SMART DOG MINING^TM
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Estimating a Project

 

Project Estimating

A key part of any project is preparing a good and reasonable estimate.  While not extremely difficult, it is tedious and very time consuming.  But not doing it correctly can be very painful later, especially in the pocket book.

 PREPARING THE ESTIMATE

 To prepare a good estimate you need to know what you are going to do, who is going to do it, how long it will take, what equipment is needed, and what it will cost to buy the material. 

 This starts with a listing of steps or tasks needed to do the job.  Then what material is needed for each of the tasks and how much that material will cost.  Then a listing of the manpower and construction equipment needed to install the material.  All of this is then combined to form the estimate.

 

Other information needed includes any location or weather related factors (for example erecting a building in central Florida in the middle of the summer has different requirements to erecting a similar building in north central Colorado in the middle of the winter).

 

This information will take the form of material requirements or bills of material (BOM} and equipment/manpower requirements.  To do this with a reasonable degree of accuracy you need to develop the following:

• Equipment/Task List

• Material Takeoff(s)

• Resources Required

• Time required

• Weather and climate

• Construction sequence 

Equipment/Task List

 Start with a list of the equipment or tasks required to complete the project.  A simple way to look at this is to put down the project title, and then start listing everything else that needs to be installed or done.  Start with broad listings and then gradually sub-divide.  Do not worry if you miss some tasks they can always be added later.  But do try and cover the whole project.  The higher the level of estimate the more detailed this list will become.  A conceptual estimate may only have three main tasks: Engineering, Procurement, and construction.  For an engineers or bid estimate this list can approach several hundred or even thousands for a truly complex project.

 Note of warning, more detail does not always mean better.  Only use the level of detail that the project and estimates requires, AND that you have information for. 

 Material Takeoff(s)

 Material Takeoffs (often called quantity takeoffs) are a listing of all material used or removed for a project.  The materials should be listed separately under the tasks which go to make up the project. Listing work items in the order in which it is used to construct the project will aid considerably in later work of more detailed estimating and will insure the early detection of omissions.

 The material takeoff is made by studying drawings, plans, surveys, and specifications and then determining what is needed to do the job.   The material takeoff can give a fairly accurate picture of just what is to be done.

 The following is a simple piping take-off for a simple jump-over line at a refinery.

TABLE xx - PIPING MATERIAL LIST
Item	Size - Description	Units	Qty	Unit          Cost	Total        Cost
1					0.00
2	3/4" 800# Gate Valve Extd body SW/SCRD	ea	5	100.00	500.00
3	4" 300# RF Gate Valve Flgd	ea	2	550.00	1,100.00
4	4" 300# RF Globe Valve Flgd	ea	1	650.00	650.00
5					0.00
6	4" Std Wt SMLS Pipe ASTM A106-B	lf	90	7.00	630.00
7					0.00
8	4" Std Wt 90deg Ell LR BW SMLKS A234-WPB	ea	12	21.00	252.00
9	4" x 3" STD WT COC RED BW SMLS A234-WPB	ea	1	54.00	54.00
10	3" 300# FLNG RF WN STD WT A105	ea	1	25.00	25.00
11	4" 300# FLNG RF WN STD WT A105	ea	7	35.00	245.00
12	4" 300# FLNG RF WN Sch 160 A105	ea	1	40.00	40.00
13					0.00
14	3/4" x 10-3 3000# SOCKOLET A105	ea	5	25.00	125.00
15	4" x 8"  8" Sch 40 x 4" Sch 160 Weldolet A105	ea	1	75.00	75.00
16	3/4" Plug Rnd Bar Scrd A105	ea	5	10.00	50.00
17					0.00
18	3" 300# RF 1/8" Thk Graphaite 95% Carbon filled Spiral wound w/ CS Gage Ring, 304 ss Winidning Flexitallic Type CG	ea	1	50.00	50.00
19	4" 300# RF 1/8" Thk Graphaite 95% Carbon filled Spiral wound w/ CS Gage Ring, 304 ss Winidning Flexitallic Type CG	ea	8	50.00	400.00
20					0.00
21	3/4" x 4 3/4" Ld Stud w/ (2) Hex Nuts A193-B7 A914-2H	ea	72	1.25	90.00
22					0.00
23	4" 300# RF "T" Strainer Flgd hayward Model 91	ea	1	900.00	900.00
	Total				5,186.00

 Similar take-offs would be done for any structural, electrical, or instrumentation work involved plus any other disciplines required.

