Solving the Construction Estimating

Puzzle: How to Estimate Thoroughly

and Accurately for Every Project
Puzzles come in all sizes and degrees of difficulty. Colorful 12-piece puzzles of happy dinosaurs
for the curious toddler. 500-piece illustrated scenes of old-timey storefronts. Mammoth jigsaw
landscapes that cover an entire drafting table. While no two puzzles are exactly alike, the strategies
for completing them are consistent, no matter how great the challenge. The same could be said for
construction estimating.

There are proven methods an estimator should follow from scoping to quantity takeoff to cost
estimating to produce a thorough, accurate estimate that stays within the project’s budget and
timeline. The advice in this guide is the same for estimating any project, from a simple bathroom
renovation to a towering new office complex.

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Solving the Construction Estimating Puzzle: How to Estimate Thoroughly and Accurately for Every Project
 Contents

Before Starting the Estimate: Puzzle Prep............3

Quantity Takeoff: Setting Out the Pieces...............5

Costing the Estimate: Assembling the Puzzle......7

Estimating Tips: Puzzle Mastery............................10

Construction Estimating: The Ultimate Puzzle.....11

Resources..................................................................11

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Solving the Construction Estimating Puzzle: How to Estimate Thoroughly and Accurately for Every Project
 BEFORE STARTING THE ESTIMATE:
PUZZLE PREP

Everyone starts a puzzle the same way: By taking a good, long look at
the front of the box to get a full picture of what the puzzle should be
when it’s complete. This happens before a piece ever leaves the box.
Construction estimating has its own prep work and it has the same
effect. By studying contract documents and doing some legwork before
you estimate quantities or prices, you’ll establish a clear picture of what
will be built in the end.

Sink Your Teeth Into the Scope of Work

Among the contract documents provided to you when a project goes
out to bid is a Scope of Work (SOW). A Scope of Work is a detailed
statement explaining exactly what is expected of the team completing
a particular construction contract. A well-written scope defines the
who, what, when, where and how of a project. The scope should
include everything—from required materials and equipment to project “GOOD
milestones and deliverables—so it’s important that you familiarize
ESTIMATORS ARE
yourself with it.i
MADE GREAT
What’s in a Scope of Work? THROUGH THEIR
KNOWLEDGE OF
• Purpose statement. This explains the intended function of the
structure being built.
CONSTRUCTION
AND THEIR
• Contractor responsibilities. In addition to project and
ABILITY TO
subcontractor management, this often includes advising on and
accepting design documentation. MENTALLY BUILD
THE PROJECT
• Owner responsibilities. Generally, this concerns approving plans
and how to communicate disputed items. MULTIPLE TIMES
BEFORE THE
• Project execution requirements. This includes standards,
regulations and special requirements. PROJECT IS

• The quality, quantity and means of execution. A contractor should

ACTUALLY BUILT. ”
have enough details to estimate labor costs. Rory Woolsey, CEP

• Project timeline. This includes milestones.

• Payment and reporting schedules. Everyone needs to be aware of

the schedule in order to meet due dates.

• Related tasks and duties. These are required to obtain expected

results in accordance with the project goal.

• Contractor performance evaluation. The evaluation methods and

metrics used for complete transparency and agreement.

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Solving the Construction Estimating Puzzle: How to Estimate Thoroughly and Accurately for Every Project
 BEFORE STARTING THE ESTIMATE:
PUZZLE PREP (CONT.)

Review Plans and Specs

During your first review of the plans and specifications, identify and note all
items to be estimated. Examine carefully the General Conditions, Supplemental
Conditions and Special Conditions sections of the specifications. These sections
describe the items that have a direct bearing on the proposed project but may not
be part of the actual construction. A good example of such an item is an office
trailer: It won’t materially build anything but the build can’t happen without it.

Visit the Job Site

As an estimator, you should always visit the project site to address specific
conditions that may not be apparent from reviewing the plans. Be sure to look
for site access, proximity to utilities and other resources and adequate space for
storage and equipment.

Check the Weather

If snow is common in your area, allow for the expense of snowplowing if the
project spans the winter season. If rain is in the forecast, determine whether site
drainage will be necessary.

Remember the Puzzle Box

Studying contract documents and visiting the job site will paint a clear picture of
what the job is ultimately trying to accomplish–just like the front of a puzzle box.

One of the most exhilarating parts of doing a puzzle is dumping the pieces from
the box and watching them spread. It’s a moment alive with possibilities. It’s the
instant the challenge officially begins. For the construction estimator, that instant
is the quantity takeoff.

