Construction Cost Estimating

Construction Cost Estimating equips a new generation of students and early-

career professionals with the skills they need to bid successfully on projects.
From developing bid strategies to submitting a completed bid, this
innovative textbook introduces the fundamentals of construction estimating
through a real-life case study that unfolds across its 24 chapters. Exercises at
the end of each chapter offer hands-on practice with core concepts such as
quantity take-offs, pricing, and estimating for subcontractor work. Online
resources provide instant access to examples of authentic construction
documents, including complete, detailed direct work estimates,
subcontractor work estimates, general conditions estimates, markups, and
summary schedules.
Through its unique mix of real-world examples and classroom-tested
insights, Construction Cost Estimating ensures that readers are familiar with
the entire estimating process even before setting foot on the jobsite.

Len Holm is Associate Teaching Professor at the University of Washington.

He has over 40 years’ construction industry experience at all levels and owns
his own construction management firm. He is the author of numerous books
on construction, including Cost Accounting and Financial Management for
Construction Project Managers and 101 Case Studies in Construction
Management, and coauthor of Introduction to Construction Project
Engineering with Giovanni Migliaccio and Construction Superintendents
with John E. Schaufelberger.
John E. Schaufelberger is Dean Emeritus of the College of Built
Environments and Professor of Construction Management at the University
of Washington. He is the coauthor of Management of Construction Projects
and Construction Superintendents with Len Holm, Construction Equipment
Management, 2nd edition with Giovanni Migliaccio, and Professional Ethics
for the Construction Industry with Rebecca Mirsky.
“Holm and Schaufelberger have always been visionaries in the construction industry.”
– Christian LaRocco, Partner, Development Manager, MJR Development
The following documents are available on the eResource for Construction
Cost Estimating, First Edition, Routledge, 2021. Reference
www.routledge.com/9780367902681

This first list is made available to students and instructors:

Case study 1 design drawings

Case study 2 design drawings
Case study 1 schedule
Live Excel versions of all estimating forms
Sample preconstruction contract
Estimating Process Figure 1.1
Steel truss project erection photograph
Reference materials for The Guide
Reference materials for Sage Construction and Real Estate software

The following are also made available to instructors:

Instructor’s Manual, complete with answers to all of the review

questions and many of the exercises. A select group of case studies
from 101 Case Studies in Construction Management (Routledge 2019)
are also included.
Power Point lecture slides for all 24 chapters, 24 separate files, 650 slides
in total
Detailed case study 1 general conditions estimate, Figure 17.2L
Detailed case study 2 estimate
Case study 2 photographs of project completion
Case study 3 design drawings
Case study 3 estimate
Case study 3 summary schedule
Case study 3 site logistics plan
Construction Cost Estimating

Len Holm and John E. Schaufelberger

First published 2021
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN

and by Routledge
52 Vanderbilt Avenue, New York, NY 10017

Routledge is an imprint of the Taylor & Francis Group, an informa business

© 2021 Len Holm and John E. Schaufelberger

The right of Len Holm and John E. Schaufelberger to be identified as authors of this work has been
asserted by them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act
1988.

All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by
any electronic, mechanical, or other means, now known or hereafter invented, including photocopying
and recording, or in any information storage or retrieval system, without permission in writing from
the publishers.

Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are
used only for identification and explanation without intent to infringe.

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library

Library of Congress Cataloging-in-Publication Data

Names: Holm, Len, author. | Schaufelberger, John E., 1942– author.

Title: Construction cost estimating / Len Holm and John E. Schaufelberger.
Description: First edition. | Abingdon, Oxon ; New York : Routledge/Taylor & Francis Group, 2021. |
Substantial re-write from previous estimating text: Construction Cost Estimating, Process and
Practices by Holm, Schaufelberger, Griffin, and Cole; Pearson, 2005. | Includes bibliographical
references and index.
Identifiers: LCCN 2020043751 (print) | LCCN 2020043752 (ebook) | ISBN 9780367902681 (paperback) |
ISBN 9780367902711 (hardback) | ISBN 9781003023494 (ebook)
Subjects: LCSH: Building—Estimates.
Classification: LCC TH435 .H848 2021 (print) | LCC TH435 (ebook) | DDC 692/.5—dc23
LC record available at https://lccn.loc.gov/2020043751
LC ebook record available at https://lccn.loc.gov/2020043752

ISBN: 978-0-367-90271-1 (hbk)

ISBN: 978-0-367-90268-1 (pbk)
ISBN: 978-1-003-02349-4 (ebk)

Typeset in Bembo
by Apex CoVantage, LLC

Access the Support Material: www.routledge.com/9780367902681

Substantial re-write from previous estimating text: Construction Cost Estimating, Process and
Practices by Holm, Schaufelberger, Griffin, and Cole; Pearson, 2005
Contents

List of figures
List of tables
Preface
Acknowledgments
List of abbreviations

part i

Introductory concepts

1 Introduction
The estimating process
Estimate schedule
Work breakdown structure
Introduction to the book
Summary
Review questions

2 Types of estimates
Introduction
Programming budget estimate
Schematic design budget estimate
Design development estimate
Construction document estimate
Qualifications and assumptions
 Summary
Review questions
Exercises

3 Contract considerations
Introduction
Project delivery methods
Procurement
Bid method
Negotiated method
Pricing
Contract agreement
Contract documents
Drawing types
Views or types of drawings
Technical specifications
Summary
Review questions
Exercises

4 Introduction to construction project management

Introduction
Introduction to project management
Construction organizations
Project team member responsibilities
Subcontracting plan
Subcontractor selection
Risk assessment
Summary
Review questions
Exercises

5 Preconstruction
 Introduction
Preconstruction phase
Preconstruction services
Budget estimating
Scheduling
Constructability review
Value engineering
Early release of subcontractor and supplier bid packages
Planning
Preconstruction contracts
Preconstruction fees
Summary
Review questions
Exercises

part ii

Quantity surveying for general contractor direct work

6 Concrete substructure quantity take-off including foundations and

slab-on-grade
Introduction
Quantity take-off process
Document review
Marking the drawings
Automated quantity take-off
The quantity take-off form
Concrete take-off basics
Building systems
Spread and continuous footings
Spread footings and pile caps
Continuous footings and grade beams
Reinforcing steel
Embedded steel
 Structural excavation
Other foundations
Slab-on-grade
Summary
Review questions
Exercises

7 Concrete superstructure
Introduction
Cast-in-place concrete elements and systems
Columns
Beams
Concrete walls
Elevated slabs
Slab on metal deck
Pre-cast concrete elements and systems
Pre-casting versus cast-in-place
Pre-cast systems
Tilt-up concrete
Grout
Post-tensioned concrete
Summary
Review questions
Exercises

8 Structural steel
Introduction
Rolled shapes
Bar joist
Miscellaneous steel
Metal decking
Summary
 Review questions
Exercises

9 Carpentry
Introduction
Rough carpentry
Framing
Engineered lumber
Framing hardware
Sheeting
Siding and roofing
Roofing
Finish carpentry
Millwork
Cabinetry
Wood flooring
Wood paneling
Doors, door frames, and door hardware
Punch windows
Specialties
Summary
Review questions
Exercises

part iii

Pricing for general contractor direct work

10 Direct labor
Introduction
Recapitulation sheet
Productivity factors versus labor unit prices
Productivity
Wage rates
 Labor burden
Required labor taxes
Labor benefits
Combined labor burden
Summary
Review questions
Exercises

11 Concrete pricing
Introduction
Material pricing
Concrete foundations
Applying pricing factors
Cast-in-place concrete systems
Pre-cast concrete tilt-up walls
Summary recapitulation sheets
Summary
Review questions
Exercises

12 Pricing balance of general contractor self-performed work

Introduction
Structural steel pricing
Rough carpentry pricing
Finish carpentry pricing
Door and window pricing
Specialty pricing
Summary
Review questions
Exercises

13 Equipment
 Introduction
Activity-based costing
Sources of construction equipment
Contractor-owned equipment
Contractor equipment companies
Equipment rental companies
Subcontractors
Concrete equipment
Structural steel and wood framing hoisting
Tower cranes
Foundations and infrastructure
Crane erection
Operations and maintenance
Dismantling
Personnel and material hoists
Pricing recap completion
Summary
Review questions
Exercises

part iv

General contractor estimates for subcontracted work

14 Envelope and finish subcontracted scopes

Introduction
Subcontractor work
Building substructure and superstructure
Building envelope
Roofing
Siding and waterproofing
Fireproofing
Insulation
Doors and windows
 Finishes
Specialties, equipment, and furnishings
Summary
Review questions
Exercises

15 Mechanical, electrical, and conveyance systems

Introduction
Conveying equipment
Mechanical
Plumbing
Fire protection systems
Electrical
Summary
Review questions
Exercises

16 Civil work
Introduction
Mass excavation and backfill
Shoring and foundation systems
Site utility systems
Site improvements
Pavement including concrete pavement and hot-mix asphalt
Walks, curbs, and walls
Striping and signage
Landscape and irrigation
Site specialties
Civil work as a general contractor
Completing the subcontractor list
Summary
Review questions
 Exercises

part v

Estimate completion

17 Jobsite general conditions

Introduction
Project summary schedule
Alternative techniques
Elements of the general conditions estimate
Administrative expense
Equipment
Temporary construction
General operations
Summary
Review questions
Exercises

18 Estimating markups
Introduction
Risk assessment
Contingencies
Insurance
Taxes
Home office overhead and profit
Additional markup considerations
Summary
Review questions
Exercises

19 Estimate summary
Introduction
Final document review
 Completing the estimate summary
Summary estimate
Preparing the estimate for bid day
Pre-bid day setup
Setting up the bid room
Bid forms
The bid day team
Subcontractor bid evaluation procedures
Summary
Review questions
Exercises

20 Bid day process

Introduction
Subcontractor and supplier bids
Posting subcontractor and supplier bids
Evaluating subcontractor and supplier bids
Delivery of the bid
Validity of verbal prices
Bid opening
Post-bid day
Summary
Review questions
Exercises

part vi

Advanced topics

21 Estimating ethics
Introduction
Pre-bid day ethics
Bid day ethics
Post-bid ethics
 Subcontractor and supplier inquiries
Post-bid negotiations with the project owner
Summary
Review questions
Exercises

22 Technology tools
Introduction
Estimating software
Sage Estimating
WinEst
Destini Estimator
On-Screen Takeoff
Bluebeam
Building information models
Use of drones
Estimating databases
RS Means Data Online
The Guide
Subcontractor solicitation
Summary
Review questions
Exercises

23 Other types of estimates

Introduction
Budgets and guaranteed maximum price estimates
Budget estimates
Guaranteed maximum price estimates
Developer’s pro forma
Heavy civil unit price bids
Residential
 Allowances and alternates
Project management estimates
Pay requests
Change orders
Claim preparation
Monthly cost forecasts
As-built estimates
Database updates
Summary
Review questions
Exercises

24 Construction project management applications of estimates

Introduction
The buyout process
Correcting the estimate
Construction schedule
Schedule of values and pay request
Cost-loaded schedules and cash flow curves
Cost control
Additional project management applications
Summary
Review questions
Exercises

Appendix: Estimating resources

References
Glossary
Index
Figures

1.1 Estimating process

1.2 Estimate schedule
1.3 Work breakdown structure
1.4 Project item list
1.5 Case study organization chart
1.6 Rendering of Dunn Lumber case study project
1.7 Photograph of Lee Street Lofts case study project
1.8 Case study #3 bid form
2.1 Schematic budget estimate: Uniformat
2.2 Schematic budget estimate: MasterFormat
2.3 Contractor’s estimate qualifications and assumptions
3.1 Traditional, agency CM, and CMAR delivery methods
3.2 Design-build delivery method
3.3 IPD delivery method
3.4 Previous 16 CSI divisions
3.5 Current 50 CSI divisions
4.1 Project management attributes
4.2 Home office staff organization chart
4.3 Project-based organization chart
4.4 Potential estimating risks
5.1 Target value design
6.1 Footing quantity take-off sheet
6.2 Spread footing excavation sketch
6.3 Structural excavation quantity take-off sheet
 6.4 Slab-on-grade quantity take-off sheet
7.1 CIP concrete columns quantity take-off sheet
7.2 Composite slab on metal deck quantity take-off sheet
7.3 Tilt-up concrete quantity take-off sheet
8.1 Structural steel quantity take-off sheet
9.1 Rough framing quantity take-off sheet
10.1 Estimate process flowchart
10.2 Spot footing cost recapitulation sheet
11.1 Slab-on-grade cost recapitulation sheet
11.2 Tilt-up wall panel cost recapitulation sheet
11.3 CIP concrete cost recapitulation summary sheet
12.1 Structural steel pricing recap sheet
12.2 Rough carpentry pricing recap sheet
13.1 Equipment lease agreement
13.2 Concrete pumping quote
13.3 Tower crane cost recapitulation sheet
13.4 Personnel/material hoist estimate
14.1 Subcontractor OM plug estimates
14.2 Doors and windows cost recapitulation sheet
14.3 Floor covering subcontractor OM cost recapitulation sheet
15.1 Elevator and MEP subcontractor cost recapitulation sheet
16.1 Photograph of tower crane and shoring operations
16.2 Site utilities subcontractor cost recapitulation sheet
16.3 Sanitary sewer work package estimate
16.4 Utility excavation sketch
16.5 Subcontractor OM plug estimates
17.1 Project summary schedule
17.2 Jobsite general conditions estimate
19.1 Estimate elements
19.2 Pre-bid day summary estimate
19.3 Subcontractor pre-bid day posting sheet
20.1 Subcontractor phone bid form
20.2 Individual subcontractor and supplier bid evaluation sheet
20.3 Combination subcontractor bid day spreadsheet
20.4 Final subcontractor bid day list
20.5 Final bid day summary estimate
22.1 Sage Estimating spreadsheet
22.2 QTO with eTakeoff bridge
22.3 QTO with Bluebeam Revue
22.4 Building information model
23.1 Guaranteed maximum price estimate summary
23.2 Heavy civil bid proposal
23.3 Heavy civil summary estimate
23.4 Residential estimate summary
23.5 Change order proposal
24.1 Estimate transition into project management
24.2 Buyout log
24.3 Schedule of values
24.4 A and B Cost control analysis
Tables

6.1 Concrete reinforcement steel weight conversions

8.1 Structural steel dimensions and weights
9.1 Dimensional lumber board foot conversions
10.1 Craft wage rates
10.2 Craft labor burden
18.1 Contingency values
Preface

The ability to predict the cost of constructing a project is an essential

construction management skill. This book examines several types of
construction cost estimates and the processes used in developing each type.
Cost estimating is not an exact science. It requires an understanding of
construction materials, construction methods and techniques, construction
equipment, and construction labor. To be a good estimator, one also needs
practical construction experience.
The first version of this book was developed for use as a textbook for
undergraduate courses in construction cost estimating and as a reference
guide for construction professionals. That book was titled Construction Cost
Estimating, Process and Practices and was first published by Pearson in 2005.
A second soft-cover edition of the same book was published by LAD
Publishing in 2018. The first edition was coauthored with professional
construction estimators and estimating instructors Dennis Griffin and Tom
Cole. We very much appreciate their contributions to that early and
successful book.
The foundation of this new book is built on the success of our first book,
which was coverage of the complete ‘processes’ of construction estimating.
While the specific procedures for cost estimating may vary from one
company to another and also for different types of construction, there are
fundamental principles and processes that are used. It is these principles and
processes that are also addressed in this book. There are many cost
estimating books on the market that address the quantity take-off process,
others that provide estimating databases, and still others that discuss
development of a lump sum estimate. There are none, however, that we
know of that provide the coverage of this book. It illustrates the process for
developing several different types of estimates, and the case study illustrated
throughout concludes with a bid for a lump sum contract. The book also
discusses analysis of subcontractor quotations as well as estimating jobsite
general conditions and company overhead costs.
The previous version of the book had one introductory chapter each on
quantity measurement, pricing of direct work, and general contractor in-
house pricing of subcontractor work. Because these topics are preferred
subject matter for many instructors and good teaching materials for
students, we have expanded that coverage from three to now 11 detailed
chapters in this book. The new book also features a current commercial case
study project that has many more different types of construction materials
and systems than did the first book. Two additional sets of case study
drawings and estimates are included on the book’s eResource that feature
residential and industrial construction materials and techniques.
This book is organized into six parts; I through VI. Part I provides an
overview of cost estimating and construction management basics and
introduces the construction project that is used as a case study throughout
the book to illustrate concepts and processes and to provide a context for
student exercises. Although the construction company used in this book is
fictitious, the project is actually just under construction in Seattle,
Washington. The authors assume that readers have a basic understanding of
the construction process and types of construction contracts as well as the
materials and methods used in the industry. In addition to an introduction to
estimating and construction management topics, this first part includes a
detailed chapter on preconstruction processes, including budget estimating.
Part II dives deep into quantity take-off for all aspects of work generally
self-performed by a general contractor, including Construction Specification
Institute divisions 03, 05, 06, 08, and 10. Part III then develops pricing for all
of the work taken off in Part II, including analysis of labor productivity,
material unit pricing, and construction equipment cost. Part IV shifts to in-
house general contractor development of most standard areas of subcontract
pricing, also known as ‘plug’ estimates.
Part V completes the estimate including detailed jobsite general
conditions, markups and fees, and subcontractor quotations. Part V
concludes with a detailed description of the process for finalizing a bid on
bid day. The final part contains advanced estimating topics, including ethics,
technology tools, and other types of estimates and project management
issues.
Each chapter has a similar organization. First, concepts are discussed and
then illustrated using the case study project. Review questions are provided
to emphasize the main points covered in the chapter, and an instructor’s
manual containing the answers to the review questions is available for
instructors. Exercises also are provided to allow students to apply the
principles learned. A listing of all abbreviations used in the text and many
other industry standard abbreviations is in the book’s front material. A
glossary of cost estimating terms is included at the back of the book.
Appendix A provides many useful estimating resources, followed by a list of
some of our reference materials that many students and professionals in the
construction industry may find helpful. All of the estimating forms used in
the book were created in Microsoft Excel and can be customized to meet the
needs of the user. Live versions of these forms and several of the figures used
in the book are included on the book’s eResource.
Acknowledgments

This book could not have been written without the help of many people. We
wish to acknowledge the following: Developers Rob Dunn and Bill Parks, for
allowing us to use their projects as our case studies; Flad Architects and
Johnston Architects, LLC, for allowing us to use their drawings; and the
many University of Washington students who have used previous versions
of this book and provided many valuable suggestions for improvement.
During the book’s development we reached out to several construction
industry professionals, including chief estimators and preconstruction
managers with some of the country’s most successful firms, and ran drafts of
tables of contents, chapters, and exercises by them for real-time input. Their
contributions have helped create an estimating book like no other we know
of. University of Washington Construction Management graduate students
and industry professionals Matt Wiggins and Andrea Perea contributed
immensely in preparation of instructional materials, including answers to
review questions and exercises and PowerPoint presentations. In addition,
we especially want to recognize our following industry partners:

Winnie Bachwitz, editor, The Guide Building Construction Material

Prices
Larry Bjork, construction management professional and estimating
instructor, UW
Robert Guymer, retired, chief operating officer, Foushée and Associates,
GC
 Kirk Hochstatter, industry professional and lecturer, University of
Washington
David Holm, project engineer, Pence Construction, general contractor
Edward Krigsman, EK Real Estate Group, Windermere
Lensit Studio Photography
Kelly McCandless, field engineer, Hensel Phelps, general contractor
Jud Youell, field sales engineer, Sage Construction and Real Estate,
estimating software
Mark Young, general manager, Brundage-Bone Concrete Pumping

If you have any comments or recommendations for inclusions in future

editions, please feel free to contact the publisher Routledge or us direct at
[email protected] or [email protected]. We hope you enjoy the book.
Len Holm
John E. Schaufelberger
Abbreviations

Most of the following abbreviations and acronyms are used in this book,
including many from our figures, tables, and boxed-in examples and
calculations. Other abbreviations listed here are standard in construction
estimating and in the construction management industry, and/or may also
be found on construction documents from which an estimator must prepare
an estimate. Knowledge of standard abbreviations is important for the
construction professional.

3D three dimensional (drawings)

A architectural (drawings)
AB anchor bolt
ABC activity-based costing
AC acre
ACE assumptions, clarifications, and exclusions
ACT acoustical ceiling tile
ADA Americans with Disabilities Act
AGC Associated General Contractors of America
AIA American Institute of Architects
Allow allowance
Arch architect
Asst. assistant or assistance
B&O business and occupation (tax), also excise tax
 BCF bank cubic feet
BCY bank cubic yards
BF board feet or backfill
BIM building information models or modeling
BOF bottom of footing (elevation or depth)
BSF building square footage
BTR better (lumber grade)
one hundred or center or Celsius or civil (drawings) or
C
channel (structural steel shape)
CA carpenter
CAD computer-aided design
Cap. capillary
City Construction Company, fictitious case study general
CCC
contractor
CCE Construction Cost Estimating (book)
CD construction documents
CDF controlled density fill (lean concrete backfill)
CDX construction grade (plywood)
CE chief estimator or civil engineer or construction engineer
CEO chief executive officer
CF cubic feet
CHR crew hour
CIP cast-in-place (concrete)
CJ control joint or construction joint, also saw joint
CLT cross-laminated timber
CM construction manager or management
CMAR construction manager at-risk (delivery method)
CM/GC construction manager/general contractor (delivery
 method), also CM-at-risk
CMU concrete masonry unit
CO change order or close-out (C-O), also company
compensation, (workers’ compensation insurance), also
Comp
complete
COO chief operational officer
COP change order proposal
CPFF cost plus fixed fee (price)
CPPF cost plus percentage fee (price)
CS closure-strip
CSF hundred square feet, see also SQ
CSFA contact square foot area (for formwork), see also SFCA
CSI Construction Specifications Institute
CY cubic yards
d penny (nail gauge)
D or d depth or dimension
DB or
design-build (delivery method)
D/B
DD design development
De-mob demobilization
Det. detail
DF Douglas fir (lumber species), also door frame
DFH doors, frames, and hardware, also DFHW or DF&H
Div. division
DL direct labor
DM direct material
Docs documents
Dwg. drawing
 E electrical (drawing) or east
EA each
EF edge form
EL electrical lighting (drawing)
E-mail electronic mail
EMR experience modification rate (safety)
Engr. engineer
EP electrical power (drawing)
EQ or
equipment
Equip.
Est estimate or estimator
EW each way or east-west
Ex example, excavation, or exercise
Excl. excluded
Ext. exterior
FE fire extinguisher or field engineer
FEC fire extinguisher cabinet
fixtures, furnishings, and equipment (often owner-
FF&E
supplied)
FICA Federal Insurance Compensation Act (social security)
FOB free on board or freight on board
FT foot or feet
FTF floor to floor (dimension)
GC general contractor
GCs general conditions or general contractors
GLB glue laminated beam (lumber)
guaranteed maximum price (estimate or contract), also
GMP
GMax or MACC
GSF gross square footage
GWB gypsum wallboard, also sheetrock or drywall
H height
HD hold downs (wood connection)
HF hem-fir (lumber grade)
HM hollow metal (door or frame)
HO home office
HR hour or human resource
hollow structural section (structural steel element),
HSS
formerly TS
HV or heating, ventilation, and air conditioning (duct or
HVAC mechanical system)
IBC International Building Code
IFB invitation for bid, also ITB
In inch
Incl. included or inclusion
IPD integrated project delivery
ISO isometric (drawing)
ITB invitation to bid or instructions to bidders
IW ironworker
JV joint venture
K one thousand or kip or kilogram
KW kilowatt, also kilowatt hour (KWH)
length or landscape (drawings), also angle (structural
L
steel shape), also labor
L&I labor and industry
Lab. labor
LB pound or labor burden
LC or L labor cost
cost
LCY loose cubic yards
LDs liquidated damages
LEED Leadership in Energy and Environmental Design
LF lineal foot or feet
LLC limited liability company or corporation
Loc. location
LOI letter of intent
LS or
lump sum (estimate or contract)
L/S
LVL laminated veneer lumber (engineered lumber)
M million or mechanical (drawings), also material
M&E mechanical and electrical (subcontractors or scopes)
M&M methods and materials
MACC maximum allowable construction cost, also GMP
Matl. material
MBE minority- or woman-owned business enterprise
MBF thousand board feet (wood measure)
M cost material cost
MDO medium density overlay
mechanical, electrical, and plumbing (building systems
MEP
or subcontractors)
MH man-hour
Mil million, also m
Misc. miscellaneous
MO month
Mob mobilization
MOCP Management of Construction Projects (PM book)
MUP master use permit
MXD mixed-use development (real estate classification)
N north
NA not applicable or not available
NIC not included or not in contract
NFPA National Fire Protection Association
No. number
NTP notice to proceed
NTS not to scale
OAC owner-architect-contractor (meeting)
OC on center
OD outside diameter (pipe dimension)
OE operating engineer or owner’s equity
OH&P overhead and profit, also fee
OIC officer-in-charge
order-of-magnitude (GC plug estimate for subcontracted
OM
work)
OSB oriented strand board (plywood)
OSHA Occupational Safety and Health Administration
OST on-screen take-off
OT overtime
P plumbing or piping (drawings)
P&ID piping and instrumentation diagram (industrial drawing)
PC pre-cast (concrete)
PE project engineer or pay estimate or project executive
Perf. perforated (drainpipe)
PEx project executive, also PE
Plam plastic laminate
PM project manager or project management
Pnls panels
P.O. purchase order
PPE personal protective equipment
PPP public-private partnership (delivery method)
Precon preconstruction phase or service
PSI pounds per square inch
PSL parallel strand lumber (engineered lumber)
post-tension (concrete reinforcement) or pressure-treated
PT
(lumber)
PVC poly vinyl chloride (pipe material)
Q&A qualifications and assumptions or question and answer
QC quality control
QTO quantity take-off
QTY quantity or quality
R insulation value
RB rubber base
RCP reflected ceiling plan (drawing)
Rebar concrete reinforcement steel
Recap recapitulation (pricing sheet)
Rep representative
RFI request for information
RFP request for proposal
RFQ request for qualification or request for quotation
ROM rough-order-of-magnitude (budget estimate)
ROT rule of thumb
ROW right of way
 S structural (drawing) or south or slope (excavation)
S/C subcontract or subcontract cost
Schd. schedule
SD schematic design or storm drain
SDS safety data sheets, formerly MSDS
Sec section
SF square feet or square foot
SFC square feet of column or square feet of contact
SFCA square foot of contact area
SFD square foot of deck
SFF square foot of floor
SFP square foot of panels
SFR square feet of roof
SFS square foot of site or slab
SFW square foot of wall
SHT sheet
SJ concrete saw joint or control joint
SOG slab-on-grade
SOMD slab on metal deck
SOV schedule of values (bid form or pay request)
Spec specification or speculation
SPM senior project manager
SQ square or hundred square feet, also CSF
SS sanitary sewer
ST subtotal
Sub subcontractor or subcontract
Supt superintendent, also super
SVP senior vice president
 SY square yard
T thickness or ton
T&M time and materials
TCY truck cubic yards, also loose yards
TI tenant improvement
TJI Trus Joist International (engineered wood shape, I beam)
T-O take-off (quantity measurement)
TOW top of wall (height or elevation or dimension)
TN ton or tonne or tonnage (weight)
TNG tongue and groove (wood to wood connection)
TQM total quality management
TS tube steel, also HSS
TVD target value design
TVM time value of money
Typ typical
U unit or units
UMH unit man-hour or unit per man-hour
U Mos. unit-months (combination of time and quantity)
U.N.O. unless noted otherwise
UP unit price
U.S. United States of America
USGBC United States Green Building Council
UW University of Washington
VE value engineering
VCT vinyl composition tile
Vol. volume
VP vice president
W width or wide flange steel beam shape or west
W/ with
WA Washington State
WBS work breakdown structure
WF wide flange steel beam shape, also W or H or I
WK week
W/o without
WWF welded wire fabric
YD yard
YR year
Part I

Introductory concepts
1 Introduction

The estimating process

Estimating can be defined as the process of determining the approximate
cost of performing a work task based on the design information available,
which is not always complete. For the general contractor (GC), estimating
and their ability to do it accurately and reliably is a critical component to
the success of each project and ultimately the success of the company. Many
construction companies have suffered bankruptcy because of estimates that
were not done properly or completely. Note we will utilize the terms general
contractor and construction manager (CM) throughout this book, and
although we define differences between the two terms in Chapter 4, we
consider them synonymous with respect to the process of preparing
construction estimates.
This book will provide students with the information, techniques, and
forms required to determine accurate quantities, apply reasonable pricing
for labor, materials, equipment, and subcontractor scopes, and determine
appropriate markups, with the end result being accurate and complete
estimates that will result in profitable construction projects. The book will
provide detailed analysis for GC self-performed work such as cast-in-place
concrete, concrete reinforcement, structural steel, rough and finish
carpentry, doors and windows, and architectural specialty materials as well
as methods for determining accurate costs for many areas of subcontracted
scopes of work.
 We have included detailed explanations of the different types of estimates
that a contractor will perform in connection with the types of contracts that
are used in the industry and how to accurately determine the jobsite general
conditions necessary to successfully manage a construction project. In
addition, risk management, estimate markups, and use of contingencies
along with the important issue of ethics that all GCs must face are threaded
throughout the book.
Estimating is not a simple task or a process that should be taken lightly
but rather could be argued as the single most important objective for GCs to
perform at the highest level. Without qualified estimators and successful
estimates, contractors do not land construction contracts. Hopefully, this
book will provide the reader with the skills necessary to begin to develop
highly accurate and reliable construction cost estimates.
Construction estimates are prepared throughout the design process of a
project, beginning with programming and conceptual phases followed by
schematic design, design development, and construction documents. The
estimates that are prepared at each of these design phases are different in
their level of detail and completeness but similar in the process of
developing any cost estimate. It is important for the contractor to be able to
communicate accurate and reliable estimate information to the project
owner and designers throughout the design process so that the design, as it
progresses, can be constructed for the budget established by the owner.
Subsequent chapters in this book will describe in detail the process for
preparing estimates at each phase of the design and how those estimates
would be used.
 Figure 1.1 Estimating process

The estimating process as described in this book is a series of calculated

steps leading to the preparation of a complete and accurate total price for
bid day or a proposal on a negotiated project. These steps are reflected in
Figure 1.1, which will be referred to through this book. It is recommended
that the reader bookmark this figure for future reference. An additional copy
has been included on the book’s eResource, which we recommend readers
print out and use as a bookmark. Two of the very important first steps
undertaken by the estimator are the preparation of a schedule to complete
the estimate and a work breakdown structure (WBS), both of which are
discussed in the next two sections.

Estimate schedule
When possible, the project manager, experienced project engineer, and
superintendent should be responsible for developing the estimate or, at a
minimum, work as integral members of the estimating team. Their
individual inputs regarding constructability and their personal commitments
to the estimating product are essential to ensure not only the success of the
estimate but also the ultimate success of the project. One of the first
assignments for the estimating team is to develop a responsibility list,
strategize their approach to the estimate, and to schedule the estimate. The
estimating process should be scheduled for each project beginning with the
dates for the pre-bid or pre-proposal conference and the end date the bid or
proposal is due. With these milestones established, a short bar chart schedule
should be developed that shows each step and assigns due dates to the
estimating tasks depicted in the estimating process, Figure 1.1. The estimate
schedule itself is included in step 2 of that figure. Familiarity with the steps
or building blocks is essential in developing the schedule. Each team member
is relying on the others to do their jobs efficiently and accurately and timely.
Similar to a construction schedule, if one of the individuals falls behind on
any one activity, the completion date may be in jeopardy or the quality of
the finished estimate will be affected unless other resources are applied. An
example of an estimate schedule for our case study project is included as
Figure 1.2.

Figure 1.2 Estimate schedule

Work breakdown structure

When the officer-in-charge decides to bid a project, the first job of the
estimator is to plan and strategize the estimating process. One of the best
organizational tools is the work breakdown structure. This is reflected as
step 3 in Figure 1.1. This is simply an outline of the activities necessary to
construct the project. The benefit of the WBS is that it takes a seemingly
large complex project and turns it into many easy-to-manage segments. The
WBS will be used, upon winning the project, for planning and scheduling,
which in turn influences many of the project management activities. Making
a comprehensive outline at this point is thus beneficial to later operations as
well as to the estimating process. As a prelude to discussing the WBS,
certain terms need to be defined. These are:

Element or activity: A description of work such as concrete footings,

steel erection, structural excavation, etc.
Task: Specific tasks that need to be done to complete an activity. Form,
fine grade, install reinforcing steel, place concrete, and finish and strip
forms are six of the tasks that are required to complete the concrete
footings.
Basic outline: The basis of the WBS is the Construction Specification
Institute (CSI) numbering system. The basic outline is therefore the CSI
division and section numbers.
First level expansion: The WBS expanded to show activities within a
CSI division.
Second level expansion: A second expansion of the WBS to task level.

Further expansion of the WBS beyond the second level by the project
estimator results in such incremental detail that it is not always useful.
Within estimating, and throughout our approach to construction
management, we practice the 80-20 rule. This means that 20% of the systems,
assemblies, tasks, or work items make up 80% of the cost or direct labor
hours and therefore 80% of the risk for the contractor. It is those 20% that the
estimator must pay the closest attention to. The first two levels of the WBS
are used when planning and scheduling a project; thus their use in
estimating helps to prepare the project team for the work after winning the
bid. Expansion to the task level provides a comprehensive guide and
checklist for the estimating process and should be referred to frequently to
ensure that all items have been quantified and priced.
When creating a WBS, a good approach is to visualize how the project
will be built. The CSI MasterFormat that is used for most estimating and
technical specifications provides the general order of the work. For example,
the first activities might be to clear and grade the site and install site
utilities. This work use to be specified in CSI division 02 but is now in 31–33.
Chapter 3 includes tables comparing the previous to new CSI division
assignments. The substructure, which encompasses the structural excavation
and concrete foundations, is found primarily in CSI division 03. The
superstructure activities can be found in divisions 03 through 06. Divisions
07 through 14 are basically nonstructural items such as thermal and
moisture protection, finishes, and various equipment and specialties,
including elevators. Mechanical and electrical systems use to be specified in
CSI 15 and 16 but are now in divisions 21–27. This basically is the order of
construction of most projects. Figure 1.3 shows a partial WBS for the book’s
case study project.
 Figure 1.3 Work breakdown structure

When starting on a WBS for a new building an estimator may organize it

in major divisions, such as: (1) foundations, (2) substructure, which could
include foundations, (3) above-grade superstructure, (4) enclosure, (5)
roofing and others. The substructure includes the cast-in-place concrete
footings, foundation walls, pits, machine foundations, and any other
concrete that is generally below the ground level of the building. For our
case study project, we chose to further define foundations as spread footings,
continuous footings, and grade beams.
Division 03 within the substructure includes the slab-on-grade (SOG). In
many projects, the SOG is commonly placed prior to the steel erection, thus
giving the ironworkers a stable working platform. Where very heavy
equipment is needed for structural steel erection, the SOG may be placed
after the framing and roof panels are in place. Buildings comprised of tilt-up
concrete construction usually need the SOG as a place on which to cast the
panels. A closure strip for the SOG is then placed after the tilt-up panels
have been set and secured. It can be argued that the SOG may be either a
part of the substructure or of the superstructure. It does not matter as long
as there is consistency from project to project. For our case study project, we
considered the SOG as part of the substructure because it is two stories
below grade.
The superstructure is all of the structural work above the ground. This
includes structural concrete and steel from the foundation to the roof,
including elevated floor slabs and pre-cast concrete items. Pre-cast concrete
elements can be either constructed by the GC or purchased from a supplier.
Either way, the GC usually installs them. Generally, most pre-cast elements
are purchased, but tilt-up walls are constructed on the project site and lifted
into place.
A miscellaneous category may be included in CSI division 03 to list
activities for exterior concrete work. This includes sidewalks, extruded
curbs, the curbs and gutters along pavement, as well as concrete pavement.
Some estimators may include site concrete with the site work portion of the
WBS and estimate, as that is where the work is shown on the drawings and
typically when it will be constructed. Depending on the work specified,
these activities may be self-performed by the GC or subcontracted.
Subcontractors frequently have specialty equipment for building these curbs
and walks and thus may be more cost effective than the GC. If, however, the
work is only flat work such as pavement and sidewalks, the GC may be able
to do the work more efficiently. We have chosen to include the estimate for
site concrete with other site work activities. So in a sense there are ‘rules’
with respect to where work activities might show up in an estimate, but
each estimator and each construction company modify those rules to fit their
specific business and custom.
The mechanical portion of the project consists primarily of the plumbing,
heating, ventilating, and air conditioning (HVAC) and the fire sprinklers.
Rough-in is done during the superstructure construction while the
installation of fixtures, diffusers, setting the sprinkler heads, etc., all
commonly known as trim work, are activities and tasks of the finish phases.
The activities for bringing the utility services to the building are part of site
work.
Some larger mechanical subcontractors perform all work in CSI divisions
21–23, while others specialize in only one set of activities. It is common for
the mechanical contractor to do the plumbing and HVAC while a separate
subcontractor does the fire sprinklers. All three activities should be listed on
the WBS. Underground site utilities frequently are installed by a separate
subcontractor.
Electrical work, CSI divisions 26 and 27 (old 16), includes two types of
work: (1) power, distribution, and lighting and (2) controls, alarms, and data.
It is common for a single subcontractor to perform all of these activities, but
on larger projects, two or even three different subcontractors may be
employed. The estimator needs to review the specifications to determine the
extent of the work and list each major activity regardless of whether the
work will be done by one or several subcontractors.
Figure 1.3 shows a task level expansion of the WBS for elevated concrete
slabs showing the specific work items required to complete an activity.
While the experienced estimator already knows what tasks are needed, this
level provides a checklist to ensure that all work has been quantified. After
winning the project, this level is used for the detailed planning and
subsequent scheduling by the construction team.
 Figure 1.4 Project item list

Another version of a WBS allows the estimator to designate which work

will be performed by the GC and which will be performed by
subcontractors. Figure 1.4 is a partial project item list as used by the
estimator to list work activities and indicate whether an activity is to be
done as direct work or is to be subcontracted. A live blank template of the
project item list is included on the book’s eResource. A separate column
under each heading indicates whether the work is labor and/or material.
This delineates that material may be furnished by a supplier to the jobsite
for installation by the GC’s own forces, furnished by a supplier for
installation by a separate labor-only subcontractor, or furnished and
installed by a subcontractor. For example, a rebar supplier may furnish the
material, and a subcontractor may be contracted to install it. A single line
item such as electrical with both the subcontractor labor and material spaces
checked means that the same subcontractor will furnish and install the
materials. The project item list is similar to the WBS, but it identifies who
will supply the material and labor for each work activity. It is used after
contract award to select subcontractors and suppliers. The remaining steps
in the estimating process (Figure 1.1) are discussed throughout this book.
Introduction to the book
Part I of the book includes this chapter and other introductory CM chapters
that prepare the estimator for the detailed estimating process. Chapter 2
describes several different types of estimates, from budgets, to guaranteed
maximum price, to lump sum bids and how they relate to the different
phases of design. Chapters 3 and 4 include many introductory contract and
CM topics including procurement, contract documents, construction
organizations, and individual contractor team member responsibilities.
Preparation of budget estimates is one of the major functions of a contractor
during the preconstruction phase, and in Chapter 5 we introduce
preconstruction responsibilities, contracts, and fees.
In Part II we dive deep into the preparation of quantity take-offs (QTOs)
for many different systems of potentially self-performed GC work, including
foundations and slab-on-grade (Chapter 6), cast-in-place and pre-cast
concrete superstructure (Chapter 7), structural steel (Chapter 8), and rough
and finish carpentry, including doors and specialties in Chapter 9. The QTO
effort is likely the most time consuming part of detailed estimating and is
reflected as step 4 in Figure 1.1.
Once all of the GC direct work is quantified, then the estimator applies
historical labor productivity rates, current wage rates, and market material
pricing utilizing industry-standard pricing recapitulation sheets, as reflected
in step 5 of Figure 1.1. Part III, Chapters 10, 11, and 12, covers all of this in
detail for all of the systems we quantified in the previous chapters plus
others. Chapter 13 also discusses the process to develop equipment pricing,
some of which will be included with direct work packages and others with
jobsite general conditions, such as tower cranes and personnel and material
hoists.
General contractors would be wise to develop reasonably approximate
estimates for subcontracted work in-house before bid day. This allows them
to better anticipate final markups, including fees, and to analyze the highs
and lows of bid day subcontractor quotations. Chapters 14, 15, and 16 in Part
IV discuss methods for GCs to prepare subcontractor pre-bid day plug
estimates. Chapter 16 especially dives deep into a variety of civil scopes of
work, from earthwork and shoring to site utilities and landscaping.
Preparation of in-house subcontractor plug estimates is reflected as step 6 in
Figure 1.1.
Once all of the direct and subcontracted scopes have been estimated, the
GC will begin estimate completion processes, including development of a
detailed jobsite general conditions estimate (Chapter 17), establishing
competitive markup percentages (Chapter 18), and preparing the estimate
summary page (Chapter 19), and Chapter 20 discusses in detail all of the
very exciting – and sometimes stressful – activities associated with an actual
bid day. All of these activities comprise our final steps 7 through 10 of Figure
1.1.
Some estimating students and instructors may have additional experience
or interest or time available to delve into more advanced topics. We have
assembled several advanced topics in Part VI including ethics (Chapter 21)
and technology tools (Chapter 22). A variety of other types of estimates
including residential, heavy civil, change orders, and others are in Chapter
23. Our final Chapter 24 bridges the next logical step from estimating to
construction project management applications of estimates.

Case studies
We are utilizing several case studies in this book to provide examples of
the material covered and advanced exercises for additional learning.
We choose to use real projects as our case studies to connect all of the
estimating elements together. The QTO from one chapter will be priced
in another and general conditions, subcontractor pricing, and markups
added to the same scopes of work in subsequent chapters. In this
manner, the reader can ‘connect the dots’ and follow the project from
when it first hit the estimator’s desk until a bid is tendered or a
proposal is submitted. Although these are real construction projects
that your authors have been involved with professionally, including
real estimates and schedules, the individual and company names have
been changed and the estimates slightly modified. Any resemblance to
actual built environment participants is a coincidence.

Case study 1
The first case study is the basis for most of the examples, including
figures and tables, used in the book. For this project we are choosing to
utilize a lump sum bid procurement process and a traditional general
contractor delivery method where the owner has two separate
contracts, one with the GC and one with the architect. All of the parties
entered into standard American Institute of Architects contract
agreements. The owner also chose to engage an agency CM as a
consultant. The project owner is Dunn Lumber Enterprises, and the
lead designer is Flad Architects. The bidding and eventually successful
GC is City Construction Company.
This is a large mixed-use development (MXD) that includes a lumber
yard, offices, a small restaurant, delicatessen, small grocery store, and
two floors of underground parking and utilizes many sustainable
enhancements. The project is being built by the developer on
speculation of attracting tenants. It is considered a shell and core
construction style with minimal tenant improvements (TI) planned at
the outset. The interiors will be built out as TI once the tenants are
identified.
The building structure includes a variety of cast-in-place concrete
systems including elevated slabs and slabs on metal deck. The engineer
transitioned from all concrete to all steel as the building rose out of the
ground. It has extensive excavation and shoring elements, a
complicated siding system, green roofs and terraces, and several
elevators. The mechanical and electrical (M&E) design is minimal in a
shell and core project. Design-build subcontractors will bid to the
established criteria, and the M&E designers will continue throughout
construction on a design-assist basis.
 Figure 1.5 Case study organization chart

Figure 1.6 Rendering of Dunn Lumber case study project

Source: Rendering courtesy of Flad Architects

The total estimate at schematic design was approximately $50 million

and is reflected in the next chapter in Figure 2.1, and the construction
duration was planned for 20 months. Most of the figures in this book
are connected with this project. An organization chart of the project
team and rendering of the project are included as Figures 1.5 and 1.6.
Several design drawings are included on the book’s eResource that
provide backup to the quantities reflected in the book’s estimate
examples.

Case study 2
Neither of our second or third case studies is featured in the book per
se. The book’s eResource includes drawings for both that are accessible
for instructors to share with students. Many of the exercises in the book
require the reader to access these drawings in order to develop
solutions. Complete estimates for both projects, which include solutions
to all of the review questions and many of the exercises, are also
available to instructors on the eResource.
Case study 2 is a much smaller project than case study 1, which is
utilized in the book. Case study 2 is a four-unit executive townhome
project which was primarily wood frame construction with added
structural steel supports over cast-in-place concrete foundations and
also had significant excavation and shoring elements. The project was
built on a hill in Seattle with wonderful views of downtown, Puget
Sound, and Lake Union. The building is five stories tall with an
occupied roof deck and garden. Each home has an underground parking
garage. There are expansive windows to take advantage of the view and
many sustainable features, including biofiltration planters. The interior
finishes were all very high end, and many rooms have exposed
structural elements which double as architectural features.
The name of the actual project is Lee Street Lofts. The development
entity was a joint venture between the previous property owner and
the GC. They established the name of Lee Street Lofts, LLC, as their
one-project development company. The architect was Ray Johnston of
Johnston Architecture and Parks Construction Company was the GC.
Parks primarily employs subcontractors but employs a full-time
superintendent and has a few craftsmen, including carpenters, who pick
up the scopes that do not fit neatly into subcontract packages. Typical
with most residential construction, this GC uses merit shop labor,
which costs $15–$20 less per hour and is often more flexible with task
assignments. Wages for case study 1 are included in Chapter 10 and
wages for case study 2 are included with its detailed estimate on the
web. The total estimated cost of construction, exclusive of land
purchase, demolition, and soft costs, was $3.3 million. This was a very
successful negotiated project, and the townhomes ended up selling for
approximately $2 million each.
 An actual photograph of the completed project was provided
courtesy of the developer and is included as Figure 1.7. We appreciate
this team for allowing us to use this successful project as an example in
our book. Several additional photographs of the actual project are
included on the book’s eResource. Sufficient drawings have also been
included for the student to be able to answer many of the book’s
advanced exercises and prepare a complete estimate. Instructors also
have access to the complete detailed estimate.

Figure 1.7 Photograph of Lee Street Lofts case study project

Edward Krigsman | EK Real Estate Group
Photography courtesy of Lensit Studio

Case study 3
The third example case study is an industrial public works project that
utilizes a competitively bid lump sum procurement and pricing method.
The project was cancelled after it was fully designed but makes for
several great exercises within an estimating book. The size of the
facility is 14,800 SF and the site is just over 6 acres. The project’s
purpose is for vehicle maintenance for the highway department. The
building is one-story, plus partial mezzanine, structural steel frame
with metal siding. The large site requires an abundance of site utility
work including storm water retention systems. The bid form submitted
by Sound Construction Company (fictitious GC for use in the book) is
included as Figure 1.8. The total construction estimate for this project is
$6.7 million, and the estimated duration is 14 months. Example
drawings for this case study are included on the book’s eResource
available for instructors along with the detailed estimate, summary
schedule, and site logistics plan. Exercises are threaded throughout the
book based on this case study, as with the previous two. Instructors
could develop an unlimited variety of exercises on any of these three
case study projects.
 Figure 1.8 Case study #3 bid form

Alternate systems
In the first version of this book, we provided examples and exercises
exclusively related to our single case study, which was a concrete tilt-
up building. For this book we have chosen the Dunn project as our first
case study because it includes many more building systems and
materials that we can apply estimating principles to. The two additional
case studies on the web also have additional systems and materials. But
in addition to those three case studies, we have included other building
 systems and materials as boxed-in examples and alternate figures
threaded throughout the book. These examples are not connected to a
real project and do not relate to any of our other three case studies. For
example, we have included detailed estimates of concrete tilt-up walls
and wood framed structures from other projects we have worked on
and complete tower crane and personnel-material hoist estimates to
include with a jobsite general conditions estimate on larger projects.

Summary
Preparation of construction cost estimates is a series of logical steps in which
each one relies on the successful and accurate and timely completion of the
work ahead of it. One tool many estimators use is to schedule the estimate
process itself, which is different than scheduling the estimate work. If any
step in the estimate process falls behind schedule, the quality of the entire
estimate may be jeopardized. An additional tool that most professional
estimators and schedulers use is a work breakdown structure. This is
essentially an outline of all construction work activities needed to build the
project. A variation of the WBS is a project item list which further divides
work activities into labor versus material and subcontractor performed
versus self-performed with the contractor’s own in-house direct crews.

Review questions
1 Which step in the estimate process (Figure 1.1) do you feel will take the
longest?
2 Why not take every scope of work in a project down to the WBS task
level?
3 Who should attend the site pre-bid meeting?
4 What is the difference between a WBS and a project item list?
5 What is the difference between a construction schedule and an estimate
schedule?
6 We have portrayed the estimating process in a series of logical steps, 1
through 10. Why can’t the construction schedule be prepared at the
beginning of the process? Why can’t subcontractor bids be received
earlier?
7 Generally, which items included in either a WBS or a project item list
will be in more detail?
8 Prepare a WBS for either of our other two case study projects. For the
Lee Street Lofts project, expand the WBS to the second level for CSI
division 06. For the Vehicle Maintenance Facility, expand the WBS to
the second level for the site utility work.
2 Types of estimates

Introduction
As mentioned in Chapter 1, contractors are required to prepare cost
estimates throughout the design process of a project. The completeness and
accuracy of each of these estimates will largely depend on the completeness
of the design documents and, as a result, will include varying levels of
contingencies and risk assessment. This chapter will discuss the different
types of estimates, how and when they are prepared, how they would be
used by the team, and the level of detail in each. Estimate types often
correlate with the phases of design and may be labeled as:

Programming or conceptual design budget estimate,

Schematic design budget estimate,
Design development estimate, and
Construction document estimate.