 Resources Required

 Now that a list of what needs to be done is made, and the material needed for that work, a list of the manpower and construction equipment needed is made.  Reviewing the drawings or other information available and making a list of what the project is and what material is required is a straight forward exercise. You will seldom get major discrepancies from one estimator to another.  The next part is where the art of estimating comes in, determining the manpower and equipment needed to install the project.

 Several ways are used for this, often times depending on the level of the estimate.  The simplest is to determine the relatively manhours for each step and then use a factor for the construction equipment. 

TABLE xx - PIPING FIELD LABOR & EQUIPMENT
Item	Size - Description	Units	Qty	Labor     M/Hrs	Total     M/Hrs	Mobil   Equip  Cost
1					0	0
2	3/4" 800# Gate Valve Extd body SW/SCRD	ea	5	2.5	12.5	93.75
3	4" 300# RF Gate Valve Flgd	ea	2	10	20	150
4	4" 300# RF Globe Valve Flgd	ea	1	10	10	75
5					0	0
6	4" Std Wt SMLS Pipe ASTM A106-B	lf	90	1.5	135	1012.5
7					0	0
8	4" Std Wt 90deg Ell LR BW SMLKS A234-WPB	ea	12	4	48	360
9	4" x 3" STD WT COC RED BW SMLS A234-WPB	ea	1	4	4	30
10	3" 300# FLNG RF WN STD WT A105	ea	1	3.4	3.4	25.5
11	4" 300# FLNG RF WN STD WT A105	ea	7	4	28	210
12	4" 300# FLNG RF WN Sch 160 A105	ea	1	4	4	30
13					0	0
14	3/4" x 10-3 3000# SOCKOLET A105	ea	5	2.5	12.5	93.75
15	4" x 8"  8" Sch 40 x 4" Sch 160 Weldolet A105	ea	1	4	4	30
16	3/4" Plug Rnd Bar Scrd A105	ea	5	2.5	12.5	93.75
17					0	0
18	3" 300# RF 1/8" Thk Graphaite 95% Carbon filled Spiral wound w/ CS Gage Ring, 304 ss Winidning Flexitallic Type CG	ea	1	2	2	15
19	4" 300# RF 1/8" Thk Graphaite 95% Carbon filled Spiral wound w/ CS Gage Ring, 304 ss Winidning Flexitallic Type CG	ea	8	2	16	120
20					0	0
21	3/4" x 4 3/4" Ld Stud w/ (2) Hex Nuts A193-B7 A914-2H	ea	72	1	72	540
22					0	0
23	4" 300# RF "T" Strainer Flgd hayward Model 91	ea	1	10	10	75
	Total				393.90	2,954.25

 Another method, often used on more detailed estimates, is to consider the actual crew size and equipment used.  This is employed where the actual equipment list has major items that have wisely varying sizes.

TYPICAL LABOR & EQUIPMENT USAGE

					MHRS/	$	Equip	Equip		MHRS/	Equip
DESCRIPTION	CREW	EQUIP	COMMENT	UNIT	UNIT	Mhr	Use %	$/hr	UNIT	UNIT	$/hr
MECAHNICAL
Air compressor	C-35	E-15A		ton	20	45.63	0.25	228.13	lb	0.01	0.114
Air blower	C-35	E-15A	100 - 1000 cfm	ton	20	45.63	0.1	91.3	lb	0.01	0.046
Air blower	C-35	E-15A	1000 - 20000 cfm	ton	20	45.63	0.15	136.88	lb	0.01	0.068
Air blower	C-35	E-15A	> 20000 cfm	ton	20	45.63	0.2	182.5	lb	0.01	0.091

Units * Mhrs/unit * $/Mhr * Equip Use % = Equip cost

 With this you need what makes up the crew and equipment class. 

	Rate
	$/hr	C-35			$/hr	E-15	E-15A
Supervisor	90			Air compressor	10
Formen	60	1		Jackhammer	1
Carpenter	43			3 kW Generator	5
Finisher	43			Concrete pump	10
Boilermaker	43			Concrete buggy	2
Ironworker	43	3		Vibrators	2
Journeymen	47			40T Crane	120	0.125	1
Millwrights	43	2		Welder	7
Welder	62			Hoist	10
Laborers	32			Elevator	25
Apprentice	36			Rotary Mixer	25
Operators	50	1		$/hr		15	120
Oiler/Gradesetter	40	1
Teamsters	45
Manhours/day		64
$/Hour		365
$/hr - average		45.63

 Please note that this crew make-up and equipment is dependent on each organization.  Using this information properly is where the art of estimating comes in.