The purpose of the quantity takeoff is to provide a complete list of material,

equipment and tasks for an accurate cost estimate. That’s a lot of puzzle
pieces. Industry practices have been established to maximize the speed, ease
and accuracy of the takeoff process. These practices should be adhered to. No
estimate will be reliable if a mistake is made during quantity takeoff, no matter
how precise your construction cost data.

Follow the Leader

It is likely that the person preparing the quantity takeoff will also prepare the
cost estimate. But if not, it is best to follow the takeoff preferences of the cost
estimator to prevent confusion and misinterpretation. Use footnotes, symbols or
sketches to clarify any ambiguities so the takeoff is as clear and informative as
can be.

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Solving the Construction Estimating Puzzle: How to Estimate Thoroughly and Accurately for Every Project
QUANTITY TAKEOFF:
SETTING OUT THE PIECES

Takeoff From the Ground Up

A good approach to completing a quantity takeoff is to follow the order of the actual construction, from the footings up to the roof. This
will provide you a clear mental picture of the project. If a project consists of more than one building, perform a separate quantity takeoff
for each building, since unit costs may vary from structure to structure.

Keep Quantities Simple and Consistent

A quantity takeoff is a massive list of materials and measurements. It’s best to keep quantities as simple and consistent as possible.
This is especially important when dealing with spreadsheets. The following is a field-tested method for entering quantities.
• Enter the building component in the far-left column, labeled “Description.”
• Next, list the number of components, followed by their dimensions. Where possible, use the dimensions stated in the plans
instead of measuring by scale. Always express dimensions in the same order: length x width x height (or depth).
• List quantities of unit items associated with each component in the subsequent columns. When taking off strip footings, for
example, the associated items include structural excavation, concrete, formwork, backfill and disposal. Measurements, such as
cubic yards of concrete, are applied to each unit item.
• If you enter different sizes of the same component in your takeoff, list quantities in the appropriate columns and find the total.
This way, you can calculate, for instance, the number of cubic yards of concrete needed for strip footings for the entire building
and sum it up at the bottom of the column labeled “Concrete.”

Strip Footings
Structural Excavation LS
Concrete 35 12 14 3
Formwork LS
Backfill LS
Disposal LS

Keep Scale in Mind

Check the plan, drawings and details carefully for change in scale, plans reduced from their original scale, notes such as “NTS” (Not to
Scale) or discrepancies between plans and specs. As you go, it doesn’t hurt to do some mental arithmetic if a quantity or measurement
seems fishy—drafters make errors too.

Remember Labor
A quantity takeoff is used for listing material items, but it lists labor services as well. These services are called work items and while
they may not appear in the plans, they are required to complete the job.

Any item that has a cost value should be assigned a unit of measure, even if it is only a lump sum (LS). The term lump sum is used for
work items that cannot be measured or expressed in any other way. These tend to be General Conditions task like cleanup or street
sweeping. The note “LS” signifies an item that requires a cost allowance based on judgment.

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Solving the Construction Estimating Puzzle: How to Estimate Thoroughly and Accurately for Every Project
QUANTITY TAKEOFF:
SETTING OUT THE PIECES (CONT.)

Keep Consistent With Plans

Whenever possible, identify items in the quantity takeoff by their location on the plans. When working with building plans, use a
consistent system. For instance, take measurements in a clockwise direction around a floor plan, first recording measurements of
items displayed horizontally on the plans and then recording those shown vertically.

Do It With Decimals
Use decimals, not fractions, in quantity takeoffs. Decimals are faster, more precise and easier to use on a calculator or in a spreadsheet.
Convert plan dimensions from feet and inches to “decimal feet,” that is, feet and tenths of a foot.

In most cases, the use of two decimal places is sufficient for quantity surveying purposes and easy to enter on a calculator or a
computer. However, when writing a product calculation, decimals are usually meaningless. It is best to develop rules for precision that
are consistent with measurement capabilities. Here’s an example:

ITEM INPUT OUTPUT

Earthwork Nearest 0.10 feet Nearest CF or CY

Concrete Nearest 0.01 feet Nearest CF or CY
Formwork Nearest 0.01 feet Nearest SF
Finishing & Precast Nearest 0.01 feet Nearest SF
Lumber Nearest 0.10 feet Nearest BF
Finishes Nearest 0.10 feet Nearest SF or SY

You must learn the measurement standards for each industry. For instance, lumber dimensions of 12 ½ feet must be rounded up to 14
feet to align with standard sawmill cutting practices.