The word ‘estimate’ has different connotations to members within the built
environment, including contractors, designers, and project owners. Even the
court system has argued the differences between budgets, estimates, and
bids. For this book budget estimates are typically developed early in the
design process, whereas firm and detailed estimates, such as guaranteed
maximum prices (GMPs) or bids, are developed later or at the completion of
design.
Programming budget estimate
A program estimate is prepared at the very early stages of a project with
little or no design information except for project location, area of the
building, anticipated number of floors, and usage of the building. Estimates
prepared at the program level are done by applying historical unit prices for
similar buildings to the area of the project with reasonable allowances for
site development and improvements based on the location of the project.
Primary uses for this type of estimate would be:

Project feasibility: Can the anticipated revenue justify the investment?

Project financing: Owners and developers often go to lenders or
investors with this estimate information to determine if financing will
be available.

At the programming stage of a project the owner will need to use the
general contractor’s (GC’s) program estimate to populate their project
budget. A project owner that is developing a construction project as a
business or for profit is also known as a ‘developer’ and will utilize the GC’s
construction estimate along with several other owner costs to prepare a
financial pro forma, which is elaborated on in Chapter 23. Some of the items
included in the pro forma include:

Cost of property purchase,

Construction budget,
Design and engineering fees,
Permits and entitlements,
Applicable state and local sales taxes,
Testing and inspection fees,
Bonds and insurance,
Fixtures, furniture, and equipment (FF&E),
Off-site improvements,
Moving expense,
 Contingencies,
Interest on the construction loan,
Legal fees,
Development fees,
Tenant improvement allowances, and others.

The programming budget may also be known as a conceptual budget. In this

case, there are likely only a few early conceptual design drawings available
for the contractor that represent the project owner’s ‘concept’ of what a
completed project might look like. An early conceptual budget for our case
study project would have factored in the use of the building, square foot of
floor (SFF) area, cost per SF, and cost modification indices for location and
size. The initial rough order of magnitude (ROM) estimate developed by a
GC when a potential project first comes into the door would likely have the
same amount of detail as reflected in the following calculation. Note that in
early budget estimates, contractors will round the values to reflect how
‘rough’ or approximate these figures are.

265,000 SFF @ $200/SFF (mixed-use office building) = $53 million

$53 million × 1.07 (location modifier) × .95 (size modifier) = $54
million

Schematic design budget estimate

Schematic design (SD) estimates are prepared when the design is
approximately 30% complete. All of these percentages of design completion
are ‘relative’ and have a range of +/−10% and are subject to a variety of
variables and opinions. It is at this point that the contractor’s estimate
format is established and will be used throughout the estimating process.
The most common way of formatting cost estimates is through the use of
building systems, or cost assemblies. The Uniformat method of organizing
cost budgets at the first level is very broad and would work only for very
early ROM estimates. This format is reflected in the schematic design budget
estimate shown in Figure 2.1. Different estimators will expand this format by
splitting out broad categories – for example roofing from enclosure – and
others will have listed site work or general conditions as either the first or
last line items. The estimator creating this budget has also slightly modified
the systems for his presentation to the project owner.

Figure 2.1 Schematic budget estimate: Uniformat

Another early method of formatting budget estimates is by Construction

Specification Institute (CSI) categories rather than Uniformat systems. In this
method, the estimate is categorized by CSI divisions, which more closely
aligns with technical specifications, also known as MasterFormat. The
MasterFormat estimate is more detailed than is the Uniformat, as reflected in
Figure 2.2, and will be used later in this book for our case study summary
estimates. Note that both of these SD budget estimate formats are more
detailed and therefore more accurate than the ROM provided earlier.
Depending on the level of the design and the information available,
contractors will quantify as much as they can in order to develop an
accurate cost estimate and will apply historical unit pricing to the measured
material quantiles. For example, the documents should give enough
information on the exterior closure that accurate quantities could be
determined for each enclosure component and historical industry unit
pricing applied. At this level, a GC will need to depend on guidance, often
from notes on the drawings or in narrative form, from the architect and
engineers to determine the work scope, such as:
Figure 2.2 Schematic budget estimate: MasterFormat

Quantity of reinforcing in pounds per cubic yard,

Structural steel unit weight per square foot of building,
Closure elements,
Types of roofing,
Level of finishes, and
Mechanical and electrical system descriptions.
The indirect costs of the contractor such as general conditions, taxes and
insurance, bonds, and fee are added generally as a percentage of the cost of
the SD estimate summary. Another important element of the GC’s estimate
is the level of contingency that is included, which varies depending on the
completeness of the documents. At the schematic level, contingencies which
are included in the contractor’s estimate are:

Design contingency: Costs for unknown scopes that are not designed
yet are allowed for at 7 to 10% of the estimated cost of the work.
Construction contingency: Costs for unknown conditions that the
contractor would be responsible for need to be allowed for at a rate of 5
to 7% of the estimated cost of the work.
Estimating contingency: Because firm quantities and quotations cannot
yet be determined for all building systems, the contractor may add +/
−5% for accuracy of the proposed costs.
Additional contingencies will need to be added on the project owner’s
side of the ledger for items outside of the contractor’s control, such as
permits and discovery of unknown conditions.

As can be seen in the following chapters, the levels of these contingencies

will decrease as the level and completeness of the design progresses. The
early SD budget estimate can be used for:

Establishing an initial construction budget for the project owner;

Supporting the application for a master use permit;
Evaluating alternative design concepts, structural systems, exterior
closure systems, and mechanical, electrical, and plumbing (MEP)
systems;
Identifying value engineering alternatives (see Chapter 5); and
Communication tool between the contractor and designers to
determine optimum building systems that will meet the project owner’s
construction budget.
Design development estimate
Design development (DD) estimates are prepared when the design is
approximately 70% complete and the scope of the work is generally
identified. These types of estimates are also referred to as semi-detailed
estimates. It is at this point that the contractor will continue to use the
systems format and will perform detailed quantity surveys for the scopes of
work in each estimate system, with particular attention paid to the
contractor’s self-performed work such as concrete, steel, and carpentry. The
structural elements of the project (concrete or steel or wood framing) will be
clearly identified at this phase, such that quantities can be obtained and the
contractor’s historical unit pricing can be applied.
It is also at this point in the design that the contractor can solicit help
from the subcontracting community in determining the cost of other
building systems. Subcontractors can provide the GC with unit pricing to be
applied to the GC’s quantities (see Chapters 14–16), or subcontractors may
provide preliminary budget pricing based on the information in the
documents. This is usually done at the discretion of the contractor. In either
instance, it is important to get reliable information from subcontractors for
complicated systems such as:

Exterior closure,
Vertical transportation,
Mechanical, electrical, and fire protection, and
Specialty items and finishes.

Another important element of the DD estimate is the proper use of

allowances. Allowances are defined as costs for known scopes of work that
are not designed yet. Good examples include landscaping, signage, floor
covering, and FF&E. The contractor should be very specific with the project
owner as to what scopes of work they have included as allowances and
clearly communicate them in a separate document, as discussed later. Many
times allowances become part of the contract documents until the design is
completed.
It is at this estimate stage that the GC will do a detailed estimate of their
indirect costs or jobsite general conditions. See Chapter 17 for a detailed
explanation of jobsite general conditions. At this point in the estimate
process, the GC understands the construction schedule and the anticipated
staff, so the estimator will be able to prepare a detailed general conditions
estimate rather than a percentage add-on, as was done with the SD estimate.
This substantially reduces the risk for the GC for the general conditions
portion of the estimate.
Contingencies will also be adjusted because the design is more complete.
Design contingency will be included at approximately 3–5% and
construction contingency at 2–3% during the DD phase. The DD estimate
can be used for:

Evaluating alternative design concepts, structural systems, exterior

closure systems, and MEP systems;
Establishing a GMP contract amount;
Confirming the owner’s construction budget;
Identifying value engineering alternatives;
Making commitments to subcontractors and suppliers for long-lead
items such as structural steel, curtainwall systems, elevators, and
mechanical equipment;
Application for building permits; and
Application for construction loans.

Construction document estimate

The construction document (CD) estimate is based on 100% design
documents and will include detailed and complete quantity take-offs for all
of the contractor’s self-performed work and competitive bids for all of the
subcontractors’ work scopes and major material supply items. As with the
DD estimate, the contractor’s general conditions will be estimated in detail
based on their schedule and anticipated jobsite staff requirements.
Contingencies will be much less or nonexistent given that the design is
complete. The contractor may include reasonable levels of construction and
estimating contingency based on negotiations with a private owner. This will
vary with the project and will in most cases not be utilized in competitive
lump sum bids. If contractor A includes significant contingencies and
contractor B does not, contractor B will typically be the successful low
bidder. The CD estimate can be used for:

Establishing GMP contract amounts,

Preparing lump sum bids,
Application for construction loans,
Incorporation into a contract agreement, and others.

In this book we will go through the process of preparing a fully detailed

competitive estimate for our case study project utilizing 100% complete
design drawings and specifications.

Qualifications and assumptions

One of the most important documents for each of the estimates already
described is a list of qualifications and assumptions (Q&A) which describe
what the contractor has used in preparing its estimate. Some contractors also
refer to this document as assumptions, clarifications, and exclusions (ACE).
At the earlier design stages, this document is more extensive, given the lack
of design information, and becomes shorter as the design progresses and
more information is available to the contractor, especially through the
design team’s development of technical specifications. The Q&A or ACE
document will include:
 Assumptions made by the contractor in preparing its estimate due to
lack of complete and detailed information;
Information used that was provided by the designers and engineers but
not shown on the documents;
Allowances included in the estimate;
Scopes of work that are excluded from the estimate either specific to
the project scope or items that are generally excluded from contractor
estimates and are customarily accounted for by the project owner.
These may include:

Applicable state and local sales taxes,

Design and engineering fees,
Permits and entitlement fees,
Soils engineering,
Site survey,
Bonds and builder’s risk insurance,
FF&E,
Signage, and
Other items specific to the project.

It is important for the contractor to include a detailed qualifications and

assumptions document with their estimate so there is no confusion as to
what is included or excluded from the estimate regardless of the level of
design that it is based on; it is a good communication tool. This Q&A
document, however, is not used on a competitive lump sum bid proposal.
Inclusion of any qualifications on a public works bid would typically be
grounds for rejection of that contractor’s bid, but they are common for
negotiated privately financed projects. An example of a Q&A or ACE
document is included here as Figure 2.3.
 Figure 2.3 Contractor’s estimate qualifications and assumptions

Summary
The four major design phases include programming, schematic design,
design development, and construction documents. Different types of
estimates are prepared by contractors at each of these phases, from ROMs to
budgets to GMPs to lump sum bids. These estimate types have similarities
and differences to contract pricing methods, which are project owner
choices, as described in the next chapter. The accuracy of design improves as
the design progresses, as does the accuracy of contractor-generated
construction cost estimates. Estimating contingencies are also reduced as
both design and estimating accuracy improve. Contractors often prepare
qualification and assumption documents to accompany cost estimates,
especially early in the design and budget phases. Qualifications are typically
not allowed to accompany competitively bid public works lump sum or unit
price projects. We appreciate the help of industry professional and
estimating lecturer Larry Bjork, who contributed to early drafts of this
chapter.

Review questions
1 At which design level (SD, DD, or CD) would a door, frame, and
hardware schedule be included?
2 Match the three levels of design (SD, DD, and CD) with the three types
of construction cost estimates (GMP, bid, and budget).
3 Which type of estimate is associated with programming or conceptual
design?
4 Which of the schematic design budget estimates presented in this
chapter would be considered the most accurate, and why that one?

Exercises
1 List five items which may be considered part of an owner’s FF&E.
2 Why would inclusion of Q&A or ACE in a public bid be grounds for
bid rejection?
3 What does the development phrase ‘does the project pencil?’ mean, and
at which design phase (program, SD, DD, or CD) is that question
addressed?
4 What would it take for a design team to produce a set of 100% complete
and accurate drawings and specifications, without error, and change
order proof?
3 Contract considerations

Introduction
This book is not a project management (PM) or a construction contracts
book, but the approach to construction cost estimating is dependent on
several issues discussed here, including the contract documents. We would
be remiss to jump right into quantity take-offs (QTOs) and pricing and
bidding without providing the reader with a brief overview of the
construction management (CM) delivery and contracting process. Project
owners choose the delivery methods (who contracts with whom),
procurement method (bid or negotiated), and the contractor’s pricing
method (cost-plus, lump sum, and others). All of these have an impact on
the estimator’s approach and risks imposed on the contractor.
There is almost an infinite number of ‘construction documents’, of which
the contract is one. Construction documents include requests for
information, meeting notes, submittals, permits, shop drawings, quality
control reports, safety inspections, photographs, transmittals, etc. The
construction contract is the most important construction document. The
contract can take on many different forms. In the next chapter we will
provide a brief overview and introduction to current CM processes,
including construction organizations and team member responsibilities. In
this chapter we discuss:

Project delivery methods,

Procurement,
 Pricing methods,
Contracts, and
Contract documents.

Much of the material included in this chapter has been abbreviated from
Management of Construction Projects, a Constructor’s Perspective, by
Schaufelberger and Holm. Our focus of CM here is on the role of the
estimator and project manager as individuals, not companies. Many
concepts and terms from one (CM or PM or estimator) apply to the other.
We use a lot of abbreviations in construction; many of them are utilized in
this chapter and are also listed in the front material.
Throughout this book we will examine estimating and project
management from the perspective of the general construction contractor
(GC). Other estimators and PMs typically are involved in a project
representing the owner and the designer, but our focus is on the knowledge,
skills, tools, and techniques needed to be successful as a PM or estimator for
a construction company. Our context in this book will be that of an
estimator for a mid-sized commercial GC. The principles and techniques
discussed, however, are equally applicable on residential, industrial, and
infrastructure or heavy civil construction projects, as well as for specialty
subcontractors. Residential and heavy civil construction estimating will be
introduced in Chapter 23.

Project delivery methods

The principal participants in any construction project are the project owner
or client, the designer (architect or engineer), and the GC or CM. The
relationships among these participants are defined by the delivery method
used for the project. The choice of delivery method is the owner’s, but it has
an impact on the estimator’s approach and the scope of responsibility of the
contractor’s PM. Owners typically select project delivery methods based on
the amount of risk they are willing to assume and the size and experience of
their own in-house contract management staffs. In this section, we will
examine the four most common delivery methods that are used in the
United States.
The traditional delivery method is illustrated in Figure 3.1A. The owner
has two separate contracts with both the designer and the general
contractor. There is no contractual relationship between the designer and the
general contractor. Typically, the design is completed before the contractor is
hired in this delivery method. The contractor’s PM is responsible for
obtaining the project plans and specifications, developing a cost estimate
and project schedule for construction, establishing a project management
system to manage the construction activities, and managing construction.
This is the model we will use throughout this book.
In the agency construction management delivery method, the owner has
three separate contracts (one with the designer, one with the general
contractor, and one with the construction manager), as illustrated in Figure
3.1B. The CM acts as the owner’s agent or owner’s representative and
coordinates design and construction issues with the designer and the GC.
The CM usually is the first contract awarded and is involved in hiring both
the designer and the GC. In this delivery method, the general contractor
may not be hired until the design is completed. The general contractor’s PM
has similar responsibilities to those for the traditional delivery method.
Responsibilities of the key team members are discussed in the next chapter.
The primary difference is that the GC’s project manager interfaces with the
agency CM instead of the owner, as is the case in the traditional method.
The agency CM is sometimes referred to as the owner’s representative.
 Figures 3.1 Traditional, agency CM, and CMAR delivery methods

In the construction manager-at-risk (CMAR) delivery method, the owner

has two contracts (one with the designer and one with the construction
manager/general contractor). The organization chart for the CMAR delivery
method is very similar to that of the traditional delivery method except the
position of ‘GC’ is replaced with ‘CM’, as reflected in Figure 3.1C. This
delivery method is also known as the construction manager/general
contractor (CM/GC) delivery method. One difference between a traditional
GC delivery method and CMAR is a GC often employs some skilled
craftsmen such as carpenters and laborers to construct concrete foundations,
whereas the pure CM primarily employs subcontractors.
In the CMAR delivery method, the designer usually is hired first. The CM
typically is hired early in design development to perform a variety of
preconstruction services, such as cost estimating, constructability analysis,
and value engineering studies. The preconstruction process is described in
upcoming Chapter 5. Once the design is completed, the CM-at-risk
constructs the project. In some cases, construction may be initiated before
the entire design is completed. This is known as fast-track or phased
construction. The contractor’s PM and/or lead estimator interfaces with the
designer and manages the execution of preconstruction tasks. Once
construction starts, the PM’s responsibilities are similar to those in the
traditional method.
 In the design-build (D/B) delivery method, the owner has a single contract
with the design-build contractor for both the design and construction of the
project, as illustrated in Figure 3.2. The design-build contractor may have
design capabilities within its own organization, may choose to enter into a
joint venture (JV) with a design firm, or may contract with a design firm to
develop the design. Construction may be initiated early in the design process
using fast-track procedures or may wait until the design is completed. In this
delivery method, the contractor’s PM and/or lead estimator is often
responsible for interfacing with the owner and managing both the design
and the construction of the project. This method is very similar to the
ancient master-builder concept, where one individual was in charge of both
the design and construction. The integrated project delivery method (IPD),
as depicted in Figure 3.3, is a relatively new collaborative delivery concept
where all three prime parties sign the same agreement and share in the same
risks.

Figure 3.2 Design-build delivery method

 Figure 3.3 IPD delivery method

Procurement
Project owners procure contracts using either a bid or a negotiated
procedure. Public owners, such as government agencies, use public
solicitation or procurement methods. These owners may require potential
contractors to submit documentation of their qualifications for review before
being allowed to submit a bid or proposal, or the owners may open the
solicitations to all qualified contractors. The first method is known as
prequalification of contractors, and only the most qualified contractors are
invited to submit a bid or proposal. Private owners can use any method they
like to select a contractor. Private owners often use contractors they have
had good experience with in the past and may ask a select few or even only
one contractor to submit a proposal.

Bid method
Bid contracts generally are awarded solely on price. The owner defines the
scope of the project, and contractors submit lump sum bids, unit price bids,
or a combination of both. The project owner requests pricing with a vehicle
such as a request for quotation (RFQ) or invitation to bid (ITB). The owner
awards the contract to the contractor submitting the lowest total price for
the project. The pre-bid conference usually is held in the designer’s office or
at the project site to resolve any contractors’ questions relating to the project
or the contract. A lump sum contract may require a single price for the
entire scope of work or require separate prices for individual portions of the
scope of work. Some contracts may have separate additive or deductive
items that must be priced during the bidding process. These are known as
bid alternates. The owner selects which combination of additive and/or
deductive alternates to award once the bids have been opened. Bid
alternates, along with allowances, are discussed in Chapter 23. We will
assume the lump sum bid method throughout most of this book.

Negotiated method
Negotiated contracts are awarded based on any criteria the project owner
selects, especially if it is a private client. Typical criteria include cost (or fee
in the case of a cost-plus contract), schedule, expertise of the project
management team, plan for managing the project, contractor’s safety record,
contractor’s existing work load, and contractor’s experience with similar
projects.
Some negotiated contracts involve a two-step procedure. First, prospective
contractors are prequalified after review of their prior work experiences and
safety records. Then a short list of the most qualified contractors (generally
three to five) are invited to submit proposals containing project specific
information required by the project owner. This invitation is often issued
with a request for proposal (RFP). As a part of the evaluation procedure,
owners may require the proposed project management teams to brief their
plans for managing the project, often during a formal presentation or
interview. This may include preparation of a project schedule and budget.
The owner then selects the contractor submitting the best proposal and
negotiates a contract price. The pre-proposal conference is similar to the pre-
bid conference used in a bid procedure. The major difference in a negotiated
procedure is the opportunity for the owner to discuss the contractors’
proposals, modify contract requirements, and clarify any issues before
executing a contract. The owner selects the contractor submitting the best-
value proposal, which may not be the least cost.
Some owners use a more informal negotiating procedure, particularly if
they have long-term relationships with their contractors. A private owner
may simply ask one or a few contractors to submit proposals. After
reviewing the proposals, the owner would negotiate contract terms with the
selected contractor. The negotiated proposal is also discussed in Chapter 23.

Pricing
There are several methods for pricing contracts used in the construction
industry. The choice of which to use on a particular project is also made by
the owner after analyzing the risk associated with the project and deciding
how much of the risk to assume and how much to pass on to the contractor.
Contractors want compensation for risk they assume; the higher the risk, the
higher the price. The most common pricing methods include:

Lump sum,
Unit price,
Cost-plus fixed fee or cost-plus percentage fee, and
Cost-plus with a guaranteed maximum price (GMP).

These four primary pricing methods have similarities and differences with
the estimate types presented in the last chapter. Lump sum contracts are
awarded on the basis of a single lump sum estimate for a specified scope of
work. Unit price contracts are used on heavy civil or industrial projects
when the exact quantities of work cannot be defined. The designer estimates
the quantities of work, and the contractor submits unit prices for each work
item. The actual installed quantities required are multiplied by the bid unit
prices to determine the final contract price. Cost-plus contracts are used
when the scope of work cannot be fully defined. All of the contractor’s
project-related costs are reimbursed by the owner, and a fee is paid to cover
profit and home-office overhead. A GMP contract is a cost-plus contract in
which the contractor agrees not to exceed a specified cost. We will hold off
until Chapter 23 for a more detailed discussion of these other contract
pricing methods.

Contract agreement
The prime contract is the agreement between the GC or CM and the project
owner. It is a legal document that describes the rights and responsibilities of
the parties. Our focus here is on the prime contract agreement, but many of
the documents and processes described apply to subcontract agreements and
supplier purchase orders as well. Five things must be aligned for a contract
to exist:

An offer to perform a service,

An acceptance of the offer,
Some conveyance, that is transfer of a completed building for money,
The agreement has to be legal, and
Only authorized parties, for example the chief executive officer, can
sign the agreement.

The terms and conditions of the relationship of the contracting parties are
defined solely within the contract documents. These documents should be
read and completely understood by the contractor before deciding to pursue
a project and prepare a bid. They also are the basis for determining a project
budget and schedule. To manage a project successfully, the GC’s PM must
understand the organization of the contract documents and understand the
contractual requirements for his or her project. This should all be resolved in
steps 1 and 2 of the estimating process (Figure 1.1).
The contract documents describe the completed project and the terms and
conditions of the contractual relationship between the owner and the
contractor. Usually there is no description of the sequence of work or the
means and methods to be used by the contractor in completing the project.
The contractor is expected to have the professional expertise required to
understand the contract documents and select appropriate subcontractors or
qualified tradespeople, materials, and equipment to complete the project
safely and achieve the quality requirements specified. For example, the
contract documents will specify the dimensions and workmanship
requirements for elevated concrete slabs but will not provide the design for
required formwork or methods for temporary shoring or re-shoring. The
contract usually includes at least the following five essential elements. All of
these documents must work together.

The agreement,
Special or supplemental conditions,
General conditions,
Drawings, and
Specifications.

Contracts are either standard or specially prepared agreements. Most

government agencies use internally developed standard formats as
construction contract documents. Federal and state agencies typically have
standardized general conditions and agreement language. Many local
government agencies and private owners use contract formats developed by
the American Institute of Architects (AIA) or the new family of construction
contracts from ConsensusDocs headed up by the Associated General
Contractors. Contracts should not be signed until they have been subjected
to a thorough legal review. This is to ensure that the documents are legally
enforceable in the event of a disagreement and that there is a clear legal
description of each party’s responsibilities. The advantage of using standard
contract forms is that they have been developed by individuals skilled at
contract law and have been tested in and out of courts. The contract
documents have a significant impact on the responsibilities of the PM and
superintendent. Many requirements are contained in the general conditions,
but project-specific requirements are defined in the special conditions of the
contract.

Contract documents
For this discussion, we are assuming the reader already has had an
introduction to plan (or drawing) reading. This section is just a brief
refresher and shows the connection of these documents to the contract
agreement and the estimating processes.

Drawing types
The word ‘plan’ has many different connotations in construction. To ‘plan’ is
a broad term which means to look ahead or to anticipate what is coming,
which is a trait of construction leaders. Construction contractors develop
several ‘plans’ or preconstruction ‘plans’ in how they anticipate managing
the project. Preconstruction will be discussed in Chapter 5. The construction
schedule, or bar chart, is thought of as a ‘plan’ where the GC graphically
shows all of the construction activities, including their anticipated start and
completion dates. In the built environment we often use the term ‘planning
and scheduling’ to describe that process. Design drawings are generically
referred to as plans; a rolled up set of drawings will be called a set of plans.
But within that set of drawings there are actually ‘plan’ views, as well as
several other views. So for this book we will attempt to stay with the term
‘drawings’ to make that distinction.
Design disciplines: As indicated earlier, the master-builder used to be both
the designer and the builder. The design element then split off from the
building element, and contractors arose. The designer further split between
the architect and the engineer. Today there are several design disciplines that
have different specializations, but the architect is still the prime ‘designer’,
especially in commercial work. In civil work the civil engineer will be the
prime designer. Within a typical set of drawings, each design entity
contributes their respective sheets, and their documents all have different
letter prefixes to indicate their authors – for example, A for architect, S for
structural engineer, C for civil engineer, and many others.

Views or types of drawings

Also within that set of drawings there are a multitude of ‘views’. Some of
those are ‘plan’ views, but it would be too generic to call them all ‘plans’.
Each of the different design disciplines will include a variety of these views
as well.

Plan: Looking down,

Reflected ceiling plan: Looking up at the ceiling,
Exterior Elevation: Looking horizontally at the outside of the building,
Interior elevations: Looking at the inside walls,
Building sections: A vertical cut through the building,
Wall sections: A vertical section through just a wall,
Details,
Riser diagrams: Single-line mechanical and electrical drawings,
Rendering: Graphic representation,
Isometric or three-dimensional drawings, and
Piping and instrumentation diagrams.

A variety of schedules are included within the drawing set as well. These are
not the same as the contractor-generated time line schedule. These are often
Microsoft Excel spreadsheets. Some examples include:

Footing schedule, hold-down schedule, and shear wall schedule,

 Room finish schedule and door and hardware schedules,
Window schedule and wall type schedule,
Mechanical equipment, plumbing fixture, and light fixture schedules,
Landscape plant schedule, and others.

Drawings and specifications serve a variety of purposes for the client or

developer, designer, and contractor teams, including:

Pro forma (see Chapter 23), permit applications, bank loan approvals,
Basis for contract, communication and understanding with all parties,
and
Estimating and bidding.

Technical specifications
Similar to distinguishing between construction and contract documents, it is
worthwhile to clarify the difference between a project manual and a
specification book. The project manual is a larger document that includes the
technical specifications, but it can also include many other documents such
as:

RFP or RFQ or ITB;

Supplemental or special conditions;
General conditions (usually AIA A201 or public entity generated);
The contract agreement, such as A101, A102, ConsensusDocs, or home-
grown;
Addenda and bid form;
Subcontractor identification form and Davis-Bacon or prevailing wage
rates;
Geotechnical (soils) report and jobsite visit verification form; and
Room finish, light fixture, or plumbing fixture schedules.
The technical specifications define the products to be used along with
installation standards and quality control expectations. They do not define
the ‘means and methods’ of assembly, as this is up to the contractor. Up until
2004, the MasterFormat specifications had 16 major divisions, plus 00, which
were the special conditions, as represented in Figure 3.4.
A typical specification section number was a total of five digits, where the
first two digits were the division number; for example, section 06410 was the
specification section for wood cabinets and 06 was the CSI division number.
In 2004, an expanded MasterFormat was issued with up to 50 major
divisions. Some of these divisions are placeholders for when new products
and processes are popularized. Some of the significant differences between
the old 16 divisions and the new 50 divisions are as follows in Figure 3.5.

Figure 3.4 Previous 16 CSI divisions

 Figure 3.5 Current 50 CSI divisions

The new MasterFormat sections are six digits, such as 064023 is for
interior architectural millwork. Note that the division 06 is the same for both
versions in this instance. A few design firms are still using the prior 00–16
divisions; that is how their internal systems are set up, and that is how many
of their clients and contractors are accustomed to working. Eventually, all
will likely transfer over to the new 50 divisions. The estimating student
should be familiar with both and be prepared to see both on construction
projects in the foreseeable future.

Summary
There are four major project delivery methods used in the United States. The
primary differences among them are the relationships between the project
participants. Owners select contractors by one of two methods, bidding or
negotiating. The owner also selects the pricing method the contractors must
use to develop the bid or proposal, including lump sum, unit price, cost-plus
fee, or guaranteed maximum price. The construction contract describes the
responsibilities of the project owner and the contractor and the terms and
conditions of their relationship.
A thorough understanding of all delivery, procurement, pricing, and
contractual requirements is essential if an estimator and/or project manager
expects to prepare a competitive estimate and complete the project
successfully. Contracts are either standard or specifically prepared
documents. Standard contracts generally are preferred because they have
been legally tested in and out of courts. A particular project could utilize
many potential combinations of delivery, procurement methods, pricing,
contract formats, and construction organizations, which are introduced in
the next chapter.

Review questions
1 What is the difference between the traditional and the agency
construction management delivery method?
2 What is the difference between the construction manager-at-risk and
the design-build delivery method?
3 Why is it essential that an estimator fully understand the requirements
and procedures specified in the contract documents?
4 What five types of preconstruction ‘plans’ might a project manager or
estimator or superintendent prepare during the preconstruction phase,
especially as it relates to (A) contract development and (B) estimating?
5 List three items/documents included in a project manual beyond the
technical specifications.
6 What is the difference between ‘general’ and ‘special’ or ‘supplemental’
conditions?
7 Which design entities/firms prepare ‘plan’ views?
8 Who should sign a contract, and why them?
9 What are the procurement, pricing, and contracting methods chosen by
the owner for the book’s case study project?
Exercises
1 Utilizing an outside case study project, draft one or two sentences each
describing the project’s delivery, procurement, pricing, and
construction organization.
2 Who assumes risks associated with design errors, unforeseen site
conditions, cost control, schedule control, quality, and safety with
respect to (A) traditional delivery method and (B) IPD delivery
method?
3 Obtain a blank copyrighted contract format such as an AIA A101.
Complete the contract for the book’s case study project or another
outside project. Make whatever assumptions are necessary.
4 Research a material item or two, such as hollow metal door frames or
carpeting or plumbing fixtures or storm system catch basins, and look
up the prior CSI specification division and section number (five digits)
and the new numbers (six digits).
5 If you were a GC PM and could assemble any combination of delivery,
procurement, and pricing methods and contract format from this
chapter, along with organization styles from upcoming Chapter 4, what
would you choose, and why?
6 Prepare a spreadsheet comparing types of estimates presented in the
last chapter and the pricing methods discussed in this chapter. Which
ones go with which, and what are the similarities and differences?
7 Add procurement methods and contract types to the spreadsheet
prepared in Exercise 6. Which ones are the most common matches?
8 Which firm pays for post-bid document discrepancies in a design-build
delivery method?
4 Introduction to construction
project management

Introduction
This chapter and the last have been included in Construction Cost
Estimating to provide a brief overview and introduction to current
construction management delivery and contracting processes. In the last
chapter we described how project owners choose delivery methods,
procurement and pricing choices, and contract forms. In addition to other
aspects of construction project management, in this chapter we discuss
construction organizations, team member responsibilities, subcontracting
strategies, subcontractor prequalification, and risk assessment.

Introduction to project management

Project management is the application of knowledge, skills, tools, and
techniques to the many activities required to complete a project successfully.
In construction, project success generally is defined in terms of document
control, safety, quality, cost control, and schedule control. These project
attributes can be visualized as depicted in Figure 4.1. The project manager’s
(PM’s) and superintendent’s challenge is to balance quality, cost, and
schedule within the context of a safe project environment while maintaining
control of the many construction documents. While cost and schedule may
be compromised to produce a quality project, there can be no compromising
regarding safety, and proper documentation is required to ensure
compliance with contract requirements.
In this book, we focus on the estimating activities of a general
contractor’s (GC’s) lead estimator, which may also be the project manager
assigned to the project if the bid or proposal is successful. Other estimators
and PMs typically are involved in a project representing the owner and the
designer, but our focus is on the knowledge, skills, tools, and techniques
needed to be successful as a PM for a prime construction contractor. Our
context will be that of an estimator and/or PM for a commercial GC. The
principles and techniques discussed, however, are equally applicable on
residential, industrial, infrastructure or heavy civil construction projects,
and for specialty subcontractors.
The project manager is the leader of the contractor’s project team and is
responsible for identifying project requirements and leading the team in
ensuring that all are accomplished safely and within the desired budget and
time frame. To accomplish this challenging task, the PM must organize his
or her project team, establish a project management system that monitors
project execution, and resolve issues that arise during project execution. In
the previous chapter, we introduced contracting and other delivery and
procurement methods the PM and estimator must operate within. In
successive chapters, we will discuss the many tools that a PM and lead
estimator will utilize in development of a complete project estimate. In our
last chapter (Chapter 24) we introduce several project management
applications which rely on a properly prepared construction cost estimate.
They may not apply to every project, but the project team must select those
that are applicable for each project.
 Figure 4.1 Project management attributes

Construction organizations
The size and structure of a contractor’s jobsite construction organization
depends on the size of the project, its complexity, and its location with
respect to other projects or the contractor’s home office. The cost of the
project management organization is considered jobsite overhead and must
be kept economical to ensure the contractor’s cost is competitive with other
contractors. The jobsite overhead costs are also referred to as indirect or
general conditions costs. The goal in developing a project management
organization is to build the minimum organization needed to manage the
project effectively. If the project is unusually complex, it may require more
technical experts, such as a jobsite cost engineer or specialty
superintendents, than would be required for a simpler project. If the project
is located near other projects or the contractor’s home office, technical
personnel can be shared among projects, or backup support can be provided
from the home office. If the project is located far from other contractor
activities, the jobsite office must be self-sufficient.
General contractors typically organize their project management teams in
one of two models. In one organizational concept, estimating and scheduling
are performed in the contractor’s home office, as illustrated in Figure 4.2. In
an alternative organizational structure, estimating and scheduling are the
PM’s responsibilities, as illustrated in Figure 4.3. Notice how the function or
position of estimating or estimator is different between these two
organizational styles. The choice of organizational structures depends on the
contractor’s approach to managing projects. The officer-in-charge is the PM’s
and estimator’s supervisor. He or she may have various titles, as described in
what follows.

Figure 4.2 Home office staff organization chart

 Figure 4.3 Project-based organization chart

Project team member responsibilities

Individual team member responsibilities may vary from contractor to
contractor and from project to project, but in general they are as described
here. The officer-in-charge (OIC) is the principal official within the
construction company who is responsible for construction operations. He or
she generally signs the construction contract and is the individual to whom
the owner turns in the event of any problems that need escalated attention.
This individual may carry the title of vice president for operations, chief
operations officer (COO), project executive, senior project manager, or chief
executive officer or may be the construction company owner.
The project manager has overall responsibility for completing the project
in conformance with all contract requirements within budget and on time.
He or she organizes and manages the contractor’s project team. Specific
responsibilities of the PM include:
 Coordinating and participating in the development of the project
budget and schedule;
Developing a strategy for executing the project in terms of what work
to subcontract;
Leading buyout activities with best-value subcontractors and drafting
subcontract agreements;
Negotiating and finalizing contract change orders with the owner and
subcontractors;
Scheduling and chairing meetings;
Submitting monthly progress payment requests to the owner; and
Managing project close-out activities.

If the PM is also assigned as the project estimator for the bid or proposal, his
or her duties will be similar to those of the estimator, as described later. But
if they are in a support role, the PM will assist the chief estimator by
attending the pre-bid meeting, quantity take-off (QTO) creation, pricing
recapitulations, subcontractor identification, general conditions estimate,
and many of the bid day activities. The PM will report to the OIC or COO.
The superintendent is responsible for the direct daily supervision of
construction field activities on the project, whether the work is performed
by the contractor’s direct employees or craftsmen employed by
subcontractors. Specific responsibilities of the GC’s project superintendent
include:

Developing and updating the detailed construction schedule;

Determining the construction building means and methods and work
strategies for work performed by the contractor’s own work force;
Managing falsework choices (formwork and scaffold) and for selecting
and directing hoisting operations;
Planning, scheduling, and coordinating the daily activities of all
craftspeople working on the site;
 Ensuring all work conforms to quality expectations included in the
contract requirements; and
Ensuring all construction activities are conducted safely.

During estimate creation, the superintendent may also assist by visiting the
jobsite during the pre-bid meeting, developing QTOs for direct work,
generating subcontractor interest, planning manpower, scheduling
development, and reviewing the jobsite general conditions estimate. The
superintendent may also report to the COO or a general superintendent.
The project engineer (PE) or field engineer is responsible for resolving or
coordinating any technical issues relating to the project. On small projects,
the project engineer’s responsibilities may be performed by the project
manager. On large projects there may be multiple PEs. There may also be a
jobsite cost engineer or accountant. Specific PE responsibilities include:

Processing submittals and requests for information and maintaining

associated tracking logs;
Preparing subcontract documents and correspondence and maintaining
the contract file;
Supporting the superintendent and foremen with material purchase and
expediting, cost control work packages, documentation support, and
foremen and safety meeting notes; and
Reviewing and processing subcontractor invoices and requests for
payment.

During estimate development, the PE can also assist with QTOs, calling
subcontractors, and taking bids on bid day or potentially running the bid in.
The foremen are responsible for the direct supervision of the craftsmen on
the project. The construction firm will assign foremen for work that is
performed by the company’s own construction workers. Foremen for all
subcontracted work will be assigned by each subcontractor. Specific
responsibilities of GC direct craft foremen include:
 Coordinating the layout and execution of individual trade work;
Verifying that all required tools, equipment, and materials are
available; and
Preparing daily time sheets for all direct craft personnel.

Home office staff specialists: Depending upon the size of the construction
firm, there may be many people in the home office who are experts in one
facet of the business or another who will support all of the jobsite teams.
This includes functions such as marketing, accounting and human resources.
As it relates to estimating, the following specialists may support the jobsite
team either in initial estimate preparation and/or support throughout the
estimating cycle:

Chief estimator and/or staff estimator,

Staff scheduler,
Quality control officer,
Safety officer, and
General or specialty superintendents such as concrete or structural
steel.

The chief estimator or project estimator assigned to the bid or proposal, if

not the PM, will be responsible for leading the GC’s estimating team. Similar
to the PM, the estimator reports to the COO or OIC. Responsibilities are
discussed throughout this book and would include:

Schedule the estimate and assign responsibilities to the estimate team,

Work breakdown structure,
Quantity take-offs for risky areas of work, such as structural steel,
Direct work pricing recapitulations,
Jobsite general conditions estimate,
Recommendations for markups, and
Setting up and management of the bid room on bid day.
Subcontracting plan
In Chapter 1, we introduced an alternate work breakdown schedule called a
project item list. This document allows the estimating team to forecast what
work will be self-performed by the GC’s direct craftsmen and what will be
subcontracted. Most of the choices of which work to self-perform versus
subcontract are straightforward. For example, the GC will typically not
perform plumbing or electrical work. But choices for other scopes such as
rebar placement, concrete slab finishing, structural steel installation, and
rough carpentry may not be made until bid day.
In the past, GCs may have performed 50% of the project scope with their
craftsmen employees, but today self-performance is down to only 10% to
20% of the project scope for most commercial contractors. Industrial
contractors employ more types of craftsmen than commercial contractors do
and perform a larger percentage of construction projects with their own
crews. Only a few residential custom builders employ any craftsmen; many
subcontract almost 100% to trade specialists. Because a typical commercial
GC subcontracts 80% to 90% of the construction project scope,
subcontractors, also referred to as specialty contractors, are important
members of the GC’s estimating and project delivery team and have a
significant impact on the GC’s success or failure. A GC cannot be successful
without its subcontractors also achieving success. Since subcontractors have
such a great impact on the overall quality, cost, schedule, and safety success
for a project, they must be selected carefully and managed efficiently. There
must be mutual trust and respect between the GC and the subcontractors,
because each can achieve success only by working cooperatively with the
other. Consequently, estimators, PMs, and superintendents find it
advantageous to develop and nurture positive, enduring relationships with
reliable subcontractors. General contractors need to treat subcontractors
fairly to ensure they remain financially solvent, not only to finish this
project but to be available to provide competitive bids on future projects.
The use of subcontractors by the prime contractor is a risk management
process. Subcontractors provide the GC with access to specialized skilled
craftsmen and equipment that they may not have in-house. One of the
major risks in construction is accurately forecasting necessary manpower
and associated cost of labor required to build a project. By subcontracting
significant segments of work, the GC can transfer much of that cost risk to
its subcontractors. When the estimator asks a subcontractor for a price to
perform that scope of work, the subcontractor bears the risk of properly
estimating the labor, material, and equipment costs. Craftsmen experienced
in the many specialized trades required for major construction projects are
expensive to hire and generally are used on a project site only for limited
periods of time. It would be cost prohibitive for a GC to employ all types of
skilled trades as a part of their own full-time work force.
The PM and project superintendent should play an important role with
critical decisions whether to subcontract work out or to perform it with their
own direct labor forces. Some of the advantages and disadvantages in
performing work direct versus subcontracting are listed here:

The GC’s jobsite team may be able to control the schedule and achieve
safety goals better with their direct craft labor.
The project superintendent may argue that his or her craftsmen can
build it better with enhanced attention to quality control, but if the
subcontractor performs the work and rework is required, that is the
subcontractor’s responsibility.
If subcontracted, the subcontractor is liable for cost overruns.
Conversely, if performed direct, and the estimate is underrun, the GC
can improve its fee potential.
Subcontractors have access to specialized craftsmen and specialized
equipment.
It may be an owner contract requirement to subcontract work.
Employing subcontractors improves a GC’s cash flow position because
the subcontractors are not paid until the GC is paid and retention is
held on subcontracted work until close-out is complete. The GC does
not withhold retention from material suppliers or their own craftsmen’s
wages.
On negotiated projects, the GC has an opportunity to prequalify select
subcontractors and provide them with detailed requests for proposal or
quotation, which tells subcontractors exactly what to price. But on public
lump sum projects, oftentimes, any subcontractor can provide a bid, and it
may be difficult for the GC to analyze which companies have provided
complete prices and are qualified to perform the work. Regardless if the
project is negotiated or bid, it is recommended that the GC develop pre-bid
day subcontractor order of magnitude plug estimates so that they are better
prepared to analyze quotations once received. Subcontractor plug estimates
are discussed in Part IV of this book. In the next chapter we dive deep into
preconstruction planning. There are many elements the PM, superintendent,
and estimator contribute to the preconstruction plan, including their
approach to subcontracting.

Subcontractor selection
Once the GC is notified of the owner’s intent to award a contract, a separate
buyout meeting is held with each potential subcontractor and supplier
before also awarding them the work. The project team should share prior
project experiences with the estimator during subcontractor buyout so that
only the best-value subcontractors are awarded work on this project or
solicited for pricing on the next project. Some of the issues to be covered in
the buyout meeting include:

Compare the subcontractor’s list of inclusions and exclusions ahead of

time with the other bidders. Go through their list at the meeting to
make the scope as comprehensive as possible.
Make sure there are no scope gaps, no scope overlaps, and no conflicts.
Did the subcontractor receive and understand all addenda?
Make sure that this subcontractor has picked up all work that will be
signatory to their crafts. For example, all plumbing work on the project
should be awarded to the plumbing subcontractor.
 Slowly leaf through the drawings and review each relevant detail: “Is
this work included?” An “I bid it per plans and specifications” response
from the subcontractor is not sufficient; the GC’s project team needs to
dig deeper.

It is imperative that the PM and superintendent select quality best-value

subcontractors if they are to produce a quality project, on time, safely, and
within budget. The jobsite management teams must remember that poor
subcontractor performance will reflect negatively on their professional
reputations and their ability to secure future projects from project owners.
In addition, a subcontractor with a bad attitude can be contagious.
General contractors who take pride in treating subcontractors with a
heavy hand will not retain loyalty and success in the long run. A GC does
not necessarily want a subcontractor to make a fortune on any one project,
especially at the GC’s expense, but they should want the subcontractor to
make a fair profit so that they will be around for the next project. This is a
collaborative and not a top-down approach to subcontracting.
Subcontractors make up 80% or more of the workforce, and it is difficult to
have a successful team if you are not including that 80%.
In addition to prequalification and selection of best-value subcontractors,
the GC’s project team continues with management of subcontractors during
physical construction, project close-out, and warrantee management. These
are all PM topics, many of which are introduced in Chapter 24.

Risk assessment
Construction is a risky business, as evidenced by the high number of
construction firm failures each year. To minimize the potential for financial
difficulty, a contractor should analyze each potential project to determine
the risks involved and whether or not the potential rewards justify
acceptance of the risk exposure. The sources of estimating risk on a project
are extensive, as shown in Figure 4.4. The contractor needs to forecast the
likelihood of such risks, the range of possibilities, and the impact of each on
the contractor’s ability to complete the project profitably. Many of these
risks are owner-risks, but depending on contract language, they may also be
imposed on the construction team. Before the estimator begins any of the
hard work of taking off material quantities, the risks must be assessed by the
GC’s project team.
Selection of risk management strategies involves selection of the
appropriate response to each of the identified risks. Internal risks must be
identified also, and appropriate management strategies selected. The three
most common internal risks are unrealistic cost estimates, unrealistic
construction schedules, and ineffective project management, including cost
and schedule control, material management, and subcontractor coordination.
Contractors must adopt strategies to minimize the potential of these
problems occurring. Often the basic issue to be addressed is the selection of
qualified people to manage the project, particularly the PM and
superintendent.
The greatest risk in developing a cost estimate is estimating the
productivity of direct craft workers. This is where an experienced estimator
has a great advantage. Other risks involve failure to include some element of
work or double counting another element of work. To minimize the
potential for making errors when developing an estimate, the estimator
should:

Rely on good estimating practices and procedures;

Choose good in-house project management and supervision teams not
only to manage the project but also to assist with the estimating;
Choose qualified or best-value subcontractors and suppliers;
Plan to build the project in less time than specified in the contract to
save jobsite overhead expenses; and
Be selective on which projects are chosen to bid. Familiarity with the
client, designer, and building location and project type are important.
 Figure 4.4 Potential estimating risks

The output of a risk assessment is a decision whether or not to pursue a

project. If the construction team decides to proceed with an estimate, the
amount of contingency to include in the bid or cost proposal, whether or not
to joint venture (JV) with another firm, the portions of work to subcontract,
and the type and amount of insurance to purchase must be factored before a
final price is submitted.
Construction is a risky business, and estimators and PMs must carefully
assess the risks associated with each prospective project. Once the risks have
been identified, risk management strategies must be developed. In some
cases, the risks can be mitigated by obtaining a JV partner or hiring
subcontractors. In other cases, the risks are too great, and the project should
not be pursued.

Summary
Contractors establish separate project management organizations to manage
construction activities on each individual project. The project team typically
consists of a project manager, superintendent, project engineer, foremen for
self-performed work, and home office specialists such as estimators and
schedulers, depending upon project size and complexity. The contractor’s
project manager is the leader of the jobsite management team. He or she is
responsible for managing all the activities required to complete the job on
time, within budget, and in conformance with quality requirements
specified in the contract. The PM may take the point on development of the
initial estimate, or this may be accomplished by the chief estimator.
Subcontractors make up 80% to 90% of the construction workforce on
most commercial construction projects. In order for the GC to be successful
in any aspect, be it cost, schedule, quality, and/or schedule, the
subcontractors must also be successful. The GC’s project team should
develop a subcontracting plan, because they are estimating the project, and
build upon that plan during subcontractor prequalification and selection of
best-value subcontractors. Subcontractor management continues into buyout
and throughout all construction phases, including contract close-out.
Any contractor, GC, CM, or subcontractor contemplating to bid or
propose on a construction project must go through a thorough risk-
assessment process. If a project is deemed too risky, the contractor should
pass on the opportunity. If a decision is made to pursue a proposal, the
contractor will make necessary adjustments in its fee and contingency, as
will be discussed in Chapters 18 and 19.
Review questions
1 How do the responsibilities of the project manager differ from those of
the project superintendent?
2 List these positions in order of who reports to whom: General
superintendent, apprentice, project superintendent, COO, general
foreman/assistant superintendent, journeyman, and helper.
3 List these positions in order of who reports to whom: Senior project
manager, OIC, PM, PE, and intern.

Exercises
1 As a PM or PE or estimator, would you prefer to work on a project-
based or a home office staff organization, and why that choice? Assume
for this exercise that even with a jobsite organization, the construction
still has a staff estimator for support.
2 Draw an organization chart for an outside case study including all of
the companies and team members discussed here and
whatever/whomever else you feel would be necessary to adequately
staff the job.
3 Draw an organization chart of a project you have worked on.
4 Which of the project attributes in Figure 4.1 is (A) the most important
to the project stakeholders (owner/designer/GC/subcontractors/city),
and, conversely, (B) which is the least important to the project
stakeholders (owner/designer/GC/subcontractors/city)?
5 What are the advantages of (A) a staff estimator taking the point on
development of a project estimate over a PM or, conversely, (B) a PM
taking the point on the estimate in lieu of a staff estimator?
6 List at least three estimating activities a PE can be involved with in
development of a project estimate.
7 List at least three estimating activities a project superintendent can be
involved with in development of a project estimate.
8 Why should the PM and the superintendent be directly involved with
preparing the project estimate and schedule?
9 Which of the project attributes shown in Figure 4.1 can be eliminated
and still consider the project successful?
5 Preconstruction

Introduction
Construction projects do not just simply start and end, but rather they have
many clear and defined steps or phases. The major phases of a construction
project include:

Planning or preconstruction,
Start-up,
Controls: Cost, schedule, quality, safety, document control, and others,
Close-out, and
Post-project analysis.

