. The primary objective of
this estimating system would take account of the following measurements;
1. shape of the building (by measuring external wall area)
2. total floor area (by measuring area of each floor)
3. vertical positioning of the floor areas in the building
4. storey heights of buildings (proportion of floor and roof areas to external
walls)
5. extra cost of sinking usable area below ground level.

However, other works would have to be estimated separately;

1. site works, such as roads, paths, drainage, service mains and other works
outside the building
2. extra cost of foundations
3. sanitary plumbing, water services, heating, electrical and gas services and
lifts
4. features which are not general to the structure as a whole, such a s
dormers, canopies and boiler flues
5. curved work.

Rules of Measurement of Storey-enclosure Method

The story-enclosure method consists basically of measuring the area of the external walls,
floor and ceiling which encloses each storey of the building. The measurements are adjusted
in accordance with the following set of rules;
1. to allow for the cost of normal foundations, the ground floor area
(measured in square metres between external walls) is multiplied by a
weighing factor of two)
2. to provide for the extra cost of upper floors, an additional weighing factor
is applied to the area of each floor above the lowest. Thus the additional
weighing factor for the first suspend floor is 0.15, for the second 0.30, for
the third 0.45, etc.
3. to cover the extra cost of work below ground level a further weighing
factor of one is applied to the approximate wall and floor areas that
adjoin the earth surface.

Summary

All areas are multiplied by the appropriate weightings to obtain the storey-enclosure units
which are then totaled. To obtain the estimated cost of the building, the total of storey-
enclosure units in square metres is multiplied by a single price-rate built up from the costs
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of previous similar buildings or projects. The cost of external works and other special items
can be added. Basically, the aim of this method is to obtain a total superficial area in square
metres to which a single price-rate can be attached.

5. APPROXIMATE QUANTITIES

Approximate quantities priced at rates produced at the time the quantities are computed
provided the most reliable method of approximate estimating, possibly using a single price-
rate method as a check. This method is sometimes described as ROUGH QUANTITIES and
the pricing document resembles an abbreviated bill of quantities. It provides an excellent
basis for cost checking during the detailed design of a project.

6. ELEMENTAL COST ANALYSES

Another approximate estimating method uses the Elemental cost analysis for previous
similar jobs as a basis for the estimate. The cost is computed on a superficial or floor area
basis but the overall superficial unit cost is broken down into elements and sub-elements. At
this lower level of division it is possible to make adjustments for variations in design in the
new project as compared with the previous job. This approach involves a close examination
of the design and cost aspects of major parts or elements of the building and the
information thus produced can form a preliminary cost plan. Changes in storey heights, floor
loadings, column spacings, or the number of storeys can have various effects on the cost.

7. COMPARATIVE ESTIMATES

Another approximate estimating uses the Comparative method which is based on taking
known cost of similar type building as a basis and then to make cost adjustments for
variations in constructional methods and materials. These comparative costs will also be
useful for costing alternative proposals as the detailed designs are developed. It is important
to consider possible side effects of alternative choices of materials to be used in the
proposed construction. For example, various form of cladding may offer differing degrees of
thermal insulation, and the adaptation of a cheaper solution may result in greater heat
losses and increased heating costs once the building is occupied.

8. INTERPOLATION METHOD

The Interpolation method is a variant of the comparative method, whereby at the brief and
investigation stages in the design of a project, an estimate of probable cost is produced by
taking the cost per square metre of floor area of a number of similar buildings from cost
analyses and cost records and interpolating a unit rate for the proposed building. This method
looks easy, but note, no two buildings are the same and it is difficult to make adjustments to
the unit rate to take account of the many variables that are bound to occur between the buildings
for which known costs are available and the project under consideration. In practice it is often

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may be necessary to use a combination of both the interpolation and the comparative
approaches.

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