AnmeldenHow to Estimate Construction Cost: Challenges & Steps to Resolve Them
Knowing how to accurately create a construction estimate is critical to the success of any project. If you’re a contractor or construction company, an accurate construction estimate allows you to give a client a realistic bid, while ensuring you’re profitable. And if you’re internal and trying to project a renovation cost? Construction cost estimating means the difference between running short on a project budget vs. getting rejected for requesting far more funds than you actually need.
But, creating accurate construction estimates is easier said than done. Data challenges can hinder your estimations, poor planning can create gaps in your projections, and the process as a whole is time-consuming. Fortunately, there are a number of steps you can take to help things go well. And, with a little help from digital twins, you can streamline things even further.
5 most common types of construction estimates
There’s no one-size-fits-all approach to construction estimates. There are multiple types of estimates, each useful for different stages of a project’s life cycle and core to effective construction management.
As construction estimates can take a significant amount of time and resources, it’s important to know which type of estimate fits your situation the best. Here are the most common estimates.
1. Preliminary estimate
A type of estimate that's a less-detailed approximation of costs, often used during early project discussions. Preliminary cost estimates are used to vet projects and determine if they're realistic or not.
2. Detailed estimate
A detailed construction estimate takes a close look at a project, chunking costs into categories based on materials, labor rates, etc. A detailed estimate is completed post-design documentation.
3. Quantity estimate
A quantity construction estimate provides a numerical estimate based on the cost-per-unit of labor or materials. This is useful during more predictable projects, such as estimating the cost to redo a large space based on square footage.
4. Bid estimate
A bid construction estimate is created by a contractor and includes a detailed breakdown of the project cost. A contractor will create a bid estimate to hopefully win over a client while also ensuring they have some level of profit margins.
5. Control estimate
A control construction estimate is a combination of projected cost, cost post-contract, and the cost post-construction. A control estimate is used to monitor the cost of a project as it happens, and to determine the total cost after the fact.
How to meka estimate for a construction project?
Regardless of the type of construction estimate, there are several steps that typically go into the process. (Save the preliminary estimate, which is generally lighter on the details.)
1. Know project feasibility and profitability
Before preconstruction work, drafting a proposal, or going any further along the construction estimation process, it’s essential to know if a project is feasible, and if it’s profitable.
First, determine feasibility. Look over the client or stakeholder’s wants, proposed timeline, and so on, and ask yourself what this will require on your end. Do you have enough people? Will you need outside contractors and specialists? What kind of materials and equipment? All of these elements can eat into whether or not a project is feasible.
For instance, if a project requires materials with a turnaround time of several months, and the client expects groundbreaking within a month of signing, it’s simply not feasible. Or, if outside experts are required and everyone is booked for X months or a year out, it’s not feasible.
Once you’ve determined feasibility, use similar measurements to gauge profitability. Will this project require so many outside resources, or does it carry enough potential risk, that you see it failing to be profitable? Will it take so long that you can’t take on additional projects in the foreseeable future?
2. Prep for a site visit
Ideally, you’ll be able to visit a construction site before creating a construction estimate. Before you visit a site, consider the following:
What does the overall scope of the project look like? What does it entail?
What potential complications or challenges do you foresee?
Any concerns you'd like to address with the client beforehand?
Potential outside specialist help or general contractors you'll need?
Do you have all the required equipment for this project?
What red flags do you need to look for at the site?
If you’ve completed previous projects similar to the one you’re prepping for, think about the above questions as well. Past experience can be a great teacher in these cases.
You also want to make sure you get all necessary construction documents, including architectural and structural drawings, equipment schedules, building specs, etc.
3. Visit the job site
Think about your questions and concerns from the previous step. Then, look for answers as you visit the job site. Are there any glaring discrepancies between the documents given to you by the client, and what you’re seeing in person? Does the location pose certain challenges to work in? Is the surrounding area going to make it difficult to get equipment in and out?
Again, past experience is a great reference point. Think about your previous projects similar to this one, if any, and ask yourself if any previous challenges seem likely in this case.
During your visit, don’t hesitate to take advantage of your time on the site and ask questions. Interview key stakeholders in the project, and speak with those who work on-site if possible.