During the planning phase, the general contractor’s (GC’s) project manager
(PM) and estimator evaluate the risks that are associated with the project,
particularly those related to safety, cost, quality, and schedule. Risk analysis
and risk management are critical skills essential to successful project
management and were introduced in Chapter 4 and will also be elaborated
on in Chapter 18 regarding estimating markups. The PM develops the
organizational structure needed to manage the project and the
communications strategy to be used within the project management
organization and with other project stakeholders. Material procurement and
subcontracting strategies also are developed during the planning phase.
Our specific focus in this chapter is on preconstruction (precon).
Preconstruction for the project owner includes everything from property
purchase and entitlements to early pro forma estimates and assembling the
design and construction teams. In addition to the design team’s preparation
of design documents during precon, they also are involved in zoning
analysis and permit applications. There are essentially unlimited aspects of
preconstruction, but we feel we have captured those most important for the
construction project manager, estimator, and preconstruction team. Our
discussion in this chapter includes:

The preconstruction phase;

Preconstruction services including estimating, scheduling,
constructability review, value engineering (VE), early bid packages, and
early quality and safety control planning;
Preconstruction contracts; and
Preconstruction fees or costs.

Estimating is not the primary focus of the construction team during the
other four phases of a construction project, as listed here. But each of these
other phases utilize the estimate and impact other future estimating aspects,
as will be discussed in the last two chapters of this book.

Preconstruction phase
So when does the preconstruction phase occur? Obviously, it occurs ‘pre’ the
construction phase as shown here.

How long does preconstruction last? Well, like the answer to most
questions, that depends. We have seen preconstruction last as short as a
month or two and as long as two years. Now the more important question:
What is done during the preconstruction phase? That answer is quite long
and is owner, architect, general contractor, and project specific. We have
again included here what we feel is most relevant for the PM and estimator.
The most obvious activity that occurs during precon is to have the project
designed. The role of the design team is to prepare construction documents
for the contractors to the build the project. The major phases of design
include:

Conceptual design or programming,

Schematic design (SD),
Design development (DD), and
Construction documents (CDs).

Not every project experiences a conceptual design, because many owners

and architects ‘know’ what they want to build and proceed more quickly
into the SD stage. Although the American Institute of Architects (AIA) has a
general definition of what occurs during these distinct design phases, they
are again project and project-team dependent and often overlap.
Preconstruction for contractors can occur any time during the
preconstruction phase as diagrammed here. When (or if) a GC becomes
involved in preconstruction depends upon the project owner and the lead
designer and the type of project. A simple project that may be bid lump sum
under a traditional delivery method likely may not have any role for a
contractor during preconstruction, especially if the owner is a government
agency. A complicated project such as a hospital may involve the contractor
very early during the design process, possibly at the end of SDs. When
would contractors like to be involved in preconstruction? As early as
possible!
Project owners may engage either a general contractor or construction
manager (CM) or a preconstruction services contractor or consultant to
work during this phase. On some public projects, jurisdiction dependent, the
owner may be required to engage a preconstruction agent who will not end
up being the construction contractor. Private negotiated project owners have
complete freedom whether to engage a preconstruction agent or not, often
with guidance from its architect. Preconstruction services provided by a GC
are more prevalent on privately funded projects than they are on public
projects. This is because private owners are not restricted to the public
bidding procedures that are required of many public owners. For the balance
of this chapter’s discussion, let’s assume that a private owner has chosen to
engage a GC to perform preconstruction services with full support of the
project architect. Let us also assume that by participating in precon, the GC
has not eliminated itself from the possibility of becoming the construction
contractor – this being the case with many public projects.

Preconstruction services
The project owner may choose to select the construction contractor during
the development of design and ask the contractor to perform
preconstruction services. For contractors, this involves attending design
coordination and review meetings and providing advice regarding the use of
materials, systems, and equipment and cost and schedule implications of
design proposals. It is customary to have weekly or twice-monthly
preconstruction meetings, often chaired by the architect, which include
agendas and action items and meeting notes, very similar to the weekly
owner-architect-contractor meeting that occurs throughout construction of
most projects, regardless of type. The GC’s PM or estimator may also offer to
chair preconstruction meetings. Owners often hire GCs or CMs to perform
preconstruction services to provide construction expertise during the DD
phase to optimize cost, schedule, and constructability input prior to bidding
and during construction. These services may include:

Preliminary budgeting or estimating;

Precon activity scheduling and preliminary construction scheduling;
Constructability analysis;
Value engineering;
 Early release of subcontractor and supplier bid packages to facilitate
long-lead material procurement; and
Planning, including development of project-specific quality control
(QC) and safety control plans, jobsite layout plan, traffic plan,
environmental protection plan, and others.

Each of these six areas is expanded here. As indicated in our introduction to

this chapter, there are numerous functions a precon agent or contractor may
assist with. Experienced contractors may also participate in a variety of
more-advanced preconstruction services such as:

Sustainability planning;
Design document quality control reviews;
Management of the design team;
Material recommendations and selections, including mechanical and
electrical systems;
Permit coordination and expediting;
Lean processes such as target value design (TVD) development and
management; and
Other cost-related considerations such as cash flow predictions and life
cycle cost analysis.

Budget estimating
One of the main preconstruction contributions the GC makes is with early
budgeting. The project owner needs to know approximately (within 10–20%
accuracy) what the project will cost before they commit financial resources
to progress the design to the next phase. Preliminary cost estimates are
developed using conceptual cost estimating techniques and refined as the
design is completed to ensure the estimated cost of the project is within the
owner’s budget. Some architects used to provide early budgets to the owner,
but now most rely on estimating consultants or contractors. One of your
authors is a former contractor, and our bias is that contractors provide the
most accurate estimates of anticipated construction costs. The contractor
knows what each item in the last project cost (see as-built estimates in
Chapter 23) and has access to current subcontractor and supplier market
pricing, even during early design and budget development. Subcontractors
want to assist the GC in hopes of having an opportunity to either negotiate
or bid the project once the design is completed. By providing early budgets,
subcontractors are at least guaranteeing themselves the opportunity to be on
a short list of bidders.
The quantity of budgets (one, two, three, or more) produced by the
construction/estimating team should be defined in the preconstruction
contract, as discussed later. It is customary for the GC to produce a budget
after completion of each of the design phases. Once the DD drawings are
finished, the GC will take three to four weeks and develop as detailed an
estimate as possible. This estimate will be presented to the owner and design
team with a list of changes from the prior budget and a list of
recommendations to enhance the design either for constructability or cost
savings. The owner will then approve the budget and the design team
progresses to the next level of design, in this case, CDs.
Often the contractor will maintain a budget options log throughout the
design process, which is very similar to the value engineering (VE) log
discussed later. The owner and architect may ask the GC to price options or
propose changes in the design at each of the weekly design meetings. In this
manner, everyone is kept as up to date as possible with design progression
and will not be surprised with large budget swings at the next formal design
submission.
The contractor also has an incentive to develop detailed and accurate
budgets, even if the design is not yet complete, and make them as true as
possible. A construction contractor is not solely in the business of
performing preconstruction services; rather, their end goal is to attain a
construction contract on this project. The best way for them to do so is to be
cooperative team players and produce accurate budgets with minimal
swings in value, that is, no surprises when the final budget, which is often a
guaranteed maximum price (GMP), is presented.
 Target value design is an early cost control method of lean construction.
The concept of TVD is to establish a project budget first, such as $50 million,
and then design to the budget. Each of the major elements of the project,
such as foundations, roofing, windows, electrical, and others, are assigned a
portion of the budget; for example, elevators may be budgeted at $1,260,000.
Essentially, each of the major work areas is akin to a piece of the pie as
represented in Figure 5.1. Then during the course of design if an element
exceeds its budget, say elevators are now $1,400,000, then another element
must be reduced such that the total budget, or the pie, stays the same size.

Figure 5.1 Target value design

Scheduling
Production of construction schedules follows the same course as production
of budget estimates. The more detailed the design is, the more detailed and
accurate the schedule will be. A preliminary construction schedule may be
developed to assess the time impacts of design alternatives. In addition to
scheduling the procurement and construction activities, the
contractor/scheduler will also offer to incorporate design and permit
activities into their schedule. Some of the types of construction schedules
contractors prepare include:

Preconstruction activities schedule, including design and permits;

Detailed construction schedule or contract schedule;
 Summary schedule; also may be the contract schedule;
Three-week look-ahead schedules;
Subcontractor, area (floor or wing), pull planning, and phased mini-
schedules.

The final construction or contract schedule will not be prepared until the
final set of drawings is issued. Ideally the complete and final cost estimate
will have been prepared, which includes direct labor hours for the GC’s crew
and firm subcontractor prices or quotes. Once the subcontractors have been
selected, they also will input to the GC’s schedule. The contract schedule is
one of many CM products produced from the construction estimate, as
discussed in Chapter 24.

Constructability review
One important contribution contractors make during the preconstruction
phase is to review progress drawings from the design team and comment
and make suggestions regarding their ‘constructability’. This is not to say
that the design team’s documents are not constructible, but rather, can they
become more constructible or easier to build? Constructability analysis
involves reviewing the proposed design for its impact on the cost and ease of
construction. These proposals are often as simple as changing a welded
structural steel connection to bolted, which can be assembled in the field
faster and safer, or having steel gusset plates welded on to the columns in
the fabrication shop rather than in the field, which is also safer and ensures
better quality control. An example with wood framing is to change
dimensional lumber to engineered lumber, which will be straighter and not
shrink. A popular change with wood-framed mixed-use development
apartment buildings today is to have the wall and floor systems ‘panelized’
and built in a fabrication shop, which improves quality and enhances the
schedule. These prefab panels are then flown in with a tower crane and
connected with fewer field connections. Many of these types of changes save
cost but not all. Some constructability changes may actually increase cost,
but improve the schedule, quality, safety, energy efficiency, and/or long-term
building maintainability.
Along these same lines, the construction team acts as another set of eyes
and helps edit or QC the drawings. The GC can help mitigate potential
subcontractor change order opportunities while reviewing progress
drawings. Most designers are not keen on contractors finding errors in the
drawings during the construction process and drafting requests for
information (RFIs) followed by change order proposals (COPs), but they are
often appreciative of the GC when errors are corrected before the documents
have been let to subcontractor bids.

Value engineering
The value engineering process involves a systematic evaluation of a project
design to obtain the most value for the cost of construction. It includes
analyzing selected building components to seek creative ways of performing
the same function as the original components at a lower life cycle cost
without sacrificing reliability, performance, or maintainability. Value
engineering studies may be performed by consultants during design
development, as a contractor-performed preconstruction service, or by the
GC during construction. The most effective time to conduct such studies is
during early design development. Some lump sum construction contracts
may contain a VE incentive provision that allows the contractor to share in
the savings that result from approved value engineering change proposals.
Value engineering studies are conducted to select the highest value design
components or systems. The essential functions of each component or
system are studied to estimate the potential for value improvement. The VE
study team needs to understand the rationale used by the architect and their
team in developing the design and the assumptions made in establishing
design criteria and selecting materials and equipment. The intent of VE is
first to develop a long list of alternative materials or components that might
be evaluated, often through a brainstorming process. Preliminary cost data is
generated, and functional comparisons are made between the alternatives
and the design components being studied. The intent is to determine which
alternatives will meet the owner’s functional requirements and provide
more value to the completed project. Estimated life cycle cost data is
developed for each alternative. The advantages and disadvantages of each
alternative are identified, and the ones representing the best value are
selected for refinement in preparation of presentation to the architect and
the owner.
The final step is the preparation of formal value engineering proposals.
The VE proposal looks very similar to a post-contract change order proposal,
including all detailed costs and markups and substantiation. Detailed
technical and cost data that is developed to support the recommendations
should be included. The advantages and disadvantages of each
recommendation are described. Each VE proposal is tracked in a log, similar
to other document control or tracking logs managed by the construction
team, including RFIs, submittals, COPs, and close-out documentation. The
VE proposals are submitted to the designer and the owner for approval. If
approved, the proposals are incorporated into the design. Value engineering
proposals approved after the construction contract is awarded must be
incorporated into the contract by formal contract change order. The
preparation of change order estimates is also introduced in Chapter 23.
To some, VE may appear the same as TVD, but there are differences.
Target value design establishes the budget up front, and each of the design
disciplines are tasked to design within their share of the budget. Value
engineering happens after some or all design is completed, which requires
redesign. Lean construction is focused on minimizing waste, and re-design
to some extent is a wasted effort.

Early release of subcontractor and supplier bid packages

An additional service a general contractor brings to the preconstruction
team is the ability to solicit pricing from long-lead material subcontractors
and suppliers. General contractors rely on positive long-term relations with
these companies to receive this valuable early input. Some of the
subcontractors or suppliers the GC estimator may engage early include:

Elevators,
Curtainwall,
Mechanical equipment,
Electrical equipment, including switchgear and emergency generators,
Laboratory equipment and casework, if applicable,
Concrete reinforcement steel,
Structural steel, and others.

Ideally the contractor will not issue subcontracts or purchase orders until it
has also received a contract from the owner. But sometimes these long-lead
items must be ordered before that can happen. Some vendors will accept
letters of intent (LOI), which may offer financial reimbursement for early
submittals and shop drawings and a promise of a forthcoming construction
contract if the project proceeds as planned. If a financial commitment has to
be made to a supplier, then a similar commitment will need to be made from
the owner to the contractor and incorporated into the precon fee and
contract, as discussed later.

Planning
The term ‘planning’ has many different connotations in construction. There
are many drawings produced by just about every different design discipline
that are ‘plan’ views, or looking down on the building or site; those were
discussed in Chapter 3. We go through a planning phase to produce the final
construction schedule, which includes evaluation of logic and deliveries and
manpower. This chapter focuses on the preconstruction plan. Presented here
are just a few other plans that contractors may prepare as part of their
preconstruction services.
Very similar to the constructability review, early quality control planning
can have significant impacts on the contractor’s ability to meet schedule and
cost goals. Contractors can input to early design development documents
regarding their ability to meet the client’s and architect’s intentions. It is
important that the QC plan is project specific and not generic. It should
include items such as prequalification of subcontractors and suppliers,
preconstruction meetings with subcontractors and suppliers, submittals and
mockups, inspectors and inspections, and early in-process punch lists.
Development of an active – not passive – safety plan is also a
preconstruction activity. Passive safety (and quality) efforts involve fixing
problems after accidents occur. A proactive plan prevents issues from
happening. Some considerations the safety plan will address involve full-
time safety inspectors, prequalifying subcontractors, Monday morning
safety meetings, personal protective equipment requirements in subcontract
agreements, and changing building design to make it safer to build. An
example is raising a roof parapet just a few inches such that those craftsmen
working on the roof both during construction and after would not need to
be tied-off or require spotters. Another example is including shop-welded
gussets on columns with eye-holes in them allowing cables to be strung
serving as tie-offs and guard rail while the structural steel is being erected.
The superintendent does not wait until day one of construction to plan his
or her site logistics. A jobsite layout plan will be developed during
preconstruction that will consider material laydown or staging, site access
and traffic flow, crane locations, dumpster and trailer locations, storm water
control, and others. The superintendent is the proper person to develop this
plan, as it is his or her site to manage. The site logistics plan for the
industrial case study project is included on the book’s eResources. There are
many contributions the superintendent can make throughout the
preconstruction process. An expanded discussion of the role of the project
superintendent, both during preconstruction and throughout construction, is
included in Construction Superintendents, Essential Skills for the Next
Generation. The interested reader may wish to look to a resource such as
that for additional superintendent roles and responsibilities. These and many
other preconstruction ‘plans’ developed by the project team have some effect
on the anticipated construction cost and should be incorporated into early
budgets by the estimator.

Preconstruction contracts
The adage that good fences make good neighbors applies to construction as
well. Good contracts make good contractors and good construction projects,
and likewise with preconstruction. During a slow economy, contractors will
offer to perform preconstruction services for free and will not request a
preconstruction contract from the project owner. This may be a mistake. The
contractor’s goal obviously is to get its foot in the door so that it at least has
the first shot at a construction contract. A preconstruction services contract
is a professional services agreement similar to a design services contract and
is not a construction contract. A short preconstruction agreement should be
drafted and signed by both parties that clearly defines the expectations from
the client and the architect of the contractor and deliverables, as discussed
earlier. The cost of these services should be clearly defined, along with what
promises are made, if any, involving a potential construction contract. Some
of these precon contract considerations include:

How many budgets are required and what is the timing, and in what
detail?
How many schedules are required, and are they preconstruction
services schedules or construction schedules?
How many meetings is the team to attend, for how long, and who will
prepare meeting notes?
Is travel expected to inspect potential material fabrication facilities?
Are early material submittals expected?
Are outside workshops such as partnering and lean planned, and who
pays for these?
What are the VE expectations?
What is the anticipated duration of the preconstruction phase?
 Will the GC receive a construction contract at completion of a
successful preconstruction phase?

There are copyrighted documents from AIA and ConsensusDocs for

preconstruction services, but many contractors will offer to draft up a short
proposal defining services and costs and timing, with space for the client to
sign in agreement. In other cases, the owner will issue an LOI which states
the contractor will be reimbursed, for, say, $50,000, for four months of
preconstruction assistance, and it is the project owner’s ‘intent’ to give them
a construction contract at the completion of the preconstruction phase.
These agreements often state that the contractor will prepare a GMP at
completion of preconstruction, and if that GMP is acceptable to the owner,
they will roll their precon costs into a construction contract. But if the
parties cannot agree on a GMP, there is no obligation of a construction
contract, and the contractor will be paid their precon fee and the two firms
will part ways. If the GMP is approved, the LOI or preconstruction contract
then should be attached to the prime contract as an exhibit once it is
finalized. A sample preconstruction agreement is included on the book’s
eResource.

Preconstruction fees
Preconstruction has a cost. The more the contractor participates in the
process, the more deliverables they provide, and the longer the
preconstruction phase, the more it costs. The amount the contractor charges
and the amount the client wants to pay also follows economic cycles.
During a slow market, contractors will offer to perform preconstruction for
free just to get a shot at negotiating a construction contract. During a busy
market they may charge $100,000 for six months of effort, again depending
upon the detail expected. Some refer to the preconstruction cost as a ‘fee’,
similar to designers charging a fee for design services. Contractors prepare
an estimate of the preconstruction fee similar to estimating any other work
that factors in scope, hours, wages, and required materials or resources. The
variations of the preconstruction fee options are very similar to estimate
types, including:

Lump sum fee, say $80,000 for eight months of work;

Time and material wages with a loaded (including labor burden and
home office overhead and materials and profit) hourly fee or rate of
$120 for the PM, $130 for the superintendent, $95 for the estimator, etc.;
Hourly fees with estimated hours to come up with a budget for
preconstruction services;
GMP of $75,000 based on hourly rates and hours and quantity of
meetings and definition of deliverables expected;
Preconstruction fees for design-build or design-assist mechanical and
electrical subcontractors may be added to the GC’s precon fee;
Description of reimbursable costs that may be included with or in
addition to, any of these fee options; and/or
If long-lead materials are ordered, their costs may also be added to the
preconstruction fee.

Regardless of the structure of the preconstruction fee, contractors rarely

completely cover their cost; they generally do this work at a loss. Again,
construction contractors are not in the business of performing
preconstruction services; rather, they are looking for an opportunity to
negotiate a construction contract. But owners who expect to receive these
services for free and/or without a preconstruction contract often receive
exactly what they pay for and are unhappy with the contractor’s
contribution toward design completion.

Summary
All projects realize a preconstruction phase in that design is accomplished
pre-, or before construction, but not all projects involve preconstruction
services from estimating and scheduling consultants or contractors.
Contractors are not solely in the business of performing preconstruction
services but often do so in hopes of negotiating a construction contract at
the completion of the preconstruction phase. There are a variety of services a
GC may perform during this process, including:

Preparation of budgets and GMPs,

Schedule creation,
Constructability review,
Value engineering proposals,
Long-lead material supplier procurement,
Quality, safety, and jobsite layout planning, and others.

Preconstruction contracts or letters of intent are good instruments to clearly

define the amount the contractor will be paid for its work, the duration of
the precon phase, and the amount of deliverables the client and architect
expect from the construction team. Contractors should be paid for their
services, the value of which is rarely sufficient to cover their cost. During a
slow economy, the precon fee is minimal because the GC’s goal is primarily
to get a shot at a construction project. During a busy economy, GCs
customarily perform preconstruction less often, and when they do, the
amount they charge for their services increases.
Additional, more advanced construction management topics are typically
covered in a construction project management book such as Management of
Construction Projects, A Constructor’s Perspective. These topics often also
occur during the preconstruction phase and have an impact on project
management and might include:

Partnering,
Permit expediting,
Developer pro formas,
Lean construction techniques,
Building information modeling,
 Storm water control planning, and
Sustainability and Leadership in Energy and Environmental Design.

This concludes the introductory concepts section of the book. In the next
section we discuss the detailed quantity take-off process for many GC self-
performed scopes.

Review questions
1 Why would a construction contractor perform precon for free? Why
would they do so below cost? Would an estimating or scheduling
consultant do this work at a loss?
2 Why would the GC offer to chair the weekly design coordination
meetings and prepare meeting notes?
3 Why does estimating typically precede scheduling?
4 A VE log may also be known as a _____________ log.
5 What is the difference between TVD and VE?
6 What is the difference between an LOI and a precon agreement?
7 As a GC, which would you prefer, a LOI, precon agreement, or
construction contract?
8 What is the difference between a post-contract VE proposal and a COP?
9 Match these estimate types with the design phases. You can use each
answer more than once or not at all, and some may have more than
one answer.

Design phases Estimate types

____ Programming (A) GMP
____ Conceptual design (B) Unit price
____ Schematic design (C) ROM budget
____ Design development (D) Lump sum
____ Construction documents (E) Cost plus
Exercises
 1 Draft a preconstruction proposal with a stated scope and fee and
duration and include a space for your client to sign it.
 2 Prepare three value engineering ideas from one of our case study
projects and include them in a VE log.
 3 Provide a three-point argument why the client should hire the GC
earlier rather than later during preconstruction.
 4 As the architect or client, why would you NOT want to hire the GC
early during design?
 5 Other than the preconstruction services described earlier, what service
might a consultant or contractor offer the client during design?
 6 Assume a major subcontractor, such as mechanical or electrical or
elevator or laboratory casework, is added to the precon team. Describe
the process when and how they should be chosen, contracted, paid, and
what their deliverables would include.
 7 Building on Exercise 6, how does the precon process with a
subcontractor conclude? How are these situations handled and what
are the implications if (A) the subcontractor is dismissed or,
alternatively, (B) they are employed as a member of the construction
team?
 8 How would your answers to Exercises 6 and 7 change if the
mechanical, electrical, and plumbing subcontractors were (A) design-
bid-build, with a separate designer working for the architect, or (B)
design-build, where the subcontractors performed their own design?
 9 In your opinion, should GCs receive an incentive bonus for VE
proposals, or, conversely, should they credit back the fee on VE cost
deductions?
10 What might cause a project not to proceed ‘as planned’ such that the
LOI does not roll into a construction contract? There are several
possibilities.
11 Looking back to the organization charts presented in the previous
chapters, and those that you may have prepared for an outside case
study project, list three members from the GC’s team who should
participate on the preconstruction team and three members from
outside of the GC’s organization who should be on the team. There are
many possibilities for this question.
Part II

Quantity surveying for general

contractor direct work
6 Concrete substructure quantity
take-off including foundations
and slab-on-grade

Introduction
Chapter 6 is our first of four chapters in Part II, which focuses on the
quantity take-off (QTO) process general contractors (GCs) utilize on
normally self-performed work, including cast-in-place (CIP) and pre-cast
concrete, structural steel, carpentry, doors/frames/hardware, and
architectural specialties. Concrete is the single most important work item
that most general contractors self-perform on a construction project, and as
a result, estimators must be able to accurately quantify and apply pricing to
a variety of concrete work items.
The QTO is one of the most important elements of the estimating process
as it is here that quantities are determined and become the basis for the
estimate. If quantities are not accurate, then the estimate accuracy is at risk
regardless of the quality of the pricing. This and the next chapter focus on
CIP and pre-cast concrete work normally performed by the general
contractor, specifically foundations, columns, walls, and slabs.
Superstructure concrete systems are quantified in the next chapter. Pricing
for self-performed GC work will be discussed in Part III.

Quantity take-off process

This section will focus on the basic principles of quantity take-off that will
apply to all work of the estimator, regardless of the scope being quantified.
Although the description here is for concrete, these principles can be applied
to the other chapters in the book pertaining to quantified self-performed
work as well as many areas of subcontractor specialization.

Document review
Before starting the QTO process for concrete, estimators must familiarize
themselves with the documents to get a general sense of the work. These
documents will include:

Structural (S) drawings: Most of the concrete will be shown on the

structural drawings. A quick look at sections, details, and schedules is
also helpful at this point to get more familiar with the project;
Architectural (A) and civil (C) drawings: Site concrete and architectural
concrete will be shown here;
Mechanical (M) and electrical (E) drawings: Equipment pads, curbs,
and similar concrete scopes are often shown on subcontractor drawings
but will be excluded from their bids; and
Technical specifications: Concrete strengths, forming, finishing, and
curing requirements must be researched.

Marking the drawings

As the estimator is working his or her way through the documents and
quantifying the work scope, it is necessary to mark the drawings to know
what work has been quantified and what work remains. Marking can be
done in a variety of ways, such as slashes or coloring detail numbers and
drawing sections, depending on the preference of the estimator. The
important thing to remember here is “when you count it or measure it, mark
it on the drawings so you know what you’ve done” – and more importantly,
what you haven’t done. It is also important to be neat when marking the
drawings so they can be read and understood after the estimate is
completed.
There may also be several quantities taken from the same drawing; for
instance, structural steel columns are typically shown on a foundation plan,
so care must be taken to mark only that which is being quantified leaving
room to add other marks as the QTO progresses. The steel columns for our
case study begin above the upper elevated concrete deck and CIP columns
sit below directly on the footings. The structural steel process for QTO is
described in Chapter 8.
At the completion of the QTO process, the estimator should be able to go
back and review the drawings and see if everything has been marked and
quantified correctly. Any items that have not been marked will raise a red
flag to check to see if anything has been missed and make corrections
accordingly.

Automated quantity take-off

Today’s estimator is likely using an automated QTO process such as
Bluebeam, On-screen Take-off, and others. Even though the QTO is
performed electronically on the computer rather than with paper drawings,
the same markup procedures also apply. These software systems allow the
estimator to utilize various colors to show what work has been quantified.
Screen shots of the take-off can be printed if they need to be reviewed by a
senior estimator or retained for record-keeping purposes. Use of technology
in preparation of construction cost estimates is discussed throughout this
book and is the focus of Chapter 22.

The quantity take-off form

The quantity take-off sheet is the form that will be used to quantify all work
scopes and is organized to provide a consistent format for quantity survey
activities. Estimators should use consistent and professional QTO sheets and
not record quantities on the drawings or on yellow notepads. The QTO
sheet, as shown in Figure 6.1, is organized as follows:

The title information at the top showing the project name and location,
classification of the work being quantified, estimator’s name, date, and
sheet number.
The left hand portion of the sheet indicates the location or description
of the work being quantified, for instance, ‘type’ of footings or grid
lines or floors or levels. It is here that the estimator can refer to sections
and/or details from which the work was quantified.
Adjacent to the description are the columns where quantities and
dimensions of the work being quantified are noted. It is important to
note that dimensions are recorded with significant digits in mind, such
as: 157′, 10.5′, and 1.25′.
The remaining columns calculate materials and scopes that have been
extended from counts and dimensions taken from the drawings.
Quantities in these columns should be noted as whole numbers using
accepted rounding protocols, as well.
 Figure 6.1 Footing quantity take-off sheet

Concrete take-off basics

In quantifying concrete, there are several basic things that an estimator
needs to know before beginning their work. First of all, concrete is a volume
take-off, regardless of what it is you are quantifying. The volumes of
concrete are initially quantified in cubic feet and then converted to cubic
yards, which are the standard unit of measurement for purchasing and
placing concrete. There are 27 cubic feet of concrete in a cubic yard. Most
concrete elements are standard in shape: Length (L) × width (W) × height
(H) or depth (d) or thickness (t); however, there may be complicated shapes
that would require special formulas to determine accurate quantities.
Depending on the specific concrete scope that the estimator is quantifying,
the QTO sheet should be set up to allow easy and quick quantities to be
entered. In this chapter and each of the following chapters in this section of
the book, partial or complete QTOs for our case study will be included as
examples.
Concrete, like development of the construction schedule, should be
quantified and developed in the same sequence as the building is anticipated
to be constructed, from the bottom to the top. In this manner foundations
should be first, followed by slab-on-grade, walls and columns, and other
elements, moving up through the building. Roof curbs and mechanical pads
would be the last elements to be quantified. It is also important to quantify
all like items at once rather than going back and forth. Consistency is
important in preparing QTO sheets so that anyone could look at the QTO
and understand the estimator’s work. The same format of estimating
worksheets should be utilized by all estimators throughout the same
construction company.

Building systems
General contractors will separate their estimates into building systems or
assemblies to allow for accurate and consistent summaries of cost
components and to provide similar comparisons from project to project. The
systems that most contractors will use are:

Foundations,
Substructure (often including foundations and slab-on-grade),
Superstructure (above grade concrete, steel, and/or wood framing),
Exterior closure or envelope,
Roofing and sheet metal,
Interior construction,
Mechanical (including plumbing and fire protection),
Electrical, and
Site work.
This method of estimate preparation and summary is known as the
Uniformat method and is preferred by many general contractors. The work
items that will be described in this book will begin using these building
systems and continue to break them down to additional levels of detail.
Foundation walls and some below-grade but elevated concrete slabs may
also be technically categorized as substructure, but for this discussion we
have moved them all to the next superstructure chapter, along with CIP
columns and beams and pre-cast concrete elements. Structural steel, which
is also part of the superstructure, will be quantified in its own Chapter 8,
and all of the self-performed carpentry work will be discussed in Chapter 9.
Uniformat is often associated with very preliminary rough order of
magnitude estimates, as introduced in Chapter 2, but most contractors will
provide additional detail, such as separating the three types of mechanical
systems and breaking site work into several cost entries, especially with
more advanced levels of estimates.

Spread and continuous footings

There are several types of concrete foundation systems, including:

Spread footings (sometimes called pier footings or spot footings or pad

footings);
Pile caps (similar to spread footings but often deeper, with more rebar,
and associated with piling);
Continuous footings (sometimes called strip footings or running
footings);
Grade beams (similar to continuous footings but deeper and with more
rebar, and often associated with shear walls or connection to pile caps);
Large mat footing; and
Other specialty foundations such as drilled piers and caissons, which
are typically performed by subcontractors.
Depending on the project, there could be other foundation elements that the
estimator will need to individually identify. Figure 6.1 is a completed QTO
sheet for spread and continuous footings for our case study project. Spread
and continuous footings, along with grade beams, could all be quantified on
separate QTO sheets, but in this book we have sometimes combined
multiple assembles to allow us to present additional material examples. Note
that the quantity columns include the major work items that will need to be
quantified, as listed here. The vertical description column on the left
indicates the type of footing being quantified. This can be a mark number
from a foundation schedule on the ‘S’ drawings or a specific location on a
drawing to allow the estimator to know where that element is on the
drawings, for example ‘detail 15/S401’. The specific work items to be
quantified for spread and continuous footings that will be discussed in this
section include:

Concrete,
Formwork,
Finish top,
Hand excavation and backfill or ‘fine grade’,
Concrete reinforcement, or ‘rebar’,
Embedded steel,
Pump, and
Structural excavation and backfill.

Spread footings and pile caps

The volume of concrete in each type of footing is first quantified in cubic feet
(CF) but converted to cubic yards (CYs), as that is the unit of measure in
which it is purchased. The conversion to CYs is not done until all of the
concrete has been quantified for each category in order to minimize the
number of calculations and also the chance for an error in the conversion
process. Waste is then added. Waste and lap factors for several materials are
included in Appendix A, but vary depending on the type of work and the
contractor’s means and methods of installation.
The area of the formwork necessary to form the footings is an important
calculation and often ends up with the largest quantity of direct man-hours;
therefore, it is one of the riskiest for the estimator and the contractor.
Formwork is also known as falsework, or temporary structures, and can be
thought of as a temporary mold to hold the wet concrete until it has
properly cured. The quantity or area of formwork is sometimes referred to as
square foot of contact area (SFCA). This calculation needs to be performed
based on the shape of each concrete element, in this case the spread footings.
If an element is 12″ or less in height or depth, then the unit of measure is
lineal foot (LF), if greater than 12″, then the unit of measure is in square feet
(SF). The reason for this is that if the depth is less than or equal to 12″, the
footing is formed with dimensional material, such as a 2 × 8, whereas if
deeper than 12″ the forms are metal or built from plywood and other
dimensional lumber materials.
The operation of finishing the footing tops includes ‘rodding off’ or
scraping the excess concrete off the top of the footing to provide a
reasonably level surface to place future structural elements such as columns
or walls on top of the footing. Although typically not a significant source of
man-hours, there is a specific labor activity included in this operation, so the
quantity should be identified and will be equal to the area of the top of the
footing.
A separate measurement or calculation is typically not performed for
hand excavation, which may also be known as fine grading. The backhoe
digging the footings cannot perform the structural excavation shown in
Figure 6.2 exactly, so a laborer will need to get into the hole with a hand
shovel and rake to finish the work. The quantity is often just the square foot
of footing, which will be the same SF as noted for rodding off. Counts and
dimensions for each type of footing are entered, and quantities are
calculated from the dimensions and rounded to whole numbers. Decimals
should not be used in the quantity columns.
Continuous footings and grade beams
Continuous footings or running footings and grade beams are continuous in
nature and are quantified in a manner similar to spread footings. In the
event that a continuous footing is less than 12″ high, the formwork quantity
would be shown in LF; if more than 12″, then a SF calculation is determined
and entered in the appropriate column. Most general contractors will have
unit pricing for both LF and SF quantities. Continuous footings are
quantified by determining the running length of the footing rather than
counting ‘each’, as is the case with spread footings. Continuous footings will
generally be located on the building perimeter and often along grid lines or
between spread footings, especially if they support bearing or shear walls.
The estimator should mark the length of the footing on the drawing after
they have determined the dimensions to know that they have quantified that
particular footing. Most of the other areas to be quantified, the process, and
the units are the same as discussed earlier with the spread footings.
An experienced estimator knows that quantities, once measured and
extended, if done properly, can be applied to other building elements
without recalculation. For example, continuous footings are often associated
with and have similar lengths as foundation walls. Perimeter continuous
footings will often have a footing drain system that includes a perforated
pipe, drain gravel, and likely drain fabric. These quantities do not need to be
separately quantified, as they are often simply the outside LF of the footing.
Ten percent may be added to the pipe quantity for waste. Drain gravel does
not expand or contract as with dirt, as discussed later, so the quantity
measured is the same as is needed to purchase. As with spread footings, the
estimator should show the drawing number and details as to where the
footings are located. After the foundation elements have been quantified, the
estimator should go back and check the drawings to make sure that all
elements have been marked to avoid missed items.

Reinforcing steel
A separate QTO sheet is often used to quantify concrete reinforcing steel, or
rebar. This is customary because the work is measured differently and is also
done by a different crew. Figure 6.1 includes the reinforcing steel for the case
study footings. An estimator should read and understand the notes in the
specifications and on the drawings prior to starting this quantification.
Perhaps most important are two items: (1) clearance to the edge of the
concrete and (2) the length the bars will lap each other. This information is
needed to determine the length of the reinforcing steel.
When reinforcing steel is specified on a spacing basis, instead of the
specific number of bars, one more bar must be added to the number of
spaces for the end bar. For our example here a type F10 spot footing is 10-
foot square and may require two mats of #5 rebar at 6″ on-center (OC)
running each way (EW), with a minimum 2 inches of clearance required on
all sides. Because the builder must start with and end with a bar on each
side, this will require 21 bars for each mat, and each bar will be 9′-8″ long.
The total length of #5 rebar required for each footing is shown in the
following calculations. This length will then be multiplied times the total
count of type F10 footings for the project.

10 feet/.5′ = 20 bars + 1 more for the end = 21 bars for each mat
Bar length: 10′ - 2″ - 2″ = 9′8″ = 9.67′.
21 bars/mat × 2 mats × 9.67′/bar = 406 LF #5 rebar for each spot
footing

When setting up a separate rebar QTO sheet, the estimator will first
differentiate the types of concrete elements (spread footings versus
foundation walls) and sizes of rebar (#5 versus #8). Lengths are then
extended for all similar bar sizes and multiplied by their weight in #/LF. The
weights are then summed, and the total is converted to tons. Waste or lap is
added for rebar in slabs, walls, and running footings but not spot footings, as
that is purchased fabricated to length. One shortcut for calculating rebar lap
is to simply add 10% to the measured quantified length. Published estimating
references usually have a table of unit weights for reinforcing steel. We have
included the most common sizes and weights of rebar in Table 6.1.
At the time of letting our case study project to bid, the structural engineer
had not yet sized all of the concrete reinforcement but instead directed the
bidding contractors to include rebar weight allowances for some concrete
elements, such as 363# and 617# of rebar for each of the two different sizes of
spot footings. Other members such as continuous footings and slab-on-grade
included specific rebar sizes and spacing.
The quantity take-off for concrete reinforcing steel can be very time
consuming to take off for an entire project. If the bidding time is short, a
reasonable estimate may be made by determining the unit weight of rebar
per cubic yard of concrete for a given concrete system. Representative unit
weights can be calculated from portions of the footings, SOG, and most CIP
walls within a reasonable accuracy to use for labor costing. Prorated rebar
weights for all concrete elements on one project are okay for budget
estimates but should not be used on any other project bid because of
differing engineering requirements. Shortcuts such as this are common
within the construction estimating industry but are also risky. If the
estimator on our case study wanted to use a standard quantity of rebar in
pounds per cubic yard of concrete for the entire project, he or she would
draw on detailed historical estimating data such as the following. It is easy
to see that drawing any conclusions from these would be risky.

Table 6.1 Concrete reinforcement steel weight conversions

Concrete reinforcement steel (Rebar) weight conversions

Bar size* Weight (pounds) per LF
2 0.167
3 0.376
4 0.668
5 1.043
6 1.502
 Concrete reinforcement steel (Rebar) weight conversions
Bar size* Weight (pounds) per LF
7 2.044
8 2.670
9 3.400
10 4.303
11 5.313
14 7.650
18 13.60
* Note: Rebar sizes reflect 1/8″ in diameter, such that a #4 bar is ½″ thick and #8 = 1″

Spot footings at 47 #/CY,

SOG at 53 #/CY,
Columns at 275 #/CY, and
Tilt-up walls at 114 #/CY.

Embedded steel
Embedded steel is placed such that it becomes an integral part of a concrete
member. It usually is supplied by the structural steel fabricator, which
provides all of the structural steel in CSI division 05. We could account for it
when we perform the QTO for the structural steel, discussed in Chapter 8,
but since the embedded steel is often shown on the foundation drawings and
will be installed by carpenters when forming the foundations, we account
for it with the cast-in-place concrete. The most common embedded items are
anchor bolts (ABs) used to secure structural steel columns, pressure-treated
wood plate, and some pieces of permanent building equipment. Anchor bolts
are either hooked on the end or have washers to secure them into the
concrete and thus securely anchor the member to which it is bolted. Anchor
bolts that connect a structural steel column to a spot footing are often in a
pattern, such as four or six ABs per column and spot footing. Anchor bolts
embedded in running footings or on top of a CIP foundation wall are found
at intervals of 4 feet on center or so and tie down pressure-treated wood
plates for shear walls. Similar to counting reinforcing bars, an additional AB
needs to be added for the end of each wall. Other embedded items include
trench or pit edge angles, weld plates in walls, and tilt-up connection angles
and lifting anchors.
Carpenters install embedded steel such as ABs as part of, and while,
building concrete formwork. An alternative to ABs is expansion bolts. They
are installed after the concrete has cured rather than being cast into the
footing. They are drilled in exactly where they are needed and secured with
epoxy. The trade that uses them for securing their material or equipment
installs these types of bolts. Bolts used for the structural steel will be
installed by ironworkers. Similarly, a plumber will install ones that are used
to hang piping and electricians those for securing conduit. If there is a
significant quantity of embedded steel, it may be shown on a separate
quantity sheet that becomes part of the concrete QTO, but if only a few ABs
are required, they will often be included with the spot footing QTO.
Most commercial projects pump all of the concrete. A separate calculation
and QTO is not necessary, but a simple repeat of the amount of concrete to
be purchased will be noted and priced separately on the pricing recap sheet
discussed in Chapter 11.

Structural excavation
A separate quantity sheet is also often used to calculate the required
structural excavation and backfill and off-haul of surplus spoils. Although
this construction work is performed before footing formwork and rebar, the
QTO is typically later, as footing dimensions are necessary. Structural
excavation and backfill could also be quantified and estimated with site
work, as these steps in the concrete process are often performed by
subcontractors. When an estimator is calculating the structural excavation,
the first thing to determine is the depth of the footing. Looking at the case
study drawings, there are different depths depending on the specific footing
and the adjacent ground elevations. Detail 15/S401 shows the top of the spot
footings to be 8 inches below the floor surface. The SOG is 4 inches thick,
and the soils report requires a 4-inch granular base on the subgrade. When
the footings are constructed, the ground will have been leveled to the
subgrade. The technical specifications require the footings to be placed on
undisturbed earth. A backhoe and a little fine grading by hand will provide
an undisturbed surface.
On some projects, the GC project team may choose to construct the
footings ‘neat’. This means that instead of building forms, the contractor can
dig a neat hole and place the concrete directly into it without further
forming. It is customary to increase the footing excavation size to
compensate for dirt contamination or sluffing at the sides. This process
requires fairly firm soil conditions; clean sand will not hold firm enough. To
determine which is more economical, an estimator must compare the cost of
building forms and over-excavating against the cost of purchasing, placing,
and finishing the extra concrete. This is a means and methods choice of the
contractor. It is customary to estimate conservatively and include formwork.
During structural excavation, construction equipment such as a backhoe
or track hoe removes undisturbed earth, and the quantity is designated as
either bank cubic feet (BCF) or bank cubic yards (BCY), which reflects the
volume of the undisturbed bank or ground. Soil swells or expands upon
excavation. Some estimating references discuss swell and suggest swell
factors to use for various types of soil. The estimator needs to make an
informed judgment as to what to use. There are many terms used for the
volume of soil after it has been excavated, such as truck cubic yards (TCYs)
or loose cubic yards (LCYs). Assuming that the soil at the location of the
case study project swells about 30%, the estimator will then multiply bank
cubic yards by 1.3 to get the volume of earth that has to be handled. When
working with any below-grade concrete, 2 feet must also be left clear
beyond each side so that carpenters have room to set and brace the forms.
The slope (S) of the excavation must also be accounted for, as discussed later.
The excavation volume (Vol.) is:
 Vol. = (Length + 2′ + 2′ + S) × (Width + 2′ + 2′ + S) × (Depth) =
BCF

A simple sketch such as Figure 6.2 is a helpful estimating tool for all types
of quantity measurements and recording of assumptions. These sketches
would be most helpful if included on the actual QTO sheet, but this sketch is
included here as a separate larger-scale figure for clarity.
The slope of the excavation will be accounted for in the previous formula
by adding the depth of the excavation to each of the length and width
dimensions and accommodating the angle of the slope. Most excavations are
on a 1:1 slope; therefore, the slope is a triangular shape, and ½ of the depth
of excavation is figured, but on two sides, so multiplied times 2, as shown in
the next formula. A vertical excavated cut may be possible with firm soil
and shallow excavations, but again the conservative method is to estimate
with a 1:1 sloped setback.

S = Depth × ½ × 2 sides = LF for both sides of a footing

The results of the excavation at the spot footings are shown in the
excavation column on the quantity sheet. The units are kept as bank cubic
feet, and only their total is converted to BCY and then TCY to keep
conversion calculations to a minimum.

BCF/27 CF/CY = BCY

BCY × 1.3 swell = TCY

Backfill is calculated by subtracting the volume of concrete from the

excavation volume. Units are still in bank cubic feet, as shown in the backfill
column heading. After summing the columns, the totals are then multiplied
by the swell factor. An accounting crosscheck that compares the total backfill
to the result of the excavation minus the concrete is made to ensure all
calculations are correct. Earthwork volumes are rounded to the nearest
whole cubic yard. The estimator must check the soils report, or geotechnical
report, to verify that on-site excavated materials, if protected from the
weather, can be utilized for backfill. If not, select import must be purchased
and trucked in and placed, and all of the excavated materials must be off-
hauled and properly disposed. This can be very expensive.

Total excavation (BCY) − Total concrete volume (CY) = Total

backfill (BCY)
Backfill (BCY) × 1.3 swell = Backfill required (TCY)

Figure 6.2 Spread footing excavation sketch

 What remains to be calculated is the amount of excavated materials to be
disposed of. For this, an estimator needs to do the following calculation:

(Excavated material × Swell) − (Backfill × Swell) = Disposal

Excavated (TCY) − Backfill (TCY) = Export (TCY)
Crosscheck: Export (TCY)/swell percentage = Concrete CY

Surplus excavated materials must be hauled off the site and disposed of at
an acceptable location. This can cost the contractor significantly and must be
accounted for by the estimator. Checking the geotechnical report again will
determine if the exported material has value and can be sold, or if
unsuitable, the GC has to pay to off-haul and dispose, which can be
expensive. The common error regarding excavation and backfill is the state
of the material during the various calculation processes. Special care needs
to be taken to ensure that they are all made in terms of bank cubic yards or
in the swelled volume. A mix-up will result in a major error in earth
volumes, which can have a significant effect on the bid price. The structural
excavation and backfill quantities for our three case study foundation
systems is shown in Figure 6.3.
 Figure 6.3 Structural excavation quantity take-off sheet

A more advanced calculation that an estimator will consider is accounting

for the ability of earth to be re-compacted to its original condition.
Commonly, specifications state that a 95% compaction rate must be attained.
This means that the backfilled earth will be compacted until it reaches 95% of
the density of the original undisturbed material. For the estimator, this
means that 95% of the excavated material will be used in backfilling. It must
be remembered, however, that the earth has expanded and that the swelled
amount is being handled by the equipment.
 When footings are fairly deep, for example five feet below the subgrade,
an estimator has to consider safety issues. A vertical trench wall is very
dangerous and generally illegal due to the possibility of collapsing. The
geotechnical data will frequently provide information for safe slopes for
trenches depending on the soil type. If nothing is shown, the estimator
should use slopes no steeper than 1 to 1. This greatly increases the amount of
excavation and backfill.
It is a good practice for all estimators to include their assumptions as
notes on the QTO sheets and accompany those with sketches indicating how
they assumed the work item would be constructed. This will be a good
communication tool with the jobsite team if the contractor is successful and
the estimate needs to be transformed into a planning and cost control tool.

Other foundations
The process for quantifying and pricing other foundation systems, such as
auger cast piling, drilled piers, and caissons, will be discussed in Chapter 16.
These systems are installed by specialty subcontractors; however, the
estimator must be able to quantify the appropriate quantity and develop pre-
bid day OM estimates or to apply unit pricing provided by subcontractors on
bid day. This is typically accomplished by:

Noting the type of piling,

Noting the pile size or diameter and length or depths,
Counting like-sized piles,
Mathematically extending the lengths of the like-type and size piles,
and
Applying unit pricing by the each for certain types and sizes or by the
total LF.

Slab-on-grade
We have chosen to include the process for quantifying the slab-on-grade
(SOG) with this substructure chapter but have grouped foundation walls
with other CIP walls in the next superstructure chapter. The SOG QTO sheet
is set up to record the size of the slab (L × W) and thickness (t) of the SOG,
and columns are established to calculate the quantity of edge form, concrete
volume, reinforcement, flatwork finish, and other significant cost categories.
Our case study SOG is specified to be 3,000 psi strength, 4 inches thick, and
reinforced with #4 bars at 18″ OC (1.5′) EW. Note that the abbreviation EW
introduced previously is defined as ‘each-way’ and not east-west, although
the direction east-west versus north-south is also common in construction.
Drawing S-201 for our project shows the layout of construction joints or
control joints (CJ) and saw joints (SJ) in the SOG. Construction joints are
formed edges that, in this design, are running along the longitudinal column
lines. The control joints are put into the slab to control where the SOG
cracks as it shrinks during curing. The designed control joints are shown as
1-inch-deep saw cuts, which will be made after the initial curing of the
concrete. Control joints will be quantified for pricing but otherwise do not
affect the placement of the SOG concrete. Large slabs, such as our case
study, cannot be placed all in one day. The estimator should consult with the
superintendent to determine the size of slab placement lanes or quadrangles
(often checkerboard) for planning purposes.
As stated, the generally accepted placement method for commercial
concrete is to use a concrete pump. Some superintendents will place all
concrete with a pump regardless of the size or location. Part of a winning
attitude is to decide if there is a more economical way to place concrete in
various applications. The SOG is one place that should be studied, and
discussions with a superintendent may be helpful for determining whether it
is more cost effective to use a pump or to place the concrete directly from
the truck chute. Generally pumping is the most cost effective way of placing
large quantities of concrete for commercial projects when compared to all
other methods. A concrete placing ‘bucket’ may be used for isolated smaller
pours such as a CIP column. Smaller pours and smaller projects may be able
to chute their footings and slabs, and this is often the case with residential
construction.
Preparations for the SOG include laying down a base layer of aggregate
and/or sand and installing a vapor barrier. Edge forms are then set, rebar or
wire mesh is installed, and the slab is ready to place. It is the
superintendent’s job to select placement methods that can be done within
the cost parameters of the estimate. Edge forms for slabs and other shallow
concrete sections are constructed from dimensioned lumber such as 2 × 6, 2
× 8, etc., and quantified as lineal feet. When edge forms are deeper than 12
inches, they are made using a sheet form material such as plywood or
medium density overlay (MDO) board. These are quantified on a square foot
basis, as has been done for the footings. Some estimators prefer to quantify
all form material by the square foot, but most published and historical
estimating databases provide both lineal feet and square feet pricing. An
estimator should review the units prior to quantifying these forms to
minimize dimensional conversions.
There are several configurations of construction joints between slab
sections, and most are designed to minimize vertical movement between
them. Some joints are keyed either with a preformed metal form or with
wood. Keyway is quantified by measuring LF. Dowels of smooth reinforcing
bars are inserted through the forms to keep adjacent slab sections aligned.
These are quantified by counting each one and furnished as part of the
reinforcing steel package. Both the construction joints and the dowels are
cost factors that an estimator must consider. The SOG quantities for our case
study are reflected in Figure 6.4.
An estimator needs to look for additional work scopes in the SOG that
will affect the cost. The case study project has 4 inches of free draining
capillary break below the vapor barrier. Closure strips and column blockout
fillers will be placed after the CIP columns have been cast and stripped. The
work includes backfilling between the placed SOG, forming, keying or
doweling into adjacent slab edges, pumping, placing, and trowel finishing
the slab. This work is still part of the substructure, and the estimator should
perform the QTO work in that section so it is not forgotten. Because the
work is done later, it may be accounted for on a separate QTO sheet.
Control joint sawing may be done by the general contractor’s own forces
but is more likely to be done by a concrete sawing subcontractor. The
estimator should quantify the length of the control joints, obtain a unit price
from a subcontractor, and develop an independent estimate. This will then
be used as an OM estimate in Chapter 16. Saw cut joints are also often filled
with caulking by a CSI division 07 subcontractor. This caulking can be
quantified here with the SOG or later with subcontractors as long as the
work is not missed and not quantified twice.

