Ways to More Accurately Estimate Construction Costs

For both general contractors and subcontractors, any potential new project starts with a cost estimate. Whether it is part of a competitive bid or the jumping off point for a negotiated job, it has to be precise.

One of the first realities that many estimators should come to grips with is that there's no shame in asking for help from experts. This is particularly true if the bid is for a general contract. There's so much specialized expertise involved in one project that it would be almost impossible for those not involved daily in other trades to hit the mark on pricing.

While cost data books and software provide a ballpark, they are no substitute for information learned in the trenches every day. Those estimators should gather at least three subcontractor or material bids for each trade, throw out proposals that are obviously too high or too low, and that's the magic number.

Speaking of subcontractor bids, insisting that each company submit its proposal on a form that has the exact same cost line items will allow for quick and easy comparison, as well as ensure that an apples-to-apples measure is used when selecting the winning sub.

Failure to account for non-construction costs is also a weak spot in some estimates. Permitting, a jobsite trailer and other project and general overhead items can all be overlooked in the quest to meet a bid deadline.

The estimating process can also become a time-wasting hotbed of errors if calculations are still being done by hand with the not-so-trusty adding machine and pencil. Construction software programs, at the very least, can keep a bid organized and formatted so that the chance of leaving out an important line item is greatly reduced, if not eliminated completely.  

Simple math errors that can wreak havoc on the bottom line are also made a thing of the past with software-generated calculations. Some systems even come with tools, such as a digitized pen, to take accurate measurements of blueprints, reducing the chance of mistakes there as well.

Attention to detail is the key to creating an accurate cost estimate, and estimators should use every modern tool at their disposal to help them produce an exact finished product with the potential to help the project turn out to be a real moneymaker for the firm.  

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Kim Slowey is a writer who has been active in the construction industry for 25 years and is licensed as a certified general contractor in Florida. She received her BA in Mass Communications/Journalism from the University of South Florida and has experience in both commercial and residential construction.