Being a good commercial construction cost estimator requires years of experience in the field as well as estimating at a line item level.
A detailed line item unit price book also greatly aids in improving productivity, sharing information, and minimizing errors and omissions.
Here are some considerations whether purchasing, buildings, or improving upon a detailed line item Unit Price Book.
UPB Application/Use – Specific Considerations for a Commercial Construction Cost Estimator
- Demolition: Separate line item costs should be included for demolition as appropriate. From an organizational perspective it’s a good practice to consistently group demolition line items together. For example, place all demolition line items for a particular section (CSI Masterformat) as the beginning of each section. Do not bundle remove and replace into one single line item as there are too many variations involved in removal to account for all instances and/or site conditions.
- Line Item versus Assemblies Pricing: A unit price line item can represent an elemental line item, such as dig a hole for a wooden fence post feet deep, or a task such as install a wooden fence post three feet deep, inclusive of material, labor, and equipment cost. The task may include separate line items for hand dug and power auger. An assembly would be install a wooden fence, post and rail, via a specific type and material, etc. and priced on a linear foot basis.
- Minimum labor/equipment or set-up charges: For projects where the calculated labor/equipment total cost the work task is less than the minimum charge (if one is provided in the UPB), establishing a minimum labor/equipment and/or set-up charge may be beneficial.
- Minimum / Maximum Cost line items: It may be beneficial for appropriate work tasks to provide a range of pricing from “low” to “high”, based upon quantity, location, work complexity, amount of size of work, etc.
- Location Factors / Cost Indexes: The practice of using a “national average” unit price cost book(s) and localization factors and/or cost indexes is NOT RECOMMENDED. The use of factors can significantly contribute to gross errors in construction cost estimates. Line item cost books should, whenever possible, be locally researched for labor, material, and equipment. The increased cost of a locally researched and current unit price book can easily be justified by a single poor estimate for a larger construction project induced by using national average pricing.
- JOC Unit Price Books: When used for job order contracting, costs reflected should be “bare costs” and therefore NOT INCLUDE contractor overhead and profit, unless explicitly defined otherwise within the Job Order Contract. JOC’s in general use bare costs as an accepted industry “best practice”.
- Labor Rates: Prevailing wage rates for all relevant construction trades should be used. If work involved Federally funded worked, the specific requirement is Davis-Bacon Wage Rates. Many other public entities have also begin to require Davis-Bacon Wage Rates. That said, it is important to recognize that not all cost data vendors research and provide Davis-Bacon or prevailing wage rates in the same manner. Ask your cost data vendor SPECIFICALLY how the labor data is researched and applied FOR YOUR SPECIFIC AREA and type of work. There can be significant errors in labor costs and how associated crews are composed even within the most popular source(s) of commercial construction cost data. As labor, on average account for 60% of construction costs, labor research techniques must be carefully evaluated.
- Granularity: To be of value to a Commercial Construction Cost Estimator, prices in a UPB should be complete and for in-place construction unless explicitly described otherwise. Incidental fasteners (nails, screws, weldments, adhesives or other connectors), incidental options/accessories, and small tools required for a normal installation are included in the line item cost unless the line item description specifically states otherwise. Line item prices include all work required to result in the end finish specified in the line item unless the line item description specifically states otherwise. Equipment costs include normal operating expendables and servicing including routine parts. All line item prices are valid to perform the work described to a height up to a specified height above finished floor or grade level unless the line item description specifically states otherwise. Testing, adjusting, balancing and start-up of installed equipment (normal commissioning) and up to four hours of familiarization training for operation and maintenance of that equipment, is included unless the line item description specifically states otherwise.
- Scaffolding/lifts, Staging, etc: Associated costs should be allocated on a Task Order basis (per job), not per subcontractor or discipline.
Are you are Commercial Construction Cost Estimator looking to build or improve upon your unit price cost database? Learn more…