Thursday, October 19, 2017
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Estimates & Bids

Construction cost estimating is both a science and an art. We are able to GUARANTEE our material takeoffs. Moreslide4 

PacWest Estimating - Art & Scienceslide4estimate

In the construction industry, the importance of construction estimating is pivotal. Successful project completion is primarily based upon the calculations made for construction estimation. If estimation is not done properly, a completed project may have much more escalated costs than budgeted earlier, as it has been based on incorrect estimates. This would be due to budgeted estimates having been calculated on the lower side.

Construction cost estimating is both a science and an art.

It is a science because a systematic method has to be adopted to draw up accurate construction estimates. An experienced estimator will first formulate a detailed estimation plan after all factors of the technical and commercial requirements of the construction project are considered and revealed.  Next, the estimator will calculate and determine the detailed material and labor requirements for the construction project in terms of the detailed bill of material and man-hours of labor. Statutory requirements, location, logistics, price escalation, time lines, weather factors, various contingencies, and special client requirements must also be considered and calculated.

To determine the various construction material costs, the estimator will base the unit material costs on the material supplier quotes and must factor in a realistic percentage for price escalation based on time line. Labor costs are based on the number of man-hours and the nature of the work performed by each skilled workman. Costs of utilities will be considered on their estimated overall consumption and different unit costs assigned to them, based on the types of the utilities.  The estimator will also factor in the construction equipment and accessory structures cost based on the hourly rental or usage cost.

Costs for  the statutory, legal, seismic, environmental,  and a variety of contingency factors for the construction project are also considered and factored into the estimate.  Historical data and past experience is used to calculate contingency expenses, basically utilizing the knowledge accumulated by a seasoned estimator professional.

In addition, fixed costs, overhead, cost of working capital, and financing must be calculated and included in the estimate.  Total everything listed thus far and to be ultimately safe, a margin for project cost escalation should be added to the total.  And finally, profit margin must be considered and added to achieve a grand total, which is when the “estimate” becomes a “quote”.

Construction estimating is also an art. The art lies in keeping the estimates accurate yet low enough to win the contract!

PacWest estimators have “been at it a long time”.  It’s a tedious process, our methods are “old school” and very little estimating software is used. We prefer to use the blueprints to build the project in “our head”, all the while carefully calculating and determining every material type and quantity, as well as the labor to install, then writing everything down, item by item.  Formulas based on our own experience are applied to check for possible errors and omissions.

And because we are so confident in our construction estimating abilities, we are able to GUARANTEE our material takeoffs.  Compare this to a material supplier who will issue a price quote for a limited time period based on an estimate they do not guarantee. The difference is easy to recognize and a major reason to carefully consider PacWest proposals.

PacWest Contracting LLC
P.O. Box 7799
Bend, Oregon 97708
office: 541-330-0450
cell:    541-213-8526
fax:     541-330-0451

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