ESTIMATION PROCESS.


Estimating Procedure

i)     Items and Units
The estimator creates a list of activities that need to be performed with the aid to the drawings and specifications. The list can subsequently be used for the bill of quantities and for tendering and making payment to contractors. Activities that can be undertaken include:
· Lineout
· Excavation
The units of measurement are determined based on length, width, height, area or volume of various components of structures.

ii)    Taking off the Dimensions
The items listed above will require a suitable dimension being taken off materials and the drawings done in appropriate units for each item, and allowances made for portions of the items which are not required to be removed before construction starts. For example, allowance may be made for doors and windows and these must be factored in appropriately. The two procedures described above (the Lineout and Excavation Procedures) should result in a list consisting of items, their quantities and matching units. All items are priced per unit, taking into consideration all resource input cost associated with each item. Each construction item requires materials, labour, and equipment. This means that it is imperative to create applicable rates for each item.

iii)   Materials Rate
The material quality for each item should be known by the estimator base on the exact specifications given. Suppliers usually provide price quotations for the materials. The material rate should also include the following costs in addition to the supplier’s quoted price:
· Transport of the material
· Loading and unloading
· Handling on site
· Storing, watch and ward
· Wastage to cover breakage, losses, theft which may vary from 2%-10%

iv)   Labour Rate
The labour rate is the most unpredictable plan due to several factors. Factors such as the expertise of the worker and weather effects are difficult to control. The labour rate depends upon the skill and size of labour. The size of labour is influenced by the quantity of items and the output of labour. Since it has been established that labour outputs are uncertain, the best solution requires keeping records of skilled, unskilled and semi-skilled worker time for a period of time. This comprehensive record can help to determine the labour components for each item (i.e. this should be in terms of the number of labour days taken to perform a task).
Calculation can subsequently be made for the cost of labour per head for each day. This includes:
a) Basic wage primarily governed by the prescribed minimum wages or fair wages
b) Payment for inclement weather when the labour reports to work but cannot be assigned any work or can do work only for a part of the day due to unfavourable weather or heavy rains
c) Paid holidays
d) Expenditure incurred on travel, labour camps
e) Overtime payment
f) Sickness benefits
g) Insurance
h) Any other payment as per statutory requirement
i) Conveyance of labour
j) Items (b) to (i) form a percentage of the basic wage

v)    Equipment Rate
The equipment’s rate can be calculated using the quantity of item and the output of the equipment. It is performed based on the total hours the equipment can be put to work (equipment hours) or the required unit output expected of each item. The following lists are considered when determining the equipment rate:
· Cost of capital investment
· Depreciation
· Cost of fuel and lubricants
· Repairs and maintenance
· Salaries of operators and helpers
· Allowance for potential idle time
· Insurance
· Any other related expenses
The material rate, labour rate and the equipment rate are used to calculate the unit rate for each of the items and then subsequently, the overall cost of each item. Lump sums are quoted in cases.  where the cost of the item cannot be determined by measurement. This is usually obtained using past experience or based on the work content of the item. The costs that have been determined above collectively make up the cost associated with the actual work.
The following costs should also be added:
a) Expenditure on surveys, data collection, design, drawings, and estimating
b) Land acquisition
c) Establishment required during the execution of work
d) Allowance for unforeseen works that may be found necessary in the course of execution
e) Overhead expenses, which are meant to be incurred on site, as well as, in the head quarters The cost of work plus the additional associated cost summed up to give the total cost of the project.

vi)   Project Approval 
       Two types of approval have to be secured for construction projects; the administrative and technical approvals.
a)      Administrative Approvals
The administrative approval must be acquired first. The approval is given by a competent authority at the user department. If for example, the health department wants to construct a hospital, it may contact the Public Works Department to carry out feasibility studies, provide layout drawings and specification to enable initial cost estimates to be determined as explained in the previous paragraph. The owner of the project (user department) is provided with the drawings and cost estimates for him/her to give the go ahead when the proposals from the Public Works Department are deemed acceptable. The above process is known as the administrative approval.
b)      Technical Sanction
When the user department (owner) gives his approval for the initial drawings and cost estimates, the Public Works Department goes ahead to provide detailed design, drawing and cost estimates. Detailed reports must be approved by a competent person(s) at the Public Works Department.

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