 Manpower should be considered only in terms of construction strength required for the work as defined.  If the project is one that requires large numbers of personnel with particular skills (plumbers or electricians for example) their availability must be considered. If additional manpower outside of what is normally available to your organization is required the source and location of this "sub contracted" labor must be taken into account.

 The ability and number of supervisors and foreman available will effect the construction as much if not more than the actual manpower. A shortage of competent supervisory personnel would reduce the construction effectiveness even though the craft personnel are adequate in number and ability.

 The status of the construction equipment, particularly heavy equipment is an important factor determining your ability to take on a project. You need to consider the average availability rates for the items of equipment he has available and judge whether they will be maintained better or worsen during a particular job. This is the time he should consider whether he needs the contract out for additional equipment or rent or lease it for a particular project.

 Time Required

 The next step is to prepare a rough estimate of the time required for the project.   The level of detail is less than for the project schedule, but is often used as input for the schedule.  The purpose is to get a feel of the total project duratrion and manpower loading peaks. Part of this is to calculate the project overhead loading which is usually based on the length of the project.

 Approximate rates of production based on your experience and records are accurate enough. Where this information is lacking published rates tempered by the knowledge of existing conditions are a good substitute. The time required to do each major work item developed in the quantity takeoff is calculated, using available equipment and manpower. Total time of the project is the sum of the time calculated less the time when two or more work items will done concurrently. Except where more accurate time data are produced following planning and scheduling this overall project time is used for the planning.

 Weather and Climate

 The effect of climatic conditions on construction operations can be so great that planning construction on the evaluation of this one item only can be as important as all other factors combined. Failure to consider weather data can result in more time lost because of bad weather then will be needed to finish all work under good weather conditions.   

The simple example given above of erecting a building in central Florida in the middle of the summer versus erecting a similar building in north central Colorado in the middle of the winter can give you a feel for the impact. 

 The Florida case needs to worry about afternoon rain and heat exhaustion.  While the Colorado case must worry about blizzards and frost bite.  Estimating for one condition and then seeing the other can ruin a budget.

You must evaluate each type of work that is to be done in relation to the weather conditions expected during the period of construction. The evaluation of the expected weather enables the planner to determine how much additional time to allow for delays.

Construction Sequence

The sequence in which major operations are to occur is another factor to be evaluated in estimating. The sequence of some operations like clearing or stripping excavation for and placement of footings is obvious this does not present a problem. Other sequencing such as materials processing and prefabrication can not be determined until later in the planning and estimating stage. However construction sequence has to be considered early because some factors effecting job sequence are present at the very beginning of planning. Among these are drainage and availability of materials. As described above if rain or other climatic problems will impact the early stages of the construction some aspect for drainage of the site even on a temporary basis must be considered. The data on availability of materials effect job sequence. Operations depending on materials cannot be started until they are available and on site.

During the initial estimating the project manager will keep notes of items that may be critical to the job. These critical items may readily be identified when the scheduling and detail estimating is accomplished and they are required for a detailed project schedule analysis.  Critical items may be materials equipment or manpower with particular skills. There procurement may be important because they are needed immediately for the job because they are not available locally or because a long lead time for procurement maybe required. The entire job and the note should be studied, such items tabulated, and action taken that they will be on hand when required.

Allowances

Allowances are used for converting "neat" quantities to "actual" quantities.  An example would be pouring a concrete slab.  No matter how careful you are, the actual excavated amounts will be larger than the drawings show.  You will than need to backfill the hole.  The final base will probably not be perfectly level.  The costs to take the time to make it level compared to the cost of some extra concrete will show the time to be worth more.  When the pour is made, the bottom irregularities will be filled with concrete.

For material such as pipe, steel, and lumber that comes in standard sizes, figuring the optimal quantity or lengths is function of the allowances.