Finally, do not convert units until all items in a column are totaled. For instance, keep concrete in cubic feet (CF) until all quantities listed
in the concrete column have been listed. Then convert the total to cubic yards (CY).

Be Real About Waste

Some material will be wasted during construction and you should allow for this waste in your takeoff. Before you make a waste
allowance, quantities are referred to as net quantities. After the waste allowance is made, quantities are considered gross quantities.

Mark as You Go
Avoid errors of omission and duplication by marking the plans as you takeoff items. Make colored pencil or highlighter shadings and
check marks directly on the plans. That way, if you stop and start again you can safely assume any unmarked item has not been taken
off yet.

Typically, a single kind of marking won’t work for every category. You have to develop a system that works for you.

Develop Your Puzzle Process

Just as it is best to sort pieces by color, find the corners and frame the border of a puzzle, following a repeatable procedure during
quantity takeoff will result in an accurate estimate completed quickly.

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Solving the Construction Estimating Puzzle: How to Estimate Thoroughly and Accurately for Every Project
 COSTING THE ESTIMATE:
ASSEMBLING THE PIECES

You’ve studied the box, dumped your pieces, organized them and built your frame.
Now it’s time to put the puzzle pieces together and apply costs to your takeoff quantities.

Types of Costs
All costs included in a unit price estimate fall
into one of two categories: direct costs and
indirect costs. Direct costs are those linked to the
physical construction of a project. Material, labor Construction Estimating Checklist
and equipment prices are all direct costs, as are
Direct Overhead Costs Indirect Costs
subcontractor costs. Direct costs are commonly (Project Overhead) (Main Office Overhead)

called “bare” or “unburdened” costs.

Personnel Salaries

Indirect or overhead costs are incurred in

Superintendent President
Project manager (if for that project only) Executives
Field engineer (if for that project only) Secretaries/reception
Cost engineer (if for that project only) Estimators/schedulers

completing the project but are not applicable to

Scheduler Project managers
Warehouse personnel (if for that project only) Construction manager
Watchman/guard dogs Cost engineers
Tool room keeper (if for that project only) Purchasing agent

any specific task. They may include items such

Tool room keeper (if for that project only) Cost/bookkeeping
Timekeeper (if for that project only) Engineers
Foreman (if for that project only) Other office personnel
Site safety manager Yard personnel
Tool manager

as supervision, insurance, temporary facilities, Mechanics/maintenance

Drivers
Equipment operators

Bonds
professional services and contingencies. Indirect
Surety

Office
costs are separated into two categories: job site
Bid
Payment
Performance
Rent/cost of ownership
Electricity

overhead and main office overhead. Gas

Water
Sewer
Miscellaneous Telephone
Internet

Job site overhead costs are indirect costs

Postage
Vehicles
Office equipment
Permits
Furniture/furnishings
Licenses
Office supplies
Tools and equipment

associated with the job site. They can be

Advertising
Photographs
Literature
Surveying
Club/association dues
Testing
Job signs

estimated in detail but are typically calculated as Pumping

Dust control
Scaffolding
Lifting/hoisting
Professional Services
a percentage of direct costs and included in CSI
Cleanup (periodic)
Final cleanup
Damage/repair to adjoining buildings Legal
and/or public ways Accounting

MasterFormat Division 1 of the estimate.

Architectural
Engineering

Temporary Facilities
Main office overhead costs are associated with Field office expense Vehicles
Set-up and removal

the operation of the contractor’s main or home

Light Cars/trucks
Water Cost of operation
Telephone/internet Mileage expenses
Supplies

office. Overhead costs are typically calculated

Equipment
Fax machine
Copy machine

Insurance
Blueprint machine
Coffee machine

as a percentage of the total project cost and Computers/software

Temporary light and power
Temporary heat
Fire
Property damage
Temporary water

added at the end of the estimate. Some costs,

Vehicles
Cell phones/radios Public liability
Toilet facilities Windstorm
Enclosures Workers’ compensation
Storage trailers Unemployment

such as professional services, may be counted as Fencing

Barricades and signals
Construction road
Social security
Flood
Theft
Project sign Elevator

either project overhead or main office overhead,

depending on how the resource is used.

Gathering Cost Data

Every item in the estimate must contain an associated cost—every single item. That’s a lot of costs to get together
and, like puzzle pieces, it’s best to find them one at a time. Fortunately for you, there are many reliable sources of
construction costs.

