Using National Average Construction Cost Data? Here are four (4) reasons why you might rethink your decision…
1. Price Averaging: National average or reference construction cost data, even from “leading” suppliers are prepared using national price averages. They rely upon local cost indexes to adjust the national price average to local prices. This results in errors ranging form 30% too 300%+ due to variations in local labor, materials, and/or equipment.
2. Poor Task Descriptions: Each detailed line item construction task should be easy to understand, using plain English, and not contain confusing acronyms or abbreviations.
3. No Separate Demolition Line Items: Owners and service providers spend the bulk of their time and budget dealing with numerous repair and renovation tasks. It is critical to have separate demolition line times versus only having new construction or “repair and replace” line items only.
4. Quantity or Means/Methods Discounts/Adds: Thirty (30%) percent to forty (40%) percent of most construction cost estimates lies in adds or deducts to the parent line item due to means/methods and/or quantities. Line items modifiers are adds or deducts to the associated parent line item.
And that’s just for starters!
Learn about the other six (6)!