Optimum Length Calculations

In the preparation of the estimate quantities of materials such as pipe and lumber are given x number of linear feet for a particular operation. This material is commonly ordered by standard commercial lengths.  Although the standard lengths are generally in the range of 8 to 20 feet in 1 or 2 foot increments, it is often times better to order shorter 8 foot 10 and 12 foot standard lengths based on ease of handling. When this can be a length that can be utilized on the project with minimum wastage. Or without having to be spliced into longer lengths. In many parts of the structure or building it is obvious what commercial lengths should be ordered for example the chose in or 10 feet inches long 10 foot commercial lengths are obviously needed. There are places in the building however where it is not quite as evident what lengths should be ordered. It is then necessary to calculate the most economical standard length that when ordered will give the least waste. A procedure for this is as follows:

• Calculate the number of pieces per standard lengths for each of the 3 standard lengths (8. 10 or 12), if this number is not an integer round down.

• Find the number of standard lengths required for each of the alternatives, if this number is not an integer round up.

• Calculate the total linear feet required for each of the 3 standard lengths and use the least.

Required 25 pieces of 2” standard weight carbon steel pipe, each piece to be 3’-3 ¼” long. 

Each piece length	39.25	Inches
Items Required	25
Standard Size (ft)	8	10	12	16	20
Inches/piece	96	120	144	192	240
Pieces/std size	2.45	3.06	3.67	4.89	6.11
Use:	2	3	3	4	6
Std sizes Required	12.50	8.33	8.33	6.25	4.17
Use:	13	9	9	7	5
Total ft	104	90	108	112	100
Needed (ft)	81.77	81.77	81.77	81.77	81.77
Wastage (ft)	22.23	8.23	26.23	30.23	18.23
Best fit		X

 For this example the best fit would be 10’ lengths, you would need to purchase 9 lengths, and the wastage would be the least. 

 Accuracy vs. Contingency

 The amount of contingency used on an estimate is NOT a measure of the estimates accuracy.  Contingency is for items that will be spent, but have not been identified at the time of the estimate.  Accuracy is a measure of the effort used in preparing the estimate.

 An estimate can have an accuracy of +/- 50% and yet have a contingency of under 10%.  A good example would be the installation of a new pump, that is a direct replacement for an existing pump.  You may know exactly the amount of manpower and time needed to replace the pump, and know every item required to place the pump (you have a high degree of project definition), but if you have not verified the cost of the pump, you have a low accuracy estimate.

 Similarly, you may be duplicating an existing facility, that was recently installed, so you have a good handle on the requirements.  So you prepare a new estimate and verify a few key costs, such as large items of equipment.  Your estimate is very accurate, yet since you have not verified all the costs, you may have a high contingency. 

TYPE OF ESTIMATE VERSUS CONTINGENCY AND EXPECTED ACCURACY
DESCRIPTION	CLASS	% OF TOTAL ENGINEERING	PROBABLE CONTINGENCY %		ACCURACY OF ESTIMATE %
			(w/ Historical Data)	(w/o Historical Data)
Bid		100	3	5	+/- 5
Engineers	I	75 - 100	5	10	+/- 5
Definitive	II	40 - 75	10	15	+/- 7.5
Preliminary	III	15- 40	15	20	+/- 10
Conceptual	IV	2 - 15	20	25	+/- 15
Magnitude	V	0 - 2	25	35	+/- 20

 

CONSTRUCTION ESTIMATING SOFTWARE 

Many professional estimators use their own estimating tools, which are normally a database of labor rates and equipment usage rates for various tasks and a spreadheet form to automate the calculations.  This allows them to tailor their estimates to fit each job.  This does lead to a lack of uniformity between any two estimators.  Because of this some companies have turned to prepackaged estimating tools. 

 For the smaller contractor, purchasing and keeping up to date with these programs can be expensive.  This is especially true for the part time estimator.  Fortunately there are some low cost and free estimating (demo versions) tools avialaible on the internet.  These estimating tools can be either downloaded for free or run in an Internet browser.

Doing a search on the internet will find many options,  but this is a dynamic environment and any list is out of date as soon as it is posted.

Good luck and happy estimating.

 

o   40+ years’ experience in the mining industry with strong mineral processing experience in precious metals, copper, industrial minerals, coal, and phosphate

o   Operational experience in precious metals, coal, and phosphate plus in petrochemicals.

o   Extensive experience performing studies and determining feasibility in the US and international (United States, Canada, Mexico, Ecuador, Columbia, Venezuela, Chile, China, India, Indonesia, and Greece).

o    E-mail:  info@smartdogmining.com