Figure 6.4 Slab-on-grade quantity take-off sheet

Concrete finishes are an item that the estimator should pay particular
attention to. Different types of finishes include leveling to the top of the
forms (rodding off); float finish; steel trowel finish (hand or machine); and
broom finish, and some exterior slabs will have an exposed aggregate finish.
In addition, there are several surface treatments such as a curing compound
that retards water evaporation, spray-on hardeners, integral colors, and the
seeding of aggregates for architectural or wearing purposes. An estimator
needs to note on the QTO sheet which type of slab finish is specified. These
different finishes all have different pricing factors. Concrete finishing applies
not only to the SOG but also elevated slabs and tilt-up walls, both discussed
in the next chapter.

Summary
Although some of the processes in preparation of a construction cost
estimate involve creativity and managerial decisions, the quantity take-off
process is very analytical. The term ‘stripping the drawings of quantities’ is
used in construction, which basically means take all of the material types
and sizes and quantities and counts off of the drawings and place them on
quantity take-off sheets such that they can be extended and later transferred
to pricing sheets. The best process to use is to proceed in the same fashion as
the building would be built, from foundations through the roof and
completing with interior finishes and landscaping. As quantities are
‘stripped’ from the drawings, the drawings should be marked-up, whether
by hand or electronically, to indicate what work has been ‘taken-off’.
The GC estimator will put much more QTO effort in the work that will be
self-performed, such as CIP concrete, than with subcontracted scopes. This
chapter discussed the process to prepare detailed QTOs for spread and
continuous footings, concrete reinforcement steel, structural excavation and
backfill, and slabs-on grade. Additional cast-in place and pre-cast concrete
elements are coming up in the next chapter, and structural steel and wood
framing in subsequent chapters. The methods of counting and measuring
and extending quantities for one building system can be applied to most
others, as we will continue to demonstrate. Early outlines and drafts and
reviews of this chapter were contributed by estimating lecturer and industry
professional Larry Bjork. We appreciate his contributions.
Review questions
1 What happens if an estimator assumes neat-cut footings, but the
superintendent chooses to form them?
2 Why would a contractor prefer to use expansion bolts for steel columns
versus anchor bolts?
3 What would happen to the contractor if the estimator assumed all of
the foundation excavation material could be reused as backfill, but then
it was rained on and the inspector rejected it?
4 Match the labor craft (laborer, concrete finisher, ironworker, carpenter)
with the concrete activity:

a Hard trowel finish

b Install rebar or welded wire mesh
c Install embedded weld plates
d Build wood forms
e Build metal forms
f Place concrete in form
g Fine grade
h Place anchor bolts

5 Place the work items from the bullet list in question 4 in the logical
order that the work will be performed.

Exercises
1 Anchor bolt templates are used to locate ABs before placing concrete
and often hold them in place until the concrete is set. This is not an
error-proof process. What would happen if an AB was out of place?
What is the remedy? When should this be discovered and resolved?
2 What would happen to the superintendent who, instead of disposing of
the surplus excavation materials properly, dumped them in nearby
 wetlands?
3 What size of lumber is typically utilized to form a 10″ deep continuous
footing? What is the lumber’s actual (or planed) size? How is the
difference accommodated by the formwork crew?
4 Perform a QTO for a substructure system introduced in this chapter for
one of our case study projects included on the book’s eResource.
Electronic copies of all of the estimating forms used in this book are
also included on that source.
7 Concrete superstructure

Introduction
In the last chapter we introduced basic quantity take-off (QTO) procedures
and applied them to those areas of direct work that many general contractor
(GC) estimators begin their QTO with, the concrete substructure, including
the foundation and slab-on-grade (SOG) systems. In this chapter we
continue with GC self-performed direct work and pick up all of the
remaining cast-in-place (CIP) concrete systems and pre-cast concrete
systems, including site-cast tilt-up concrete walls. Our specific coverage
includes:

Cast-in-place concrete elements and systems, including:

Columns,
Beams,
Walls,
Elevated CIP slabs,
Elevated slab on metal deck, and
Post-tension (PT) concrete;

Pre-cast concrete elements and systems, including:

Columns,
Beams,
Slabs,
 Walls, and
Tilt-up walls.

For our analysis, the concrete foundations and SOG are considered
substructure and were included in the previous chapter. Additional concrete
systems such as foundation walls and columns and beams and elevated
decks may also occur below grade and would then technically be classified
as substructure as well. But these systems also exist above grade and would
therefore be considered superstructure. We have included these scopes of
work in this chapter for convenience and to avoid duplication. Additional
superstructure materials such as structural steel and wood framing are
covered in the next two QTO chapters.

Cast-in-place concrete elements and systems

With all concrete elements, we have many of the same items to measure and
count as we did with the foundations and SOG, including:

Formwork,
Concrete reinforcement steel (rebar) or welded wire mesh,
Embedded steel,
Purchase and pump and place concrete,
Finish concrete,
Protect and cure, and
Patch and sack if necessary.

Columns
The estimating process for CIP columns includes the previously mentioned
types of work scopes and is similar to many other concrete elements but also
has some differences. The column forms are typically steel because the
pressure of the wet concrete toward the bottom of the column is significant.
These forms are often ‘engineered’ by a consultant employed by the GC. The
column forms will be reused on multiple occasions to make rental or
purchase cost effective. Because of the expense of the forms, a GC will
encourage the structural engineer to use the same size columns, such as 24″
or 30″ square, as often as possible. This will occur as part of ‘constructability’
and was discussed in Chapter 5, “Preconstruction”. The forms require
significant bracing to hold them in place. Chamfer strips are used vertically
within the forms on the column corners because it is difficult to hold a
perfect 90 degrees outside corner in concrete and the chamfer minimizes
chipping after stripped.
Rebar is assembled in ‘cages’ and is often prefabricated in a specialized
assembly area somewhere on the site, and the cages are flown in with a
tower crane. Rebar in a column is of larger diameter than in other concrete
elements, and the quantity of rebar, both vertically and horizontally, is quite
dense. The concrete is typically very high strength, maybe 6,000 or 8,000 PSI,
and will therefore not be mixed with other pours such as foundations or
slabs. The concrete must be pumped but is often placed with buckets
suspended from the tower crane. The tops of the columns will need to
accommodate other concrete elements either with anchor bolts (ABs) or
embedded steel plates to connect with steel or pre-cast concrete elements
(discussed later) or rebar extensions to connect with other CIP concrete
elements. An example QTO for our case study CIP columns is included as
Figure 7.1.

Beams
Estimating elevated structural slabs and beams presents some different
estimating techniques. Both require bottom forms that are comprised of
heavier temporary construction materials and thus costlier. The difficult item
is the support of the forms. Concrete weighs approximately 150 pounds per
cubic foot or over 4,000 pounds per cubic yard. An elevated beam that is 12
inches wide by 2 feet deep then weighs 300 pounds per foot of beam length,
and if it were 20 feet long, the total weight is 6,000 pounds. The forms alone
will not hold this weight, and supplemental supports are required. These
temporary supports are termed ‘shoring’. The size and type of shoring
depends upon the location of the concrete element. A beam that is 6 feet
above a ground surface may only need pole jacks placed at selected
intervals, while an elevated floor slab 20 feet up will require a system of
heavy duty scaffolding. The ability of an estimator to determine the support
system for elevated concrete depends on experience. There is an extreme risk
associated with these support systems, and the estimator should seek outside
structural engineering help to determine the correct system. The project
owner’s design team will not assist with this means and methods evaluation.

Figure 7.1 CIP concrete columns quantity take-off sheet

Concrete walls
Cost factors for CIP walls are different than those for other concrete
sections; thus, an estimator will quantify them on a separate QTO sheet. The
quantity sheet is set up essentially the same as for other concrete members
but will have a column for de-fin and patch and sack. Forming CIP concrete
walls is very labor intensive and therefore one of the riskiest elements for
the estimator to quantify. Typically, wall forms are calculated in square foot
of contact area (SFCA). The height and length of the walls is noted, and
multiplying these two dimensions by two for both sides of the wall results in
total formwork. A small amount of forms for end conditions is also added.
The GC’s estimating team must determine the type of forming system and
whether forms are to be stick-built on-site or rented. Snap tie patterns and
count are quantified. Many formwork material unit prices will allow for
snap ties, whalers, form oil, and wedges, in which case additional counts are
not necessary.
In general, when constructing walls, two concrete finish items must also
be considered: Wall tops and the vertical surface. Finish other than leveling
the tops and de-fin and patching of rock pockets is not required. Foundation
walls exposed on the outside to earthwork will typically be waterproofed,
and therefore patching of snap tie holes and rock pockets is required. Other
estimating elements such as volume of concrete, embeds, and rebar are taken
off similar to CIP concrete columns.

Elevated slabs
As indicated earlier, estimating elevated structural slabs and beams present
some different estimating techniques. Both require bottom forms that are
built from heavier construction methods and thus are costly. These forms
must be ‘shored’ up and supported by the slab below – assuming it has
cured sufficiently to reach design strength. The method of shoring is either
with steel pole shores or wood posts such as 4 × 4s. Both construction of the
formwork and shoring is often subcontracted to specialty firms that own
these forms. They typically will utilize small hard-tired ‘warehouse’ forklifts
to lift and lower forms.
After shoring is accomplished, much of the remaining categories to
include with quantifying elevated slabs are similar to the process of taking
off the SOG. This includes volume of concrete, rebar, and finishing. A CIP
elevated slab will have a significant amount of rebar or will include post-
tensioning cables, as discussed later. These slabs are also often integral with
CIP concrete beams. Because beams may drop down significantly below the
slab and impact clearance for the occupied floor below, ‘drop caps’ are used,
which in plan view look similar to spot footings except they sit atop concrete
columns and not the earth. Our case study project uses the drop cap system.
It is expensive and time-consuming to core drill holes or saw cut
rectangular penetrations in cast slabs, therefore, the mechanical and
electrical subcontractors will place as many embeds and blockouts on the
formwork before casting the slab as they can. Once the slab reaches design
strength the formwork can be dropped and the shoring removed except ‘re-
shores’ are added to extend the curing period, especially if this new slab is to
receive the weight of another slab above it. Re-shores are similar in design
to the initial shoring system but are much more spread out. Again, this
requires structural engineering input employed by the GC.

Slab on metal deck

Mezzanine and elevated floor slabs for offices are relatively simple
structures. For a structural steel framed building such as the case study,
structural steel girders support steel joists on which metal decking is welded.
Steel erection includes installation of angles that are to be used as slab edge
forms that become permanently embedded in the concrete. The combination
of metal deck and concrete slab working together is known as slab on metal
deck (SOMD) and is considered a composite structural slab. There may be
some places where wood edge forms are required to have a clean concrete
edge showing. These additional edge forms occur at blockouts for
mechanical ductwork and stair and elevator shafts. An estimator needs to
pay particular attention to the type of edge forms and make sure that they
are all covered within the estimate.
The volume of concrete placed on a corrugated metal deck is less than the
equivalent thickness placed on a flat surface. There are many configurations
for decking that affect the concrete volume, and an estimator needs to use
those for the specified decking. Some estimating references have quantities
or formulas for representative shapes of decking, but manufacturer’s data for
the specified product will provide more accurate information. As mentioned
previously, a good practice for an estimator is to include sketches and
assumptions on the QTO sheets, as is shown in several of our examples.
Other than shoring and metal edge form that comes with the metal deck,
and accounting for the differences in deck depth, most of the QTO elements
are similar to that of the other elevated CIP decks and SOG. Nelson studs,
also known as ‘lugs’, are welded to steel beams and create a secure
connection with the elevated concrete slab, metal deck, and the structural
steel. These are typically quantified with the structural steel take-off in the
next chapter. An example QTO for SOMD for our case study is included as
Figure 7.2.

Pre-cast concrete elements and systems

Pre-casting versus cast-in-place
Sometimes the designer will specify and draw whether certain concrete
elements are site-cast or pre-cast, and other times they will be open to the
contractor making a means and methods decision. Like many of our other
construction management topics, a contractor needs to consider cost,
schedule, quality, and safety factors when deciding to cast concrete in-place,
pre-cast on site, or purchase elements from a prefabrication (prefab) supplier
and ship to the jobsite for erection. Pre-cast concrete building elements will
include significant steel embeds such that the different members can be
connected to each other and with structural steel utilizing field welding. Pre-
cast concrete requires preparation of shop drawings or fabrication drawings
that should be processed through the structural engineer of record for
approval before casting.
In some instances, pre-casting may be performed on the jobsite if a
suitable casting bed and space can be made available. But most often, typical
pre-cast concrete elements are fabricated off-site in a warehouse or yard
where quality can be controlled better and the casting process is protected
from harsh weather. These concrete elements are then shipped to the jobsite
as needed, also known as just-in-time delivery, which is an aspect of lean
construction techniques. Another schedule advantage for pre-casting is the
concrete elements are fabricated in parallel with other preparatory work
occurring on the jobsite.

Figure 7.2 Composite slab on metal deck quantity take-off sheet

Additional decisions need to be made by the construction team when

deciding CIP versus pre-cast, and if pre-cast, whether site-cast or off-site
fabricated. Some of the questions to consider will include: Which is most
cost effective? Which will enhance our ability to meet or beat schedule the
best? How can we best control quality, and are there any exceptional quality
control standards specified in the contract documents? And will one choice
or another make it safer for our craft workers?
Pre-cast systems
There are many different shapes that pre-cast concrete can take, but
economy and efficiency of scale usually dictate that structural elements are
of common sizes. Pre-cast concrete elements can be cast on site with a
casting bed and erected or purchased from a prefabricator and hauled to the
site and erected. Erection of pre-cast can be by the general contractor’s own
forces or with a subcontractor. If self-erected, it is common that the GC uses
a combined crew of carpenters, ironworkers, laborers, operating engineers,
cement masons, and surveyors. Some of the more typical concrete shapes or
elements that are pre-cast include:

Columns,
Beams:

I beams
T’s
Double T’s,

Slabs, including hollow-core planks, and

Walls.

The installation of pre-cast concrete is very similar to structural steel. The

members are unloaded from a truck with a crane and hoisted to their final
location. Double handling is minimized, if not completely eliminated, to
avoid damage and control costs. The concrete is furnished with embedded
steel plates and fastened to other structural elements by field welding,
performed by ironworkers. The craftsmen will often work off of scissor lifts
or personnel hoists to make the connections. Some pre-cast elements will
also require temporary shoring until installation of all adjoining members is
accomplished. The system of pre-cast may only function safely when the
whole assembly is installed. This may include elevated slabs above the
columns and beams. After assembly, the joints may also require grouting,
which will be accomplished by cement masons. The estimator must consider
all of these differences between different types of concrete systems,
including formwork, hoisting, and craft workers.

Tilt-up concrete
An economical structural and envelope method for construction of a
building is the use of tilt-up concrete walls. These walls are pre-cast, as
discussed earlier, but they are site-cast, usually very close to the location
where they will be erected. Panels are cast on a flat slab, such as the SOG,
and after curing are lifted and set (tilted up) onto the foundations. The
economics compared to vertical CIP walls is in the forming. Since only edge
forms are required, less form material is needed, and the craftsmen are
always at ground level. These savings offset the cost of the equipment and
manpower used to lift and set the panels, and the construction is much
faster.
When starting the tilt-up QTO, an estimator should discuss the project
with an experienced superintendent. Together, they can determine if the
SOG is suitable for the work and what has to be done for preparation of it. If
the SOG is not suitable, they will need to determine where a special casting
slab can be constructed. It is common that some panels can be placed one on
top of another, known as ‘stacking’, if relatively the same size.
Information about the tilt-up panels is primarily detailed on the structural
drawings, but there is information needed to quantify from the architectural
drawings as well. An estimator must look at all drawings and note where
different information is located. For example, reveals are typically found on
the architectural elevations or wall sections.
Of particular concern to an estimator are the embedded items. There are
angles and plates that connect concrete to concrete and structural steel to
the concrete. One significant item not shown is the lifting hardware. There
are companies that supply all sorts of concrete accessories from form-ties to
tilt-up anchors, and a product catalog should be in every estimator’s library.
The responsibility of engineering the sizing and placement of the lifting
anchors lies with the contractor doing the work, in this case the general
contractor. The GC’s estimator is not a licensed structural engineer.
Therefore, he or she should seek professional help for sizing and locating the
lifting anchors. Contractors who build tilt-up walls usually have an outside
structural engineer available for this. The engineer, ironworker foreman, and
anchor supplier can usually determine the quantity, size, and location of the
anchors. The estimator must also add cost to the estimate for the panel
engineering and detailing work.
When quantifying tilt-up work, an estimator will want to look for panels
that are basically the same. For example, if panels #1 and #2 are
dimensionally the same, with the only difference being the embedded
connection steel, they can be quantified on the same line as long as the
different types of embeds are quantified separately. Most embedded steel is
relatively similar in size, and it takes about the same effort to install each
one. Unless there is an unusually large piece of embedded steel that takes
more effort to install, they may be grouped together on a single line. Our
case study is not a concrete tilt-up building, but we have provided Figure 7.3,
which exhibits a portion of a typical tilt-up panel QTO sheet.
Figure 7.3 demonstrates a feature that is helpful in the QTO. Simple panel
sketches have been drawn so that someone else knows exactly what is being
quantified. This is a good practice for the estimator to visualize reinforcing
steel embeds and concrete shapes. Sketches may add pages to the estimate
but provide valuable clarity to those who will use the estimate after the
project is won.
As an estimator becomes more experienced, he or she looks for ways to
save time and effort. The quantification of the tilt-up panels is just such a
place where this can be done. A QTO for the embedded steel will need to be
made for developing an order of magnitude estimate later on for supply of
the fabricated steel. While the panels are being quantified, the estimator can
start a separate sheet for the embedded steel and list the pertinent
information such as the quantity, dimensions, and materials. This saves time
by not having to review the drawings again to search for the information.
 There are many similarities in quantifying tilt-ups compared to CIP walls
and SOG, but there are also significant differences, such as the quantity of
embeds and additional engineering. Once the tilt-up panels have been cast
and cured, they are ready to be tilted up and set in place. Labor cost factors
include attaching the braces, rigging the panel for lifting, breaking the panel
loose as lifting tension is applied, guiding them into place, securing the
bracing, patching, and grouting the base. Material and equipment costs are
included with all of these activities and the cost of the crane, rental of
braces, shim packs, patching material, and grout must be added as well.

Figure 7.3 Tilt-up concrete quantity take-off sheet

Cranes are rented by the hour, and their rate usually includes the rigging
for hoisting and setting the panels. There are, however, two additional cost
items associated with them: (1) the travel time to and from the job,
sometimes referred to as ‘in and out’ time, and (2) the cost of mobilizing the
crane on site. Mobilizing a crane includes assembling and rigging the boom
for lattice-boomed cranes and installing rolling outriggers. One tank of fuel
is furnished, and if more is needed, the general contractor will furnish it.
Cranes used for relatively heavy lifting will come to the jobsite with a
trained crew of at least an operator, and if it is a very large crane, it will also
have an oiler. Some large cranes also require an ‘assist crane’ to assemble
and disassemble the tilt-up crane on-site. An estimator must call the crane
rental company to get the hourly rate, in and out cost, and mobilization
costs. The general contractor furnishes the labor to supplement the crane
crew during mobilization, and the estimator needs to find out from the
vendor the approximate time that this operation takes. We have provided a
detailed example of a tilt-up crane estimate with Chapter 13.
The erected panels need to be supported until the structural steel is
installed. Braces usually are rented from the same accessories vendor who
furnishes the lifting embeds discussed earlier. The estimator must determine
how many are needed and how long they will be required. Each panel
requires at least two braces, and larger panels require more, say four braces.
A superintendent and brace supplier can help with this. The braces for all of
the panels of the building need to be rented for the entire time until the steel
erection is completed.
Only after the panels have been completely tied into the other building
structural systems may the braces be removed. The panels will be connected
at the top to the structural steel roof and to floor systems if more than one
story. Each of the panels will be welded on its side to adjoining panels. Some
panels are connected to the footing by welding embedded plates together. In
many cases, a small strip of the SOG was left out, called a closure strip. The
void space can now be backfilled, and the closure strip will structurally
connect rebar from the panels to the SOG, tying in the bottom.

Grout
Grout is a cementitious material applied under the base or between different
elements to provide full bearing surfaces. It is applied under tilt-up panels
and under the structural steel columns. The design drawings will indicate
the approximate gap under the members of each application in which the
grout is to be installed. Cement finishers install grout, and although amounts
are small, the cost can be significant. Grout typically has high cement
content and is specified as very high strength, such as 10,000 PSI.
An estimator should set up a separate QTO sheet for all of the grout on a
project. There are only two cost items in the grouting operation, the grout
material and installation labor. It is quantified in cubic feet but not
converted to CY, and most estimating references have productivity rates that
are reasonably accurate.

Post-tensioned concrete
Because project owners and their architects want to achieve as much
building height as zoning code will allow and free up building interiors for
horizontal runs of mechanical and electrical systems and still maintain high
ceilings, they are always looking for vertically thinner building systems.
Post-tension concrete replaces most of the standard rebar with cables, which
are pulled or jacked and tensioned after the concrete has been cast. By
placing stress into the concrete slab, thinner slabs can be used. Once other
building loads or occupancy loads are placed on the cured slab, it relaxes
into a more neutral condition. Cast-in-place beams and drop cops discussed
earlier can be reduced in depth and spread further with the use of PT slabs.
Sometimes the beams are also cast integral with the slabs and may have
post-tension cabling in them as well. Many other concrete shapes can also
be constructed using the PT method.
Many of the elements, such as shoring, formwork, and finishing and
curing associated with elevated CIP slabs discussed earlier apply to PT slabs
as well. And as with all concrete systems, there are differences. The
installation, termination, and stressing of the cables is often another
subcontract specialty. Shop drawings will be prepared and processed
through the building structural engineer for approval before fabricating the
cable. This work is all performed under the supervision of a third party test
and inspection company. Conventional rebar is measured in lengths and
converted to pounds and purchased by the ton. PT cables are counted by the
each and extended for the lengths, but the final purchasable units are
pounds, not tons. Mechanical and electrical embeds and other blockouts
MUST be accurately located and installed before casting the slab. It is very
difficult to safely core drill or saw cut a PT slab after placement. Care must
be taken not to cut a cable. After the slab has cured to design strength
hydraulic jacks are employed to stress the cables. Occasionally a cable
breaks or will not tension to its design strength. Because of this, the engineer
will have included a few additional cables as a factor of safety in the original
design. Because of the difficulty of working with a concrete slab with
embedded and tensioned cables, it is a good practice to take photographs of
the cable location before placing the concrete and marking the underside of
the slab with cable locations. Preparation of as-built drawings is critical as
well.

Summary
Many of the estimating processes used for one type of concrete system, such
as spread footings, apply to other concrete systems, just as the QTO
processes are similar for other building materials such as steel and wood.
But there are differences between different concrete systems as discussed in
this chapter. Some of the estimating processes for concrete elements
presented in this chapter will be undertaken by senior estimators, whereas
the beginning estimator or project engineer will assist with straight-forward
concrete foundations.
Concrete can be cast-in-place, prefabricated on a jobsite casting bed, or
purchased from an off-site prefabricator and trucked into the jobsite and
hoisted into place, often with the use of a tower crane. In many cases, the
building’s structural engineer will have made these determinations,
sometimes with the input from the GC during the preconstruction phase.
But in other instances the GC can make these choices as part of its means
and methods, in which case the GC will need to contract with an outside
structural engineer to assist with calculations and shop drawing
development.
Some of the CIP systems we discussed in this chapter included columns,
beams, walls, elevated slabs, and composite steel and concrete slabs. Just
about any concrete shape that can be cast in place on the jobsite can be
prefabricated. A GC estimator should work with the project superintendent
and evaluate cost, schedule, quality, and safety considerations when
choosing between CIP, on-site pre-cast, or off-site pre-cast. Concrete tilt-up
construction is typically a project owner’s choice and can be a very
economical building system that combines structure with building envelope.
There are many more estimating elements associated with tilt-up walls than
CIP walls. Post-tension cables replace rebar and allow slabs to be thinner
and lighter and improve interior building clearances. In our next two
chapters, we will evaluate QTO techniques associated with structural steel
and wood – those materials that often sit atop and connect with the concrete
discussed in these last two chapters.

Review questions
1 If one pre-cast concrete element was to be connected in the field to
another pre-cast element, how is that connection accomplished?
2 When would a contractor choose to cast concrete in place or pre-cast
concrete?
3 When would a contractor choose to site-cast pre-cast concrete rather
than purchase from a supplier?
4 What is one large cost savings of a tilt-up wall compared to a CIP wall,
and what is one large extra cost?
5 Why does the structural engineer ‘of record’, or the building structural
engineer, not provide design for concrete formwork or shoring or tilt-
up bracing and others?
6 What is the most expensive item associated with constructing a (A) CIP
wall, (B) CIP beam, (C) elevated slab, and/or (D) tilt-up wall?
Exercises
1 Assume a concrete tilt-up building with an outside footprint of 200′ ×
250′. Assume that panels are 9 inches thick and no larger than 30 feet
wide and all panels are 27 feet tall. The building has two man-doors on
each face and eight each 14′ wide by 14′ high truck doors on one face.
(A) How many panels will there be? (B) What is the weight of the
heaviest panel? (C) Utilizing a suggested estimating rate of 30 minutes
per panel for erection, how long will it take to tilt the entire building?
(D) With an eight-person erection gang of various crafts, as discussed
earlier, how many man-hours will be involved with the erection?
2 Match the labor craft (laborer, electrician, surveyor, cement mason,
operating engineer, ironworker, and carpenter) with the following
concrete activities. Note some crafts are utilized more than once and
others not at all for this exercise.

a Crane operation,
b Grout placement,
c Embedded steel installation,
d Patching of rock pockets,
e Shoring underside of beams or slabs,
f Shoveling concrete,
g Welding embeds together, and
h Aligning tilt-up panels after erection.
8 Structural steel

Introduction
Chapters 6 and 7 focused on quantity take-off (QTO) measurements for
several concrete systems that are often an area of work self-performed by
most general contractors (GCs) and comprise a substantial amount of direct
labor and corresponding estimating risk. But not all GCs are the same, in
that some perform other areas of work on either a sporadic or routine basis
depending upon their expertise, geographic location, union preferences or
affiliations, owned specialized equipment, availability of quality
subcontractors, or market conditions. There are a variety of materials
installed by carpenters, which we will cover in detail in the next chapter.
Here we are going to focus on the Construction Specification Institute’s
(CSI) division 05, which is predominantly installed by the ironworker trade.
Some of these types of work include:

Rolled structural steel shapes, including columns and beams,

Bar joist,
Miscellaneous steel, and
Metal decking.

We have grouped all structural steel related work into this chapter. Many of
the measuring and counting techniques and procedures presented in the
concrete QTO chapters apply to these systems, as well, and others that we
will cover in this book. Many GC estimators shy away from estimating
structural steel and rough carpentry, but they are not as complicated as
appears. Unfortunately, many GC estimators focus on concrete only, as that
is what they are most comfortable with. Even if the work described in this
chapter is subcontracted out, it helps for the estimator and project manager
to know the quantities and pricing that make up a subcontractor’s quote.
There is more to selecting a best-value subcontractor than just choosing the
lowest bid on bid day. We will discuss the bidding process in Chapter 20.
Knowledge of the makeup of subcontractor pricing is also a benefit to the
GC’s jobsite management team when analyzing monthly pay requests and
change orders, which are two of the additional types of estimates that we
will also introduce in Chapter 23. A new estimator can carve themselves a
niche in the construction industry by knowing just a little more about one
subject than do others, whether that is mechanical, electrical, and plumbing
(MEP) work or structural steel and rough carpentry. In this chapter, as in
many others, we use a lot of abbreviations, all of which are also described in
the book’s front material.

Rolled shapes
In the steel mill or factory, structural shapes are ‘rolled’ out. Some of the
structural shapes common in construction include:

Wide flanges (WF), formerly ‘I’ or ‘H’ beams, also designated as ‘W’,
Hollow structure sections (HSS), formerly tube steel (TS),
Channels,
Angles, and
Pipes.

Estimating structural steel is simply a process of counting members,

measuring their lengths, noting their weights per linear foot, extending the
math, and adding some other elements to that. Structural steel is primarily
shown on the structural engineering drawings, or the ‘S’ series, although
some steel may be shown on the architectural drawings and/or the
mechanical drawings. Structural steel is specified in CSI division 05 and
installed by ironworkers. The process of estimating steel should follow the
guidelines discussed previously; start with the work you are doing first and
progress through the building, similar to creating the construction schedule.
The steel QTO starts first with the building columns. A QTO spreadsheet
should be set up by the estimator that lists all of the different column types,
whether they are HSS or WF members. Pipes are used for columns, but their
connections are difficult and not preferred by contractors. Angles and
channels are rarely used for columns. Then, within each type, either HSS or
WF, separate the QTO spreadsheet by sizes, for example a vertical column
on the spreadsheet for 6 × 6 HSS and another for 8 × 8 HSS. Add a separate
column for W30 × 99 columns and another for W12 × 30 columns, and so
forth.
The next step is to count each steel column member from the structural
drawings. The columns may be shown on the foundation drawing (note
columns usually are associated with spot or pad or spread footings or pile-
caps). They may also be shown on the first floor structural framing drawing.
With each of the counts, it is important to note the length or height of the
columns as well. Every math step should be shown on the QTO; do not skip
steps. It is easy with Excel to combine many math steps in one cell, but this
can be prone to error when cutting and pasting spreadsheet rows and
columns. Combining formulas also makes it difficult for the estimator’s
senior manager to validate the accuracy of the estimate just prior to bid day.
So, utilizing our previous examples, the estimator may find:

8 each 6 × 6 HSS columns at 15 feet tall = 120 LF

4 each 8 × 8 HSS columns at 15 feet tall = 60 LF
4 each 8 × 8 HSS columns at 20 feet tall = 80 LF
= 16 EA HSS columns
2 W30 × 99 columns at 20 feet tall = 40 LF
14 W12 × 30 columns at 20 feet tall = 280 LF
 2 W12 × 30 columns at 40 feet tall = 80 LF
= 18 EA WF columns

When taking the column count off of the drawings they should be
‘marked up’, either with a highlighter or electronically, indicating that each
steel column has been accounted for. ‘Take-off’ means placing all the
measurable material results on the quantity take-off sheets, similar to the
process introduced in the concrete QTO chapters. Make sure each QTO sheet
is properly labeled. The estimator should not group different types of
systems together on the same sheet; for example, do not add wood doors to
concrete QTO sheets or toilet accessories to the steel sheets.
The next step will be to extend the counts and lengths to a total lineal
footage (LF) for each type and size of steel member. At this time, both 8 × 8s
can be added together for total LF (60 + 80 = 140 LF), and both W12 × 30s
can be added together (280 + 80 = 360 LF). Next, the weight per foot of each
of the member sizes must be looked up and multiplied times the total LF to
come up with total pounds per member size. Our goal will eventually be to
know what the total pounds, converted to tons, is for the project for all of
the structural steel. We buy steel by the ton, not per each or per LF or per
pound. The estimator does not need to look up the weight of the wide flange
members, as the designation already tells us that. A W30 × 99 is
approximately 30 inches deep and weighs 99 pounds per linear foot. Weights
for a few additional steel members are included in Table 8.1. The estimator
can find weights for all structural steel elements in the Steel Construction
Manual (www.aisc.org/Steel-Construction-Manual) or from a variety of
Internet sources. So for our simple example, we would end up with:

120 LF 6 × 6 × 3/8″ HSS @ 27.48#/LF = 3,298#

140 LF 8 × 8 × 1/2″ HSS @ 48.85#/LF = 6,839#
40 LF W30 × 99 @ 99#/LF = 3,960#
360 LF W12 × 30 @ 30#/LF = 10,800#
Total Weight = 24,897#
 Plus 15% gussets and plates = 3,735#
Total Pounds = 28,632#
Conversion to tons (T) @ 2000#/T = 14.3T

Table 8.1 Structural steel dimensions and weights

Structural Steel Dimensions and Weights

Wide Flanges: W 8 × 40 40 #/LF, 8.25″ d
W 24 × 62 62 #/LF, 23.25″ d
W 36 × 260 260 #/LF, 36.25″ d
Channels: C 6 × web 10.5 #/LF
C8×¼ 11.5 #/LF
C 12 × ½ 30 #/LF
Angles: 3×3×¼ 4.9 #/LF
4 × 4 × 3/8 9.8 #/LF
6×6×½ 19.6 #/LF
Hollow Structural Sections:
4 ½ × 4 ½ × ¼″ t 13.91 #/LF
6 × 6 × ½″ t 35.25 #/LF
8 × 4 × ½″ t 35.25 #/LF
Plates: 3/16″ t 7.66 #/SF
¼″ t 10.21 #/SF
½″ 20.42 #/SF
Pipes: 4″, Schd 80 14.98 #/LF, 4.5″ OD
6″, Schd 40 18.97 #/LF, 6 5/8″ OD
8″, Schd 60 35.64 #/LF, 8 5/8″ OD

We do not add waste or lap with steel, as we expect to have the pieces
fabricated to exactly the correct size. But the estimator should add a
percentage add-on for gusset plates, base plates, erection saddles, knife
plates, web stiffeners and similar appendages that are welded to the steel
members by the fabricator in the shop. The more of this we can have
prefabricated, the better the labor savings will be in the field. This was part
of the constructability discussion in Chapter 5. In our example we have
added 15% for gussets and plates. We purchase steel by the ton, so the
pounds also have to be divided by 2,000#/ton. The total weight number will
now be utilized for several percentage add-ons associated with structural
steel, as discussed later in this chapter and in the direct work pricing chapter.
Every steel member typically has two connections, one on each end. But if
you calculate two connections per each you would double up on half of
them when steel connects with steel. In the case of columns, they have only
one end to be connected, the bottom, and the top is accounted for with
beams, discussed next. Purchase and installation of anchor bolts (ABs)
embedded into wet concrete were included with the concrete QTO. Some
estimators choose to quantify ABs with CSI 05 work as that is the vendor
which will provide them. Contractors may attempt to have the columns
connected to the concrete foundations with para-bolts, which are drilled in
and epoxied after the concrete has set. These are more expensive than anchor
bolts and are not usually part of the original design and not acceptable to
many structural engineers.
Some estimators will take shortcuts with steel by simply allowing 10
pounds per square foot of floor (SFF) for all steel and not performing any
QTO, which does not take into consideration the specific project’s
idiosyncrasies. The next shortcut that some take is to figure labor on the
total tonnage for the project. The mistake here is that it takes the
ironworkers just as long to install a 6 × 6 HSS column or beam as it does an
8 × 8 HSS column or beam, even though the 8 × 8 weighs more. Many
estimating guides allow us to figure labor hours for steel members by the
‘each’. In this case we have a total of 16 HSS columns and 18 wide flange
columns. It is a good suggestion that the estimator look to their in-house or
published databases to see how the work will eventually be priced before
they do the QTO and extensions and conversions. This is similar to reading
the last chapter of a novel first, to see how the mystery will turn out.
Estimating steel elements by the each for labor and by the ton for material
purchase is the most accurate method, so the estimator should have both
quantities handy.
Horizontal floor and roof steel members have a variety of names
including beams, girders (which are large beams), lintels, joist, and purlins,
which are beams along the perimeter walls. Let’s group all of these into
beams for this conversation. Also similar to columns, beams are usually
wide flange members, HSS, or channels. Angles may be used for lintels and
purlins or additional support at blockouts. The QTO for beams is very
similar if not identical to the process for the column take-off. Count the
‘eaches’, measure their lengths, and note their sizes. Then extend out the
total length for each size and convert to pounds for each size member.
Additional beams are required for blockouts at stairs, mechanical shafts or
risers, elevator shafts, and under heavy loads such as mechanical and
electrical equipment. The beams should be installed by the each and
purchased by the ton, similar to the columns. We will discuss labor
productivity and steel material pricing in Chapters 10 and 12.
Beam connections quantified by the estimator are customarily two each,
one for each end, but if steel connects to steel, only one is counted.
Connections will either be welded or bolted. A structural steel
subcontractor, or GC who also specializes in steel erection, will diligently
count each bolt and calculate the total welds (in pounds) required in the
project. This is a tedious task, as there may be 50 or so different
configurations of bolted or welded connections on a typical commercial
construction project. A shortcut to this is to count common connections, that
is, there are 14 each 2/S601 bolted connection assemblies on the project, and
later estimate the labor productivity necessary to assemble that typical
connection. A shorter cut to this is to group all welded connections into one
pot and all bolted connections into another pot. Then the estimator can seek
out the connection for each type that occurs more than the others. For
example, 50% of the welded connections on the project are type 16/S601, and
the others are split amongst 14 different variations. Then a productivity
factor can be figured for that one common configuration and applied to all
welded connections, with a similar process for the bolted connections.
Connections are not always figured separate from member installation,
depending on the database used.
Nelson studs or ‘lugs’ are a vertical mushroom-looking appendage that is
welded through the metal deck onto the top of beams. When the concrete
topping slab is placed on the metal deck, this results in a composite deck
where the steel and the concrete now work together resisting horizontal
shear. Studs are not shown on the drawings but usually included as a note or
in a schedule, or in parentheses along with the beam size: W30 × 99 (20) has
20 lugs for that particular beam. Some beams will have a lot of studs, some
just a few, and others none at all. The stud spacing will also vary. The
estimator must make a count of Nelson studs and note them on the QTO, as
they have a significant impact on the amount of ironworker labor necessary
to complete the beam and deck installation.
Steel trusses in this context are different from bar joist, discussed next.
Bar joist are a manufactured relatively lightweight item, whereas structural
steel trusses are comprised of rolled shapes, bolted together either in the
shop or the field, and erected all as one assembly. The individual members
may be angle iron, channels, tube steel or HSS, or even wide flanges. If the
truss is completely assembled in the shop and delivered to the site in one or
two pieces, they would be quantified by the truss. If the truss is delivered to
the site in many individual parts and pieces, then each piece of steel would
need to be quantified separately. Their field assembly would be a very
similar process as assembling beams, but the assembly would usually be on
the ground at waist height, with the total truss temporarily supported on
blocking.
Once the truss is assembled, it would be lifted in place all as one assembly.
The installation is then similar to a truss that had been fabricated and
shipped to the jobsite whole. This author worked on an aerospace
manufacturing facility where the finished building was a 300′ × 300′ square
free space. The trusses were delivered to the jobsite in hundreds of pieces
and assembled lying horizontal on the ground to create several 30′ deep
trusses each 300′ long. Then five large cranes tipped the trusses vertical and
lifted them to sit atop 80′ tall columns. Photographs of this actual project are
available on the book’s eResource.

Bar joist
Bar joist is an inexpensive and lightweight cousin to steel beams. In this case
the structural engineer indicates the desired depth of the joist and the
weight it must carry but places the ultimate design responsibility on the
supplier, who must submit shop drawings and corresponding calculations. In
addition to cost and weight benefits, bar joist also add the flexibility to run
small pipes and ducts and conduits at a 90-degree angle through them,
whereas this is difficult to do with wide flange beams.
The method to determine the QTO for bar joist can be as simple as
measuring the square foot (SF) of area they cover, that is, length times width
of the building or portion of building covered by the joist; for example, 30′ ×
100′ = 3,000 SF. Some estimating databases will have joist purchased and
installed by the square foot of coverage. The problem with this approach is it
does not factor the depth of the joist (deeper joist cost more money to
purchase) or the weight they must support (stronger joist also cost more
money to purchase) or their layout, for example, 30 inches on center versus
48 inches on center. The tighter the layout, the more joists that are required,
and that will also cost more money.
An alternative QTO method is to follow our guidelines for columns and
beams in Figure 8.1. The estimator first notes the joist sizes, or in this case
the depths. There is no need to focus on the weight they support, as this will
be up to the fabricator to incorporate. Then measure their length and
calculate the total LF of all of the similar depth of joist. Both the labor
productivity and material purchase price may be figured on the LF, as will
be discussed in the pricing chapter.
An even more accurate way to perform QTO for bar joist, as it relates to
labor productivity (at least in this author’s opinion), is to count how many
joist there are. Sometimes each joist is drawn by the structural engineer, but
often a note is just provided indicating they are 2 feet on center. In this case,
the estimator measures the width of the area covered, divides by 2 feet to
come up with a count of joist, and then adds one more for the end. The
quantity of connections will be two per joist, one for each end. The drawings
are marked up with a highlighter indicating that each joist, or area of joist,
has been accounted for. It takes one crane and two ironworkers (one at each
end) to install a joist, regardless if it is 18 inches deep or 36 inches deep and
regardless if it is 20 feet long or 40 feet long. The material price is, however,
depth and strength related and must follow the LF QTO process, as
described earlier. Looking back at our example of 36″ deep joist spanning 30′
at 2′ on center (OC) and covering a 100′ area would require:

100′/2′ OC = 50 EA 36″ deep joist, plus one for the end = 51 joist
at 30′ long each
51 EA 36″ deep joist @ 30′ long/EA = 1,530 LF to purchase

Angle iron or steel rod bridging or X-bracing will run perpendicular to the
joist and may not all be drawn and are therefore difficult to quantify,
especially if threaded rod is used. If possible, a detailed count and weight are
calculated. If not, a percentage add-on (10–15%) similar to the previous
column example can be applied.

Miscellaneous steel
Often the most difficult element of CSI division 05 to perform QTO on is
miscellaneous steel. Any item in construction which has the prefix
‘miscellaneous’ in it is by definition ambiguous. There are many steel
elements in a construction project that fall into this category, even if the
building is a concrete or wood structure. The miscellaneous steel may be
shown on the structural drawings, but much of it is found on the
architectural or civil or mechanical drawings. It is up to the GC’s estimator
to find it all. There is not a comprehensive list in the documents (some items
are called out in the specifications), and nonstructural subcontractors, such
as mechanical and electrical, usually exclude it. Some of the items we group
under ‘miscellaneous’ steel include:

Figure 8.1 Structural steel quantity take-off sheet

Steel stair flights,

 Handrails,
Embedded angle or channel,
Pipe bollards – both inside and outside of the building,
Grates over trenches or catch basins or decks or air shafts,
Mechanical and electrical equipment sleepers or curbs,
Deck and awning supports and metal decking, and
Ladders, such as an elevator pit or roof ladder.

The best method to perform QTO for miscellaneous steel is to note all of the
items and their counts or lengths. Miscellaneous steel may be purchased by
the item or each or LF or pound, but rarely by the ton. Installation will also
be by the each or LF. Steel stairs would be estimated by the ‘flight’. This is
another place where it is a good idea to look ahead at the last chapter of the
novel, or in this case at the estimating database, to see how the work will
ultimately be priced and perform and organize the QTO sheet accordingly.
Structural and miscellaneous steel will also be delivered to the jobsite in
different conditions, such as shop-primed, galvanized, or bare steel. Bare
steel is likely embedded in concrete or will receive a fireproof coating in the
field. Galvanized steel will be left exposed to the weather. Steel that is
delivered shop-primed often becomes nicked or damaged in the field and
will require touch-up painting before being finish-painted or enclosed in
gypsum wallboard (GWB). Field welds and bolts also should be touched up.
The GC should include an allowance in the painting subcontractor’s scope
for touch-up.

Metal decking
Metal decking often receives a concrete topping to create a composite steel
and concrete deck. The decking is taken off by the square foot of coverage
area. The estimator simply multiplies length times width of the building or
area served by the deck. Openings such as stairs or elevators or heating,
ventilation, and air conditioning (HVAC) duct shafts are not usually
deducted from this SF calculation, as the deck will often be delivered in
whole sheets (5′x10′) and the openings cut out later. Even if openings were
deducted prior, the cost of working around them is more than straight flat
deck, so a deduction in SF would be counterproductive for labor costs. In
most cases the structural engineer will choose one size of deck to use
throughout the same project, but if multiple depths or gauges of deck were
to be used, the QTO sheet would need to be organized around these different
sizes. After the deck SF is calculated, it may be converted to squares (SQ) or
hundred square feet (CSF). Contractors do not purchase deck by the sheet or
pound or ton.
Metal deck that is to receive a concrete topping slab will often be ordered
with a shop-fabricated edge angle on the outside building perimeter, and
preferably around all interior block-outs. This angle will function as an edge
form for the elevated concrete deck; therefore, an additional wood form
would not be required. This is another example of constructability the GC
will input to the design, either during preconstruction or during buyout of
the metal deck supplier. The deck will be puddle-welded to the beams and
joist below. An estimator can either count the welds, such as one per 2 feet
on center for every joist, or calculate the deck welding on a SF of deck basis,
again depending on how the welding operation will be priced.
Metal deck is ‘gauge’ steel and not a ‘rolled’ shape. We typically do not
include gauge metals with structural steel, but metal decking is the exception
because it functions in a structural fashion, especially when combined with
beams and concrete to create a structural composite deck. Specialty metals
such as stainless steel, aluminum, or copper are also not included in the
structural steel QTO. There are many other gauge metals in a construction
project that may be installed by trades other than ironworkers and not
necessarily specified in CSI 05. Some of them are listed here by CSI division
and include:

05: Metal studs and joist, installed by carpenters with gypsum wallboard;
07: Metal wall and roofing panels, installed by sheet metal workers or
roofers;
 07 and others: Metal flashing, gutters, and downspouts, installed by sheet
metal workers or roofers;
07, 10, or 12: Louvers, installed by many trades; and
Old 15, new 23: HVAC ductwork, installed by sheet metal workers,
nicknamed ‘tinners’.

For a typical structural steel building, the steel QTO would be several sheets
long. Each of our structural steel categories (columns, beams, joist,
miscellaneous steel, and deck) would all have their own separate QTO sheet,
if not many sheets for every category. In addition, each floor and roof would
have its own QTO sheet. The steel categories we discussed are likely
provided to the GC for installation, or an installation-only subcontractor, by
four different suppliers:

Rolled shapes including columns and beams (likely purchased together),

Bar joist,
Miscellaneous steel, and
Metal decking.

If the main structure of the building was concrete, as discussed in our last
chapters, or wood framing, as discussed in the next chapter, there may only
be a small amount of steel on the job, and then it would be acceptable to
group all of it together. Figure 8.1 is an abridged example structural steel
QTO sheet for our case study project.
There are additional structural steel items and equipment we will price,
but not necessarily take-off; these items are total tonnage or schedule
dependent. Some of the items we will include on our steel pricing recap
sheet will be: Shake-out, safety, crane mobilization and rental, operators and
riggers, forklifts, man-lifts and scissor lifts, compressors and welders, plumb
and align, and others. Prices for these add-ons are included with Chapter 12.
Summary
Rolled shapes of structural steel include wide flange beams and columns,
HSS columns, channel beams, pipe columns, and angle iron bridging and
lintels. Estimators should have some idea as to how work will be estimated
for labor productivity and material purchase and perform their quantity
take-off to allow easy transition from the QTO sheets to pricing
recapitulation sheets. Steel elements can be taken off by the each, separated
by size and category, lengths noted, and converted to pounds and tons. Bar
joist can also be quantified by the SF of floor coverage, linear foot, or each.
There are many different elements which make up the miscellaneous steel
category. Many of these items are shown on the architectural drawings.
They are best quantified by the type and each and not customarily converted
to pounds or tons. Metal decking is quantified by the square foot of coverage
and converted to hundred square feet or squares.
In this chapter we tried to capture many of the structural steel items a GC
‘might’ install direct, but there are others. These types of work items all have
unique quantifying processes, and there are often shortcuts for each.
Shortcuts work fine for budget estimating or when there is not sufficient
detail in the drawings, but if the detail is available, the estimator should take
the time to do a thorough quantity take-off. Shortcuts can result in shortfalls
and are risky. Detailed estimates are essential for lump sum bidding and are
beneficial for later development of the construction schedule and
implementation of the cost control plan, both of which are introduced in
Chapter 24.