COSTS FROM PREVIOUS PROJECTS AND ESTIMATES: Sometimes the best place to look for cost data is your
last job, provided the estimate for your last job was accurate.

SUBCONTRACTOR QUOTES: Subbing out the concrete work? That subcontractor should be able to give you
accurate costs for his services.

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Solving the Construction Estimating Puzzle: How to Estimate Thoroughly and Accurately for Every Project
 COSTING THE ESTIMATE:
ASSEMBLING THE PIECES (CONT.)

SUPPLIER QUOTES: It is common to call a supplier and ask for costs. Fair warning:
The supplier may expect your business in exchange for this info.

PUBLISHED COST DATA: There is a lot to be said for published cost data from independent sources. Cost
databases are researched and maintained by teams of cost engineers with industry experience. Additionally, you
can rely on these sources for costs you, your subs and your suppliers do not have readily available and they can be
used to validate your costs and costs you receive from other sources. RSMeans data from Gordian, for example,
contains more than 85,000 unit line items gathered and scrutinized by a team of engineers who spend a collective
22,000+ hours every year verifying the validity of their cost data. To ensure you have recent, localized construction
prices, there is no beating published cost data.

In all likelihood, you are going to use multiple sources of cost data during the course of an estimate. No matter
which source you are using at a given time, you should follow the same system and sequence for pricing as
you did for the quantity takeoff. If you started with the footings for the takeoff, start with the footings when you
apply costs as well. Keeping consistent throughout the project will make it easier to check that your estimate is
complete.

Organizing the Data

At this stage of the estimate, you have a large amount of data on hand. All that information must
be assembled, organized and analyzed. Generally, the information falls into one of the following major categories:

• Quantity takeoffs for all general contractor items

• Material supplier quotes and published prices
• Material supplier telephone quotes
• Subcontractor quotes
• Equipment supplier quotes and published prices
• Cost analysis
• Historic costs from previous projects
• Cost data from independent sources

That’s a lot of information to get your arms around—you need a system to handle it all efficiently. Your goal is to
transfer everything from the quantity takeoff to the cost estimate one time without rework. This is a tall task, but
doable if you follow this procedure:

• Code each document with a division number in a consistent place. Give yourself only one place to look for
division.
• Use telephone quote forms and templates for uniformity.
• Document the source of every quantity and price.
• Use a logical, consistent directory filing system and file naming conventions.
• Back up all important data.

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Solving the Construction Estimating Puzzle: How to Estimate Thoroughly and Accurately for Every Project
 COSTING THE ESTIMATE:
ASSEMBLING THE PIECES (CONT.)

All subcontractor costs should be noted and listed separately. These costs contain the
subcontractors’ markups and should be treated differently from other direct costs after
you calculate the overhead, profit and contingency allowance.

Unit price estimates for building construction are typically organized according to the
divisions of the CSI MasterFormat. Within each division, identify, list and assign costs
to each component or individual construction item. This level of detail and definition is necessary to complete an
accurate estimate. Additionally, each item can be divided into material, labor and equipment components.

The Estimate Summary: The Final Piece of the Puzzle

When you complete pricing of direct costs, you have two choices: Either make further price changes and
adjustments on the Cost Analysis or Consolidated Estimate document or transfer total costs for each subdivision
to the Estimate Summary document so further price changes are recorded in one place. Given the immense
volume of unit items in an estimate, it is standard practice to transfer costs to the Estimate Summary. Be sure to
double-check this step, as errors are easy to make.

To save time, it is wise to create a standard Estimate Summary document that lists items repeatedly estimated.
Appropriate column headings or categories for any Estimate Summary include:

Material Labor Equipment Subcontractor Total

Remember to apply the appropriate markups to total dollar values. Generally, the sum of each column has different
percentages added to account for indirect costs, including:

• Sales tax
• Main office overhead
• Profit
• Contingencies

Factoring in Subcontractor Costs

Since subcontractors complete over 50% of the work on a typical building project, pay special attention to
two aspects of bid preparation. The first is the subcontractor’s Scope of Work. It is essential to have a clear
understanding of subcontractor scope to compare competing bids and to ensure you have included all items the
subs may have excluded, such as cutting and patching, temporary protection and the like. The second aspect
that needs a careful eye is pricing. Subcontractor prices typically arrive on bid day, leaving little time to analyze
competing bids or address last-minute gaps in coverage. Thorough communication and coordination throughout
the bid process will go a long way to minimize eleventh-hour changes.