Lastly, if you’re unable to visit the site for any reason, get all the documentation you can. This includes blueprints, documents from previous renovations or projects, utility information, and so on.
4. Create your scope of work
A scope of work document is critical to the construction estimate process, and contains a detailed breakdown of materials and labor needed to fulfill the client’s requests. This document not only helps the client understand the scope and potential cost, but is also an agreement between both parties.
When creating the scope of work, consider:
What the client is requesting
The estimated timeline for the project
Labor hours and requirements
Equipment rentals or purchases
Total cost of materials
Insurance requirements
Permits and licenses
Keep in mind the scope can change during a project, so it’s important to leave some wiggle room. Material costs and needs can fluctuate, complications can arise and consume more labor, and so on. Don’t hesitate to refer to previous project estimates when creating your scope for a specific project, either.
5. Create a material takeoff
The material takeoff is a core construction estimate document that breaks down any and all required materials for the project. Within the material takeoff, you should detail how much of each material you'll need, along with projected costs for each.
The material takeoff is typically based on any available documentation, like blueprints of the existing structure, your own architectural docs, or even a digital twin of the site. You can also look at any similar projects you've completed in the past to further inform your material takeoff.
Once you have the material takeoff created, you can then develop the bill of quantities, which outlines material and labor costs.
6. Estimate total construction costs
All of the aforementioned efforts and documents should allow you to come up with a total estimate for the project.
Use your scope, material takeoff, and bill of quantities to determine the complete labor, materials, equipment costs, and other. Remember to build in wiggle room for indirect costs, unexpected challenges, and to ultimately ensure your bottom line is protected.
Provide your client or stakeholder with both line item costs and total costs when delivering the construction estimate, ensuring maximum transparency.
Challenges in creating accurate estimates
Every construction project is rife with opportunities for error, and the creation of construction estimates is no different. There are a number of challenges when it comes to creating accurate estimates, but a few in particular are more common than others.
Data discrepancies
Inaccurate or incomplete data can make it next to impossible to create an accurate estimate. In fact, it’s estimated bad data is the cause of 14% of construction rework. Bad data can come in the form of an outdated blueprint, inaccurate design docs, and so on.
Communication troubles
Miscommunications or communication breakdowns are common in construction projects, especially larger ones. The more stakeholders or project sites you have to work with, the more likely it is for communication troubles to arise. Any kind of miscommunication can result in getting outdated documents or misinformation, impact your estimate, and cause the project to go out of scope or over budget.
Resource constraints
Again, construction estimates are often time-consuming and expensive. This isn’t ideal for anyone, let alone smaller teams who are spread thin. This is why it’s important you choose the right type of estimate, cut out the noise and data you don’t need, and streamline your estimation process as much as possible.
How to optimize construction estimates using digital twins
Digital twin technology makes it possible to scan a space and create a virtual recreation of that same area that stakeholders can use for collaboration. Incorporating digital twin technology into your construction estimation process brings a number of benefits:
Reduce travel time: When you’re creating a digital twin, you can quickly “visit” the site via most devices and remove the need to frequently visit a site.
Save time: Creating design docs by hand takes a large amount of time. Scanning a space requires far less time and enables not only the digital twin use, but exportable files like CAD, BIM, and point clouds. This accelerates your team’s ability to get started with design or estimation work.
Fosters collaboration: Digital twin files can open the door to remote collaboration, allowing distributed teams to work together and offer feedback no matter where they are.
Reduce errors: Digital twins capture every visible detail, providing more detail than many design docs, and you can create them more frequently than manual docs, allowing them to be up to date. Working with the most recent information available can help reduce errors significantly.
Improving sustainability: Digital twins can improve sustainability by reducing planning and travel costs by 75% for Bayer, which translated to correcting an overbid estimate.
Unlike many scanning technologies, the Matterport digital twin platform is fast and easy to use, enabling anyone to quickly create digital twins based on real spaces. This makes Matterport digital twins ideal for construction estimates, and in only a few steps.
1. Choose the right capture device
The first step is capturing a space. This requires the right Matterport device, of which there are several to choose from.
Mobile device: Most mobile devices are compatible with Matterport and capable of accurate scans up to 16 feet away.