Review questions
1 How many pounds are there in a ton?
2 Why do we separate different estimating categories by types of
craftsmen, for example, carpenters versus ironworkers?
 3 Should the rental equipment necessary to erect structural steel be
included with the labor cost to install the steel or with the jobsite
general conditions, and why there?
4 Wide flange columns and beams have the abbreviation of WF. What are
some of the other past and present abbreviations for wide flanges?
5 Why would an angle iron not necessarily make a good column choice?
6 Why are different steel categories (rolled shapes, bar joist,
miscellaneous steel, and decking) usually supplied by different vendors?
7 If a GC were to install only one of the four categories of steel, which
one would it be, and why that one?
8 Why would a GC prefer para-bolts over anchor bolts?

Exercises
1 Looking back to Chapter 5’s discussion of constructability, what
suggestions might a GC make to the structural engineer with respect to
the structural steel drawings?
2 Figure 8.1 is an abridged QTO for the Dunn Lumber case study project
utilized in the book. The actual steel QTO would be several pages long.
Compare this QTO to the drawings on the book’s eResource: What did
we miss?
3 Although our Lee Street Lofts case study included on the book’s
eResource is primarily a wood-framed building atop cast-in-place
concrete walls, there was a substantial amount of structural steel –
some of it left exposed as interior architectural features. Prepare a steel
QTO for this project.
4 Including allowances for gussets, etc., compute the total tonnage for the
following quantities and sizes of rolled steel members. You will have to
look up the weights of the steel members for this exercise.

a 100 LF of 3.5 × 3.5 × 1/4 angle

b 250 LF of 12 × 3 × 5/16 channel
 c 85 LF of W36 × 135
d 525 LF of 4 × 4 × 1/4 HSS

5 How many LF of bar joist are there in an area measuring 100′ × 100′
where the joists are 30 inches on center?
6 Building on the joist question in Exercise 5, assume that WF girders sit
atop steel columns which are 33′ apart and the joist span from girder to
girder. How many joists will be in this 100′ square grid? You may want
to draw a sketch for this question.
7 Looking to the list of materials in Exercise 4, and assuming that each
steel member was the same length, let’s say approximately 30′, and all
things being equal (which they never are, but…), which element would
take the most labor to install?
9 Carpentry

Introduction
Chapters 6 and 7 focused on quantity take-off (QTO) measurements for
concrete, and Chapter 8 focused on structural steel. In this chapter we are
going to cover several remaining categories of work, many of which may be
installed by the general contractor (GC). We have grouped all of these items
together in this chapter because they are predominately scopes of work
claimed by the carpenters’ union and/or usually installed by the carpenter
trade. It is customary to think of the carpenter trade performing woodwork
specified in Construction Specification Institute (CSI) division 06, but there is
also carpenter work in CSI divisions 07, 08, 10, 12, and others. Carpenters are
also responsible for CSI 03 concrete formwork, as discussed previously.
Many of the measuring and counting techniques and procedures presented
in the previous QTO chapters apply to these systems as well and others that
we may not have covered. Some scopes of carpentry work include:

Rough carpentry or framing,

Siding and roofing,
Finish carpentry including cabinets and millwork,
Doors, door frames, and door hardware,
Punch windows, and
Specialties including toilet accessories, signage, fire extinguishers,
lockers, and others.
Rough carpentry
Steel and wood buildings have significant differences, but many of the QTO
processes are similar. We count and measure the materials and extend and
convert into purchasable quantities. Carpentry is of course installed by
carpenters. Most of this work is grouped into CSI division 06. We separate
rough from finish carpentry for a couple of reasons. Some GCs may
subcontract out the rough carpentry, or framing, but may perform the finish
carpentry themselves; others just the opposite. Although many carpenters
will tell you that they can do both rough and finish carpentry, this is not
customarily the case. This author was a pretty good rough framing carpenter
but was not patient enough to be a good finish carpenter, whereas his father
was just the opposite. A rough carpenter uses a sledgehammer and an axe
and a nail gun, whereas a finish carpenter uses a nail set and block plane
and sandpaper. They belong to the same union and are paid the same wage
rate but have different tools in their toolboxes. On a residential project, all of
the carpentry may be included on the architectural drawings, whereas
commercial projects clearly have the structural framing included with the
‘S’ or structural drawings, and the finish carpentry is on the ‘A’ or
architectural drawings.

Framing
The very shortcut way to perform a wood framing QTO is simply by the
square foot of floor (SFF) or, in the case of an apartment building, by the
unit. The second easiest is to run a tape or a wheel along the total wall
length and figure wall framing (all types together) by the lineal foot (LF) of
wall. Software QTO systems perform the same process. There are multiple
problems for the estimator who relies on shortcuts and does not perform
detailed QTOs. In this case, some of the variables include

Engineered lumber versus dimensional lumber,

2 × 10 versus 2 × 12 floor framing and joist frequency,
 2 × 4 versus 2 × 6 wall framing and stud frequency,
Single, double, or triple top and bottom plates,
Wall height,
Double or staggered stud configurations and stud packs,
Shear walls with multiple layers of plywood sheeting on one or two
sides,
Framing hardware, and others.

Similar to structural steel, a detailed wood framing QTO starts at the bottom
of the building and works its way to the top. Pressure-treated (PT) plates are
applied to the concrete foundation walls. They are measured in LF by sizes,
usually 2 × 4 or 2 × 6. If columns or beams are in contact with concrete, they
will also be pressure-treated. Pressure-treated lumber should be quantified
separate from the other dimensional lumber, as it is generally more
expensive to purchase.
Dimensional lumber is ‘sticks’ cut straight from trees and ranges in size
from 2 × 4 and 2 × 6 to 2 × 12 or even 12 × 12. These are ‘rough’ sizes, before
planing. A 2 × 4 actually measures 1.5″ × 3.5″, but when we figure board feet
(BF) or thousand board feet (MBF), we figure it on the gross size, 2 × 4.
When performing a wood framing QTO it is important to note the type and
grade of tree that the lumber came from. For example, a Douglas fir (DF)
graded #2 and better (BTR) will be stronger and more expensive (and
straighter!) than that cut from a hemlock tree of similar size and grade. If
lumber is specified as hem-fir (HF), that means it can be either hemlock or
fir, but because hemlock is cheaper than fir, hemlock will be most prevalent
in the bundle when received from the lumber supplier. There is no such
thing as a hem-fir tree.
Wood columns and beams are counted and measured very similar to the
structural steel examples in Chapter 8. We count their quantity and note
their sizes and lengths. Also similar to steel, estimating columns and beams
by the SFF is a shortcut and is risky. The most prudent method is to count
each wood framing member, or ‘sticks’, and add up all of the common sizes
and lengths and convert them to board feet and thousand board feet. In
Table 9.1 we have provided the reader with conversions for the most
common dimensional lumber sizes, from LF to BF. Solid sticks, often cut
from old-growth fir trees, include 6 × 6 columns or 6 × 12 beams. A more
sustainable way for the designer to specify large sizes such as this today is to
use engineered lumber, as discussed later, or ‘stud-packs’ for smaller
columns. For example, an 8 × 8 column could be comprised of five each 2 ×
8′s nailed together in the field. Each individual 2 × 8 could more easily come
from a smaller tree than one 8 × 8.
Wood joist are counted similar to steel bar joist, measuring the area
covered and dividing by the frequency of occurrence, whether they are 16″
on-center (OC) or 24″ OC, and always adding an additional joist to the end.
The end joist may be known as a rim joist.

Table 9.1 Dimensional lumber board foot conversions

Dimensional lumber board foot conversions

Lumber size Board feet (BF) per lineal foot (LF)*
1×2 0.17
1×4 0.33
1×6 0.50
1 × 12 1.00
2×4 0.67
2×6 1.00
2×8 1.33
2 × 10 1.67
2 × 12 2.00
4×4 1.33
4×6 2.00
4×8 2.67
4 × 10 3.33
 Dimensional lumber board foot conversions
Lumber size Board feet (BF) per lineal foot (LF)*
4 × 12 4.00
6×6 3.00
6×8 4.00
6 × 10 5.00
6 × 12 6.00
* Note: BF/LF can be calculated for any board size by multiplying the two dimensions
and then dividing by 12, for example a 2 × 12 joist is 2 × 12/12 = 2 BF/LF and a 10 × 20
beam would be: 10 × 20/12 = 16.67 BF/LF.

Rim joist also run perpendicular to common joist, secure the end of the
joist, and sit atop a PT plate. Seldom are the joists all drawn by the
structural engineer for all of the floors and roof, as this would cloud up the
drawing and it would be very difficult to draw every joist exactly, allowing
the contractor to change order for any discrepancies. Also similar to steel,
additional wood beams and joist will be necessary at blockouts such as
heating, ventilation, and air conditioning (HVAC) duct risers. The total count
of joist times the span or length provides the total LF, which is converted to
BF and MBF. For example, let’s assume again a 100′ square area supported
by 2 × 8 DF #2 and BTR @ 16″ OC. The resultant quantity of joist in LF and
MBF would be:

100′ × 12″/16″ OC/EA = 75 rows + 1 @ end = 76 rows @

Joist:
100′ long
76 rows @ 100′ (don’t deduct for the rim joist) = 7,600
LF
Rim joist: 2 EA @ 100′ = 200 LF, perpendicular to common joist
Total: 7,600 + 200 = 7,800 LF × 1.10 waste and lap = 8,580 LF
8,580 LF × 1.33 BF/LF = 11,411 BF/1,000BF/MBF = 11.4
MBF
 Quantity: The purchasable quantity will vary depending on
layout, but assuming 16′ long/EA = 8,580 LF / 16′/EA =
536 EA of 2 × 8 joist
(Don’t round up, as 10% for waste and lap is already
included)

So now, depending upon the method to price both the labor to install the
joist and the unit price to purchase the material, the estimator has all of the
quantities available necessary to move to the next pricing recapitulation
stage, described in Chapters 10 and 11.
Wall framing has a couple of different elements. Most projects have
multiple wall types, and the structural drawings will have a wall schedule.
Each wall type should be quantified separately. They differ with respect to
plate count, stud sizes and layout, plywood sheeting, and framing hardware
required. Bottom plates can be one or two boards thick, and top plates are
usually two boards thick. Once the total LF of a wall type is known, this
dimension can be simply multiplied times the plate quantity to come up
with a total LF of plates, which can also later be converted to BF and MBF.
Wall studs are not typically shown, similar to joist, either, and it is up to the
estimator to figure their count. The different wall types and lengths and
heights are known, and the stud frequency, often 16″ OC or 24″ OC, is given.
Some walls have double or back to back or staggered studs, and those must
be accounted for independently. Our rule of thumb (ROT) for calculating 16″
OC stud count is to figure one stud per LF of wall. This is more than
required but will account for added studs at corners and intersecting
partitions and cripples at doors and windows. The estimator should figure
1.5 studs per linear foot if they are specified at 2′ OC. The total stud count
times the height of the wall (deducting for plate thickness can be done, but
this is outside of the 80–20 rule) will produce a total LF of studs and then
will convert to BF (.67 BF/LF of 2 × 4 or 1 BF/LF of 2 × 6) using Table 9.1.
If the walls, whether they be structural or non-bearing partition walls, are
framed of metal studs and not wood studs, they will be typically installed by
the gypsum wall board (GWB) subcontractor. The same holds true if the
ceiling joist are metal. Metal gauge studs and joist may be specified in CSI
division 05 but will not be supplied by the structural steel fabricator, as
discussed in the last chapter. On occasion the gauge material may be
specified in 09 along with GWB. Although the carpenter trade also installs
the metal studs (and the GWB, acoustical ceilings, plaster, and others), they
are installed by different carpenters with a different skill set and a different
set of tools. QTO and pricing subcontracted work is discussed in detail in
Chapters 14–16.
Wood door headers and window headers can also be cut from dimensional
lumber. Sizes and spans should be separated and counted and then like sizes
grouped together to calculate total LF, which can be converted to BF and
MBF in the case of dimensional lumber, similar to beams and columns. The
thickness of a header usually matches the stud width; for example, 2 × 4
walls utilize 4 × 8 or 4 × 12 headers. Headers today are often fashioned from
engineered lumber, which is straighter and does not shrink, as discussed
next.
Heavy timbers are those customarily larger than 12 inches square,
potentially rough-cut if left exposed, sometimes from old-growth timber or
even reclaimed from existing buildings. They are unique structural
members, often beams and columns, and ones that an estimator would not
want to price from a standard estimating database. They should be counted
by the each, with sizes and lengths noted and no additional conversions
required.
Blocking and backing may be shown on the drawings, and if so, estimated
similar to beams. Some common locations an estimator should look for
blocking (or bridging) and backing include rows perpendicular to joist, over
or under shear walls, behind toilet accessories and kitchen cabinets, or
support for anything else surface mounted to the GWB. But if just an “Add
blocking as required” note is on the framing drawings, then it is customary
that the 10% we recommend adding to the wood framing QTO will suffice
for blocking and backing.
Engineered lumber
Engineered lumber comprises a growing family of wood framing products
that are ‘sustainable’. Different than dimensional framing lumber, these
members are not cut whole from an old-growth tree but rather assembled
from smaller trees and glued together to produce a stronger and straighter
product. Engineered lumber typically does not shrink or split like
dimensional lumber. For ease of matching up with or substituting for
dimensional lumber, engineered products are fabricated in the same (final)
sizes as are typical framing lumber. For example, Truss Joist International
(TJIs) are 9½″ or 11¼″ deep, similar to the planed sizes of a 2 × 10 or 2 × 12
joist. There are many types of engineered lumber products today, including:

Glue lam beams (GLB),

Wood ‘I’ beams or TJIs,
Parallel strand lumber (PSL) or laminated veneer lumber (LVL),
Cross-laminated timbers (CLT),
Oriented strand board (OSB) discussed with sheeting, and
Trusses: Roof or floor.

The QTO process for these members is similar to dimensional lumber, but it
must be kept separate and not grouped together and will often be purchased
from alternate suppliers. An adder for 10% lap and waste is usually not
necessary for engineered lumber as, similar to structural steel, this material
is fabricated and delivered to the jobsite to fit exactly. Engineered lumber is
more often purchased by the LF rather than MBF and labor for installation
estimated by the LF or each.
Wood roof trusses are more common on residential than commercial
projects. They can be flat or sloped, such as 5″ rise in 12″ run. These trusses
will sit atop load-bearing exterior walls and allow uninterrupted free space
between the walls. The trusses are purchased from a supplier and shipped to
the jobsite in one piece. The supplier will ‘engineer’ them and size the wood
members and the steel gusset plates. The truck they are shipped on often is
equipped with a small crane or boom to allow unloading and placing
directly on the walls of the structure. The wood truss take-off is very similar
to the steel bar joist take-off. Most published databases such as Means have
trusses priced by the SFF or SF of roof. This does not account for the
frequency of occurrence, i.e. 16″ OC or 2′ OC, nor the framing material, 2 ×
4 versus 2 × 6, etc. Many trusses are composed of all wood, but some
combine wood with gauge metal for elements in tension. The trusses are
estimated by the supplier by the each, and a good way for the GC’s
estimator is to quantify them by the each. It takes three carpenters just as
long to install a 20′ truss as it does a 30′ truss.

Framing hardware
We do not calculate the quantity of nails or screws or glue or caulking
required for a typical construction project – they fall outside of our 80–20
rule – but often an allowance of $1,000 or so will be included in the estimate.
We do, however, need to calculate the amount and types of framing
hardware required. “Simpson” hardware is a common brand of hardware,
and all wood framing hardware is often generically thought of to be
Simpson hardware. The proper way to perform the QTO for hardware is to
categorize each different type and count them from the framing drawings,
marking them up in hand with a highlighter as we have discussed
previously, or performing the same process electronically with QTO
software. As a shortcut they can be all grouped together, similar to structural
steel connections discussed in the previous chapter. An even shorter cut is to
just allow $/SFF for framing hardware. The problem with either of these last
two methods is they are not accurate and are risky. Some of this hardware
can cost hundreds of dollars per each and others less than a dollar, so to
group them all together would be shortsighted. If the estimator were to be
awarded the bid, he or she would still have to come up with definitive
counts to be able to place a purchase order with a hardware supplier.
Sheeting
Sheeting for walls and floors and roofs is easy for the estimator to calculate:
Simply multiply the length of the area to be covered times the width or
height. Similar to metal decking, it is not necessary to deduct for openings
unless they were substantial, such as glass curtain wall. Ten percent is added
to SF of coverage for waste and divided by 32 SF per sheet to come up with
the quantity of either plywood or OSB sheets required. The estimator should
keep plywood and OSB separate and all of the different thicknesses of
sheeting, such as ½″ and ¾″, separate as well. Sheeting will likely be priced
out of a database by the SF, but having the quantity of sheets handy will be
helpful during the buyout and construction process. If we had an area of
100′ square requiring ¾″ tongue-and-groove (TNG) plywood, the sheet
calculation would be as follows:

100′ × 100′ = 10,000 SF × 1.1 waste = 11,000 SF

11,000 SF/32 SF/sheet = 344 sheets of 3/4″ TNG plywood

The same rules for combining different structural steel elements apply
here as well for the rough carpentry QTO sheets. If this were an all-wood
building, there would be many sheets of carpentry QTO, often separated by
floor or system, and walls versus floors versus roofs, but if it were primarily
a steel or concrete building structure, much of the wood could be captured
on just one or two QTO sheets. Figure 9.1 is an abridged example of a rough
carpentry QTO for another project we worked on professionally. The
commercial case study we chose to include for most of the examples in the
book does not have wood framing or significant rough carpentry. We have
however included drawings for an executive four-plex townhome project on
the book’s eResource. That project will require several QTO sheets for each
of our carpentry systems discussed in this chapter.

Siding and roofing

There are many different types of siding on a building, including glass and
brick and steel and granite, etc. Very few commercial buildings today would
have wood siding, and even the houses that do are seldom cedar anymore,
but more often a cementitious material such as HardiePlank. Wood siding
and cedar wood roofing shingles may be included with wood CSI division 06
or may be with division 07 along with the balance of waterproofing and
roofing materials. If a GC were to figure the wood siding to be performed by
its own carpenters, it would be quantified by measuring the surface area of
all of the walls, length times height, to come up with total square footage.
Windows and doors are again seldom deducted from this quantity. In the
case of beveled siding, up to 20% would be added to the SF of wall for lap
and waste. The siding is then purchased by the linear foot. For example:
 Figure 9.1 Rough framing quantity take-off sheet

100 LF × 16′ high = 1,600 SF × 1.2 waste and lap = 1,920 SF

1,920 SF × 2 rows/SF = 3,840 LF of six-inch beveled siding
Or 8-inch beveled siding = 1,920 SF × 1.5 rows/SF = 2,880 LF

Regardless if the siding is cedar or HardiePlank, it is usually accompanied

with rough-sawn (one face) cedar trim around doors and windows; 1 × 4 and
1 × 6 are often the most common sizes. The material is quantified by the
linear foot, and at a minimum 10% is added for waste. It is difficult to find
straight cedar trim material without knots. Clear cedar is very expensive.
This author’s father would buy up to twice the material necessary just to
‘cherry-pick’ the good ‘sticks’ from the cedar siding or cedar trim pile; the
remainder making good but expensive kindling for the fireplace at home.
Cedar siding and trim quantities therefore should include a 20–30% waste
factor.
There are many other materials that the siding or building enclosure could
be designed from, but these are typically not carpenter or GC installations.
Some of them would include masonry (CSI 04), metal siding (CSI 07), glass
or curtain-wall (CSI 08), and stucco (CSI 09). These systems are all supplied
and installed by subcontractors and will be discussed in an upcoming
chapter.

Roofing
Very few if any GCs will install roofing with their own craftsmen, but a few
residential contractors will on a smaller scale. Roofing materials used to be
all cedar shingles or cedar shakes, and therefore it was also the responsibility
of the carpenters to install. Today it is more common to see tile or
composition shingles or composite products for houses. Carpenters claim all
types of shingles and will also install metal roofing on residential, but sheet
metal workers will claim the work on commercial projects. In commercial
there is a ‘roofing’ trade which will essentially take the entire roof, including
hot-mopped or single-ply rubber membrane. If an estimator were to
quantify the roofing, he or she would measure the square footage looking
down on the roof, multiple by a factor from Pythagorean’s theory to
accommodate for the slope (a2 + b2 = c2), factor lap, and convert the total
quantified square footage into squares; 100 SF = 1 SQ. An alternate is to
measure the length of the roof and multiply times the sloped width or height
taken from the exterior elevation drawings. Any underlying waterproofing
membrane, such as 30# asphalt, would be quantified the same way. Typical
with many QTO processes, as long as the estimator is ‘there’, it is easy to
quantify related materials. In this case, siding and roofing typically have
similar quantities to many other division 07 materials, including vapor
barriers, waterproofing, and insulation.

Finish carpentry
Finish carpentry, like rough carpentry, is also specified in CSI division 06 but
shown on the architectural drawings. Some of these items may be purchased
from suppliers and installed by the GC, and some may be packaged together
and purchased and installed by subcontractors. Sometimes the GC will
purchase the material from one supplier and employ a labor-only
subcontractor to install it. Regardless, it is a good idea for the GC’s estimator
to figure the quantities in detail to allow him or her to make informed
decisions on pricing options on bid day as well as later during buyout.
Similar to our discussion in the previous chapter of miscellaneous steel, there
are a plethora of finish carpentry materials that could be on a project. We
will focus on just a few of the more common, including millwork, cabinetry
and countertops, wood flooring, and wood paneling.

Millwork
Millwork is a large group of materials that generally comprise small wood
interior trim items. The estimator should categorize them separately by
location or use, note the materials (wood and species, versus composite
materials, versus plastic), and measure their lengths. Millwork is quantified
by the LF and should include an allowance of 10% for waste. If at all
possible, it would be beneficial for the GC to purchase all of these materials
from the same supplier. Some of the millwork items found in residential or
commercial building projects include:

Base and crown molding,

Interior door and window casing,
Wood stair and balcony rails,
Shelving,
 Backsplash at countertops,
Stair and balcony wall caps,
Corner guards,
Wall bumper or chair rail, and others.

A shortcut for performing the millwork QTO is to group all types of

millwork together into one LF total, but variances in material unit prices
may cause this to be problematic. Closet and pantry kits include shelves and
rods and today are most often metal, covered with vinyl, but still categorized
as millwork and installed by carpenters. They are usually quantified by the
set or kit or closet.

Cabinetry
Cabinetry exists in residential projects in the kitchen, bathroom (vanities),
and the utility room. Commercial projects also have kitchens or coffee or
break rooms with cabinets. Commercial projects may also have cabinetry in
executive offices, libraries, or conference rooms. Where finishes change, for
example from plastic laminate (Plam) to oak to cherry, the cabinet take-off
must be kept separate by material type. Many estimators and estimating
guides have cabinets quantified by the LF or SF, looking down into a room
at the floorplan. These are quick and easy take-offs to perform but have risks
associated with them. Lower cabinets are customarily 2 feet deep, and upper
cabinets are 1 foot deep. If LF is the basis for the take-off, it will not take into
consideration that the lower cabinets are much more expensive to purchase
but counted the same as the upper cabinets. Measuring the cabinets by the
SF corrects this inconsistency, but does not consider the increased
magnitude of labor effort for installing the upper cabinets. They have to be
temporarily shored and held in place and leveled before fastening to the
wall, whereas the lower cabinets are held in place by gravity and require
simple leveling with shim shingles before attaching. If the estimator uses SF
as the metric, he or she places twice the labor effort into the lower cabinets.
An alternative is to estimate the cabinets by the each or ‘box’, similar to our
discussion with some steel members in the last chapter. It takes just as long
to install a 2-foot-wide cabinet as a 3-foot cabinet.
Cabinet tops may be purchased from the same vendor as the cabinets, but
depending on materials, they often come from an alternative source. Some
countertop materials utilized today include:

Plam,
Ceramic tile,
Soap stone,
Corian,
Granite tiles,
Solid granite, or even concrete slabs.

Carpenters may install the plam tops, but the others are likely subcontracted
by firms that employ tile masons. Cabinet tops can be quantified by the SF
of top, which should approximately equal the SF of lower cabinets discussed
earlier. Cut-outs for sinks and ranges should not be deducted from the SF,
similar to our discussion of plywood sheeting earlier in this chapter and
metal decking in the last chapter. There is more labor to accommodate these
cut-outs than there is a flat uninterrupted counter-top installation. Cabinets
or casework specified in CSI division 12, and not 06, are specialized and
most often supplied and installed by a subcontractor. These cabinets are
common with hospital or laboratory or school projects.

Wood flooring
In most cases wood flooring is supplied and installed by the flooring
subcontractor. It is beneficial for the GC to package all of the flooring (and
base) together with one firm; that way, if it is on the floor, it is that
subcontractor’s responsibility, regardless if it is carpet or tile or vinyl or
wood. The question of who installs the transition strips is also resolved if
packaged under one firm. But because wood flooring is made of wood, it
may also be installed by the GC’s carpenters. Like many of our items in this
chapter, only if the GC was short on work, if there was a small quantity, or if
this was one area in which the GC specialized would they choose to do this
work. Wood flooring would be taken off by the square foot of floor area,
simply measuring length times width. An allowance of 10% for waste would
be appropriate here as well. Then a conversion would be necessary for the
width of the floor material. If the material were ¾″ thick TNG oak at 3″
wide, then the SFF would be divided by 4 (four boards of 3″ in each foot) to
get the LF of material necessary.
Vinyl plank flooring may look like wood but really isn’t. It may have a
thin particle board backing, but more likely it is made of compressed paper
or composite resin materials. Seldom would a GC do this work with its own
carpenters but would prefer to subcontract it out with the balance of the
other floor systems. This would be quantified by L × W = SFF plus a minimal
allowance for waste, say 3–5%.

Wood paneling
Wood paneling was popular in residences in the 1970s but not so much
anymore. Paneling can be found in some high-end offices, such as a
downtown attorney’s office, business reception areas, or elevator lobbies.
Wainscot is wood wall paneling 36″ or 42″ high located in some of these
same upgraded spaces or in hallways. Wood paneling is rarely work
installed by the GC’s own carpenters and would most likely be
subcontracted out. The QTO would be performed similar to the wood floor
QTO, except by wall area, not floor area. The total SF would be divided by
the material size. If wall paneling were composed of individual boards, it
would be similar to our wood floor analysis. If the paneling is in sheets, then
the SF would be divided by 32 SF/sheet.

Doors, door frames, and door hardware

Doors, door frames, and door hardware (DFH) are one of the easiest
categories to ‘take-off’, and one often assigned to a junior estimator or
project engineer. Even though we promote performing the QTO in a logical
sequential fashion as the building would be built, starting with the
foundations, it is sometimes difficult for an estimator to get started. Jumping
in with the DFH QTO is an easy way to get into the flow of the estimating
process. Doors, door frames, and door hardware are specified in CSI division
08 and customarily installed by the GC’s carpenters. There are also special
gates or garage doors in 08, which may be subcontracted and installed by
different trades. But in this section, we are focusing with what in the
industry are known as ‘man’ doors; sorry, ladies!
One mistake inexperienced estimators will make is to simply take the
door schedule out of the architectural drawings, even literally cutting it out
and taping it to a standard QTO sheet, and performing the ‘take-off’ right
there. That process is very simple and quick and may be accurate, but it may
also come up short. The contractor is responsible to provide ALL of the
materials shown in the drawings or required in the specifications. Not all
drawings are perfect, and they are not all prepared at the same time. It is
imperative that the floor plans and exterior elevation drawings be checked
for additional doors that may not be on the schedule; the entire contract
documents must work together. Even if a door is not on the door schedule
but located somewhere else in the documents, it is in the GC’s scope and in
their contract.
The DFH QTO is a simple process of separating the three major categories
of work and then separating them again by material, then again by size.
Most projects do not have all of the different categories, and there are
significant differences in residential and commercial and industrial work
with respect to door assemblies. Here are some of the separations the
estimator must consider on his or her QTO sheet:

First count the door frames and separate them by material, such as
hollow-metal (HM) (prevalent in commercial) and wood (prevalent in
residential). There are also additional subdivisions. Hollow-metal door
frames are often solid welded units, but they may be delivered as
‘knocked-down’ separate pieces that require assembly in the field.
Hollow-metal door frames may also require to be grouted with
cementitious material in the field, which adds significant labor cost and
weight. Wood doors and frames may be pre-hung on residential
projects, in that the door and the frame and the hinges are sold as one
unit, or they may be separate and require assembly in the field. Wood
doors and frames may also be delivered pre-painted or stained, but if
not, this work needs to be in the painter’s request for quotation.
There are aluminum door frames as well, often accompanied by
aluminum and glass doors, but these are customarily the responsibility
of the curtain-wall subcontractor. It would be prudent for the estimator
to count them here and include them in the QTO, but when it comes
time to price them, he or she should note “by subcontractor” in the
pricing column.
The door frames also need to be separated by size. There are single and
double door frames, and although the labor to install them is similar,
the cost to purchase is different.
We classify the doors themselves as ‘leafs’. The door leafs need to be
counted similar to the frames and separated into categories such as:

Hollow metal door leaf,

Solid core wood door leaf, and
Hollow core wood door leaf, and
There are also plastic laminate door leafs.

Many door leafs in commercial construction will have glass panels, or

‘relites’, in them of various sizes and fire ratings. If relites are included,
a separate count with their sizes should be noted. This glass will not be
provided by the door supplier or the punch window supplier or the
curtain wall subcontractor or the mirror supplier unless the GC
specifically requests it and includes it in their bid packages. The GC’s
carpenters typically install this work. The glass panels will be framed
 and ‘stopped’ in with a ‘relite kit’. Special counts of all of these are
important, as they will affect the direct labor portion of the door
estimate as will be discussed in Chapter 12.

The door hardware take-off may be as easy as counting one ‘set’ of hardware
for every door leaf. A double door frame requiring two leafs will have two
sets of hardware. But the correct way is quite detailed and time-consuming.
There are likely 20 to 50 different door hardware set combinations on a large
commercial project. Every hardware set type will have hinges and knobs or
latches and throws and door stops and kick plates and many other elements
that require assembly by the GC in the field. The detailed way to perform a
hardware QTO is to note how many door leafs from the DFH schedule apply
to each of the different hardware types. Next multiply each of the elements
of each set type times the leafs. Then the estimator may combine individual
elements from one set type with others when they are the same. For
example, hardware type 4 may have the same hinges as type 16, but 4 has a
kick plate and 16 doesn’t, and 16 has a door closure but 4 does not.
Therefore, after extending the hinges times the leaf count, they can be added
for these two door types. The result is a very large and very complicated
Excel spreadsheet. This is how your door hardware supplier will perform
their take-off. This is how one of your contributing authors started his
estimating career, including counting Phillips screws.
A shortcut for the estimator is to group all hardware sets together and
apply one average price throughout, often with that being the hardware set
type which occurs most often. The total hardware set count should
approximately equal the total door leaf count – there are two leafs and sets
of hardware per double door frame. Grouping all DFH work together as an
assembly, regardless of size and material and complexity, to come up with a
total count, such as 100 sets or openings at $1,000/set, is an extreme shortcut
and one to be utilized by the estimator with schematic budget estimates only
and not lump sum bids.
 Door hardware is expensive to purchase, and because individual items are
relatively small, they sometimes have a way of vanishing from the jobsite
before they are installed. The GC will often build a hardware room that is
locked up to store door hardware until ready for installation. On larger
projects, a carpenter will be responsible to ‘man’ the hardware room. All of
the hardware is separated by type and sorted on labeled shelves. When a
carpenter is ready to install three sets of hardware type 23, he or she will
request an exact list of materials from the hardware room and often is
required to sign out for the material. Assembling and staffing a hardware
room, if utilized, will need to be accounted for in the DFH direct work
portion of the GC’s estimate.
The doors, frames, and hardware may all be supplied by one material
supplier to the GC, which makes contracting and hopefully installation
smoother. But most often they will be supplied by several different vendors
depending upon material and require ‘machining’ of the frames and door
leafs to the hardware. If they are supplied by multiple vendors, the GC may
need to make arrangements for the different materials to be shipped from
one supplier to another for machining. If the wood doors are pre-stained,
they may also make a trip to the painting subcontractor’s shop, as well.
Other residential pre-hung doors and frames (usually wood) include
bifold doors, sliding barn doors, and pocket doors and are furnished
complete with hardware sets. They would be quantified separately by type
and by size, as ‘sets’.
Some access doors may be assigned to subcontractors whose scope of
work requires them to be installed. For example, the mechanical, electrical,
and plumbing subcontractors may be required by building code to provide
access doors to valves, but these may not be shown on the drawings. Access
doors that are shown on the bid documents are customarily quantified by
the GC by the each, noting different sizes and fire ratings, as with other
items, and installed by their carpenters.

Punch windows
Windows are also specified in CSI division 08, and their take-off process is
similar to the door take-off. There will be a window schedule, but similar to
doors, the estimator should review the floor plans and exterior elevations to
develop a complete window count by type. If windows are preassembled
with frame and glass ‘pre-hung’ and ready for installation into a wood or
metal stud wall, we classify them as ‘punch’ windows. These windows will
have been specified to come from a manufacturer, and each window will be
noted with a size, such as 4-0 × 6-0, and a product number, such as
XCY4060D. A window supplier will provide the GC with a lump sum quote
for all of these windows, but they will not install them, so therefore the GC’s
estimator must perform their own take-off, and the contractor will install
them with their own carpenters. The window frames may be aluminum or
wood or plastic/vinyl, and there will be many different sizes; each of these
must be separated on the QTO, again similar to the door take-off. Operable
punch windows will come with screens as well, or at least they should, but
the estimator should make a note of them. Sliding glass doors are included
with this system as well. The GC’s punch window QTO can be by the each
(it takes two carpenters 30 minutes to install a 3-0 × 3-0 as well as a 5-0 × 5-0
window), or it can be by the square foot of glass. Again, the diligent
estimator will have both quantities handy to later apply labor productivity
and material pricing to.
Windows can also be classified as storefront or curtain wall. These
systems will be supplied and installed by a separate subcontractor utilizing
the glazier trade rather than the carpenters. We will discuss the GC’s
subcontractor take-off and pricing procedures in an upcoming chapter.
Storefront glass is quantified by the SF, with adders for operable doors.
These window systems are often design-build, where the architect has
provided some guidelines and details but extensive calculations and shop
drawing submittals are necessary from the subcontractor. A mixed-use
building may have storefront on the first floor retail level and punch
windows on the upper apartment floors, and two different vendors will be
involved.
Specialties
It would be impossible to list every architectural ‘specialty’ item in this
chapter. Well, it is possible; it is just that we don’t have enough room and
likely would miss an item or two, anyhow. What follows are just some of the
more common items, listed by CSI order (most from CSI division 10), and
how the estimator will quantify them from the architectural drawings. Many
will be shown on the floor plans, details, interior elevations, or schedules,
and still others are not shown on the drawings at all but will be called out in
the specifications. This work is customarily also installed by the GC’s
carpenters.

CSI specification section 077000: Roof accessories: It is possible for the

GC to group all of the work that occurs on the roof together with the
roofing subcontractor, but sometimes, due to specialization or pricing,
the GC may choose to install some items themselves. Examples include
small self-contained skylights and roof hatches and window-cleaning
davits, which would all be quantified by the each.
101100: White boards, chalk boards, and tack boards: They can be
quantified by the each or the SF.
101400: Interior signage: In commercial projects we have door and
room and directional signage that may all be grouped into one supply
package. They are often wood or plastic and quantified by the each, and
also installed by carpenters. This does not include illuminated signs
such as ‘exit’ signs, which will be provided by the electrical
subcontractor. Exterior signs are also a separate specialty subcontractor
and will not be quantified here or installed by the carpenters.
102100: Toilet partitions: Included here only to note they are NOT
typically installed by the GC. This is a subcontract item and included in
an upcoming chapter. Toilet partitions are typically quantified by the
‘stall’. The accessories may be supplied by the same vendor as that
which is supplying and installing the partitions.
102300: Chair rail, chalk rail, and wall/hallway bumpers: These are
manufactured products fabricated from a variety of materials,
including wood and plastic and steel, and quantified by the lineal foot.
102600: Corner guards: These can be stainless or plastic or wood (and
maybe then included with millwork). They have varying sizes, such as
1.5″ or 3″ or 6″, and heights, 3′ or 4′ or 6′. They will be purchased and
installed by the each, so taken-off as such.
102800: Toilet accessories: Separated by different types (toilet paper
dispensers from paper towel dispensers) and counted by the each.
Mirrors: If they are framed, they are counted with the toilet accessories
and ideally supplied by that firm. In this case they will be specified in
CSI 10. But if they are unframed, they are usually considered glazing
and specified in CSI 08 and may be supplied and installed by the
exterior window supplier. Mirrors are quantified by the each if with a
frame and by the SF if unframed.
104400: Fire extinguishers (FE) and fire extinguisher cabinets (FEC) can
come in a variety of sizes and assemblies similar to our door discussion.
The FE can be wall-mounted without a cabinet, or it can come with a
surface-mounted cabinet, a semi-recessed cabinet, or a fully recessed
cabinet. Some FECs are also fire-rated. They must all be quantified
separately by the each but are likely purchased from the same vendor.
They are not part of the CSI 21 (new division number, previously
number 15) fire protection subcontractor’s scope, which is a mistake
made by many new estimators.
105100: Lockers can be supplied and installed by a subcontractor or
supplied only for installation by the GC. If GC-installed, they are
quantified by the each, with special note if separate sloped tops are
required and/or a separate base. Benches are probably provided by the
locker vendor or a separate supplier and also quantified by the each and
installed by the GC.
113000: Kitchen equipment for a commercial project could be
substantial if it has a large commercial kitchen or cafeteria. It also could
be quite small if it is only for a coffee room or single family residences
 and therefore installed by the GC’s carpenters. Apartment and
condominium projects will have potentially hundreds of pieces of
equipment, including washers and dryers. Kitchen equipment is
quantified by the different types of equipment; for example, ovens are
separated from dishwashers. Ideally, all of the equipment may be
purchased from the same supplier. Some suppliers will deliver and
install the equipment and will therefore receive a subcontract
agreement rather than a purchase order. The installation process of
kitchen equipment is integral with the electrical and plumbing
subcontractors, as they have many connections to make. The cost of
their connections will be factored into their separate subcontract
agreements and is not part of the GC’s take-off.
115200: Projection screens: These will be counted by the each. If they
are motorized, they may be grouped with the projectors and supplied
and installed by a subcontractor.
122000: Window blinds: Today, window treatments are customarily
provided by a subcontractor, but on residential projects they may be
purchased from a supplier and installed by the GC. It takes just as long
to install a 3-foot-long blind as a 5-foot-long blind, so counting them by
the each but separating by sizes (as that is how they will be purchased)
would be appropriate.

Summary
In this chapter we tried to capture many of the remaining direct work
carpentry items a GC ‘might’ perform. Will any GC perform all of these
activities? Not likely, but they pick up some on one job and others on
another job, contractor specialty and economy dependent. These types of
work items all have unique quantifying processes, and there are often
shortcuts for each. Shortcuts work fine for budget estimating or when there
is not sufficient detail in the drawings, but if the detail is available, the
estimator should take the time to do a thorough quantity take-off. Shortcuts
can result in estimate shortfalls and are risky.
Were we able to pick up every item? Not likely, but we have picked up the
more common items. Even an experienced estimator, when developing his or
her initial work breakdown structure, will not pick up every item; new items
present themselves as they get further into the documents. If something is
discovered later, after the QTO for a system was completed, the new item
must still be added somewhere to the estimate. We present a lot of
estimating ‘rules’ in this book, but a couple of the most important ones are:

Include everything somewhere; just don’t leave anything out.

Count everything once, but only once.

This section described in detail most of the scopes of work a general

contractor may self-perform with their own craftsmen. Many of these scopes
may likely also be subcontracted, contractor preference and specialty
dependent, but it still behooves the GC’s estimator to have a thorough
understanding of the quantities. In the next section of the book we price up
all of these self-performed scopes and many of the more common
subcontracted scopes, including the building envelope, mechanical,
electrical, elevator, and civil work.

Review questions
1 How many BF are there in MBF?
2 Why do we separate different estimating categories by types of
craftsmen, for example carpenters versus ironworkers versus glaziers?
3 How many total MBF are there in this group of lumber sizes and
lengths?

A 1,000 LF of 2 × 4 studs and plates

 B 500 LF of 2 × 6 studs and plates
C 820 LF of 2 × 8 joist
D 160 LF of 4 × 8 door header
E 60 LF of 4 × 4 posts
F 40 LF of 6 × 6 treated columns
G 80 LF of 4 × 12 girder

4 What are three advantages of using engineered lumber over

conventional dimensional lumber?
5 How many 2 × 12s would it take to build up a 12 × 12 column cut from
individual members or sticks?
6 If the GC is confident it will receive competitive subcontractor bids on
items described in this and previous chapters, why is it prudent for the
estimator to do a detailed QTO anyhow?
7 Since many GCs employ carpenters, why would they consider
subcontracting out any of the work discussed in this chapter? There are
many potential answers here.

Exercises
1 (A) List three reasons why a GC may choose to subcontract an item of
work that they might normally self-perform or for which they are
signatory to that particular trade union, and conversely, (B) list three
reasons the GC should do the work with their own forces.
2 Does your answer change in Review Question 6 if it is a slow versus a
busy economy, and why?
3 Quantify all of the different types of lumber in Len’s Shed. You are
going to have to make some assumptions for this exercise, and likely
develop a sketch or two, but these are both common estimating
activities. Here are the parameters:

12′ square floor plate

8′ high interior space from top of floor to bottom of the truss
 One-man door and one 3–0 × 3–0 fixed window
Straight gable roof with 3-tab composition shingles over 30#
asphalt paper
HardiePlank 6″ beveled siding over Tyvek over 5/8″ CDX sheeting
Shed sits on two 4 × 8 PT beams which rest on six pre-cast
concrete footings
Floor is framed with 2 × 8 joist at 2′ OC and sheeted with ¾″ TNG
Walls are 2 × 4 at 16″ OC with one bottom and two top plates
Pre-fabricated 2 × 4 roof trusses at 2′ OC
7/16″ OSB roof sheeting
1 × 4 exterior cedar trim
Include hardware as required
Everything is nailed with galvanized 8d or 16d or shingle nails

4 How many sheets of 5/8″ plywood wall and floor and roof sheeting are
required for a two-story house (18′ high exterior walls) with a footprint
of 50 feet across the north elevation, 30 feet across the west, 40 feet
across the south elevation, and then an inverted jog of 10′ by 15′ on the
southeast corner? There are two exterior man doors, ten windows of
varying sizes from 3-0 × 3-0 to 5-0 × 5-0 and two garage doors that are
8′ square each. Assume a 5″ rise in 12″ run (5/12) sloped hip roof. You
may want to sketch this structure as well. It is important that the
estimator order enough plywood, so the crew does not run short, but
not too much, as extra sheets of plywood tend to vanish from the
jobsite at the end of the day.
5 If we have a residential kitchen that measures 12′ × 16′ which has full
upper and lower cabinets on one 12′ side and one 16′ side, and an 8′x 3′
island in the middle without upper cabinets, how many cabinets will
we have, and how many SF of granite countertops? Assume that we
have a mix of 1′, 2′, 30″, and 3′ cabinets. Assume that there is a 3′
kitchen sink on the outside wall and a 30″ drop-in range in the island.
The sink is centered on a window and does not have an upper-cabinet.
Assume that the refrigerator and the double oven are outside of these
 parameters. The under-counter dishwasher next to the sink will take
the place of one 30″ cabinet. Estimating is a mix of science and art, and
a little creativity is often needed. You should sketch this one as well.
6 Perform detailed carpentry QTOs for the Lee Street Lofts case study
included on the book’s eResource. There are a variety of systems
available for this exercise including rough carpentry, siding, finish
carpentry, DFH, windows, and specialties.
7 In what part of the country do HF trees grow?
8 Prepare a DFH QTO for the Vehicle case study project.
Part III

Pricing for general contractor direct

work
10 Direct labor

Introduction
Recapitulation (recap) is the fourth level of the lump sum estimating process
shown in Figure 1.1. This involves summarizing and pricing processes that
follow the quantity take-off (QTO) work. In Part III, we price all of the direct
work that was taken-off by the general contractor’s (GC’s) estimator, as
discussed in the last several chapters. This section of the book includes
detailed pricing discussions for direct labor, concrete, steel and carpentry,
and construction equipment, in Chapters 10 through 13, respectively.
Quantity totals are used as the basis of the tasks listed on the recap sheets.
Quantities were taken-off from the drawings and transferred to and
extended on the QTO sheets, and now these tasks are priced and totaled on
cost recap sheets. In some cases, the amount of the work requires several
recap sheets, and a summary recap is used to consolidate them. The recap
process involves transferring numbers from the detailed quantity sheets to
more summary sheets. Consequently, errors are likely to occur, and error
prevention procedures need to be implemented. An estimator should make it
a habit to use these procedures to minimize the potential for making
significant errors in the estimate.
Along with error prevention, the estimator should utilize good
organizational skills. Attaching the recap to the top of a group of QTO sheets
from which data has been transferred completes a package of information
that can be easily checked and used later by the project team. If a summary
recap is necessary, it should be attached to the corresponding groups of
recap/QTO packages used to generate it.
General contracting is a challenge because a contractor bids to perform
work for the lowest price with a temporary workforce at a future point in
time. The key to being effective is to have key field personnel who can direct
and perform the work efficiently and correctly. Direct labor is the general
contractor’s own labor force that does some portion of the construction
work. It also represents the contractor’s greatest risk. Labor costs are
determined in one of several ways. An estimator must be aware of these
methods, because some bids may ask for labor rates, and he or she should
know the proper way to determine them. Several of the factors of labor
pricing are discussed in this chapter.

Recapitulation sheet
The recap sheet is used to gather the quantified data, apply pricing factors,
and perform calculations that result in the various costs that make up a bid.
It is also used as a summary recap to consolidate several priced work
activities to a single cost item for a particular group of tasks. In Chapter 19,
we will see how this number is then entered onto the estimate summary
form to complete the estimate. Figure 10.1 is a flow chart that illustrates the
recapitulation process.
 Figure 10.1 Estimate process flowchart

The recap sheet is a relatively standard estimating form. The estimator is

encouraged to always fill out the title block information on each estimate
worksheet. Starting at the left, the first column on the recap sheet is for a
cost code. It can also be used for custom information, such as a drawing or
addendum reference. The advantage of the estimator completing the cost
codes now is it facilitates a smooth transition into cost control after the
project is secured. This column may be used to reference a particular section
or detail from the drawings or designate crew type.
The description column on the quantity sheet is used to express the item
being quantified. On some recap sheets, the tasks shown will be the same as
the column headings on the quantity sheet. For example, on the QTO sheet
for the footings (Figure 6.1), the columns were fine grade, formwork,
concrete, and reinforcing steel. Excavation and backfill could have also been
included on this QTO, but instead the estimator grouped all foundation
excavation and backfill on its own QTO sheet. Figure 10.2 shows a
completed recap for the interior spot footings. Note that the line item
descriptions basically are the same as the column headings on the quantity
sheet. Additional pricing line items, or rows, have been added to the recap
sheet, as these quantities were similar to other measured and calculated
totals. The two columns following the description are the quantity and unit
columns. The quantities to be entered are the double underlined totals from
the quantity sheet, and the units are always shown. A live standard recap
template is included on the book’s eResource.
A consistent procedure should be used when transferring information
from the quantity sheets to the recap sheet to minimize the chance of errors.
When the quantity from the QTO is transferred to the recap sheet, the
estimator should make sure that the number has been entered on the recap
sheet exactly as it is shown on the quantity sheet, along with the correct
units. Common errors include transposing numbers within the quantity
being transferred, slipping a digit, or utilizing different units to be priced.
Once the quantity shown on the recap sheet has been verified that it is
exactly the same as it is on the quantity sheet, the double underlined total
on the quantity sheet is circled. This indicates to others that the checked
total has been used on the next sheet in the sequence, in this case the recap.
Time constraints as bid day gets closer may affect the thoroughness of
checking.
The estimator is encouraged to group only ‘like items’ on a recap sheet.
Figure 10.2 shows the interior spot footings and may eventually include the
perimeter footings and grade beams as well. The totals then will reflect the
man-hours and the labor and material costs for all of the building footings.
The slab-on-grade (SOG), concrete columns, foundation walls, elevated
slabs, composite slab, and miscellaneous concrete will each be on separate
recap pages. Totals from all of these pages will be consolidated onto a
summary recap that will then represent the cost for all cast-in-place (CIP)
concrete work. Later, the CIP concrete may be entered as a line item on the
estimate summary sheet.

Productivity factors versus labor unit prices

Labor costs can be determined by using either labor unit prices or a
combination of productivity factors and wage rates. Labor unit prices are
expressed as dollars per unit of the quantity being priced, for example,
dollars per square foot, and are subject to revision due to a change in the
wage rate, fringe benefits, and/or labor tax rates. Productivity, on the other
hand, is expressed as man-hours per unit and is constant over time for a
given work task.
Figure 10.2 shows columns for both unit man-hours (UMH) and labor unit
prices. Labor costs are calculated by entering the unit man-hours and the
current wage rate without fringe benefits or labor taxes. The unit man-hours
are multiplied by the quantity to get the man-hours, which in turn are
multiplied by the wage rates, the result being the labor cost. Labor cost can
then be divided by the quantity to get the unit labor cost, which can be used
as a check against historical information. Using current wage data, this
process eliminates the need to make adjustments in labor costs over time.
Fringe benefits and labor taxes are accounted for at the end of the estimating
process and are discussed later in this chapter.

Figure 10.2 Spot footing cost recapitulation sheet

An estimator should always calculate the unit labor cost and use it as a
checking tool. For example, if unit man-hours times the wage rate equals a
unit labor cost of $10 per board foot, and $0.10 per board foot is more in line
with historical costs, the estimator knows there is an error; in this case a
digit (or two) was misplaced.