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Solving the Construction Estimating Puzzle: How to Estimate Thoroughly and Accurately for Every Project
ESTIMATING TIPS:
PUZZLE MASTERY

As you complete puzzles, you build puzzle-building habits. The same could be said for creating construction cost estimates—the more
frequently you estimate, the more efficient you’ll become. Below are tips and tricks for optimizing your estimating process to become
more efficient, minimize rework and produce accurate estimates.

Tips and Tricks for Manual Tips and Tricks for Estimating on Tips and Tricks for Estimating With
Estimates Electronic Spreadsheets RSMeans Data Online
Estimating by hand is, to put it charitably, Estimating in Excel or electronic It is an industry best practice to use a
not ideal. Handwriting may be illegible. If spreadsheets makes construction construction estimating software. RSMeans
work is interrupted, finding your place later estimating easier, though this method has Data Online offers the ability to create and
may waste precious time. Errors of omission its flaws. Versioning can get cumbersome. manage estimates in an online platform
may be more common. Estimating by hand Formatting can devour your time. One backed by North America’s leading
should be a bygone practice, but if you must formula mistake can tank the whole construction cost database. Here are
estimate by hand, here are some ways to do estimate. Here are some tips for optimizing some tips for using RSMeans Data Online
it more effectively: your process: successfully:

• Write on only one side of a page. • Save commonly used templates in their • Mark commonly-used assembly and
own folder. unit items as “favorites” to save them
• Keep each type of document
for quick access.
(quantities, materials, equipment, etc.) • Spot-check important formula
separate and filed in order by division results with manual calculations. • Follow price trends and set alerts to
number. be notified when costs change. You
• Save your work frequently.
can choose to receive notifications for
• Keep the entire estimate in one or • Combine related spreadsheets into local costs and/or costs for particular
more compartmented folders. workbooks. materials and equipment.
• Use a naming convention that indicates • Check the reference section for the
whether a spreadsheet is City Cost Index, common construction
in progress or complete. abbreviations, crew explanations,
• When entering quantities into a cell, video tutorials and even more tips for
include useful numerical information. success.
For example, if 10% is added to a • Customize assemblies and units to
quantity of 300, enter =300*1.1 meet your estimating needs. Add,
instead of 330 to keep track of the swap and remove assembly
addition. components to meet project
requirements or to value engineer.
• Print, email or export estimates to
Excel for easy sharing with other
project stakeholders.
• Use predictive costs to create accurate
conceptual estimates up to three years
in the future.

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Solving the Construction Estimating Puzzle: How to Estimate Thoroughly and Accurately for Every Project
 CONSTRUCTION ESTIMATING:
THE ULTIMATE PUZZLE

Estimating for building construction is the ultimate puzzle. Not only are there
thousands of pieces to put together, but you have to find them yourself—they
don’t have the decency to come in a box. Like completing a puzzle, putting
together an estimate requires patience, attention to detail and the discipline to
orient yourself toward a goal and work toward it. It helps to have the right tools
as well.

RSMeans Data Online helps you complete more estimates in less time and
with fewer headaches. With RSMeans Data Online, you can:
• Find reliable, localized construction cost data for fast access to labor,
equipment and material prices.
• Create square foot, assembly and line item estimates and easily share,
print and export to Excel.
• Receive automatic price updates for certainty and peace of mind with
every estimate.
• Estimate accurately up to three years into the future with predictive cost
data.

Ready to piece together construction cost estimates quickly and

accurately? Sign up for a free 30 day trial of RSMeans Data Online.

RESOURCES
Estimating Checklist

Quantity Takeoff Sheet

i
https://www.thebalancesmb.com/must-have-items-on-a-scope-of-work-sow-844916

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Solving the Construction Estimating Puzzle: How to Estimate Thoroughly and Accurately for Every Project
 About Gordian
Gordian is the world’s leading provider
of facility and construction cost data,
software and services for all phases
of the building lifecycle. A pioneer of
Job Order Contracting (JOC), Gordian’s
solutions also include our proprietary
RSMeans data and Sightlines Facilities
Intelligence solutions. From planning
to design, procurement, construction
and operations, Gordian’s solutions help
clients maximize efficiency, optimize cost
savings and increase building quality.

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Solving the Construction Estimating Puzzle: How to Estimate Thoroughly and Accurately for Every Project