360 cameras: 360 cameras offer a low-cost way to enter into the ecosystem, and can capture accurate scans up to 16 feet away, and in only three seconds.
Matterport Pro2: The Pro2 can capture accurate scans 15 feet away, but with enough detail for many tasks and in only 25 seconds.
Matterport Pro3: The Pro3 uses a LiDAR sensor and is capable of capturing with accuracy up to 33 feet, and in less than 20 seconds. Not only this, it works outside and delivers accuracy suitable for roughly 95% of all use cases.
There are also survey-grade scanners, such as the Leica BLK360. While these deliver even more precise dimensional accuracy, they also take much longer (2-15 minutes) and come with a substantially higher price tag.
2. Pick the right documentation type
Matterport digital twins enable exports of a number of file or document types, and can be imported directly into most common design and project management tools like Revit, Autodesk Construction Cloud, and Procore. Some of the most highly utilized include the following types:
BIM360/ACC Insights Partner Card
3. Collaborate
Once you have your scans completed, you can start collaborating. Collaboration is especially easy with Matterport files, thanks to a number of integrations and plug-ins.
Autodesk Revit plug-in: This plug-in allows you to easily import Matterport point cloud and Scan-to-BIM assets into Revit for further use.
Procore integration: Our Procore integration makes it possible to import a Matterport point cloud into Procore, where you can then incorporate it into your workflows.
Matterport Notes: Using Matterport Notes, you and your team can leave notes and comments directly on a point of focus within the digital twin. Whether your team is local or distributed, Notes streamline communication and collaboration for all.
Custom user access: With Matterport, you can tweak access settings for any users, making it possible to involve external stakeholders and customers in the review process — from construction estimation to groundbreaking and beyond.
Without digital twins, collaboration typically requires copious photos, on-site visits from everyone on the team, and in-person meetings. Fortunately, digital twins are easy to manipulate and access from virtually any device.
4. Integrate
Lastly, you can connect Matterport with Autodesk Construction Cloud, where you can then seamlessly switch from dashboard views to your digital twin files, complete with notes and the like.
By uniting your Matterport files with Autodesk Construction Cloud, you have access to a truly comprehensive view of your construction projects. And, your team can continue collaborating on Construction Cloud just as they have, only with access to virtual tours and digital twins from Matterport.
From helping you reduce travel time to fostering unprecedented levels of collaboration and project management, the Matterport Digital Twin platform can benefit any construction team’s estimation efforts and beyond.
4 tips to help you create the best construction estimate in a timely manner
The construction estimation process doesn’t have to consume so much time, nor does it have to be an all-hands-on-deck situation. There are multiple tips and preliminary steps you can take to help streamline the process and save you heartache.
1. Set customer expectations early
Whether you’re working with a customer or internal stakeholders, setting clear, realistic expectations as early as possible is crucial to the estimation process. And, this will help you throughout the entire construction project as well.
When setting expectations, remember to give yourself some wiggle room. In construction you should always expect the unexpected, so build this into your timeframe and costs as well.
2. Use the unit cost method
The unit cost method is a type of estimation where you break the project into clearly-priced chunks or units. This method isn’t always applicable or realistic, but is ideal for projects with clear deliverables.
Even in cases where you don’t have clear-cut deliverables, you can make this method work. Simply total up the estimated cost of the project, then divide it into evenly-priced units. However, keep in mind you’ll need to have a measurement for determining when a “unit” is completed, whether it’s based on X hours of labor or X percentage of a space.
3. Develop a framework or template
As you create one estimate after another, take note of what challenges you’re constantly running into, and what’s working particularly well. Use this knowledge to develop your own framework for construction estimates. By developing a framework or template, you’ll know which internal stakeholders you’ll need when creating your next estimate, which questions you should ask clients, and so on. All of this can result in a smoother process, for both you and the other party.
4. Digitize the process for better transparency
Consider using technology to bring more transparency into the process and connect all the moving parts. Digital twins improve documentation and access to information, making it easier to collaborate across different phases of your project.
To learn more, watch our webinar on digitizing construction estimation today.
Using digital twins for your next construction project can save you countless time and money, and give you a foundation on which to build lasting success. Click here to learn how Matterport can help your AEC firm from scan to build.