Productivity
Productivity is the time that it takes a person to do a unit of work. Examples
of productivity factors are man-hours per square foot of contact area (SFCA)
for concrete forms or man-hours per ton of steel. They are entered in the
UMH column on the recap sheet. When multiplied by the quantity, the
result is the estimated man-hours to complete the work activity. Most
published estimating references show productivity factors and will delineate
the crew that does the work and the daily output for the crew. The
productivity in man-hours per unit and the crew makeup are important.
Daily output is used in planning and scheduling after the project has been
won. Published databases such as RS Means have productivity factors, as
well as The Guide, which has agreed to allow students electronic access to
their pricing for free at www.bestconstructionsite.com with the username
“uw” and the password “class”, both without quotation marks.
Some contractors record cost information based on unit labor costs and do
not bother with productivity factors. Cost accounting systems in use today
can determine historical productivity factors and provide the estimator with
a wealth of information. The practice of using productivity factors helps to
produce good estimates and reduces the amount of work by eliminating the
need to adjust for inflation. Consider the following:

Quantity × Unit labor cost = Total labor cost

Which must be adjusted for inflation for future use, whereas
Quantity × Productivity factor × Wage rate = Total labor cost
For future use, only the wage rate needs to be updated

Adjusting for inflation can be done, but judgment must be exercised to

estimate how it has affected construction costs. Conversely, updating a wage
rate does not require judgment.
Wage rates
Not all construction participants receive the same compensation or wage,
whether in the office or in the field. Every specialized craft is different, and
all receive different wage rates. Union craftsmen generally receive a higher
wage than do merit-shop craftsmen, primarily because of the time they
served in apprenticeships. But even merit-shop crafts receive different wages
for different scopes or activities. Some estimators may use a blended wage
rate, as discussed later, and although that is easy and often acceptable for
budget estimates, it can be risky for detailed competitive bid projects. Every
estimator should recognize the scopes of different crafts and their different
respective wage rates. Three basic elements that make up the cost of labor
are wages, fringe benefits, and payroll taxes. Other elements that may be
part of the labor cost are travel, per diem, and overtime.

Table 10.1 Craft wage rates

Base

1.5

Construction Craft
Wage Overtime Overtime
Carpenters $41 $62 $82
Cement Masons $44 $66 $88
Electricians $45 $68 $90
Equipment Operators $40 $60 $80
Ironworkers $43 $65 $86
Laborers $35 $53 $70
Plumbers and Pipefitters $48 $72 $96

Wages are paid based on hours worked, with straight time generally being
the first eight hours worked per day up to 40 hours per week. Overtime (OT)
comes generally in two multiples, time-and-a-half (wages × 1.5) or double
time (wages × 2). All time expended over the base wage rate is classified as
premium pay in that it represents the premium cost of working a person
beyond the agreed-upon normal pay period. Table 10.1 is an example of the
wage rates for several union crafts at the location of our case study project.
Payroll taxes and labor benefits will be added to this table later in this
chapter.
We are using only straight-time wages in this book. This is the approach
most estimators take and utilize OT only when needed, often at the
discretion of the project superintendent. If a contractor feels that working
OT is the only way it can achieve the owner’s schedule and avoid liquidated
damages, it might be a good option to pass on the bid opportunity. We also
will utilize only the base wage rates on the pricing recap sheets, and the
labor burden is then calculated from the total direct labor cost and inserted
as a line item on the estimate summary page. Some contractors prefer to
combine wages and labor burden for a loaded wage, as discussed later.
Labor productivity in UMH and wage rates has been used on Figure 10.2
to determine the labor cost of each line item. The estimator needs to
determine which wage rate is the correct one to use for activities and/or
composite crews. Some will pick a rate that is representative of all work and
use it throughout the entire estimate. A better approach is to determine a
composite wage rate based on the type of work being done. An estimator
should not use apprentice wage rates for any pricing, unless specifically
requested by the project owner and permitted by the union. Foremen are
generally paid $1 to $2 per hour more than a journeyman. The lower wage of
apprentices balances more or less with the increased wage of the foremen,
such that using the journeyman wage as an average is standard in the
industry. Where a crew includes a single foreman and a crew of three or
four journeyman of the same trade, the composite wage rate is relatively
easy to determine. When it comes to a concrete placing crew, several trades
are involved, such as carpenters, laborers, cement masons, ironworkers, and
maybe an operating engineer and a surveyor, and the calculation is more
complex. It is often the easiest and relatively accurate to use the journeyman
rate of the one craft that is most dominant for each task, such as:

Laborers for earthwork, placing concrete, and cleanup activities;

Carpenters for forming concrete and rough and finish carpentry;
 Ironworkers for installing rebar and erecting structural steel; and
Cement masons for finishing concrete flatwork.

Carpenters are often the dominant craft employed by a GC, and the
journeyman carpenter’s wage is a fairly good average to use if the estimator
is looking for a placeholder or shortcut in the labor pricing effort – but
shortcuts are risky, as discussed elsewhere. This would be acceptable for
budget estimating but not bid estimates, which may contain a substantial
amount of self-performed work. A check that the estimator should make
after pricing the direct labor for a system or assembly is to compute the
wage rate for the entire recap sheet. This is done by dividing the total labor
cost by the total man-hours. The result should approximate that of the
various wage rates used on the sheet. If there is a wide variation, the
estimator knows that there is an error in the labor cost calculation and must
devote the time to find it.

Labor burden
Direct labor costs contractors much more than just the wages the craftsmen
and administrative supervisors receive on their paycheck. There are several
add-ons to the cost of labor, whether that be indirect labor, including the
project manager and superintendent, or direct craft labor such as carpenters
and laborers. Contractors pay an additional markup or percentage add-on on
top of all of the wages they pay; this is known as labor burden. Labor burden
is not a fee or profit markup, but it is a direct cost of doing work. The
amount of this markup is not established at the jobsite level by project
managers or superintendents; rather, labor burden is determined at the chief
financial officer and chief executive officer (CEO) level. The burden is
usually a journal-entry charge from the contractor’s home office accounting
department to the jobsite and is not accompanied with a separate invoice.
Project managers, superintendents, and estimators do not typically have any
direct input to the amount of labor burden estimated for or charged to a
project. Labor burden has two major components, labor taxes and labor
benefits, as reflected in the following equation:

Labor burden = Labor taxes + Labor benefits

The combination of labor taxes, or payroll taxes, and labor benefits, or

fringe benefits, is commonly referred to as labor burden. This burden can
vary widely from one trade to another, and the estimator can spend an
inordinate amount of time calculating them for each crew. It is common to
determine an average labor burden based on the overall makeup of all
tradesmen employed by the company. This average can then be used for
most estimating purposes.

Required labor taxes

Some members of the built environment community will refer to all of labor
burden as either labor taxes or labor benefits, but they are distinct and have
different costs and rates for different types of labor. Labor taxes are also
known as payroll taxes. Labor taxes are government determined and have at
least four major elements that contractors are required to pay; this includes:

Social security was created by the Federal Insurance Compensation Act

(FICA). The employer pays one half or approximately 6.2% up to the
first $133,000 of wages (changes yearly) for FICA contributions and the
employee pays the other half as a withholding from their weekly check,
for a total tax of 12.4%.
Medicare is also a joint contribution from the employer and the
employee similar to FICA and amounts to approximately 1.45% each for
a total of 2.9%.
Unemployment tax has two elements, federal and state:

Federal unemployment tax costs 6% on the first $7,000 of income,

but much less if there is a state unemployment tax; and
 State unemployment tax varies by state. The amount of
unemployment tax percentage paid by any company is
proportional to the amount of unemployment claims they
experience from personnel lay-offs.

Workers’ compensation insurance markups, or workers’ comp, vary

considerably due to a variety of factors, including the safety record of
the contractor and its associated experience modification rate (EMR). In
addition, the potential safety risk of the labor craft and differences
between indirect and direct labor will impact workers’ comp. The
baseline EMR is 1.0. Contractors which have a higher incident rate of
safety accidents have an EMR rate greater than 1.0, and those with
fewer accidents a rate below 1.0. Some crafts are more prone to
accidents, and they will have a higher workers’ compensation rate.
Indirect salaried employees have a much lower chance of a safety
accident and therefore have a much lower workers’ comp rate than a
direct work craftsman.

Labor benefits
Labor benefits are also known as fringe benefits; they are determined by the
contractor and include a variety of items. These are not ‘taxes’ per se but are
voluntary contributions. Labor benefits are a significant portion of the total
labor burden that is attached to wages. If contractors are signatory to labor
unions, they will likely pay higher labor benefits than do contractors that
employ merit-shop labor. Some items that may be included with labor
benefits include:

Health insurance,
Dental insurance,
Eye insurance,
Disability insurance,
Life insurance,
 Union dues,
Pensions and retirement,
Use of company cars and cell phones,
Vacation,
Sick leave,
Bonus,
Education and training,
Safety add-on,
Supervision add-on, and
Small tools add-on.

Some labor benefits, such as medical insurance, are a shared cost between
the employee and the employer. Depending upon contract terms and the
definition of reimbursable costs on open-book projects, some contractors
may include more or less of these potential labor benefits in their labor
burden rates. Benefits are paid based on each hour worked and are not
subject to the effects of premium time.

Combined labor burden

There are significantly different labor burden rates for direct craft labor
(carpenter and electrician) than for indirect labor (project manager and
superintendent and CEO). In addition, different crafts or trades have
different rates depending on the type of work and associated safety risk;
ironworkers and electricians are subject to more safety incidents than
painters and landscapers. There are a variety of union issues that also affect
labor burden; for example, some trades do not provide their own tools – the
contractor does. Subcontractors are responsible to pay their own labor
burden; the GC does not get involved with subcontractor burden. Table 10.2
includes several trades’ wage rates and their associated labor taxes and labor
burdens, which add up to a combined loaded wage rate.
 It would be very cumbersome for a construction company to invoice or
journal entry each jobsite’s different labor burden rates for each type of craft
or administrative labor category. Most contractors will develop a ‘blended’
burden rate at the beginning of the year, which is based on labor mixes from
the prior year. A blended burden rate for a general contractor that is
signatory to the carpenter, laborer, ironworker, and cement finisher unions
might be 55% or higher. Contractors that utilize merit-shop labor will have a
lower total labor burden percentage markup due to a mix of fewer labor
benefits that were listed in Table 10.2, maybe 30%. Usually direct and
indirect labor is kept separate, as the burden rate of indirect labor is much
less than direct (maybe 35%), but even these may be blended on certain
projects, again depending on contract terms. In addition, some contractors
will invoice their clients on open-book projects a ‘loaded’ wage rate, which
includes the base rate plus a blended burden rate. Contractors may choose to
do this because a loaded wage reflects the total cost of an hour of direct
labor, but it is difficult to substantiate during an audit of an open-book
project. The loaded wage rate for laborers in Table 10.2 would therefore be
$54 per hour. Some contractors include other markups with labor burden
such as liability insurance, but these are volume-dependent and not labor-
dependent and would not be accurate on projects with a different mix of
direct labor versus subcontracted labor.

Table 10.2 Craft labor burden

Base

Labor

Labor

Total

Loaded

Construction Craft
Wage Taxes Benefits Burden Wage
Carpenters $41 $8 $13 $21 $62
Cement Masons $34 $6 $11 $17 $51
Electricians $45 $9 $14 $23 $68
Equipment Operators $40 $10 $12 $22 $62
Ironworkers $43 $12 $19 $31 $74
Laborers $35 $8 $11 $19 $54
 Base

Labor

Labor

Total

Loaded

Construction Craft
Wage Taxes Benefits Burden Wage
Plumbers and Pipefitters $48 $11 $17 $28 $76

Construction projects that receive federal funding require contractors to

pay direct craft employees a ‘prevailing wage rate’, which is the wage rate
most common to the area being worked plus labor benefits. This is also
known as the Davis-Bacon wage rate. The prevailing wage rate for
carpenters in Table 10.2 would therefore be $54 per hour. It is up to the
contractor whether they want to contribute additional labor benefits beyond
the prevailing wage rates. Labor taxes are mandatory percentage add-ons
whether the labor wages are union, merit shop, or prevailing wages.
Labor burden is charged on a contractor’s own direct and indirect labor
only. Labor burden is not added to material costs, equipment rental, or
subcontractors. Subcontractors are required to factor their own labor burden
within their bid prices to the general contractor.
Occasionally the estimator will encounter a project in a remote location.
The workforce has to travel to the site and stay there for certain periods of
time. The travel and per diem costs have to be included in the bid. These, like
the labor burden, are shown as a line item on the bid summary.

Summary
The direct work pricing recap process is the listing and pricing of the items
that have been quantified. Some work activities, such as CIP concrete,
require summary recap pages, which consolidate the totals of several recaps
into a single total. This total is then entered as a single line item on the bid
summary. During the recap process, quantities are transferred from the QTO
sheets to the recap sheet. This operation can be a source of errors, and the
estimator needs to be diligent in following procedures for reducing them.
Circling the totals on the QTO after they have been transferred eases the
checking process later on.
 There are two ways to use the wage rates in determining labor costs. The
estimator can develop an average wage for all work of a class of activities
and use it throughout those activities, or he or she can develop a composite
wage for crews used on particular activities. While the latter may be slightly
more accurate, the average wage method is sufficient for most estimates and
is easier to use.
Payroll taxes are government-mandated taxes and are based on the
amount of total wages paid. They consist of FICA, state unemployment
insurance, federal unemployment insurance, and workers’ compensation
insurance. Labor taxes are calculated as a percentage of the actual wages
paid. It is important for the estimator to know how the fringe benefits and
payroll taxes are calculated, because they will affect the labor burden
percentage used later on the bid summary sheet.
Contractors have some flexibility in their calculation of total labor burden
and how it is used in estimating and job cost accounting. This flexibility is
sometimes utilized differently on closed book competitively bid lump sum
projects compared to open-book negotiated projects. In this book we are
recommending that the estimator only use bare wage rates on the pricing
recap sheets, and the labor burden is added on the estimate summary page
as a percentage markup to labor. Labor burden is discussed again in Chapter
18, with other markups.

Review questions
1 What is the purpose of a recapitulation sheet?
2 What is a productivity factor, and what are its units?
3 What can a wage rate check indicate?
4 What is one of the best sources of information for pricing and
productivity factors?
5 Which craft in Table 10.2 has the highest: (A) bare wage rate, (B) total
labor burden, (C) percentage markup for labor burden, and/or (D)
loaded wage rate?
 6 Which person costs the contractor a higher percentage of labor burden,
the CEO or the carpenter foreman?
7 What is the difference between labor taxes and labor benefits?
8 What is the difference between a loaded wage rate and a blended wage
rate?

Exercises
1 Assuming five craftsmen for each of the crafts in Table 10.2, (A) what
would the total blended labor burden percentage markup be? (B) What
would happen to that rate if you eliminated the craft with the highest
burden percentage and doubled the manpower from the craft with the
lowest burden percentage? (C) What would happen to the original rate
if you eliminated the lowest burdened craft and doubled the manpower
from the highest craft?
2 If contractors charge a blended labor burden rate to a client and alter
their craft mix as discussed in Exercise 1, what would that potentially
do to their profit?
3 If a contractor charges the blended labor burden rate you calculated
from Exercise 1.A to a client but applies it to both direct and indirect
labor, how would this affect their profit?
4 What customarily happens to labor burden rates journal-entered to a
jobsite after employees top $133,000 in wages paid in one calendar
year? Is this ethical? How does this affect project profits? How does this
affect corporate profits?
11 Concrete pricing

Introduction
In the last chapter, we discussed a contractor’s direct labor productivity and
wage rates. In this chapter, we price the material costs of all of the cast-in-
place (CIP) and pre-cast concrete systems that were quantified in Chapters 6
and 7. The best source of material pricing for any estimate is current market
pricing. Second would be a contractor’s in-house historical database. The
third choice would be to utilize material unit pricing from published
databases that combine averages for all types of construction and in all
geographic locations.
In this chapter, we build on the foundation and slab-on-grade quantities
developed in Chapter 6 and discuss all of the other typical CIP concrete
systems an estimator may come across, many of which are included in the
Dunn case study project. In addition, we price the tilt-up quantity take-off
(QTO) from Chapter 7 and develop a comprehensive pricing recapitulation
(recap) sheet for that unique method of construction. After all of the pricing
is complete, the estimator may want to combine CIP concrete systems onto
one summary recap and another for pre-cast systems before forwarding to
the estimate summary sheet. Pricing for structural steel and carpentry and
other GC direct work is discussed in the next chapter.

Material pricing
Material pricing can be straightforward when properly done on the pricing
recap sheet. The material unit price is entered in the column headed ‘Unit
material cost’ (Unit M Cost). It is then multiplied by the quantity to get the
total material cost in dollars. An estimator must ensure that the units of the
unit price are the same as those of the quantity. It seems self-explanatory,
but multiplying 1,000 square feet (SF) of plywood (versus sheets) times $30
per sheet of plywood (versus SF) will result in a significant estimating error
– but these types of errors happen.
Unit prices can be obtained in several ways. One way is to use published
estimating reference data. Most estimating references are published
annually, and their prices have been updated during the previous year. They
are representative of a nationwide average and may not reflect the prices of
a particular location. The estimating student will typically use this approach,
as they do not have access to other prices. One such published database is
The Guide, which has agreed to allow students electronic access to their
pricing for free at www.bestconstructionsite.com with the username “uw”
and the password “class”, both without quotation marks.
A second source is from historical data maintained by the contractor.
Data may come from cost reports of previous jobs or from recent estimates.
The age and verifiability of these prices must be kept in mind if the estimator
decides to use them. Prices that are a year or more old should be, at a
minimum, adjusted for inflation. The third and best way to obtain market
unit prices is to solicit them from vendors. The estimator should describe to
a supplier what the job is and when it is expected to be performed. As a
result, the vendors will usually honor their pricing throughout the duration
of the work.
An estimator must understand that some material prices can be solicited
during the estimating process, but others will not be received until bid day.
Vendors that are major material suppliers, such as concrete reinforcing steel
(rebar) and structural steel fabricators, will submit their prices as complete
bids on bid day. Those materials that are priced by the unit, such as concrete,
lumber, gravel, etc., can be priced by calling the vendors during the course
of the estimate preparation. In some cases, bid prices also may be received
from them on bid day, which may require the estimator to make a last-
minute adjustment to the overall bid.

Concrete foundations
Concrete is priced by the cubic yard delivered to the jobsite. The vendor
needs to know the concrete specifications and the approximate quantity of
each type being used. For example, the case study specifications call for 3,000
pounds per square inch (psi) concrete for footings and slab-on-grade (SOG),
4,000 psi for foundation walls and elevated slabs, and 6,000 psi for columns.
Exterior paving is to be air entrained to 6%, and maximum slump for all
concrete is 4 inches. The project manual should be checked to see if
superplasticizers or other additives that aid in the placing, finishing, or
curing can be used. The estimator should send the specifications to concrete
suppliers and then follow up for pricing.
Concrete formwork is typically the most labor intensive and therefore
deserves attention from the estimator. There are different ways to build
forms depending on the type and size of the concrete elements being
constructed. General construction firms generally have historical records
that provide data on the cost of the material per square foot of contact area
(SFCA). This cost includes all lumber and sheet material, bracing, kickers,
and form ties. A concrete subcontractor would get into more detail. Items
such as nails and form oil may be priced separately as a percentage add-on.
The forming is typically the most expensive of all concrete tasks for many
elements, such as walls, elevated slabs, and elevated beams. A contractor, in
an effort to reduce this cost, will buy form material that can be used more
than once. For example, forming material will be purchased for only one-
fourth of a long wall section. After the first placement, the forms will be
stripped, cleaned, patched, and reused. Since the forms do not have to be
built from scratch, a major cost reduction is realized in both material and
labor. It is common to use forms up to four times, and on occasion five or six
times. When pricing form material, an estimator must have a good idea of
how many times the forms will be used.
Using unit costs for multiple uses of foundation forms will provide
reasonable savings over single use. The same is true for many elevated
structures, such as beams, columns, and structural slabs. But the estimator is
usually not the ‘builder’, and he or she should discuss the planned means
and methods, including quantity of concrete pours and form reuse, with the
project superintendent. A good rule of thumb is if a contractor can get more
than four uses out of the same form material, they are making money on
that aspect.
Prefabricated metal forms can be rented for some common shapes, such as
columns and beams. On large concrete construction projects, form costs can
be reduced by having custom metal forms made and using them an
indefinite number of times. Prefabricated forms are usually made of steel
and are strong enough to minimize any extra bracing that might be required
for wood forms. If prefabricated forms are more economical, the estimator
needs to obtain a quote from a form-rental supplier.
Occasionally the specifications will prescribe how long forms are to be left
in place. Most superintendents remove forms as quickly as possible so they
can be reconditioned and set up for the next concrete placement. The
estimator must be aware of anticipated form use and concrete curing
requirements before pricing them.
Other material prices that need to be determined are fasteners, bonding
agents and curing compounds, rebar chairs and tie wire, lifting inserts, and
any other similar items. For nails and bonding agents, the estimator should
use a percentage of the total form material cost, showing it as a line item on
the recap sheet. Curing compound is applied only to flat slab surfaces,
elevated slabs, and tilt-up panels. It is priced by the area of coverage.
Reinforcement steel tie wire and chairs are classed as rebar accessories and
are also calculated as a percentage of the rebar costs or an allowance of
$/ton of rebar.
One other item the estimator needs to consider is any hoisting equipment
that may be required to lift forms into place. Some situations will allow the
forms to be handled by a jobsite forklift. Multi-story projects will require a
crane to lift the forms and set them. If a tower crane is to be used, it will be
priced separately and does not need to be included in the concrete work. But
if a 20-ton crane is to be brought onto the jobsite just for handling the forms,
its cost needs to be included in the concrete section of the estimate.

Applying pricing factors

In illustrating how the pricing recap sheet is used, reference will be made to
the quantity sheets developed in Chapters 6 and 7. Referring ahead to Figure
11.1, the application of the pricing factors is shown in the Unit M Cost
column. The estimator should make sure that the units of the unit prices
match those units shown after the quantity unit column from the QTO
sheets.
The unit prices and quantities are extended (multiplied) to determine
material cost of the line item. Note that the figures to the right of the
decimal point are insignificant and not shown. There are some spaces in the
Unit M Cost column for which no cost is entered. A zero or dash may be
entered so that others will know that there is no material rather than
wondering if a cost was accidentally omitted.
Two line items are shown that were not quantified on the quantity sheets.
These are accessory items that are priced by calculating them as a
percentage of some other cost. Nails and form oil are noted as 5% of the
form material costs. The second accessory line item is miscellaneous
material needed for installing the reinforcing steel. This cost covers the
purchase of the tie wire, chairs, dobies, or other supports specified to give the
proper spacing to the bars. An allowance for these is calculated as $100 per
ton of reinforcing steel material. The actual price for the reinforcing steel
will not be known until bid day, but it has been quantified by weight; thus, a
simple extension will determine a cost. Unless there is a wide variation in
the weight shown on a supplier’s bid, an adjustment in the calculation of the
reinforcing steel and accessories on bid day will not be necessary. This then
becomes part of the buyout process discussed in Chapter 24. Additional line
items appear on the pricing recap, as their quantities were similar to other
measured quantities on the QTO sheet. Figure 11.1 is a pricing recap for the
SOG for our case study project. Pricing recap for the spot footings was
included with Chapter 10. The other self-performed systems or assemblies
will have a similar pricing format and process.

Figure 11.1 Slab-on-grade cost recapitulation sheet

Concrete pumping was not a separate QTO item but is essential for most
commercial construction. An average per yard pump cost of, say, $15/CY is
easy to plug into the recap sheet, but as we indicate throughout this book,
estimating shortcuts can be risky. The backup to the $15 is explained in
detail in Chapter 13.

Cast-in-place concrete systems

Most of the processes we have discussed for extending quantities and adding
labor productivity rates, wage rates, and market material unit prices for
other CIP systems are similar to those utilized for the foundations and SOG.
In this section we briefly describe many other CIP systems and the cost
differences they may have that the estimator should pay attention to. In
many cases different concrete systems have similar elements, such as:

Structural excavation and backfill (for foundation systems),

Fine grade or hand excavation,
Formwork including layout,
Reinforcement steel,
Embeds, including anchor bolts,
Purchase and pump and place concrete,
Finish: Rod-off for foundations and trowel finish for slabs,
Protect and cure, and
Patch and sack exposed or finish surfaces.

Pile caps and grade beams are very similar to spread footings and
continuous footings, as discussed previously. Because they often sit atop
piling and support shear and bearing walls above, these concrete systems
likely are specified with higher strength concrete than typical foundations,
and they will have more rebar. Their sections or depths may also be deeper.
But the process to perform the QTO and extend the quantities on the recap
sheets is similar – it is just that the quantities may be greater and the unit
prices may be slightly more.
As indicated, the strength of redi-mix concrete in psi varies with different
concrete systems. Columns typically have higher strength concrete, in this
case 5,000 psi, and the purchase cost will be greater. The estimator should
plug in as accurate of material pricing in the direct work as possible, and if
significantly different supply prices per cubic yard (CY) are received on bid
day, be able to make a pricing adjustment, or at a minimum be able to
analyze the differences during buyout. A separate recap for purchasing
concrete for our case study may look like the following example. If concrete
prices varied by $10/CY on bid day, there would be a substantial change in
estimated cost to purchase concrete.
 Concrete redi-mix supply
2,497 CY of 3,000 psi concrete @ $105/CY = $262,185
7,963 CY of 4,000 psi concrete @ $110/CY = $875,930
267 CY of 6,000 psi concrete @ $120/cy = $32,040
Total material cost included with direct work estimate: $1,170,155

Patching and sacking of finished concrete elements may be defined in the

specifications, but it is often a judgment or allowance made by the estimator.
Patching and sacking is a broad term which means to touch up the concrete,
often with a concentrated cement and sand and water mix, either by
troweling over the finished surface or applying it with a sponge. Gunny
sacks were at one time the tool of choice for ‘sacking’. If patch and sack is
required, the estimator will estimate sacking using $/SF of surface area.
Concrete elements typically considered for patching and sacking are CIP
columns, foundation walls, and tilt-up walls, which are discussed later.
Concrete that will be covered with other building elements, such as studs
and sheetrock or suspended ceilings, are not typically touched up after
stripping the forms. Exposed architectural concrete will require snap tie
holes to be filled, concrete fins left between joints in forms need to be
ground, and rock pockets must be filled. Significant rock pockets may require
review by the structural engineer, even if the concrete is later covered with
other building elements. The estimator may assume a percentage requiring
touch-up, say 50%, or may conservatively estimate 100% of the surface area
of all concrete left exposed should be patched and sacked. Bid jobs are likely
the former allowance and negotiated projects the latter. The estimator for
City Construction Company approached material cost patch and sack as
indicated here. Labor was plugged at 0.025MH/SF and figured with the
cement mason’s wage rate.

Patch and sack material recap

20,000 SF of columns @ 50% @ $0.50/SFC = $5,000
106,000 SF of walls @ 50% @ $0.50/SFW = $26,500
 Total material cost: $31,500

As mentioned with QTO, elevated concrete structures must be ‘shored’ in

addition to formed until the concrete has cured to its design strength. This
includes beams, drop caps, and elevated CIP slabs. After the forms are
dropped from the concrete, often with assistance of small forklifts, the slabs
will be ‘re-shored’ with fewer shoring poles laid-out on a predetermined
grid. Although this is somewhat a means and methods process, the GC will
typically employ a structural engineer to calculate shoring requirements.
Shoring is a cost that must be included with the recap sheets, which is
usually calculated on a $/SF of form area basis.
Composite concrete slabs on metal deck differ from elevated slabs because
the metal deck is essentially the temporary form for the wet concrete but
remains with the concrete. The metal deck will also require shoring and re-
shoring, similar to the previous process. Structural steel beams that support
the metal deck often have lugs that are welded to the beams and penetrate
through the deck and are embedded in the concrete. The supply cost of the
deck is typically $/SF or $/hundred SF and is included with CSI division 05
pricing recaps.
Supply and installation and tensioning of post-tension cables in elevated
concrete slabs are often a subcontract specialty. A plug estimate may be
included by the GC on a $/pound basis within the direct work or carried on
the subcontractor list in hopes of receiving quotes on bid day. Shotcrete is
also a subcontract specialty and will be priced based on $/SF of shoring wall.
The GC may be involved in supportive activities of the shotcrete
subcontractor with scaffold or cleanup and, if so, will include these costs in
its direct work estimate.
There are many other miscellaneous concrete systems that will likely
warrant their own QTOs and recaps and a summary recap, as discussed
later. Some of this concrete may be shown on design drawings other than
the structural drawings, such as civil, architectural, and mechanical and
electrical. But regardless of where the work is shown, it is still in the GC’s
scope and contract with the project owner. All of these systems have similar
makeup (forms, rebar, embeds, concrete, finish) and will be estimated
similar, but because their quantities may be less, the unit pricing may be
higher. Some of the miscellaneous concrete systems include:

Cast-in-place concrete stairs,

Curbs for mechanical and electrical equipment,
Housekeeping pads for mechanical and electrical equipment,
Site concrete including curbs and walks and pavement, and
Architectural concrete.

Early in this book we discussed that the estimating team should decide what
work they intend to construct with in-house craftsmen and what work they
will subcontract out. There is much more estimating and cost control risk
associated with self-performed work over subcontracted work, and the
estimator will spend his or her time appropriately. If a contractor has an
option to self-perform or subcontract out, they should estimate the work
both ways to give them flexibility on bid day. But this approach requires a
lot of work and accuracy up front and careful attention to complete scope
analysis on bid day. The conservative approach would be for the estimator to
figure it all self-performed, receive subcontractor quotes on bid day but
place them aside, and if successful with the bid go back into the estimate and
develop a complete assembly price that can be compared with the
subcontractor quote. If it makes sense considering cost, schedule, quality,
and safety, then during buyout the GC may choose to award the work to a
subcontractor. An example of this analysis is included in the box that
follows. Some of the concrete work that may be self-performed or
subcontracted includes:

Structural excavation and backfill using equipment such as a backhoe,

Formwork and shoring for elevated beams and slabs,
Rebar placement,
Post-tension cable installation and stressing,
Slab finishing, and
 Supply and installation of complete concrete systems such as beams
and elevated slabs.

Form elevated CIP slabs

(1) Direct work:
Labor: 112,346 SF @ 0.2 MH/SF @ $41/HR @ 1.55 labor burden =
$1,427,918
Material: 112,345 SF @ $1.00/SF = $112,345
Equipment: 2 hard-tired forklifts @ 2 months each @ $1,500/mo.
= $6,000
Total direct estimate: $1,546,263, or $13.76/SFS, or
(2) Subcontractor pre-bid day unit price budget of $15/SFS, or
(3) Subcontractor lump sum quote received 30 minutes before the
bid was due: $1,350,000

Pre-cast concrete tilt-up walls

The pricing recapitulation of concrete tilt-up panels will be similar to that of
other concrete elements except that it will also include the hoisting,
shimming, bracing, and grouting of the panels. Figure 11.2 is an expanded
pricing recap sheet for the panel samples quantified in Figure 7.3. The same
checking and circling procedure is used on the tilt-up quantity sheets as was
done for the spread footings and SOG.
 Figure 11.2 Tilt-up wall panel cost recapitulation sheet

Published references provide pricing data on tilt-up wall panels. Some will
give a detailed account of the items that make up the construction costs, and
others will only give an average price per square foot of panel. If the
estimator lacks a good sample estimate to use as a model for his or her work,
it is worthwhile to find an estimating reference that provides details of the
various costs. These details can then be used as a guide to obtain local
pricing.
Many of the tasks required to construct tilt-up panels are similar to a slab-
on-grade, and applying bonding agent is similar to a sprayed membrane
curing compound. Edge forms are similar to SOG forms, and placing and
finishing of the concrete are also similar to a SOG. Reinforcing steel is a
little heavier, but labor productivity is based on weight, so this task is easily
priced. This leaves only the inserts, hoisting, and setting the panels as the
unknowns. Grouting is given in most estimating references. Backfilling in
preparation for the closure strip will have been accounted for in the SOG
section of the estimate. This analogy will aid in developing most of the costs
of the tilt-up panels, and consulting with a knowledgeable superintendent or
ironworker foreman will provide the rest.
 Note that Figure 11.2 shows a detailed listing of the work required. The
first item, ‘Prepare pouring slab’, has been noted to include the application
of a bond breaker to the slab. This is done after the forms are in place and is
the only material cost in the original slab preparation process. The form
material was quantified in lineal feet similar to that of a slab-on-grade.
The number of hoisting anchors and their placement was determined at
the time of the panel detailing. The estimator can determine how many will
be needed and consult with a superintendent or ironworker foreman to
determine what type of anchor is preferred. The estimator will also want to
have a catalog of concrete accessories that shows hoisting anchors and their
load data. He or she should also have some basic knowledge of structural
properties.
To determine the number of lifting inserts in a sample panel, the weight of
the panel is calculated by multiplying the concrete volume in cubic feet by a
unit weight of 150 pounds per cubic foot. This results in a panel weight of
approximately 85,950 pounds. Typical vendor data recommends that even
though the sizing information incorporates a 2:1 safety factor, 33% should be
added to allow for the extra tension required to break the bond between the
panel and the forming slab. Adding 33% to the calculated weight results in a
total weight of 114,305 pounds. An insert is selected and its capacity is
divided into the total weight. Using a 16,000 lb. capacity face tension insert:

114,305 pounds ÷ 16,000 pounds per insert = 7.14 inserts

required/panel

The estimator should use eight inserts for this panel. It is a good idea to
have the vendor’s sales engineer also verify these calculations and use the
results only for pricing purposes. The final panel detailing may cause a
variation in the number and type of inserts, but the cost difference is
generally insignificant.
There are some items on the tilt-up recap that are unique to this particular
type of construction. These include braces, shims, and grout. When a panel
is installed, it needs to be leveled and set at the proper elevation. Tops of
footings are designed to be slightly low so the panel can be set on shim
packs. This does two things: (1) allows adjustment so the panel can be set to
the proper elevation and (2) provides a space in which grout will be inserted
so the panel will have full bearing on the footing. Once the panels are in
place, they need to be braced until the structural steel and/or roof system is
completed. A concrete-accessories vendor will provide shim packs, grout,
and rent braces to the job. This vendor is a good source of pricing
information. From a labor standpoint, the installation of the shims and all of
the work involved with the braces is included in the panel hoisting and
setting cost. Grouting is a separate operation and needs to be priced
accordingly.
Near the end of the listing on the recap are two line items for the crane
that will be used to hoist the panels. The weight of the heaviest panel is
calculated including an allowance for breaking the initial tension bond
between the tilt-up and the SOG. The estimator must either have someone
who is knowledgeable about cranes and their operation select the crane
required or must learn to use crane rating tables that are available from
vendors who rent cranes. Crane capacity drops off very fast from their
nominal rating the further the boom reaches out from the cab of the crane.
Some estimators may show equipment such as a tilt-up crane in the
general conditions section of an estimate, but we recommend that wherever
possible, equipment should be estimated and charged to the work. This is the
approach behind activity-based costing, which is a function of lean
construction. The crane for hoisting the panels is used only for that purpose
and should be included with the recap that shows the tilt-up work. By
contrast, if the building were constructed with a stucco finish or a brick
veneer, the tilt-up crane would not be required. Also, the estimator must
include the transportation to and from the site. There will also be a similar
cost at the end of the work to prepare the crane for transportation back to its
base. Some large cranes require an ‘assist crane’ to assemble the tilt-up crane
on-site. The elements associated with tilt-up crane costs are discussed in
detail in Chapter 13.
 Two miscellaneous items need to be added to the tilt-up recap sheet. The
first is the detailing of the lift points, which must be done by a qualified
structural engineer. This cost is the responsibility of the general contractor
and is to be included in the estimate. The estimator needs to find out whom
his or her company regularly employs for panel detailing and have them
provide an estimated cost for the work.
Another potential cost item is patching of the lifting and bracing points
after the panels have been set and the structural steel erection has been
completed. The patching is a cement-based material, and the work usually is
done by the GC’s own forces. Estimators will use a historical percentage for
the patching work, but a conservative approach is to use 100% of the tilt-up
surface area that will remain exposed when the project is complete. This rule
can be applied to patch and sack of other exposed CIP elements such as walls
and columns and beams.
When finished, the estimator must do the operational and accounting
checks as shown for footing and SOG recaps. The assemblies check is done
on a square foot basis for a given thickness of wall. The overall total of
$9.17/SF is reasonable, but if excessively low or high, the estimator would
need to go back and look for adjustments in the material and labor columns.

Summary recapitulation sheets

A summary recap is an extra sheet on which to consolidate several related
recaps, as might be the case for the CIP concrete. The commercial estimate
summary sheet that will be introduced in Chapter 19 is limited in the
number of line items that can be used for direct work. Using a summary
recap on some work allows more concise information to be entered onto the
bid summary.
CIP concrete frequently is recapped on several sheets. There may be one
for footings and foundations, one for floor slabs, one for CIP walls, and one
for miscellaneous concrete, among others. The totals of these are listed as
line items on a summary recap sheet and then summed to a bottom line total
for all CIP concrete activities. These totals are then ready to be transferred to
the bid summary as a single line item. Figure 11.3 represents a summary
concrete recap as it might appear for the case study. Tilt-up panels are not
part of the commercial case study project but would not have been included
on the CIP concrete summary recap because of the significant hoisting and
setting operations that are unique to that work.
It should be noted that the summary recap does not contain all of the
information that is on a recap. It is only necessary to show the man-hours,
labor cost, material cost, and the total cost. But total quantities of a system,
such as cubic yards, are useful to include as well as $/hour and $/assembly
checks. After checking for transposition errors, range summations, and an
accounting crosscheck, the totals on the summary recap are double
underlined to show that they are ready to be transferred to the bid
summary.
Not all work activities will use a summary recap. Only those that require
several recaps for sub-activities, such as the CIP concrete, structural steel,
and possibly the rough carpentry, will have them. Smaller items such as
door installation, toilet accessories, and minor amounts of finish carpentry
will have their own single pricing recap sheets.
 Figure 11.3 CIP concrete cost recapitulation summary sheet

Summary
Pricing of materials should be a straightforward process. Data may be
available from past projects the construction company has done. Published
data also is available. Vendors provide the most current unit prices for many
materials. Labor pricing can be more difficult, especially if unit labor costs
are used. These have to be adjusted for inflation. Productivity factors, which
are man-hours per unit, are easier to use. They seldom change for a work
activity unless there is a new and innovative way of working more
efficiently. Determining labor costs using productivity factors only
necessitates the use of current wage rates, which are commonly available.
This eliminates the need to apply inflation judgments to the costing process.
Labor productivity and wage rates were discussed in the previous chapter.
The estimator may then calculate the unit labor cost, if so desired, to use as a
check against other similar projects. In the next chapter we will price the
materials for the balance of GC self-performed work including structural
steel, carpentry, doors/frames/hardware, and architectural specialties.

Review questions
1 When is a summary recap page used?
2 How is a crosscheck performed?
3 What can an assemblies check indicate?
4 If the estimator (not you) made the mistake of using the wrong units on
the pricing recap, as in the example given at the beginning of this
chapter, how much would have been included for the plywood? How
much should have been included?
5 Why should CIP concrete systems be priced separate from pre-cast or
tilt-up concrete?
6 What is an advantage of using UMH over labor unit costs?
7 Should a GC issue a purchase order or a subcontract agreement for each
of the following different concrete scopes:

a Form purchase
b Form rental
c Rebar supply
d Rebar installation
e Concrete pump
f Concrete purchase
g Slab finishing
h Tilt-up crane

Exercises
1 Create a pricing recap sheet for the concrete walls quantified in
Exercise 1 of Chapter 7. Using a current published database, price the
material. Price the labor costs using the productivity factors, also from
 the reference, but with current wage rates for the trades in your state.
How do the labor costs calculated from your local wage rates differ
from those in the database or those used in this book? What is the
cause for the differences? Hint: What is included in the wages, and are
they union or merit-shop?
2 Combine the wage rates of one each laborer, carpenter, cement mason,
operating engineer, and ironworker from Chapter 10 and calculate an
average wage rate. Why would a GC (A) use the average wage for all
its work, or, conversely, (B) not use an average wage rate? (C) Which
craft wage rate is closest to your average?
3 Looking back at the CIP elevated slab formwork example at the end of
the CIP concrete systems section, which of the three estimating options
would be the best choice: (A) in a budget estimate, (B) in a GMP, (C) in
a pre-bid day summary estimate, (D) on bid day, and/or (E) during
buyout?
4 If concrete redi-mix supply prices came in on bid day of $95/CY and
$102/CY and $107/CY for 3,000, 4,000, and 6,000 psi mixes, respectively,
what would be a potential bid adjustment the estimator might make?
Refer to the quantities in the example shown in the CIP concrete
systems section. Provide an argument why he or she should or should
not (choose one position) make this adjustment on bid day – there are a
couple of reasons for both.
5 What are the assembly costs/CY of each of the concrete systems in
Figure 11.3?
6 What is the cost/CY of our tilt-up example shown in Figure 11.2?
7 In Chapter 6 we discussed both detailed and rule-of-thumb methods for
quantifying rebar weights. We have not given you rebar solutions for
each CIP concrete system. Using 100#/CY as an average and the
summary recap Figure 11.3, what is the approximate total tonnage for
our case study rebar? Using rebar unit prices from figures in these last
two chapters, what is our total anticipated rebar supply cost? We will
be able to use these results on bid day if we receive rebar supply
quotes.
8 Why do the dollar totals in the self-performed option of boxed-in
elevated CIP slab example included in this chapter not exactly match
the values in Figure 11.3?
9 Price up the concrete substructure system(s) you quantified in Exercise
6.4. How does the total system $/CY compare with a comparable
system from the Dunn commercial project? Why might they be
different?
12 Pricing balance of general
contractor self-performed
work

Introduction
The last chapter priced all of the concrete work. Our coverage for this
chapter is the balance of the direct work a typical commercial general
contractor (GC) may perform, which includes Construction Specification
Institute (CSI) division 05, structural steel, and all of the carpentry work in
CSI divisions 06, 08, and 10. Much of this work was quantified in Chapters 8
and 9. General contractors will choose to perform different aspects of work
with their own direct forces or to subcontract work out for a variety of
reasons, including:

Union affiliations,
Specialization,
Equipment and tools,
Economy,
Client or contract requirement, or
Magnitude (quantity) of that type of work.

In this chapter we will again assume that the contractor is estimating the
work utilizing labor productivity (hours per measured unit) and not labor
unit pricing. Labor is priced with bare wages, not loaded, and we
recommend adding labor burden to the end of the estimate on the estimate
summary page, as described in Chapter 19. The contractor will also be
purchasing materials from independent specialized material suppliers and
fabricators, for which they will have executed either long-form or short-
form purchase orders. Many materials will be priced utilizing database
material unit prices and not plugs or lump sum allowances. Other materials
will receive competitive supplier quotations on bid day. It is imperative for
the estimator to understand in what units materials will be priced so that
during the quantity take-off (QTO) process he or she measured and counted
and converted quantities into units that allow a smooth and error-free
pricing process. If the QTO was developed detailed enough, and measured
quantities were converted to purchasable units, the pricing is very
straightforward. Many of the labor productivity rates and material unit
prices used in this book were provided by The Guide, which has made
electronic access free to students. Other rates and prices were provided by
our industry partners.

Structural steel pricing

Structural steel columns and beams: Installation labor of many elements of
structural steel is figured by the unit man-hours (UMH), and material is
purchased by the ton, as shown in the next boxed-in example. Note that for
simplicity we have not defined every abbreviation used within these
estimating formulas and calculations. All of them, and others, are spelled
out in the front material of the book.

15 HSS columns @ 1.5 MH/EA @ $43/HR = $968 labor cost

And 2.5 tons @ $2,600/T = $6,500 material cost
20 W33 × 118 beams @ 2 MH/EA @ $43/HR = $1,720 labor cost
And 39 tons @ $2,600/T = $101,400 material cost
500 Nelson studs @ .33 MH/EA @ $43/HR = $7,095 labor cost
 Material cost was accounted for with the gusset add-on to beams

Estimating references commonly provide productivity in terms of man-

hours per ton of steel. If the estimator has not quantified the steel by weight,
this productivity factor is of no use. A more accurate way to perform the
labor estimate is to know the crew size and capabilities. For most projects,
structural steel will be erected with a five-person crew commonly called the
raising gang. The raising gang will be supported by an operating engineer
operating the crane and an ironworker (IW) rigger on the ground hooking
steel up to the crane. This crew should be capable of installing 40 pieces of
steel a day for most of the structural members. Once the steel is plumbed
and aligned, a two-person IW bolt crew will install the remaining bolts. This
is done on a mechanical lift, and a good crew should be able to install and
tighten a bolt every two minutes. This time includes required inspections by
the building department. A surveyor or two will also assist with the steel
alignment.
Structural steel material prices are furnished as competitive bids by
fabrication shops. It is important for the estimator to know what is included
and what is not. Bolts have been discussed in Chapters 6 and 8, but as a
reminder, the fabricator furnishes all steel-to-steel connecting bolts and all
anchor bolts placed in concrete. The general contractor will furnish all other
bolts. Anchor bolts and other embedded steel will be installed by the
carpenters and steel-to-steel bolts installed by the IWs.
Trusses: If steel trusses are purchased and shipped to the job in parts and
pieces, they will be field assembled and priced similar to beams, discussed
earlier. If prefabricated and pre-assembled, they are purchased by the each,
for example:

10 trusses @ 40MH/EA @ $43/MH = $17,200 labor cost

10 trusses @ $10,000/EA = $100,000 material cost

Bar joist:
A fabricator will design the bar joist and enter into a lump sum
purchase order with the GC. The estimator will develop their price based
upon the depth and strength and lineal footage of joist. The installer may use
a MH/SF or MH/LF productivity factor, but the most efficient is a MH/EA
calculation, as follows:

51 Joist @ 0.5MH/EA @ $43/HR = $1,097 labor cost

1,530 LF @ $30/LF = $45,900 material cost

Miscellaneous steel: Because there are so many different sizes and shapes
and types of potential miscellaneous steel items, it is difficult to provide
rules of thumb for all of them. Some are purchased by the pound, such as
embedded steel; others by the each, such as bollards; and others by the linear
foot, such as handrails, and metal stairs are estimated by the flight. In all
cases, a supplier quotation should be provided for the material and the
contractor’s own in-house historical database used for labor productivity. If
the IW crew is still on-site when the miscellaneous steel arrives, they may
assemble parts and pieces of it, but often a carpenter will assist with
installation later in the project.
Metal decking: Installation labor and material purchase are generally
calculated by the squares (SQ) which is equal to 100 square feet (SF) of deck,
although some estimators may price it by the SF. An example would include:

1,632 SQ @ 2.25 MH/SQ @ $43/MH = $157,896 labor cost

And 1,632 SQ @ $180/SQ = $293,760 material cost

Joist and decking are installed relatively quickly. Estimating references

often show joist installed by the lineal foot. The estimator should talk to an
ironworker foreman and determine the time it will take to install the joist
and related bracing. Bridging for the joist is listed and priced as a separate
line item. Decking is priced by the square foot (or 100 SF or SQ) for slab
form and by the SQ for roofs, and productivity includes its welding to the
support structure. Shear studs, or Nelson studs, involve the labor to weld
them and special welding equipment.
 Equipment such as cranes, man-lifts, scissor-lifts, and welding machines
will be figured on total structural steel duration. Additional costs associated
with structural steel erection include shake-out (receiving materials,
unloading from the truck, and assembly on the ground for easy installation),
plumb and align, and safety. These costs are predominantly labor-based and
are estimated using either an assumed crew size and duration of activity, or
duration of the project, or as a percentage add-on to total tons of steel on the
project.
All structural steel needs to have hoisting equipment for handling. This
can be anything from a forklift to a heavy lift crane or traveling derrick.
Equipment selection and costing can challenge the estimator. He or she
should consult with a superintendent and an ironworker foreman to
determine the type and size of equipment that is best suited for the project.
It is also important to discuss operating personnel and mobilization costs.
Additional consultation with a company that rents hoisting equipment will
provide rental rates, travel times and costs, and the fuel and maintenance
requirements. Equipment costs are expanded on in the next chapter.
As discussed earlier, pricing recapitulation (recap) sheets for structural
and miscellaneous steel erection contains tasks that are not necessarily
shown as columns on the quantity sheets. Many scopes that require pricing
have similar quantities as other measured items, and some are too small to
quantify but still require allowances or plug estimates. One small steel item
that is often overlooked is shim material. Shims are small pieces of steel
plate that are used under column base plates to set them to the proper
elevation. The fabricator does not furnish shims, and the estimator must
determine their cost and include them as a line item on the pricing recap.
Some companies have historical data that allows a percentage of the steel
cost to be used to cover items such as shims.
Often, an estimator will find cement-based items on the structural steel
drawings such as grout under the column base plates and fill for stair treads
and landings. Both of these should be quantified and recapped as
miscellaneous concrete. This work will be accomplished by laborers and
cement masons and not ironworkers.
 We have brought many of the steel quantities developed for our case
study in Chapter 8 forward and added labor productivity rates, labor wage
rates, and material and equipment unit pricing and assembled them on
Figure 12.1, which is an abridged pricing recap sheet.

