Rethinking construction cost data is the first step towards improving repair, renovation, maintenance, and new build outcomes.
First let’s discuss a few myths perpetuated by time, vendors, and poor education:
#1. National average cost data can be used for estimating projects. Project costs throughout the United States can easily vary by 60% or more. Using a national average cost database for budgetary purposes is unreliable for similar reasons.
#2. Localization factors can be used to national average cost data to specific market conditions. This is a complete fallacy perpetuated by vendors and many government organizations as it simplifies data collection and tends to add a false sense of security to those in charge of the purse strings. Individual labor rates for tradesmen, material, and equipment costs vary significantly and must be researched per location. City cost indexes or area cost factors are grossly inaccurate and generate result in error of 30%-40%+.
#3. Economic factors can be used to update estimates and/or cost data. The application of a single factor to an estimate or cost database, for example the ENR cost index, results in gross errors. Individual components within the estimate or cost database vary widely over time. Just as line-item construction cost estimate is the only method of producing a valid result, individual items in an estimate and cost database need to be individually researched and updated.
Line-Item Construction Cost Estimating
Any experienced professional construction cost estimator knows that line-item construction cost estimating is the only way to provide a current reliable result.
This process requires a listing of all required construction activities and their quantities for the specified location and considers location and productivity and associated impactful variables. Despite this fact, and the above, many real property owners accept lump sum bids from builders without preparing a line-item estimate.
Creating a line-item estimate can be expedited with the use of locally researched line-time construction cost database than s not only reflect current local market conditions, but also is organized using clear terms and definitions as well as the CSI Masterformat data architecture. Leveraging this approach also improves early and ongoing communications among owners, designers, and builders and mitigates both miscommunications and related change orders.
Learn more!