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Chapter 3
Cost Estimating
Review Questions:
1. What is the difference between a conceptual cost estimate and a detailed cost estimate?
2. What is the greatest risk the contractor faces when developing a cost estimate?
3. How does an estimator develop the work breakdown structure for a project?
4. When is a construction schedule developed in the estimating process and why?
5. What is the difference between job site general conditions and home office indirect
costs?
6. What are two sources for labor productivity rates?
7. List five of the general contractor’s personnel who should participate in developing an
estimate for the project and what their specific roles would be.
General contractor personnel who should be involved in preparation of the estimate are the
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estimator with take-offs and soliciting subcontract bids. The superintendent develops the
construction sequencing schedule and reviews labor hours and crew sizing. Each of the team
should check and review the others‘ related work. The officer–in–charge assigns a fee to the
estimate and reviews the contractual requirements of the project.
8. Why is it important that the first conceptual estimate developed by a contractor be
somewhat accurate?
9. What is wrong with unit prices from published references for material and subcontract
items of work?
10. What is the difference between a construction schedule and an estimate schedule?
11. What is the 80 – 20 rule and how does it apply to estimating concrete formwork?
12. If an estimator is certain of receiving at least one or two subcontract bids on bid day,
why should he or she bother with estimating that area of work themselves?
13. What is an acceptable job site general conditions percentage? Should straight
percentage calculations be used in developing an estimate?
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14. Where do most estimate errors occur?
Exercises:
4. In addition to the data shown in Figure 3.15 summary estimate and on the website for
NanoEngineering, what other detail would a construction-savvy client look for from a
contractor on a completely open-book project? If you were the client, list your top ten
items.