Figure 12.1 Structural steel pricing recap sheet

Totals are calculated at the bottom of each pricing recap page for labor
hours, total labor cost, total material and equipment cost, and the far right-
hand total cost column. Each of the total columns should then also be added
horizontally across to verify the far right-hand column is correct. With Excel
it is easy to cut and paste and insert rows and columns and cells, and
sometimes automatic formulas may be impacted. A manual cross-check of
pricing recap totals is a good practice.
An average wage check also should be made on each pricing sheet for
each system or assembly. The estimator should divide the total labor dollars
by the total labor hours. The average should be within the range of different
wage rates used on each sheet. Major estimate errors come from slipping a
digit, not from a miscount of anchor bolts.
An assembly check could be made on rolled shapes based on tons of steel.
But if this were a small steel project, and bar joist and metal deck and
miscellaneous steel were all added to the same recap sheet, $/ton would not
be an appropriate check. A more common assembly check would therefore
be to unitize the man-hours and total cost in terms of square foot of the steel
structure. This can be checked against other square foot cost data in either
published or historical references.
After validation, the totals at the bottom of each of the columns are
double-underlined, indicating they are ready to be forwarded to the next
summary level in the estimating process. Once forwarded, each of these
totals is then circled. After all of the hours and costs have been forwarded
from an individual recap sheet, the estimator may place an “X” in the lower
right-hand corner of that sheet, indicating he or she is done with it.
A large structural steel building would require multiple CSI division 05
pricing recaps separated by area or floor or phase or member types, such as
one for columns and another for beams. But if this were a wood or concrete
structure, steel may be recapped all on one or two pages. These cost
organization features then all feed into an efficient cost control system, as
introduced in Chapter 24.

Rough carpentry pricing

The process of applying labor productivity factors and wage rates and
material unit prices to rough carpentry quantities developed in our previous
carpentry QTO (Chapter 9) is similar to structural steel.
Columns and beams and joist: Labor is figured for rough carpentry
members by multiplying the converted quantity by the contractor’s in-house
UMH productivity rate times the bare wage rates. Material purchase cost is
estimated by the thousand board feet (MBF) multiplied times database or
market or quoted unit prices, for example:

1.4 MBF of columns @ 41 MH/MBF @ $41/HR = $2,411 labor cost

1.4 MBF @ $2,400/MBF = $3,360 material cost
100 LF of GLB @ 0.1 MH/LF @ $41/MH = $410 labor cost
 100 LF @ $15/LF = $1,500 material cost
536 joist @ 0.5 MH/EA @ $41/MH = $10,988 labor cost
11.4 MBF @ $1,500/MBF = $17,100 material cost

Wall framing: Headers would be estimated similar to beams or joist. Studs

and plates can be estimated by the LF of wall or the MBF of material, for
example:

18.1 MBF of studs @ 19 MH/MBF @ $41/MH = $14,100 labor cost

18.1 MBF @ $2,000/MBF = $36,200 material cost

Trusses are estimated similar to steel bar joist. They are engineered by the
supplier, and the GC enters into a purchase order for a lump sum. The
supplier would have developed their own supply price by the each. Some GC
estimators will figure labor productivity on the LF of truss or SF of roof, but
the most accurate way to figure labor cost is by the each, for example:

51 trusses @ 1 MH/EA @ $41/MH = $2,091 labor cost

51 trusses @ $250/EA = $12,750 material cost

Framing hardware: These should be separated by type; the following

example applies to Simpson beam-to-column supports:

50 EA @ 0.2 MH/EA @ $41/HR = $410 labor cost

50 EA @ $100/EA = $5,000 material cost

Sheeting: Wall and floor and roof sheeting should all be separated and
estimated independently, as well as separating plywood from oriented
strand board and varying thicknesses of sheeting. Some estimators and
databases will figure plywood by the square foot, but it is supplied by the
sheet and the carpenters install it by the sheet. For our example, we estimate
3/4″ tongue-and-groove plywood floor sheeting as follows:
 344 sheets @ 0.5 MH/sheet @ $41/HR = $7,052 labor cost
And 344 sheets @ $30/sheet = $10,324 material cost

Siding and trim and roofing: Whether the estimator takes the siding off by
the square foot of wall or converts to LF, the process of multiplying the
measured quantity times a historical UMH and bare wage rates plus
published or market material prices is the same, for example:

3,840 LF 6″ beveled siding @ 0.1 MH/LF @ $41/MH = $15,744

labor cost
And 3,840 LF @ $3.75/LF = $14,400 material cost
420 LF cedar 1 × 4 trim @ 0.1 MH/LF @ $41/MH = $1,722 labor
cost
And 420 LF @ $2/LF = $840 material cost
25 SQ cedar shakes @ 10 MH/SQ @ $41/MH = $10,250 labor cost
And 25 SQ @ $300/SQ = $7,500 material cost

Rough carpentry equipment such as a crane or compressor or nail gun is

based on activity duration times market rental pricing. The quantities from
the rough carpentry Figure 9.1 QTO have been brought forward and
extended with productivity rates, wage rates, and material pricing and
assembled in an abridged rough carpentry pricing recapitulation sheet,
Figure 12.2.
 Figure 12.2 Rough carpentry pricing recap sheet

Lumber suppliers do not typically furnish prices on bid day. They prefer
to have the GC’s estimator determine the approximate quantity of lumber
and sheet goods that are required, and then they will furnish unit prices over
the telephone. Most lumber suppliers price lumber according to each size.
Sheets of plywood are also priced according to type and size. The estimator
should talk to a lumber supplier prior to estimating the work to learn how
the pricing will be received. He or she can then set up the estimating sheets
accordingly. Residential GCs will send the framing drawings to the lumber
supplier, and the supplier may perform its own take-off and provide a lump
sum bid, but there can be complications if the supplier underestimated a
quantity and the framing crew runs short of material out on the jobsite.

Finish carpentry pricing

There are potentially as many different types of finish carpentry items as
there are miscellaneous steel items. Here are some pricing examples for
wood base, lower kitchen cabinets, and wood flooring:

450 LF oak base @ 0.1 MH/LF @ $41/MH = $1,845 labor cost

 And 450 LF @ $1.75/LF = $788 material cost
24 oak kitchen cabinets @ 1.5 MH/EA @ $41/MH = $1,476 labor
cost
And 24 @ $400/EA = $9,600 material cost
1,250 LF oak flooring @ 0.15 MH/LF @ $41/MH = $7,688 labor
cost
And 1,250 LF @ $3.50/LF = $4,375 material cost

All of the finish carpentry items would be priced on a recap sheet separate
from the rough carpentry recap, and the totals from each of the columns
forwarded to the estimate summary page. These two types of CSI division 06
work are performed by different crews at different times. Independent recap
sheets facilitate an easier transition to cost control, as we will discuss later.

Door and window pricing

Several examples follow as a sampling of pricing for some of the major
items self-performed by a GC in door and window CSI division 08.

100 single hollow-metal (HM) door frames (DF) @ 1 MH/EA @

$41/MH = $4,100 labor
100 single HM DF @ $300/EA = $30,000 material cost
50 double HM DF @ 1.5 MH/EA @ $41/MH = $3,075 labor cost
50 double HM DF @ $300/EA = $15,000 material cost
150 wood door leafs @ 1 MH/EA @ $41/MH = $6,150 labor cost
150 wood door leafs @ 520/leaf = $78,000 material cost
25 door relites @ 0.5 MH/EA @ $41/MH = $513 labor cost
25 relite kits @ $150/EA = $3,750 material cost
150 door hardware sets @ 5 MH/set @ $41/MH = $30,750 labor
cost
 150 sets @ $1,100/set = $52,500 material cost
1 hardware room @ LS $10,000 labor cost
1 hardware room @ LS $5,000 material cost
35 EA access doors @ 1 MH/EA @ $41/MH = $1,435 labor cost
35 EA @ $250/EA = $8,750 material cost
750 punch windows @ 1.6 MH/EA @ $41/MH = $49,856 labor cost
750 EA @ $400/EA = $300,000 material cost

A GC may self-perform single, or ‘punch’ window installation with its

own carpenter crew. This is especially true if there are only a few windows
on a commercial project or a residential project. Commercial storefront
glazing is different than punch windows, as the frames and glass and
hardware are engineered by a design-build subcontractor and assembled in
the field by the glazier trade. A GC plug estimate for storefront window wall
system is discussed in Chapter 14.
CSI division 08 would likely have at least two separate pricing recaps, one
for doors, frames, and hardware and the other for glass and glazing. They
are provided by different suppliers and installed at different times. The totals
from these recap pages would also be forwarded to the estimate summary
page.

Specialty pricing
The pricing process for most of the CSI divisions 10 through 12 specialties is
similar. The items were counted and taken-off by the each, and most will be
installed by the GC’s carpenters. Some items may be provided by similar
suppliers, but it is possible to end up with ten or so specialty item suppliers
– hence the term, ‘specialties’. Some pricing examples include:

75 interior Plam signs @ 0.25 MH/EA @ $41/MH = $769 labor

cost
 75 signs @ $50/EA = $ 3,750 material cost
17 semi-recessed paper towel dispensers @ 1 HR/EA @ $41/EA =
$697 labor cost
12 dispensers @ $150/EA = $2,250 material cost
117 recessed fire extinguisher cabinets (FECs) @ 2.5 MH/EA @
$41/MH = $11,993 LC
117 FECs @ $175/EA = $20,475 material cost

Most of the specialty items would be grouped to one pricing recap page or
separated by major CSI division. If this were a large apartment or hotel, then
there would be one sheet dedicated to just toilet accessories and another for
kitchen appliances.

Summary
The key to an efficient pricing process is a thorough detailed quantity take-
off process with quantities converted to units that will reflect pricing. The
experienced estimator knows how items will be priced. The new estimator
should look ahead at databases to facilitate this important transition.
The resulting bottom line of each pricing recapitulation sheet needs to be
carried forward to the estimate summary page, as described in Chapter 19. If
there are several pricing pages for large systems such as concrete, steel, or
carpentry, they may need to be gathered to a separate summary recap page
before forwarding to the summary page. All of the columns should be
totaled and cross-checked on each page before forwarding. These columns
include the labor hours, labor cost, material and equipment cost, and total
cost. The estimator should add rows across and compare to totals from the
vertical columns. Average labor wage checks and system checks such as total
dollars per cubic yard of concrete or per ton of steel or per apartment unit
are relevant to perform on the pricing recap sheets as well. Similar to the
QTO process, when pricing is forwarded to the next summary level, totals
are circled, and when every double-underlined total has been forwarded
from a recap, an ‘X’ is placed in the lower right corner, indicating the
estimator is done with that sheet.
It would be impossible for us to have provided pricing examples for all
work items that may be found in any type of project. We have hit on a few
of the more common ones. If an estimator cannot find an example that
exactly applies to their work item, they should look around in any
estimating database and find something similar or ask a coworker.
Superintendents are great sources for labor productivity. Although
superintendents may not think in terms of $/SF or UMH, they do think in
terms of a four-person crew working two weeks to accomplish a task, which
totals 320 man-hours. How does this total feel? The estimator must compare
the superintendent’s plan to the total estimated cost or hours for that scope
of work. We call this a ‘gut-check’.

Review questions
1 Why should estimators utilize standard estimating forms?
2 What is the downside of using labor unit rates, such as $3.55/SF, versus
labor productivity rates, such as 0.1 MH/SF?
3 How would mistakes from the QTO process discussed in the four
earlier QTO chapters affect the pricing processes in these four pricing
chapters?
4 What happens if the estimator’s hours and the superintendent’s hours
do not agree?
5 In addition to IWs, what other crafts may be involved with steel
erection?
6 In addition to carpenters and laborers, what crafts may be involved
with concrete system construction?
7 What is wrong with a residential wood framing subcontractor figuring
a labor estimate for a new house on a $/SFF basis? They often do that.
Exercises
1 Prepare a pricing recapitulation page for the lumber quantities from
Chapter 9 Review Question 3. Utilize published database productivity
rates and material unit prices. Utilize the carpenter wage rate presented
in Chapter 10.
2 Assume the Exercise 1 project will take five days to install. What will
your crew size be? What equipment is necessary, and how much will
that cost? What other items might the estimator add to this work
package so that the foreman has a complete estimate and bill of
materials? Expand the Exercise 1 pricing recap to include all of these
items.
3 Utilizing a standard database and making whatever assumptions are
necessary (yes, estimators do this), price up Chapter 9’s Exercises 3, 4,
or 5. Utilize standard pricing recap forms.
4 What are the average wage rates in Exercise 3? What are the systems
costs? Are those reasonable? How might you verify?
5 Some estimators used ‘loaded’ wage rates on their pricing recap sheets;
others use bare wage rates. What are the advantages and disadvantages
of each approach?
6 Prepare an argument why an estimator would choose to (A) use one
standard average wage rate for all work and, conversely, (B) use
different wage rates for different crafts.
7 Price up one of the carpentry systems that was quantified in a Chapter
9 exercise.
13 Equipment

Introduction
The estimator needs to think where the cost of certain equipment will go in
the estimate. Some equipment is unique to certain activities, and its cost
should be included in the direct work part of the estimate. A concrete pump,
for example, is used only for concrete work and is a direct cost to those
activities. The cost of a crane to hoist tilt-up wall panels should be shown on
the pricing recapitulation (recap) sheet for the panels. The cost of a crane
brought on site specifically for hoisting structural steel should be shown on
the recap sheet for the steel, because once this work is done, the crane will
be removed from the site. After completion of direct labor, material, and
equipment pricing, the estimating team will organize and summarize all of
the recap sheets in preparation of posting the information to the estimate
summary page. Proper placement of equipment costs will have an effect on
the checking procedures as the estimate is completed.
Equipment that is used throughout the job is considered a jobsite
overhead cost or jobsite general conditions cost and will be discussed in
Chapter 17. For example, a tower crane or jobsite forklift is used for many
work activities for most of the duration of a project. Its cost is difficult to
apportion to specific tasks and is thus considered part of the jobsite general
conditions. Estimating, and later cost coding, of the equipment used for the
work is known as activity-based costing (ABC), which is an element of lean
construction techniques. Because tower cranes and personnel and material
hoists are such significant costs and have an impact on several parts of the
construction process, we describe techniques for estimating their costs in
this chapter.
The major topics covered in this chapter are:

Activity-based costing;
Sources of equipment pricing;
Concrete equipment, including concrete pumping and tilt-up crane;
Hoisting for steel erection and wood framing;
Tower cranes;
Material and personnel hoists; and
Pricing recap completion.

Use of market databases to estimate equipment cost is not recommended.

Databases may be used to estimate equipment productivity, but published
rental rates or internal company rental rates are the best sources of
equipment cost data.

Activity-based costing
Activity-based costing is not a process to reduce costs; it is a means for
identifying indirect costs that can be applied to the cost of direct
construction activities. This allows contractors to understand the true cost of
direct work and enable them to focus on improving costs where needed
most. Applying project indirect costs to construction activities also allows a
contractor to improve their estimating capabilities. Controlling overhead
costs has always been of interest to contractors, and the first step in ABC is
to understand these costs and track them. This is achieved by establishing
cost codes to link project indirect costs to specific work activities.
Activity-based costing is an approach to the costing and monitoring the
total cost of individual construction activities. This involves tracing resource
utilization and assigning all project costs. This results in better as-built cost
data that can be used in estimating future projects.
Sources of construction equipment
Contractor-owned equipment
Few construction companies own any equipment. The exception would be
heavy civil, marine, and industrial contractors. Most commercial and
residential contractors either establish separate equipment companies or rent
from outside sources. Equipment may also be provided and operated by
subcontractors as part of their scopes of work. The equipment manager for
company-owned equipment will establish internal rental rates based on the
estimated annual use of each piece of equipment. These rental rates are
charged to individual projects whenever the equipment is used.

Contractor equipment companies

Many construction companies choose not to own equipment themselves but
rather set up separate equipment companies that own the equipment. The
equity ownership of these companies is usually a select group of individuals
within the construction company, often the corporate officers. These
equipment companies charge rental for equipment use on projects at rates
similar to rental charges from equipment rental companies. Often there are
two rental rates: An operating rate and a standby rate. The standby rate is
charged when equipment is on a project site but not being operated.

Equipment rental companies

Another primary source of construction equipment is an equipment rental
company. Rental rates typically are quoted by the day, week, and month.
Equipment rental is often accompanied with mobilization or delivery
charges and demobilization or pickup charges. Some pieces of equipment
have meters installed that measure hours used or miles driven, and if the
equipment is used overtime or on weekends, the equipment rental company
may require additional rent, as indicated in the forklift lease agreement
shown in Figure 13.1.
 Figure 13.1 Equipment lease agreement

Subcontractors
Subcontractors typically provide any equipment needed to perform their
scopes of work. Often the general contractor (GC) will provide hoisting
support rather than requiring subcontractors to provide their own cranes or
other hoisting equipment. Any equipment used on a project where the
equipment supplier also provides an operator will be obtained by a
subcontract issued to the supplier. The subcontract defines the scope of
services to be provided, establishes the duration of the agreement, and
delineates insurance requirements.

Concrete equipment
Estimating the cost of concrete pumping includes several variables. Many
estimators will price pumping at a historical rate such as $15.00 per cubic
yard (CY) for all concrete. This is satisfactory as long as the estimator
understands what makes up the pumping cost and what affects the rate. A
concrete pump has a minimum charge for just showing up at the jobsite plus
a rate per CY for pumping plus an hourly component. Travel costs will vary
for different projects depending on the anticipated travel time from the
concrete pump supplier’s yard. For most quantities to be pumped at a given
time, the rate used by the estimator is usually fairly accurate. If a small
quantity is to be pumped, the pumping cost will be much higher. This is
caused by applying the minimum pumping charge to the small quantity of
concrete. Large placements will have a lower pumping unit cost. If the
pumping costs are too high, the estimator may need to explore another more
economical means of placing the concrete such as waiting until a larger
volume of concrete is needed.
Concrete pumps come in various sizes, and the estimator must anticipate
a placement rate and the distance that the concrete must be pumped. Pumps
that are too large are more expensive, while those that are too small will
affect the placing labor cost. A small pump can cause additional costs by
keeping a concrete truck on site too long. A concrete pump supplier’s quote
for the case study project is shown in Figure 13.2.
 Figure 13.2 Concrete pumping quote

The following example illustrates the use of the quote shown in Figure
13.2.

A 105-foot boom pump is to be used to pump 100 CY of concrete

in 4 hours (HR). What is the estimated cost per CY to pump the
concrete?
Concrete pump travel cost: $198
Rental cost per hour: 4 hours @ $198/HR = $792
Pump cost per cubic yard: 100 CY @ $4.50/CY = $450
Total cost per this pour: $1,440
 Cost per cubic yard: $1,440/100 CY = $14.40/CY

Note that the pumping cost at $14.40 per CY is less than the estimator’s
historical rate of $15.00 per CY but is applicable for this placement.
The concrete pump company is really a service provider or subcontractor
and not a supplier because the pump is operated. The pump supplier should
therefore receive a subcontract agreement from the GC and will in turn be
required to provide a certificate of liability insurance before arriving on the
jobsite. Another item to consider is the time a concrete truck is at the jobsite.
The price of the concrete typically includes transportation to and from the
site and 20 minutes for standby and placement time. Time is money, and the
superintendent must move the concrete placement along to avoid extra costs
for the truck and pump.
Other equipment used for concrete construction includes forklifts, cranes,
and mobile man-lifts. Forklifts are used to offload delivery trucks and to
move materials around the jobsite. Since they are used for multiple tasks,
they usually are included in the jobsite general conditions estimate and not
charged to specific concrete construction tasks. Cranes are used to hoist
formwork and reinforcing steel as well as lift smaller pre-cast concrete
panels. Tower cranes often are used to hoist concrete formwork and
reinforcing steel if available on the jobsite. If a tower crane is not available, a
mobile crane may be required. If the mobile crane is only used to support
concrete construction, its cost would be included in the direct cost for the
concrete work. If the crane is required for multiple tasks on the jobsite, its
cost may be prorated across each task or included in the jobsite general
conditions cost estimate.
Concrete wall panels for a tilt-up structure typically are cast on a concrete
floor slab. When properly cured, a crane is used to hoist the panels into
place. Once elevated, the panels must be braced and connected with
adjoining panels. Because the safe lifting capacity of a crane is reduced as
the boom is lowered, the crane may need to be relocated multiple times
around the walls being constructed with the tilt-up panels. Mobile cranes
with hydraulic booms are often used to set the concrete panels. Since the
crane is to be used for a single purpose, its cost would be included in the
direct cost of wall erection. To lift the pre-cast panels, the GC would issue a
hoisting subcontract to a crane company for the equipment and labor
needed to operate the crane.
Let’s look at an example.

A contractor has selected a 250-ton self-propelled hydraulic crane.

Equipment cost for the crane is $485 per hour. Mobilization and
demobilization costs are estimated to be $10,500. Each panel will
need to be raised and held in location until metal supports are
installed and the connecting brackets welded. After conducting a
time analysis, the contractor estimates that the crane will be able
to erect two panels per HR. A total of 30 panels are required for
the project, so 15 HR will be required for panel erection.
250-ton tilt-up crane mobilization: $10,500
Crane rental per hour: $485/HR
30 panels @ 30 minutes/panel = 15 HR
Crane rental cost: 15 HR @ $480/HR = $7,200
Total tilt-up crane cost: $17,700
Crane unit cost per panel: $590/EA

Structural steel and wood framing hoisting

The estimator needs to understand the characteristics of hoisting equipment
when sizing it for a particular job. A forklift has a rated capacity based on
the load being a certain distance from the backstop and with the forks
positioned near the ground. Once the load is elevated or a boom is extended,
the lift’s capacity is reduced due to an increased tendency of tipping. This is
basically true for cranes also. An accurate determination of the weight of a
load and equipment rating tables will provide information on sizing the
equipment to the job. The estimator should always discuss hoisting with a
superintendent so that properly sized equipment is priced.
A forklift should be operated by a full-time operating engineer, if a union
project, or a certified carpenter foreman. No one on the jobsite should be
allowed to jump on the forklift unless they are properly trained and licensed.
Small cranes can be rented without an operator by using a rental
agreement similar to the lease agreement in Figure 13.1, in which case the
GC will need to supply a certified operator. If the crane is rented with an
operator, a subcontract agreement and liability insurance will be required, as
previously discussed for concrete pumps. Larger cranes will also require a
full time rigger or bellman to connect loads to the crane. If open lattice
boom cranes are required to support steel erection, there will be increased
mobilization and demobilization costs. This is because the booms must be
detached from the crane for transportation and then installed and rigged
with cable once the crane arrives at the jobsite.

Tower cranes
Tower crane estimates are typically a substantial part of the overall estimate,
with costs generally being in the tens of thousands of dollars per month.
Estimates for tower cranes can generally be put into three categories –
primarily due to how they are determined: Foundations and infrastructure
can be estimated based on quantities and unit prices; erection and
dismantling are typically bid out or done on a lump sum or price per each
basis; and operations and maintenance estimates are based on the amount of
time (months) that the crane will be on the jobsite.
Estimate preparation typically is started with a boilerplate template from
the contractor’s database, where line items can act as questions to be
answered in regard to the crane’s requirements. The estimator should review
these line items, as well as bring up other questions based on project and site
requirements, with the project team to determine appropriate line items to
price in the tower crane estimate. Because of the multiple factors involved in
determining location, duration, and size of crane, the estimate should not be
completed until some planning analysis is performed. This section is not
meant to be a detailed ‘how-to’ for preparation of a tower crane estimate but
more of an overview of the sections and processes. We assume the reader
has some prior estimating knowledge.
Once decisions have been made on location, type of crane, and the length
of time it will be needed on the project, it is time to prepare a cost estimate
for the work. If the project is a lump sum bid, the GC may plug in a generic
estimate and then modify it if they are successful in obtaining the project,
and a hoisting plan is developed. Most GCs use a generic or boilerplate
estimate to build off of that asks all the questions and allows for associated
dollars to be attached for different situations that may or may not apply for
a particular installation. The estimate may be developed by a staff estimator,
but our survey found that most project managers responsible for
administering the crane contract will develop the estimate with input from
their operations officer, the project superintendent, and a hoisting
superintendent. The following subsections correspond to the crane estimate
template sections and are organized as the crane would go together; first the
foundations, then crane erection, followed by operations, and finally
disassembly.

Foundations and infrastructure

The foundations required to support the loads induced by the tower crane
can be substantial. Typically, the most economical way to construct these
foundations is to integrate with the building foundations to lessen both the
initial installation cost as well as potential demolition costs if the pad is
constructed outside the building footprint.
In regard to estimating the footing, the first step (like anything in
construction) is to determine the design. This is done by a licensed structural
engineer who is hired by the GC. The structural engineer will take into
consideration the foundation requirements for the crane, the contractor’s
preferred location, and the building foundation system when designing the
footing. Once the design is complete, the contractor should be able to
estimate the cost similar to any other building element. Similar to any other
foundation, the estimator would figure excavation and backfill, formwork,
concrete, and rebar costs. In addition, choices of anchor bolts or a sacrificial
lower steel section of the crane that are both embedded into the concrete
need to be considered. Tower crane foundations are estimated similar to
spread footings, as discussed in Chapters 6 and 10.
Other costs to consider when evaluating the infrastructure required are
power requirements for the crane and how that will be provided. Generally,
this can be determined by giving an electrical subcontractor the tower crane
requirements and some parameters on electrical equipment locations and
service. With this information, they should be able to give the estimator a
bid for the work.
Lastly, and often forgotten when evaluating the infrastructure costs of
installing the crane, is how it affects other building elements – especially
when installed within the footprint. Some of the items to consider are:

If the crane is installed in an elevator shaft, what are the costs to

expedite the work that was held off in the shaft because it had to wait
until the crane was removed?
Are there ‘pour-backs’ required in concrete decks after the crane is
removed?
Is there other work that needs to be expedited because it was held up
while the crane was in place?
Are horizontal braces required between the crane mast and the
building?

These are important questions to consider and address when preparing the
tower crane estimate. As mentioned in the overview, these questions are
generally included in the template provided by the GC for crane estimates to
help determine costs when necessary.
Crane erection
It should be noted that most cities have crane erection companies that will
construct and dismantle tower cranes. When deciding how to erect the
crane, the contractor should compare the cost of managing the work
themselves (if they are capable) with the cost of using a crane erection
company, as well as the risks involved, when making their decision. The
following paragraphs describe the costs involved with erecting the crane
regardless of who does the work.
Tower cranes are engineered to be built relatively quickly, like an erector
set, but they cannot go up themselves. Typically, erecting a tower crane
requires the use of another mobile crane or crawler crane to hoist the pieces
into place. Generally, it can be assumed that the tower crane can be built in
one or two days, and the rental costs for the crane and their hoisting crew
can be established by requesting a quotation from a mobile crane company.
Similar to determining foundations, the location and hoisting requirements
for the mobile crane must be known before the price can be established. This
second crane is known as an assist crane.
In addition to the mobile crane costs, there needs to be an erection crew
who can guide and fasten into place the pieces being hoisted by the mobile
crane company. The erection crew size can vary from four to eight
ironworkers depending on the size and complexity of the crane installation.
Lastly are the incidentals or other factors that can greatly affect the cost
of erection. Some of these considerations are:

Does the work have to be completed on the weekend?

If an urban site, are there street use fees to be paid for building the
crane on public property?
Are there power or trolley lines to be temporarily (or permanently)
moved in order to construct the crane?
Will the crane swing over a private neighbor’s property, and can a
temporary easement be gained to allow that swing?
What types of inspections are required?
These questions, as well as others, need to be considered and addressed
before completing the estimate.

Operations and maintenance

There are four fundamental costs to operating and maintaining the crane:
Rental, crew (operator and rigger), utility costs, and maintenance. Tower
crane rental is generally similar to renting any other piece of equipment –
although more expensive. General contractors may have their own cranes
and rent to the project, or they may rent through a third party supplier. An
extensive analysis of the advantages and disadvantages of crane ownership
along with other major pieces of equipment is an interesting study but
beyond the scope of this book. Generally, the rental agreement includes a
mobilization cost, demobilization cost, supplier monthly rental fee, and some
unit prices for maintenance of the crane. The crane supplier handles
shipping and factors those costs in their bid. Like most subcontractor and
vendor work, this can be bid out competitively between different vendors,
and the most economical selection can be made for the project. In many
areas, only one supply source of tower cranes is available.
Operator costs are generally hired direct by the general contractor or
through a third party subcontractor who provides an operator labor pool.
However, when estimating operator costs, it is important to include time and
monies for climbing the crane (most union agreements call for the shift to
start when they start up the ladder), operator inspections, and overtime.
Generally, it is safe to assume a 50-hour week for operator costs, but the
estimator should evaluate schedule, hoisting requirements, and other factors
with the project team before determining the hours required by the operator
on a given project.
Rigging costs are sometimes included in the crane estimate or in other
places in the overall project estimate. This depends on how the crane is
going to be used, subcontractor agreements, and how the general contractor
likes to present their estimates. Rigging costs can be quite expensive. The
rigger and the operator need to be well coordinated. Every time there is a
pick, the rigger is responsible for guiding the operator, making appropriate
and safe connections to whatever is being hoisted, and then guiding the load
into place. Some contractors prefer to have a dedicated person do this task;
others let it be handled by a variety of trained riggers. From an estimating
perspective, the important thing to remember is that this person(s) needs to
be accounted for somewhere in the estimate. It is also safe to assume that
the number of hours required will be similar to those of the operator.
Utility costs could be estimated based on the power usage of the crane,
operating time, and local utility rates, but most contractors just plug an
allowance based on experience. Sometimes the electrical costs are shifted to
the owner, who assumes the risk but also saves on tax and overhead costs.
Regardless of how the costs are paid for, the cost can be tens of thousands of
dollars and needs to be accounted for in someone’s budget.
Lastly are the maintenance costs of keeping the crane in good working
order. Typically, the rental agreement will allow for routine inspections and
service or if there is a major issue with the crane but will not include costs
for service due to wear and tear to the equipment. Generally, it is not
appropriate to include significant costs for repairs due to wear and tear, but
it is reasonable to include costs for things that would be expected to need
replacement/repair during the course of the project. For example, think of
the tires and brakes on your car. Again, this is something that the estimator
should evaluate with the project team when reviewing project requirements
and the rental agreement when determining appropriate amounts to include
in the estimate. Major service or repair items not covered under the rental
agreement should be clearly excluded from the contractor’s contract
estimate to the owner if this is a negotiated project. Initial periodic
inspection costs should also be included with the operational costs.
Because the tower crane is expected to be on the project for several
months, it is important to thoroughly evaluate the monthly operation and
maintenance costs when estimating the project. Underestimating the time
the crane is required on a project by even one month could cost the project
tens of thousands of dollars.
Dismantling
The process for dismantling or disassembly of the tower crane is similar to
erection but is oftentimes more difficult due to the fact that there is now a
building structure to maneuver around. It may be simple to assume the same
costs for dismantling as the erection, but factors that may have not been
required during erection, such as street use fees, may now come into play.
Some other more complicated options for disassembly in tall high-rise
buildings include a helicopter (which is very dangerous and requires all sorts
of other permits) and the use of a jib crane mounted on top of the building
that disassembles and lowers the crane to the ground. It is important for the
estimator to evaluate these conditions with the project team before
completing the estimate. A tower crane estimate for our case study is shown
in Figure 13.3.

Figure 13.3 Tower crane cost recapitulation sheet

Personnel and material hoists
Personnel and material hoists, formerly ‘manlifts’, are also known as
temporary construction elevators. They are typically required on buildings
taller than four stories. State labor laws and union agreements will have an
impact if a GC is required to provide these hoists, but often it is a practical
time and cost efficiency decision made by the GC. The process to prepare a
hoist estimate is very similar to the tower crane estimate discussed in the
previous section. An example estimate for a personnel and material hoist is
shown in Figure 13.4.
Exterior areas of the building skin will need to be left out to allow access
to each floor. These areas will later be in-filled, but the work is completed
out of sequence and subcontractors will need to remobilize. In addition,
platforms will need to be built at each floor to allow safe access in and out.
A rigger is not required, but a full-time elevator operating engineer is
required.
 Figure 13.4 Personnel/material hoist estimate

Pricing recap completion

When all labor, material, and equipment pricing recap entries have been
completed and the extensions made, the man-hour, labor cost, material cost,
equipment cost, and total cost columns are summed to totals at the bottom
of the page. Two checks should be made at this point. First, the page should
be scanned to make sure it is complete and that every line item has the
entries and appropriate calculations. The summation ranges should also be
checked. The format of the page is such that the line items are totaled to the
total cost column, which is then summed to a total at the bottom of the page.
A crosscheck now should be made. This check adds the totals of the labor,
material, and equipment cost columns to make sure that the result equals
the sum of the total cost column. If it does not, there is an error on the recap
sheet.
When completed, the estimator needs to verify if the system or assembly
cost is competitive. A quick assemblies check, as shown at the bottom of the
pricing recap in Figure 11.1, will provide a unit cost that can be used as a
check against other estimates or the contractor’s database. An assemblies
check unitizes certain figures to a common quantity on the recap sheet. In
this case, a cost per man-hour check and the total cost per cubic yard placed
are calculated. The first figure results in an average $37.10 per man-hour to
construct the spread footings. The second figure is the total cost of $333 per
cubic yard. If the estimator has done several estimates, he or she will attain a
level of comfort with these figures.

Summary
The estimator needs to ensure that the cost of all equipment used on a
project is properly accounted for. Equipment that is used for a single activity
should be charged to that activity, while equipment used for multiple
activities should be included in the jobsite general conditions estimate. Use
of published databases for equipment pricing is not recommended because
rental rates will vary based on the source of the equipment. ABC is used to
allocate project indirect costs to the cost of direct construction activities.
Pricing for concrete pumps is commonly needed for many construction
projects. The cost of a concrete pump will vary based on the size of the
pump, the quantity of concrete to be pumped, and the length of time
required to pump the concrete. Tower cranes typically are used for extended
periods of time and support multiple construction activities. Therefore, the
tower crane cost is included in the jobsite general conditions estimate.
Tower crane cost estimates have four components: foundation and
infrastructure, crane erection, operation and maintenance, and crane
disassembly. There are many other types of equipment used on construction
projects, and similar approaches should be used in estimating their cost.

Review questions
1 What are four sources that might be used to obtain construction
equipment needed for a construction project?
2 What type of cost information can be obtained from an equipment
lease agreement?
3 A contractor needs a concrete pump for a project that can pump
concrete a distance of at least 150 feet. The concrete placement will last
six hours and involve the placement of 150 CY of concrete. What is the
estimated pumping cost in $/CY for this concrete placement?
4 Where is the rental cost shown for equipment that is specific to an
activity of work such as concrete tilt-up or structural steel?
5 What is the difference between the rigger and the operator? What labor
craft is the rigger usually, and why that choice?
6 With whom should the estimator discuss the tower crane estimate
before completing it?
7 Why are certain pieces of construction equipment included with jobsite
general conditions and not attributed to specific scopes of work?

Exercises
1 Without looking ahead to our general conditions chapter, what
equipment not addressed in this chapter might also be estimated and
cost-coded to jobsite general conditions?
2 Make a list of ten pieces of equipment that might be used on a
construction project and identify how each might be procured. Are
 they subject to ABC or costed to jobsite general conditions? Will they
be obtained with a subcontract agreement or a lease agreement and
operated by the GC’s craftsmen?
3 Even if it is not a union project such that a full-time operating engineer
was required to run the forklift, why is that still a good idea?
4 What is the cost of a 20 FT × 20 FT × 8 FT concrete tower crane footing
based on the following parameters? The process to be used is similar to
the process described in Chapter 6 for quantity take-off of a spot
footing and the pricing process described in Chapter 11. Make sure you
perform a $/MH and $/CY check when you are done. Make whatever
assumptions are necessary.

a Formwork material cost at $2/SFCA and 0.5 MH/SFCA

b Concrete purchase including pumping at $150/CY
c Rebar tonnages at 200 LBs/CY
d Rebar purchase and install costs at $1,000/ton
e Rebar template at $100 for material plus one-hour labor
f Eight tower crane anchor bolts at $5,000
g Overhead and profit at 20%
h Excavation and backfill at $1,550

5 What portion of the tower crane estimate is based on time?

6 Why would a GC choose not to own some of the major pieces of
equipment discussed in this chapter?
7 A photograph of a tower crane is included in Chapter 16. What type of
tower crane is that: Horizontal jib (also known as a hammer-head)
tower crane, self-erecting tower crane, or luffing tower crane?
Part IV

General contractor estimates for

subcontracted work
14 Envelope and finish
subcontracted scopes

Introduction
In the last two parts we focused on the quantity measurement and pricing
practices that general contractors (GCs) undertake for the cost estimation of
direct work performed by their own craftsmen. Now, with this chapter, we
shift our attention to the companies that generally perform 80 to 90% of the
work on a typical commercial project, the subcontractors. Subcontractors
may also be known as specialty contractors or trade contractors, and today
many negotiated GCs prefer ‘trade partners’. Much of the work required to
complete a project involves subcontractors and major material suppliers.
Some GCs estimate this work in detail and plan, upon winning the project,
to solicit subcontractor and supplier quotations afterward. This is risky and
may not always prove to be the best method of doing business. A more
common practice is for general contractors to solicit quotations from
subcontractors and suppliers while preparing their bids. The advantage is
that the GC, upon being awarded the contract, can immediately enter into
agreements with the subcontractors and material suppliers knowing their
final prices. The general contractors in this scenario, however, do not know
the subcontractors’ and suppliers’ prices until near the time that bids must
be submitted to the owner. To protect themselves, the contractors should
prepare order of magnitude (OM) estimates for the subcontractors’ scope of
work and the major suppliers’ materials. That process is the focus of this and
the next two chapters.
The sixth step in the lump sum estimating process shown in Figure 1.1
provides a way to determine an approximate estimate of the cost of the
overall project. In this step the GC estimator creates OM or ‘plug’ estimates
for the work that will be done by subcontractors and material furnished by
major suppliers. These are allowances or placeholders until competitive
market subcontractor quotes are received. Order of magnitude estimates are
a reasonable determination of the expected range of subcontractors’ or
major suppliers’ quotations. The method for developing these estimates is
not as detailed as was used for self-performed direct work but is based on
historical or published reference data. Since these estimates are based on
averages for several projects, they do not consider some of the unique
aspects of the project being bid. Order of magnitude estimates for major
scopes should not be relied upon to complete the contractor’s bid to the
owner. Some of the smaller OM estimates, however, can be used in cases
where no competitive vendor quotations are received. Order of magnitude
estimates are useful in determining the pre-bid summary estimate so that
various markups can be determined. The pre-bid summary estimate will be
discussed in Chapter 19.
In this chapter we focus on the subcontractors covered by Construction
Specification Institute (CSI) divisions 04, 07, 08, 09, and 12. This will cover
most of the subcontractors involved in the building envelope, which may
also be known as the building enclosure or ‘skin’. The major subcontractors
here include waterproofing, weather protection, curtain wall, roofing and
others. In addition, this chapter will cover many of the subcontractors
involved in building finishes, which includes drywall, painting, floor
covering, and others. Although we presented the substructure and
superstructure as areas estimated direct by the GC’s estimator, some of the
work in those categories is also subcontracted and is covered in this chapter
as well. In the next two chapters we will expand our subcontractor coverage
to some of the most significant team members, including mechanical and
electrical and site work subcontractors.
Subcontractor work
In Chapter 1, the estimator determined what portions of the project will be
performed by subcontractors and what materials would be provided by
major suppliers or fabricators. When listing subcontractors on the project
item list, the estimator must be aware that some direct work sections will
also be listed. For example, the general contractor may install the reinforcing
steel direct, but a fabricator supplies it. The same usually is true for the
structural steel. On bid day, the general contractor may receive bids not only
for supply but also for reinforcing steel installation and structural steel
erection.
General contractors typically perform work direct if that work is
accomplished by their own craftsmen as a normal course of business.
Commercial GCs likely employ the following labor crafts to install these
associated scopes of work:

Carpenters install concrete formwork, rough carpentry or wood

framing, finish carpentry and millwork, doors/frames/hardware, punch
window installation, and specialties.
Laborers shovel and rake earthwork, perform general cleanup, install
below grade vapor barriers and waterproofing, assemble perforated
pipe drain systems, and place concrete.
Ironworkers install rebar in concrete forms and erect structural and
miscellaneous steel.
Cement masons finish concrete slabs and patch and sack vertical
concrete surfaces.
Operating engineers run heavy equipment and also perform surveying.
Teamsters primarily drive trucks.

General contractors typically do not employ crafts such as glaziers,

plumbers, sheet metal workers, or electricians; therefore, they almost always
subcontract that work out to specialty contractors. The work normally or
potentially installed with a GC’s own workforce receives the most attention
from the estimator and was the focus of our last several chapters. Figure 14.1
is a partial pre-OM subcontractor list for the case study project.
When completing the subcontractor list, the estimator uses the work
breakdown structure as a guide. The estimator should populate a
preliminary subcontractor list with in-house developed ‘plug’ estimates and
not wait until bid day. This list is used more than once in the bid completion
process. Each time that it is used, it should be prominently identified, such as
“OM Estimates”, “First Run”, or “Final Run”, so that the wrong version will
not be used in the final bid. The completed pre-bid day subcontractor OM
list for our case study is included at the end of Chapter 16.

Figure 14.1 Subcontractor OM plug estimates

As a reminder, not all materials are on this list. Only those that are
procured from major suppliers, such as reinforcing steel and structural steel,
are listed. Those direct work items for which the estimator expects to receive
subcontract bids should be broken out of the direct work estimate and listed
on the subcontractor list. This is done by taking the total cost for the work,
including labor taxes, and treating it as a vendor bid, with the general
contractor being the vendor. This price is then entered as one of the prices
on the bid evaluation worksheet on bid day and noted as “GC Direct” or in
our case “CCC Direct”. The estimator must make sure that the cost of these
work items is eliminated from the direct work portion of the estimate. If the
subcontractor’s quotation is lower than the estimated cost of self-performing
the work, the general contractor may choose to execute a contract with the
subcontractor.
The procedure for generating an OM estimate is to perform a simple
quantification of the work to be done and then apply assembly unit prices.
Sources of unit price data include published estimating references, historical
databases, and the estimator’s personal notebook. Subcontracted unit prices
from RS Means can be derived from the far right-hand pricing column for
most materials and systems, which includes labor, material, equipment, and
subcontractor markups. The Guide has separate sections within each major
CSI division – one for direct labor, one for direct material, and one for
systems in place – that can also be utilized for subcontractor pricing plug
estimates.
Select subcontractors may also provide the estimator with a pre-bid day
budget or unit price to use as a placeholder for the GC until their official bid
is submitted. Prices for OM work do not need to be broken down into labor
and material. Most references will show an overall unit price that includes a
reasonable overhead and profit for the subcontractor. If productivity
information is available, it can be entered on the recap sheet and extended to
provide the total man-hours for the work. This information will be helpful
when generating the project summary schedule discussed in Chapter 17.
Creating OM estimates for the work that is to be subcontracted on the case
study project involves the use of several techniques, as will be discussed in
the next sections.
After the bid has been tendered, the GC estimator should compare the
OM estimates with the vendor quote. If there is a wide variation, it is useful
to determine the reason. Performing this post-bid analysis will increase an
estimator’s skill in developing more realistic OM estimates in the future.
This chapter will describe the basic procedures a general contractor
estimator will utilize to prepare OM estimates. Order of magnitude estimates
for building envelope and interior finish subcontractors will be discussed in
detail along with specific examples for our case study project.
Building substructure and superstructure
Masonry (CSI division 04) is one of the major work items in the substructure
or superstructure that is done by a subcontractor. Most estimating references
have good information for preparing masonry subcontractor OM estimates,
and often company historical data can be used. Units generally are square
foot measure or piece count. The GC estimator measures height times width
and typically only deducts for major openings, such as curtain wall. The
resultant square footage is then multiplied by an all-in subcontract unit price
such as:

1,610 SF of CMU wall @ $20/SFW = $32,200 of CMU

We utilize a lot of abbreviations in these boxed-in examples and equations

but have not spelled out each for simplicity. All of the abbreviations used in
this book are included in the front material.
Most of the work in division 05 involves materials that are furnished by
steel fabricators and installed by the general contractor or a specialty
contractor that employs ironworkers. The major variation is cold-formed
metal framing, which usually is furnished and installed by a drywall
subcontractor as part of the gypsum wallboard (GWB) systems. There may
be a few other minor work items that will also be subcontracted from
division 05, and a thorough review by the estimator will pick these up.
Division 06 covers wood and plastics. Rough carpentry is commonly used
for the superstructure of various housing projects, but its use in commercial
and institutional buildings is limited. It is common to find rough carpentry
for accessory items, such as canopies, soffits, and walls in commercial
projects. If subcontracted, an OM estimate would be similar to that for direct
work, and the estimator should use reference data for unit prices or contact
lumber suppliers to determine current prices. Rough framing is generally a
subcontracted item for residential construction. Our case study includes a
variety of enclosure or siding materials, including some wood siding. The
GC has chosen to subcontract all that work, and an OM estimate will be
included as follows:

18,500 SF of wood siding @ $25/SFW = $462,500

Building envelope
Division 07 covers those items that provide thermal and moisture protection
for the building structure. The building envelope includes all of the materials
that surround the building and protect it from the elements. The main items
are foundation moisture protection, waterproofing, insulation, roof systems,
fire stopping, and caulking and sealing. Most quantities are either square
foot or lineal foot, and dimensions previously determined in other parts of
the estimate can be used for these as well. Several pre-bid day subcontractor
OM estimates have been prepared by City Construction’s estimator for the
division 07 work for our case study project and are reflected in this section.

Roofing
Roofing is a fairly simply process of measuring the length of the building
times the width. If there is a significant slope, such as is the case with
residential projects, then the slope needs to be accounted for in an a2 + b2 =
c2 formula. Some roofing continues up the inside of parapet walls and also
needs to be added in. Included with the roofing scope often are cant strips,
curbs, roof accessories, flashing, and rigid insulation. Traffic coating may
also be performed by roofers, and because of our case study’s garage ramps,
this is also a significant cost. A roofing subcontractor will quantify and
estimate all this work separately, but the GC’s estimator will factor a
combined systems estimate such as:

Roofing: 42,000 SF of roof @ $13/SFR = $546,000

Traffic coating: 20,000 SF of deck @ $20/SFD = $400,000
Siding and waterproofing
There may be a multitude of different types of siding and specialty
subcontractors involved with a commercial building’s envelope. Wood
siding will be installed by a different trade – carpenters – and was discussed
earlier. The siding subcontractor, if there is only one, may also install the
metal studs, insulation, and waterproof barriers and is often responsible for
their own scaffold systems. Siding and waterproofing plug OM estimates for
our project are reflected as follows:

Metal siding: 40,000 SF @ $22.50/SF = $900,000

Waterproofing: 38,462 SF @ $16/SF = $615,392

Fireproofing
Fireproofing is extremely difficult to take-off exactly because it generally
covers most of the structural steel members and metal decking, but there are
exceptions to this rule. Typically, the fireproofing subcontractor will need to
generate shop drawings, often shared with the city, to confirm what areas
need to be coated and in what thickness. The easy way for a GC’s estimator
to develop a plug estimate is by the underside square foot of the floor
structure to be treated and is reflected in the following:

163,200 SF of steel structure @ $2.70/SF = $440,640

Insulation
Insulation is also specified in CSI division 07 and can be estimated here
along with siding and roofing, or can be estimated along with finishes,
discussed later. It is common for the drywall subcontractor also to be the
insulation installer, as the two scopes of work are typically installed
together. Insulation should be separated by type (rigid, batt, spray-on) and
by the insulation value, or ‘R’ value (R19 versus R30, etc.). An insulation
QTO and pricing recap should also be separated by thermal or acoustical.
An insulation subcontractor would definitely make these distinctions, and
more. But a GC estimator preparing a plug estimate may group all insulation
together, as reflected at the end of this section. Many quantities will have
similar measurements, such as the roofing and siding may match the thermal
insulation, and the drywall, discussed later, may include the acoustical
insulation.
Additional division 07 work that appears on all projects may be difficult
to quantify; it is estimated as a lump sum allowance and will be replaced out
with market-priced subcontractor or supplier prices on bid day. Examples of
this include caulking and fire stopping. Many GCs will try to buy these
scopes out with other subcontractors such as the waterproofing or drywall
subcontract or shift responsibility to the mechanical and electrical
subcontractors to caulk and fire stop their own work.

Insulation: 133,000 SF @ $2/SF = $266,000

Caulking: Allow one lump sum $25,000
Fire stopping: Allow one lump sum $12,000

Doors and windows

Doors and windows are included with CSI division 08. As explained in the
direct work QTO for self-performed work, the GC may install single or
punch windows purchased from a supplier with its own carpenters but
would need to hire a glazing subcontractor that would design the storefront
window systems and install it with their own glaziers. Storefront is estimated
on a square foot of wall (SFW) for the GC, and an OM installed price is
applied. Skylights may be priced on a square foot of glass or by the each.
Exterior glass doors will be plugged on a $/leaf basis, similar to other doors,
except these will be furnished and installed by the storefront subcontractor.
Doors, door frames, and hardware (DFH) are furnished by major suppliers
and often installed by the general contractor. The estimator already has
prepared a QTO and an installation estimate when estimating the direct
work. Depending on the material for the doors and frames, there may be one
supplier who bids all doors, door frames, and hardware, or there may be up
to six vendors supplying different portions, such that one bids wood door
leafs and another that bids hollow metal (HM) door leafs and frames, and
others. The OM material estimate is prepared based on the direct work QTO
and will be priced in units similar to the following:

Doors: $/door leaf, for example $520 for solid core wood door and $700
for HM door leafs. Double doors will count as two leafs.
Door frames: $/frame or opening, for example $300 for a single HM
door frame and $500 for a double HM door frame. Frames that require
grouting will be accomplished in the field by the GC’s laborers or
cement masons. Grouting should be included on the GC’s 08 direct
work estimate recap.
Door hardware: $/set such that each leaf has one set of hardware, for
example $1,100 for commercial door hardware sets for projects that
have panic hardware, such as our case study, can be plugged as an OM
estimate until competitive bids are received on bid day. Nonpublic
commercial door hardware sets may cost in the $300 to $500 range per
set to purchase.

