Estimating Construction Costs... Using Technology In The Process Of Estimating Construction Costs

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Projecting Construction Costs Is The First Step To A Successful Projec

Estimating project costs include land acquisition, as well as assembly, holding and improvement. Planning and feasibility studies of the structure are also important steps. The capital costs for a construction project run the gamut from expenses related to the initial establishment of the facility to final filing fees and assessments. The early phases in need of financial consideration are architectural and engineering design. Actual construction, including materials, equipment and labor, field supervision of construction, construction financing, insurance and taxes during construction, owner's general office overhead, equipment and furnishings not included in construction inspection and testing.

Operation and maintenance costs of the construction project can take up a lot of revenue. As a consequence, they need to be carefully accounted for and included in the process of estimating construction costs. Among these considerations are operating staff, land rent, periodic renovations, labor and material for maintenance and repairs, insurance and taxes, financing costs, utilities and other expenses.

Construction costs will vary with the size of the project, including factors for location, and the efficiency of management. It is not only the construction costs that need to be taken into consideration, but labor and ancillary expenses come into play too. While actual construction costs are the largest component in the costing process, the smaller cost components can nickel and dime you to death, because they can’t be avoided, and are numerous.

No plan survives contact with the enemy, and no budget ever survives contact with the vendors. In any large project, something will ALWAYS go wrong. As a result, you’ll need to include a contingency budget, to handle unexpected expenses that may occur during the construction process. This contingency amount may be included within each cost item, or may be included in a separate budgetary line item.

The size of the contingency allowance should be based on past experience and the difficulty of the construction project. For example, one construction firm makes estimates of the expected cost in five different areas: Design development changes, schedule adjustments, general administration changes (such as wage rates), differing site conditions for those expected, and third party requirements imposed during construction, such as new permits.

Any excess funds from the contingency budget should be used to further improve the project, or be returned to the owner at the project’s completion. Estimating construction costs is a highly professional and skilled process that needs to be carried out by the best personnel in the industry to ensure the smooth running of the construction project.