Overhead doors are also supplied and installed by a subcontractor and will
be estimated on a $/each basis but noting the differences in sizes and
materials. Door operators may be supplied by the door subcontractor or may
be separate and would also be plugged with a $/each allowance. Our case
study project includes two different categories of these specialty doors for
the garage and for the retail spaces. Access doors are quantified by the each
and may be included with division 08 or division 10 specialties, or the GC
may assign them to the mechanical and electrical subcontractors whose
work they affect.
The estimator for our case study project has grouped all of the CSI
division 08 subcontractors and suppliers together onto one pricing recap
sheet, as reflected in Figure 14.2. Each of these specialties will be separated
out into individual bins for bid day, as discussed later in this book. The same
cost recap sheet as was used for the direct work is the best format for
preparing subcontractor OM estimates or may be compacted for simplicity
and eliminate the labor columns.

Figure 14.2 Doors and windows cost recapitulation sheet

Finishes
Division 09 covers finishes throughout the building, which is typically all
subcontracted work. Most of this work involves dimensions and quantities
that have been determined for other items. Floors, walls, ceilings, tile,
painting, and wall coverings as well as floor coverings are shown on the
architect’s finish schedule. Most of the finishes are defined in the drawings
and specifications and can be quantified readily. There is almost an infinite
amount of finish specialty materials, with new ones developed daily. We
have included examples of some of the more common ones that appear in
most commercial construction projects. In projects that are budgeted early,
before a room finish schedule has been established, the estimator will simply
use an allowance or plug in dollars per square foot of floor ($/SFF). In most
cases, the unit prices can be determined from published estimating databases
or historical records. In this section, we have presented the finishes scopes in
the relative order in which the work will be installed, not necessarily by
strict CSI order.
When preparing the OM estimate for walls and partitions, an estimator
should be aware of different construction methods and how they affect cost
data. Two-sided partitions will be priced per square foot for a complete wall
system, which includes framing, wallboard on both sides, and taping.
Perimeter walls will be estimated as one-sided.
The experienced estimator will do two things to enhance his or her ability
to efficiently prepare OM estimates. The first is to use assemblies or systems
pricing whenever possible and reliable unit prices that include all related
costs. Second, the estimator will make sure the quality level of the system is
understood and representative unit pricing is applied. For example, an
interior partition will include the framing, wallboard on both sides, and one
of four quality levels of taping finish. Also, adjustments may have to be
made for things such as 5/8-inch wallboard in lieu of ½-inch or fire-rated or
waterproof board instead of standard board. Some wall assemblies also
include insulation and potentially paint.
When taking off the quantities for OM estimates, an estimator often
encounters fractional dimensions. These should be rounded up to the nearest
reasonable unit (inch or foot). The estimator, in the interest of improving
efficiency, may want to make a template QTO that lists all of the rooms and
their dimensions. Copies can then be used for the various finishes, as well as
walls, floor coverings, or ceilings.
Columns on the floor covering subcontractor QTO worksheet are set up
for all different types of floor covering and base. Base is typically quantified
in lineal feet and most flooring in square feet, although carpet is often later
converted to square yards. The floor covering template with the room
dimensions can be used for other finishes as well. Ceilings are nearly always
the same as the floor area, and columns are set up for the different types that
may be used, such as acoustical ceiling tile (ACT) and drywall. Acoustical or
wood or GWB ceilings are priced by the $/SF. Another QTO sheet will be
used to quantify the walls by type and finish, and yet another for paint and
wall covering. Paint is estimated by the $/SF of wall and $/SF of ceiling in
the case of GWB ceilings.
Subcontracted quantities are transferred to the pricing recap sheet using
the same error control procedures that are used in direct work estimating,
discussed in previous chapters. For OM estimates, several changes are made
to the recap sheet. The material unit cost and cost columns are changed to
read S/C (subcontract) unit cost and subcontractor cost. Since these are
subcontractor and major supplier OM estimate sheets, the hours, labor, and
total cost columns are not used and have been eliminated for simplicity from
the following example. Figure 14.3 shows an OM subcontractor recap for all
of the floor covering scopes for another project one of your authors
managed.

Figure 14.3 Floor covering subcontractor OM cost recapitulation sheet

Most projects will have some architectural wood, such as moldings, base,
and other types of trim. Using the room finish templates discussed earlier,
the estimator should be able to quantify the items and complete the OM
estimate. Cabinetry and casework will be furnished and installed by
subcontractors on commercial projects, but the GC may install small
installations with its own carpenters. The estimator should use published or
company data sources as a guide for quantifying and pricing.
Specialties, equipment, and furnishings
CSI divisions 10, 11, and 12 contain many items that may be specified for a
given project. The estimator needs to be sure how they are specified in
relation to the general contractor’s direct work estimate. Some will be
purchased and installed by the general contractor, some furnished by the
contractor for installation by a subcontractor, some furnished by a supplier
to be installed by the general contractor, and some furnished and installed
under a separate subcontract agreement. There are no required rules or
procedures for specialty OM estimates, and the estimator should consult
references to determine the best way to determine unit costs. Many items
are customarily purchased from a supplier and installed by the GC’s
carpenters, and preparation of their OM estimates is straightforward.
Others, such as projection or sound equipment, are more complex and may
be subcontracted work. Some specialty scopes and their unit of measure for
applying OM unit prices include:

Many items that have already been quantified on the direct work QTOs
and are purchased by the each, such as toilet accessories, fire
extinguishers, signs, corner guards, white boards, and others.
Toilet partitions are included in CSI division 10 and will be supplied
and installed by a subcontractor. A GC’s estimator will plug them on a
$/stall basis. The same supplier who furnishes the toilet accessories
(with a purchase order) may also provide the toilet partitions (with a
subcontract agreement).
Dock levelers are included in CSI division 11 and priced as $/ea. This
work will be performed by a specialty contractor. Steel embeds
associated with dock levelers should be included with the concrete
estimate and are likely furnished by the miscellaneous steel supplier.
Power to the dock leveler is in the electrical subcontractor’s scope.
Window blinds or curtains and other window treatment are included
with CSI division 12, along with furnishings. Window treatment may
be estimated by the GC’s estimator on a $/EA or $/SF basis, size and
 material dependent. If more than a few blinds are required, this work
will also be performed by a specialty contractor. Furnishings are
typically not in the GC’s scope.

Summary
Order of magnitude estimates should be developed by the GC’s estimator for
all subcontracted work items to have a means of preparing a pre-bid day
summary estimate and to have a basis for comparing subcontractor
quotations on bid day. For most of the project scope, OM estimates can be
developed by making simplified QTOs and applying either assembly costs or
unit prices per square foot of floor area. When taking off building
dimensions, an estimator can set up one QTO sheet for the flooring, one for
the ceiling, and one for the framed walls, using the same data. The best
source of information is to use unit prices, first from subcontractors and
then, if not available, from historical references based on the type of project.
Mechanical and electrical OM estimates are more difficult to determine and
are discussed in the next chapter.

Review questions
1 What work should OM estimates be done for?
2 What are two purposes for developing OM estimates?
3 Where are the results of the OM estimates listed?
4 What type of source material is good to use for pricing OM estimates?
5 If subcontractor prices are received for work usually done as direct
work, how should these be handled?
6 How can the estimator make his or her work easier when preparing
OM estimates?
7 Why is the resilient base estimated separately from the resilient
flooring?
 8 If a GC is certain of receiving competitive subcontractor bids on bid
day, why should it bother preparing OM estimates? There are several
good reasons.
9 What is the difference between a subcontractor and a supplier? Note
that just answering “labor” is not correct, as suppliers often fabricate
materials and deliver them to the jobsite with their own labor.

Exercises
1 Prepare an OM estimate for a system or assembly from one of our case
study projects that was not resolved in this chapter, such as the Vehicle
project’s metal siding and roofing scopes.
2 If you prepared an OM estimate for ACT for $100,000 on your own
project and one of the following happens on bid day, what do you do?

a Not one subcontractor bid is received,

b One subcontractor bid of $90,000 is received,
c One subcontractor bid of $110,000 is received,
d Two subcontractor bids are received, one at $50,000 and another at
$95,000, or
e Two subcontractor bids are received, one at $105,000 and one at
$150,000.

1 The Lee Street case study project did not include a formal finishes
schedule in the contract documents, as the builder was also the
developer and the finishes evolved as the building was constructed.
Utilize the photographs and drawings from the book’s eResource and
prepare a CSI 08 or 09 OM recap for one of these executive townhomes.
15 Mechanical, electrical, and
conveyance systems

Introduction
Major portions or elements of the completed building ‘function’ or run in
that they are operating ‘systems’. This includes the mechanical, electrical,
plumbing (MEP), fire protection, and elevator systems that are the focus of
this chapter. Because their costs are so significant, development of accurate
order of magnitude (OM) budgets by the general contractor’s (GC’s)
estimator is important. The more accurate the total estimate is leading into
bid day, the more efficient will be the bid day process.
Most of the systems in this chapter are typically procured and designed in
one of two ways. The conventional method is for the building architect to
employ mechanical and electrical engineers and fully design the systems in
preparation of a lump sum bid. Architects also engage an elevator consultant
to assist with the elevator design early in the schematic design phase. The
other common method is for all or some of these systems to be design-build
(DB) by the subcontractors that will perform the work. Their prices can be
negotiated or can be bid. In the case of DB subcontractors, the GC’s
estimator would have little to no design drawings to assist with his or her
OM estimate. The third approach is a hybrid of these two known as bridging
or design-assist. In this case the design consultants prepare preliminary
schematic drawings and specifications or design criteria from which the
subcontractors can prepare estimates and complete the design themselves.
 Some categories of subcontracted work such as mechanical and electrical
represent significant portions of the project cost and are based on
information that may not be completely detailed in the bid documents. It is
difficult for an estimator to anticipate all of the work because such things as
routing of pipes, ducts, and wiring are often left up to the subcontractor to
determine. This is part of their means and methods. The GC estimator
therefore often relies on rough OM estimating techniques for these systems.
These systems all represent significant costs in any typical commercial
construction project, and the more accurate an OM estimate the GC can
prepare, the smoother the bid day operation will be. The best method to
prepare these high-value OMs is to call the subcontractors early, shortly
after the bid documents have arrived and the GC has made a decision to
pursue the project. If subcontractors can provide early ‘budget’ pricing for
the GC, such as “the fire protection for this project will likely be in the $3/SF
to $3.25/SF range”, this would be very beneficial and preferred over using a
database. These costs can vary significantly depending on the type of work.
Unfortunately, some GC estimators will spend an inordinate amount of time
only quantifying scopes they are familiar with, such as counting concrete
formwork snap ties or anchor bolts, but may miss the MEP scopes by
millions of dollars. All of the plug estimates discussed in this chapter include
the subcontractor’s labor and associated labor burden, materials, equipment,
second- and third-tier subcontractors, startup and testing, and add-on
markups.

Conveying equipment
Construction Specification Institute (CSI) division 14 includes a variety of
complicated ‘conveyance’ systems, including elevators, escalators, and
horizontal people-movers. Internal crane systems for industrial projects may
be part of division 14 or included with 13. Division 14 scopes are not
typically included with MEP, but we have added it to this chapter because
the equipment operates, is typically long lead, and costs significant amounts
of money. The GC’s estimator will approach OM work for this division
similar to that of the MEP systems. Because elevators ‘move’ or function as
do other systems discussed in this chapter, the beginning estimator
mistakenly views this as mechanical work. Elevators, for example, are not
designed by the mechanical engineer but typically by a separate elevator
consultant working direct for the architect. There is substantial published
estimating data on elevators, but the estimator has to be careful to fully
understand unique specifications. Our case study has six elevator cabs with
varying stops. The other conveyance systems can be quite customized, and
rule-of-thumb unit pricing can be risky. The estimator should discuss these
scopes with a potential bidding subcontractor.
Traction elevators used in high-rise buildings have more extensive
controls due to their coordinated operation with other units and for some of
the life safety issues. The estimator needs to gain some understanding of
what is specified in order to find the costs in published or historical
reference data. General contractor estimators typically price elevator OMs
by the floor or ‘stop’ and separate by hydraulic versus traction and
passenger versus freight elevators. A two-story building will have an
elevator with two ‘stops’. Standard elevator cab finishes are not what many
architects prefer, so an allowance of $10,000 per elevator cab for finish
upgrades is customary and has been called out in the case study
specifications. Hydraulic elevators will require a recessed cast-in-place
concrete elevator pit to be constructed by the GC. The elevator’s plunger or
piston will recess into a casing that must be drilled and installed by a
separate subcontractor – such as the piling or shoring subcontractor. The
casing will be installed in a ‘jack hole’, which, along with the pit, is one of
the first things to be constructed on the project because it is typically one of
the deepest building elements.
Escalators are also part of conveyance systems and included in CSI
division 14. They are very expensive and would be plugged with an
allowance based on distance or height covered, such as $250,000 per
escalator.
 An effective way to develop an OM estimate for special items and
equipment such as a bridge crane is to have one or more subcontractors look
at the requirements and ask them for help in determining the costs. These
are likely DB systems that will be required on industrial projects more than
commercial. One of your authors recently installed one on such a project,
and it is included with the guaranteed maximum price estimate in Chapter
23. Many times these specialty contractors will provide a budget price based
on their experience and may guide the GC estimator on related costs and
qualifications. If possible, more than one supplier should be solicited for all
these scopes so a competitive quotation will be received.

Mechanical
Mechanical systems include fire protection, plumbing, heating, ventilation,
and air conditioning (HVAC), and controls. This work was formerly all
grouped in CSI division 15 but is now separated into divisions 21, 22, 23, and
25, respectively. Division 24 has been reserved for future use, along with
several other new division numbers. Secondary support systems and
subcontractors include mechanical insulation, labeling, balancing, and
potentially commissioning. Most commercial buildings have all of these
elements. Fire protection sprinklers are not customarily included in single
family residences. The mechanical work may all be performed by one
contractor in-house direct, or the HVAC subcontractor may contract with
the other entities as second- or third-tier subcontractors, or the GC may take
some of the systems under separate subcontracts. Regardless of how the
mechanical system ends up being packaged, it behooves the GC’s estimator
to develop separate OM estimates for each portion and be prepared on bid
day to analyze both separate and combination bids.
HVAC estimates are very dependent on the type of system specified. The
MEP delivery system for the case study project is design-assist, and only
performance criteria is included with the bid documents. The estimator thus
can use only basic unit price information to develop the OM estimate. The
easiest method again is for the estimator to call a subcontractor and ask for
an early budget allowance. Short of that, the estimator will likely plug a
dollar per square foot of floor ($/SFF) allowance in. The HVAC subcontractor
typically performs the mechanical controls direct or employs the services of
a specialty third-tier subcontractor.
Another method a GC estimator may use to develop mechanical plug
estimates is to perform a quantity take-off (QTO) of the basic system
assemblies. Items that can be measured or counted and then labor and
material unit pricing applied include:

Ductwork: Separate by systems (supply, return, and exhaust), duct

material (spiral, galvanized, stainless), size and shape of duct (round,
square, rectangular); measure lineal footage of each; and convert to
pounds of ductwork.
Diffusers and grilles: Count the devices and separate by sizes.
Equipment: Sometimes $/ton of cooling is a metric for performing
rough HVAC plug estimates. A mechanical subcontractor would
perform all of this detail, and more, to prepare its in-house estimate.

The mechanical contractor is often the largest subcontractor on the project.

On mechanical-intense work such as biotechnology laboratories, electronic
clean rooms, or hospitals, the mechanical subcontractor may account for 50%
of the overall cost. The success of a construction project for a GC will rely
on all of its subcontractors, especially the mechanical subcontractor, as will
the success of a bid or proposal.

Plumbing
Plumbing is also designed by the same mechanical engineer that designed
the HVAC. The plumbing scope includes the service water and sewer
systems within building lines, along with roof drainage if handled internally
and not part of the roofing subcontractor’s scope. Process piping associated
with heating and cooling will be performed by pipe fitters, which are from
the same union as plumbers but will typically be employed by the HVAC
subcontractor.
A GC can prepare a plumbing estimate by using a $/SFF allowance or
perform a fixture count, such as toilets and sinks, and utilize a $/fixture
system plug. When doing a fixture count, some confusion can occur about
what is and is not a fixture. Most fixtures have a supply and drain
connection, and some have a hot water connection. Water heaters have a
water supply and possibly a fuel connection and an exhaust (unless electric).
Water heaters can be considered the same as a fixture as far as installation
and plumbing rough-in are concerned. An OM estimate on a $2,500/fixture
basis includes purchasing and installing the fixture itself, all supply and
waste piping, and associated hangers, pipe insulation, labeling, and testing.
All fixtures can be grouped together to come up with a total count, or they
can be separated by types. The latter would be recommended for apartment
projects, which have a substantial quantity of plumbing fixtures.
The plumbing drawings for the case study show that there are 130
plumbing fixtures requiring piping connections including floor drains, roof
drains, mechanical condensate drains, and four water heaters. The building
floor area is 265,000 SF including the garage, offices, retail space, and
restaurants. Dividing this area by 130 fixtures equals approximately 2,000
square feet of floor per fixture. The estimator may then look for a unit cost
of a representative building. But because this is a mixed-use building with
such diverse areas and considering the restaurant space is ‘shelled’, pending
a tenant lease agreement, representative $/SFF would be difficult. This
applies to electrical, discussed later, as well. A more accurate estimating
approach is to figure types and sizes and lengths of piping, including
associated fittings. This is difficult because often the small bore piping, less
than 1.5 inches in diameter, is not drawn, and routing is left to the
subcontractor as part of its means and methods. A plumbing subcontractor
may take this approach, but a GC estimator will fall back on a $/SFF OM
without additional design detail.
 The plumbing estimate does not typically include the outside service
piping. That work will be designed by a different engineer (civil engineer)
and performed by a different subcontractor (site utility subcontractor). This
includes the water service to the building, a fire loop and hydrants around
the building, storm system including catch basins, and sanitary sewer
system. Typically, the utility subcontractor figures the piping systems to 5
feet outside of the building, and the plumbing subcontractor makes the
connection there. The gas service is often provided by the local utility
company, but the site utility subcontractor may be responsible for
excavation and backfill. Site work OMs are described in the next chapter.
Separate third-tier subcontractors that will be contracted direct through the
HVAC and plumbing subcontractors include pipe insulation and pipe
labeling.

Fire protection systems

The fire sprinkler system is often bidder-designed, meaning that the
subcontractor bidding the work will design the system and then furnish a
price based on their design. Fire sprinklers are typically bidder-designed for
private negotiated work, but this is not always the case for public projects.
The simplest OM estimate to prepare is again based on square footage of
floor area. If the sprinkler system is designed, the GC estimator should count
the heads shown, which often average one sprinkler head per 100 SFF and
utilize a unit price per head, such as $300/head. But every room requires at
least one head, so an 8-foot square room that measures only 64 SFF still
requires one head. Assembly unit prices per head include all associated
piping, pipe hangers, heads, escutcheons, labeling, and testing.
The fire sprinkler specifications for our case study state that the system is
to be bidder designed, and only general information has been provided. The
main concern for the estimator is the hazard classification, as this is the
major cause of cost variations. Notes on the drawings indicate the National
Fire Protection Agency specification for the system, and there are no
extraordinary hazards noted within the structure. Both published and
historical data on fire sprinkler systems usually are quite representative of
actual costs. Unit price data for a wet pipe ordinary hazard system for an
office building will range at about $3.40 per square foot. The garage is
unheated; therefore, a dry system is used there which requires an air
compressor. The GC should group all of the fire protection scope under one
subcontractor for consistency.

265,000 square feet × $3.40/SFF = $890,000

A mistake that beginning estimators may make is to assume that the fire
protection subcontractor will also provide the fire extinguishers and
associated cabinets. This work is specified in CSI division 10 and will be
purchased by the GC from a separate supplier and installed by the GC’s
carpenters. As mentioned earlier, the site fire protection loop and hydrants
will also be separate and installed by the site utilities subcontractor. But
instead of stopping five feet outside of the building, as is the case with water
and sewer systems, the utility subcontractor brings the fire service within
the building and stubs it just above the slab-on-grade. It is flanged and tested
to that location. The building fire protection subcontractor picks up the
service from that point.

Electrical
Electrical work generally is divided into two primary categories: line voltage
and low voltage. Each of these also has several subcategories. All of
electrical was formerly in CSI division 16 but is now split into divisions 26
(service and distribution), 27 (communications), and 28 (security). Line
voltage includes service and distribution of primary electrical, including
lights and power for receptacles, and equipment, including mechanical
equipment. Service is the power from the utility connection to and through
the main service panel. Distribution is the wiring, switches, receptacles, and
connections within the building. Low voltage electrical includes several
subcategories including fire alarm, controls for mechanical systems, low-
voltage lighting control, audio-visual systems, televisions, telephones, data,
and security. Security includes alarm systems, card readers, and cameras.
Order of magnitude estimates for divisions 26–28 are developed similar to
other OM estimates we have discussed. Since these rough budgets are
prepared only for the pre-bid day summary estimate, this type of OM
estimate is adequate. Unit prices for each of these categories can be found in
estimating references. The range for a mixed-use project such as our case
study might be as follows:

Service including a 4,000-amp main panel $1.00/SFF

Distribution: Power and lighting $10.50/SFF
Low voltage and security $0.50/SFF
Total: $12.00 per square foot

This total is then multiplied by the overall building floor area to calculate
an OM estimated cost. A GC estimator preferably would develop a more
detailed plug estimate for electrical based on quantifying what they can and
applying assembly unit prices such as:

Site lighting poles: $2,500/EA, includes trenching, conduit, wire, and

fixture;
Building light fixtures: $300/EA, includes the fixture, conduit, wire, and
termination;
Convenience outlets and light switches: $200/EA, includes the box,
outlet or switch, conduit, wire, and termination;
Emergency generator: $/EA, based on size in kilowatts;
Mechanical or service equipment utilizing horsepower of the
equipment; and
Low voltage devices: $200/EA, includes the device and wire, but not
always in conduit. Low voltage cabling may be grouped in an open
cable tray and priced as $50/LF. Security cameras do not fit within this
 rule-of-thumb, as they may cost $4,000 per each just for purchase,
depending on performance.

Electrical outside of the building is contracted differently than plumbing

work, which transfers to a site utility contractor once the pipe is five feet
outside of the building. In the case of electrical, the building electrician
provides trenching and backfill and conduit for the power company to pull
its wire. The electrician also is responsible for all site lighting, including
parking lot pole fixtures. Because the electrician does not normally operate
backhoes to perform excavation and backfill, they will hire a subcontractor,
which may be the same one the GC hired to dig the footings. Power for site
lighting is typically in the electrical subcontractor’s scope. If there is an
emergency generator, the electrician will also supply and install that
equipment, including conduit for power and controls. The electrical
subcontractor will, however, typically exclude concrete for the site lighting
and a pad for the emergency generator, and the GC will need to pick that up.
The electrical subcontractor may attempt to exclude excavation and backfill;
therefore, the GC needs to be diligent when analyzing subcontractor quotes
on bid day.
Each of the operating systems described in this chapter would have
separate QTO and pricing recapitulation (recap) sheets. Total subcontractor
cost from each of these would be forwarded to the estimate summary sheet
described in Chapter 19. For convenience of space, we have combined all of
the systems onto one pricing recap sheet, Figure 15.1.
Because all of these systems ‘operate’, the building owner or architect may
require their project to be commissioned. Building commissioning involves
testing and retesting all equipment to simulate all four seasons of the year.
The goal with commissioning is to shake out any potential warranty
problems before the contractors have demobilized. Buildings that are
typically commissioned are those with intense MEP systems such as
hospitals, biotechnology laboratories, and electronic clean rooms.
Commissioning requires support from the major subcontractors discussed in
this chapter, but subcontractors often exclude these costs from their scopes;
therefore, the GC must verify inclusion on bid day. The commissioning
agent is typically a third-party consultant employed by the owner direct,
and their cost is substantial and may run 1% of the total construction cost.

Figure 15.1 Elevator and MEP subcontractor cost recapitulation sheet

Summary
General contractor estimators typically spend the most time on the work
their company performs direct, which is to be expected, as this is the riskiest
portion of their estimate. But the operating systems subcontractors,
including elevators, HVAC, plumbing, fire protection, and electrical, are
typically very expensive, and attention needs to be paid to their scopes and
costs not only on bid day but in preparation of OM estimates in support of a
pre-bid day budget total. The most accurate pre-bid day subcontractor
estimates are provided by the subcontractors themselves after they have had
a chance to review the bid documents. General contractor estimates based
on a cost per square foot of floor area are fairly easy to develop but are not
very accurate, due to the variety of building types and breadth of MEP
scopes. Breaking down these scopes into assemblies such as stops for
elevator, diffusers or tons of cooling for mechanical, plumbing fixtures, fire
protection heads, and electrical light fixtures and outlets and applying unit
prices that include all associated labor and material is better than $/SFF. By
preparing these assembly estimates, the GC estimator or project manager
will ‘learn’ the work as well and be better prepared on bid day and during
buyout to make the best-value subcontractor choices. In our next and last
chapter dedicated to subcontractor pricing, we will review many aspects of
the civil work or site work that the GC must also consider.

Review questions
1 Which subcontractor connects to the other’s piping work, the site utility
subcontractor or the plumbing subcontractor?
2 If a building has two stories of underground parking garage, five
occupied floors, and a green roof with outdoor spaces for tenants, how
many ‘stops’ will an elevator have?
3 Why are small bore pipes and conduits not typically drawn on design
drawings?
4 How many sprinkler heads should be estimated for a large assembly
room that measures 24 feet by 42 feet?
5 Why should a GC estimator prepare an early ROM estimate? Why
should they later refine that estimate with subcontractor OM estimates?
6 Why did we total all of the floor covering OMs in Figure 14.3 together
but not the scopes included in Figure 15.1?

Exercises
 1 Determine an OM estimate for a 2,500-pound capacity hydraulic
passenger elevator for a two-story office building. Use commonly
available estimating references.
 2 Which costs more per stop, a hydraulic or traction elevator with the
same capacity?
 3 Have you ever worked on a project with an elevator? Was a down
payment made before delivery? How long was the lead time? Was the
cab finished per specification, or were upgrades made? Who built the
cab upgrades – the elevator subcontractor, or the building finishes
subcontractors?
 4 Determine a reasonable unit price for HVAC of a two-story fire station.
What kind of system is this?
 5 How does the cost of the HVAC for a fire station compare with a two-
story medical office building, both in unit price and percentage of total
building cost?
 6 Envision a 10-foot square office. Look up at the ceiling. Of the MEP
systems described in this chapter, what will be located in the center?
 7 Prepare HVAC, plumbing, and electrical subcontractor OM estimates
for the Lee Street case study, available on the book’s eResource.
 8 Which is typically one of the first subcontractors to mobilize on a
project site and one of the last to leave?
 9 What building labor trades install the work described in this chapter:
Elevator, HVAC, plumbing, fire protection, mechanical insulation,
mechanical labeling, and electrical?
10 Why would a GC buy out all of the mechanical systems from one
subcontractor or, conversely, separate the work out among several
subcontractors? The same question applies to electrical.
11 Prepare an argument why a GC should partner with MEP and elevator
subcontractors in preparation of a competitive bid or, conversely, why
they should not partner with these companies.
12 Mechanical subcontractors may offer ‘balancing’ and ‘commissioning’
as extra services to be included with their scopes. Why should project
owners provide these services?
13 The Lee Street executive townhomes did not include elevators. Assume
there was space to add one and a potential buyer wanted to negotiate
this high-end addition. Prepare an OM estimate for a small cab
hydraulic elevator. Include $5,000 each for an elevator pit and an
elevator penthouse.
14 What CSI division is ‘commissioning’ specified?
15 Other than the systems described in this chapter, what building features
or equipment ‘operate’?
16 Elevator equipment is often located in a rooftop penthouse. What
contractors will typically build the penthouse?
17 Arrange these electrical activities in the order that the work will be
performed: Test, install conduit, pull wire, inspections, install boxes,
terminate wire at device and panel, install panel, install device, drill
holes in studs and joist (if a wood-framed building).
18 In addition to elevators, what other systems or equipment may require
a substantial down payment from the GC and, in turn, from the project
owner?
19 Significant detail was included with the Vehicle project’s MEP design.
Quantify what is available and prepare a pre-bid day GC plug estimate
for one of those systems.
16 Civil work

Introduction
Commercial general contractors (GCs) typically perform concrete, steel, and
carpentry work with their own direct workforces. Other scopes of work are
then performed by subcontractors. Subcontractors supply and operate
equipment for scopes of work that require use of equipment. General
contractors that specialize in heavy civil, utility, or industrial work usually
own and operate their own equipment. Most of the civil site work for
commercial or residential projects included in old Construction Specification
Institute (CSI) division 02 and new divisions 31–33 is performed by specialty
contractors that have access to specialized equipment.
Civil site work includes earthwork, shoring, underground utilities, paving,
sidewalks and curbs, landscaping, and deep foundation systems. An
estimator must determine which of these apply to a particular project from
the work breakdown structure (WBS). A heavy civil contractor or a site
work subcontractor develops a more detailed cost estimate than we cover in
this chapter. Our goal here is to describe the process a GC estimator will go
through to prepare plug estimates so that he or she has a realistic complete
estimate before bid day. Of course, as stated elsewhere, the best source for
subcontractor prices is from subcontractors, even if provided as a pre-bid
day budget or order of magnitude (OM) estimate.
Since site work is now not only at the end of the CSI order, it is typically
the last area a GC estimator will address. In addition to site work
subcontract OM estimates, we discuss in the last section of this chapter the
process the estimator will use to gather the entire subcontractor OM
estimates in completing the pre-bid day summary estimate.

Mass excavation and backfill

Earthwork probably is the most difficult of all site work items to estimate. It
is the mass excavation and backfill that are required to level the site and
prepare it for the building. Structural excavation and backfill of foundations
are often subcontracted, and the estimator may choose to quantify that work
here rather than with the substructure. Earthwork subcontractors commonly
quote unit prices for the cut, fill, and hauling. Thus, they transfer the risk of
estimating the quantities of work to the general contractor. The general
contractor should accept only bids for the total cost of the work from
subcontractors.
Acceptable and firm earthwork conditions are not always present, and
this major scope can present many problems for the GC’s estimator, because
subcontractors typically disclaim responsibility for unforeseen conditions.
Even though a soils report is part of the project manual, it cannot predict
everything that might be encountered. For example, a shallow rock
outcropping or submerged spring may be discovered, and special work will
be required to make the area suitable for the building. The subcontractor has
a right to file a claim for more money for rock removal, to stabilize the
ground of an underground spring, or for any other hidden condition. They
cannot be responsible for unanticipated or undefined subsurface conditions.
Most construction contracts contain a clause holding the project owner
responsible for the cost of unforeseen subsurface conditions.
To forecast earthwork costs, an estimator can use a basic grid system to
estimate the cut and fill. Identical rectangular grids are set up on the existing
and proposed contour drawings, and then, by determining the difference of
the average elevations for a given grid, the cut and fill can be estimated.
Grids used for estimating cut and fill can be any size that the estimator finds
convenient; however, a little forethought can simplify the work. A simple
grid system to use is one in which area equals 270 square feet (SF). This may
be squares of 16.43 feet or rectangles, such as 10 feet by 27 feet, or any other
convenient size that equals 270 square feet. The key, however, in selecting
the grid size is that with a 270 square foot grid, each foot of cut or fill equals
10 bank cubic yards (BCYs). This same concept applies to a grid of 2,700 SF
and 100 BCY.
Once a grid has been established, the estimator finds the elevation change
of a given grid on the existing and proposed contour drawings. The average
elevation of a grid is determined by averaging the elevations at the four
corners. The average elevation on the existing grid is subtracted from the
corresponding elevation on the proposed grid. A negative answer represents
a cut, and a positive answer represents a fill. Earthwork measurements and
conversions from bank cubic feet (BCF) to bank cubic yards and truck cubic
yards (TCYs) are the same as for structural excavation and backfill, discussed
in Chapter 6. A GC estimator will use $/BCY unit pricing for earthwork
subcontractor plug estimates, as shown in the next example for our case
study.

Mass excavation: 33,500 BCY @ $44/BCY = $1,474,000

Under-slab drainage system: 2,600 LF @ $50/LF = $130,000
Capillary break: 60,700 SF of 6 inches thickness @ $2.25/SF =
$136,575
Other mass excavation scopes: $170,525
Total mass excavation plug estimate: $1,911,100

Shoring and foundation systems

Major excavations are often accompanied with temporary shoring systems,
especially in deep downtown skyscraper excavations and highway projects
with steep embankments. For a commercial GC, shoring is typically
quantified in an assembly of SF of wall, including all elements, as shown in
our next case study example. Some of the typical shoring elements or
systems include:

Soldier piles, often wide flange steel columns with horizontal timber
lagging;
Tie-back cables or rods;
Diagonal raker systems, often pipes, where tie-backs are not feasible;
Soil nailing systems that do not use soldier piles or lagging;
Shotcrete and other materials and systems.

The estimator typically estimates the SF of shoring needed and uses unit
price plugs, as shown in the following example.

Shoring installation: 26,920 SF of wall @ $62/SF = $1,669,000

Tie-back removal in right-of-way: 125 EA @ $1,600/EA = $200,000
Total design-build shoring system plug estimate: $1,869,000

Figure 16.1 is a photograph taken from a drone which shows a recently

erected horizontal jib tower crane. Drones are becoming valuable
construction management tools to perform a variety of functions. The
construction occurring on this project at this time was the slab-on-grade
(SOG) and shoring wall scopes. This shoring system was similar to that of
the book’s primary case study: Soldier piles, wood lagging, tiebacks, and
shotcrete.
Ideally, the geotechnical report allows the use of conventional spread
footing foundations to support building columns. This was the situation with
our case study project. But often the condition of the soil, even after a deep
excavation, requires use of piling. These piles function as deep columns and
are often drilled or driven to a depth where solid soil conditions are found.
When piles are used, the footings that sit on top of them are typically
referred to as pile caps and grade beams and are estimated in the same
manner as conventional foundations, using the techniques discussed in
Chapters 6 and 10. The difference is that they are often deeper and include
more concrete reinforcement (rebar) than do spread and continuous
footings. Some common types of piling that are found on commercial,
residential, and civil construction projects include:

Figure 16.1 Photograph of tower crane and shoring operations

Auger cast: Drilled with rebar cages and cast-in-place concrete;

Pre-cast concrete: Driven in;
Steel pipes: Driven in and can be filled with concrete;
Caissons: Large piles filled with rebar and concrete;
Pin piles: Large groupings of smaller piles or ‘nails’, and others.

Piling is estimated by the GC estimator by noting the type and size,

counting the quantity of each, measuring the length of each, and estimating
the total LF of pile. A piling or shoring subcontractor will get into more
detail than will a GC estimator who is developing pre-bid day plug
estimates. The exact length of piling required for a project is often difficult to
determine because of unknown underground soil conditions, so unit price
bid items may be used by the project owner for pile construction.

Site utility systems

Site utility work includes all of the piping systems outside of the building.
The building plumbing subcontractors install the piping from inside the
building to five feet outside. The site utility subcontractor installs all of the
exterior underground systems. Site utility systems include:

Water service,
Fire line,
Sanitary sewer,
Storm drains and sewer,
Natural gas, and
Electrical systems.

The service piping is a very involved estimate for a civil contractor, but for
the general contractor’s estimator, preparing a plug estimate is fairly
straightforward. It is the piping from the nearest utility connections off site
to approximately five feet outside of the building perimeter. The estimator
should note pipe size, length, and depth of burial and then consult published
cost data to obtain an anticipated unit cost. Some published pricing data will
not include excavation and backfill; thus, the estimator may need to add
these as well as any special valves and fittings. For most installations, the
estimator should be able to estimate an installed unit cost per 100-foot
section with minimal fittings and extend it to the length of line shown on
the drawings. A reasonable allowance for connection and metering fees
should also be included. Relying on the advice of vendors will greatly aid in
developing a reasonable OM estimate for the service piping.
The foundation or footing drain is typically hard-piped to the storm
system but is not typically installed by either the utility subcontractor or the
plumber. The GC does this work with its laborers. The gas system is often
provided by the public or private utility supplier. Electrical conduit will be
installed by the building electrician, along with all associated work for the
site lighting. The electrical subcontractor will excavate, install the conduit,
and backfill, but the electrical utility company typically supplies and pulls
the cabling to the building’s main switchgear room. Usually, site utility
systems OM estimates include everything necessary, such as:

Excavation,
Pipe bedding,
Pipe and fittings,
Testing and inspections, and
Backfill.

Different pipe sizes and materials would be quantified separately. Permits

and connection fees may be added or may be included by the project owner.
A more accurate plug estimate can be developed by also adding costs of
significant utility structures on a $/each basis. This includes expensive items
such as hydrants for the fire system, manholes for the sanitary sewer system,
and catch basins for the storm drain system. A GC estimator can then apply
historical unit prices to these quantified scopes. A subcontractor OM pricing
recap for all site utilities for Lee Street Lofts is shown in Figure 16.2.
 Figure 16.2 Site utilities subcontractor cost recapitulation sheet

Site improvements
Pavement including concrete pavement and hot-mix
asphalt
This scope of work involves placement of both concrete and asphalt
pavements. Concrete pavements may be formed and placed by the GC’s
direct workforce, may be constructed by the site work subcontractor, or may
be constructed by a specialized concrete paving subcontractor. Asphalt
pavements require specialized equipment and typically are constructed by
an asphalt paving subcontractor. Concrete is typically purchased by the
cubic yard, and asphalt is typically purchased by the ton. Based on the
specified pavement thickness, the GC estimator can develop a $/SF plug unit
price for the OM estimate, as shown in the following example for our case
study project.
 Concrete pavement: 8,627 SF @ $26/SF = $224,302
Asphalt pavement: 5,273 SF @ $12/SF = $63,276
Subtotal pavements: $287,578

Walks, curbs, and walls

This scope of work, and associated OM pricing units, involves construction
of the following:

Walks and patios: $/SF,

Cast-in-place curbs: $/LF,
Curb and gutter: $/LF,
Extruded concrete curbs: $/LF,
Extruded asphalt curbs: $/LF, and
Site retaining walls: $/CY or $/LF (may be cast-in-place concrete or
masonry units). (Work may be quantified with other concrete scopes of
work as discussed earlier in this book.)

Cast-in-place concrete work may be self-performed by the GC with their

direct workforce or subcontracted to specialty subcontractors that have
equipment and formwork unique to these work items. A GC may undertake
some of this work if it is in small quantities as fill-in work for their crews.
Some quantities and assembly unit pricing for our case study plug estimates
are shown in the following example.

Sidewalks: 8,660 SF @ $11/SF = $95,260

Curb and gutter: 1,144 LF @ $43/LF = $49,192
Other hardscape work: $307,570
Subtotal walks, curbs, and walls: $452,022

Striping and signage

This scope of work involves painting striping on streets and parking areas
and installation of traffic signage, wayfinding signage, and building signage.
Excluded would be any electronic signage that is provided by the owner. To
develop an OM estimate, the GC estimator determines the length of the
striping and the number of signs required. Then, using plug estimates of
$/LF for striping and $/EA for signs, the estimator can develop an OM
estimate similar to the following example for our case study project.

Pavement and parking striping: 4,000 LF @ $4.35/LF = $17,400

Site signage: 6 EA @ $5,000/EA = $30,000
Subtotal striping and signage: $47,400

Landscape and irrigation

This scope of work typically involves placement of topsoil, installation of an
underground irrigation system, and placement of sod and plants such as
shrubs and trees. All of this work is performed by a landscaping
subcontractor who, in addition, may be required to provide landscape
maintenance for a specified period and an extended warranty on the plant
material. The landscape scope may be awarded as a design-build
subcontract, or a landscape architect may produce drawings and
specifications that will be used by the subcontractor in developing a cost
estimate. In developing an OM estimate, the GC estimator typically uses a
plug estimate of $/SF, as shown in the following example for our case study
project.

Green roof: 4,968 SF @ $30.10/SF = $149,646

Street level landscaping: 17,437 SF @ $26/SF = $453,354
Trellis landscaping: 4,097 SF @ $45/SF = $184,000
Subtotal landscaping: $793,000

Site specialties
This scope of work includes the miscellaneous site improvement tasks not
included in earlier parts of this section. Plug estimates for some of the
additional site improvement materials and systems for our case study
project are shown in the following example.

Bike racks: 7 EA @ $800/EA = $5,600

Water feature: Allowance $38,800
Seating: 148 LF @ $250/LF = $37,000
Stainless railings: 15 LF @ $400/LF = $6,000
Subtotal site specialties: $87,400

Civil work as a general contractor

Heavy civil contractors typically self-perform a higher percentage of the
total project scope of work than do commercial GCs. Heavy civil contracts
tend to contain both unit price and lump sum bid items, so heavy civil GC
estimators develop work packages for each bid item, whether it is priced as
lump sum or unit price. An example work package for construction of 1,600
LF of sanitary sewer is shown in Figure 16.3. The work package may include
both GC-performed work and subcontractor-performed work. It also
includes labor burden for the GC’s workforce. The objective is to estimate
the direct cost for a specific bid item. A critical element in developing a cost
estimate for the work package is estimating the productivity of the crew. In
this case, the sewer line is to be placed 10 feet below the surface, so the
productivity was estimated to be 200 LF per 8-hour shift. Similar work
packages are developed for each bid item on the bid form. Adding mark ups
to finalize a civil bid will be discussed in Chapter 23.
 Figure 16.3 Sanitary sewer work package estimate

Figure 16.4 Utility excavation sketch

As mentioned in other parts of this book, estimators often create sketches,

such as Figure 16.4, of anticipated construction means and methods to assist
with their QTO process and communicate their intentions for the builder’s
later use. In this case, the estimator chose a trench box shoring system in lieu
of a 1:1 slope cut. This approach was faster, safer, and saved considerable
costs. An exercise at the end of this chapter evaluates those two pricing
options.
Completing the subcontractor list
As the OM estimates are completed, they are entered onto the subcontract
list that is marked “OM Estimate”. Once all line items have been filled in, the
OM estimating work is complete and ready for use in determining the first
run summary estimate total, as will be discussed in Chapter 19. Figure 16.5
shows a completed OM subcontractor list for the case study. The left-hand
side of this same list will be used on bid day. The OM plugs will gradually be
replaced with market competitive subcontractor quotes as they are received,
as will be discussed in Chapter 20.

Summary
Civil site work includes earthwork, deep foundation systems, shoring,
underground utilities, paving, sidewalks and curbs, and landscaping. A
commercial GC estimator typically develops OM estimates for these scopes
of work, while a civil GC estimator usually develops more detailed cost
estimates. The reason is that the commercial GC typically will perform these
scopes of work by subcontract, while the civil GC may self-perform many of
them.
Mass excavation may be required to level a site and prepare it for building
construction. Shoring systems may be required to support open foundations
until the permanent foundation is constructed. Site utility systems are
needed to connect the completed building to existing utility systems. Site
improvements are required site features such as pavements, sidewalks, and
landscaping.
 Figure 16.5 Subcontractor OM plug estimates

Developing an OM estimate for these items ranges from relatively

straightforward for paving and curbs to difficult for earthwork and
landscaping. For much of the site work, the estimator usually has to perform
a semi-detailed estimate and use published references for costing.
Because civil contracts typically contain both unit price and lump sum bid
items, a civil GC estimator creates work packages for each bid item. These
work packages may include both self-performed and subcontractor-
performed work. The work packages are used to create a civil bid.
In this chapter, we have included only a few of the major civil work
systems – there are many others. An estimator developing plug estimates for
new scopes of work should look to how pricing is applied before developing
quantity estimates and should seek the counsel of an experienced estimator.
This work can be difficult to estimate and is often very risky, and the GC
estimator should rely on a subcontractor specialist to assist with budget
estimates wherever possible.
This concludes this section of the book covering preparation of GC in-
house subcontractor plug estimates. In the next section, we begin the process
of completing the GC’s estimate, including development of a detailed jobsite
general conditions estimate, estimating markups, preparation of the estimate
summary form, and participation in bid day activities.

Review questions
1 Why would a commercial GC choose not to self-perform many of the
scopes of work discussed in this chapter with their own craftsmen?
2 Why might a heavy civil GC estimator develop a detailed cost estimate
for mass excavation, while a commercial GC estimator only prepares
an OM estimate?
3 Why are unforeseen ground conditions an issue in preparing estimates
for deep foundation excavation?
4 Why are shoring systems often needed when constructing deep
excavations? How would you develop an OM estimate for soldier piles
and timber lagging?
 5 How is a grid system used to estimate the volume of cut and fill when
preparing an earthwork cost estimate?
6 Why might a commercial GC decide to self-perform construction of
concrete sidewalks instead of hiring a subcontractor for the work?
7 What are the major site utility systems that typically are required to
support the construction of a new apartment building?
8 Which scope of work discussed in this chapter lends to it being
performed by a design-build-operate subcontractor?
9 Why do civil GC estimators develop work packages for each bid item
listed on the contract bid form?

Exercises
1 Which systems discussed in this chapter might be packaged by a GC all
under one subcontractor?
2 Prepare an alternate complete stand-alone direct work estimate,
including equipment and labor burden, for the concrete pavement,
sidewalks, and curb and gutter OM plugs presented in this chapter.
Utilize the quantity take-off techniques and pricing included with direct
work concrete examples from earlier in this book. Make whatever
assumptions necessary.
3 Prepare an argument why a GC estimator may choose to utilize the
subcontractor site concrete plug estimates as developed in this chapter,
or later bids received on bid day, compared to performing all of this
work direct.
4 Prepare a stand-alone site utility estimate for the vehicle maintenance
facility based upon the drawings included on the book’s eResource.
Assume you are a civil specialty contractor providing a bid to a GC.
Include the water, sanitary sewer, and storm sewer systems. Include all
labor, material, equipment, labor burden, and all necessary markups.
Make whatever assumptions as are necessary.
5 The Figure 16.1 tower crane photograph was taken during the shoring
stage of another project. The shoring was bidder-designed based upon
soldier piles, wood lagging, tiebacks, and shotcrete. The site measured
200′ × 200′, and the SOG was 20′ below original grade. The mixed-use
project included several seven-story apartment towers over one floor of
retail at ground level over two floors of underground parking garage.
Prepare a GC-generated subcontractor OM plug estimate based upon
(A) the unit price from the example included earlier in this chapter
and/or (B) a unit price from The Guide or another source, such as a
shoring subcontractor.
6 How many TCY of earth were generated from the excavation described
in Exercise 5?
7 The contractor installing the sewer pipe in Figures 16.3 and 16.4 chose a
moveable trench shoring system over a 1:1 slope cut excavation.
Calculate the contractor’s overall savings for this approach utilizing the
excavation conversion process and pricing discussed with structural
excavation in Chapters 6 and 10. Assume the native soils are sufficient
for backfill.
8 Other than the tradeoff for less excavation and backfill versus the
shoring box rental for Exercise 7, what are some additional
complications and potential costs an estimator might consider for a
slope cut of this magnitude?
Part V

Estimate completion
17 Jobsite general conditions

Introduction
After the estimating team has completed all of the direct work quantity
take-off (QTO) and pricing and has plugged in order of magnitude estimates
for subcontractors and major suppliers, it is time to begin the estimate
summary process, which is the primary topic of Part V of this book. Up until
this point, the team has been relying on the early rough order of magnitude
estimate that was developed when the project first came into the
contractor’s office. Now a lot more is known about the project, and a much
more accurate total estimate can be developed. The estimate summary sheet
(Chapter 19) collects the direct work and subcontractor estimates and
combines that with jobsite general conditions (this chapter) and several
anticipated percentage markups or add-ons (Chapter 18). We have used the
abbreviation GC for general contractor throughout this book, as is
customary in the industry. But GCs is also a common abbreviation for
general conditions, and we will utilize that definition in this chapter. yPart V
completes the estimating process all the way up to and through bid day
activities (Chapter 20).
The general conditions portion of the lump sum estimate is represented by
step 8 of the lump sum estimating process shown in Figure 1.1. Prior to
determining the GC’s requirements, it is usually necessary to prepare a
summary schedule for the project (step 7 in Figure 1.1) so that the duration
of the project can be estimated. General conditions costs are the jobsite
overhead and project indirect costs that are not attributable to specific work
activities but occur throughout construction. Estimating references
commonly refer to these costs as Construction Specifications Institute (CSI)
divisions 00 and 01 or general requirements costs. The general conditions
cost estimate often connects to the project manual (or contract) general
conditions and/or special conditions sections, which define many
contractual and managerial aspects of the project.
Indirect labor and materials are those not utilized directly in the
performance of the construction activities on the project. For example, the
labor of the general contractor’s superintendent and the project management
staff are not attributable to any of the specific work activities but are
necessary for the execution of the entire project. Similarly, a jobsite pickup
truck or forklift is used for many tasks, but to prorate these equipment costs
to each construction activity is difficult and meaningless. Some other general
conditions items include trash hauling, safety, jobsite office rental, and
temporary utilities. Conversely, direct work scopes include earthwork,
structural steel, carpentry, plumbing, and others.
The general conditions should be thought of as the jobsite or project
overhead. It includes costs associated with administration of the project,
indirect equipment usage, temporary construction, and general requirements
costs. This is different from the contractor’s company overhead and profit.
The jobsite overhead pertains strictly to the project, while the contractor’s
company overhead and profit relate to the home office operation of the
construction firm. Home office overhead and profit, or fee, will be discussed
in the next chapter.

Project summary schedule

In order to develop a general conditions estimate, an estimator must know
the project duration. This may be determined in more than one way. The
duration may be defined in the contract, or a project owner may request that
bidders submit a schedule along with the price. In either case, the estimator
or project manager (PM) should develop a project summary schedule prior
to completing the general conditions estimate. A summary schedule differs
from a project schedule in its level of detail. It is a summary of the work
required to complete the project and shows only gross activities, such as
major concrete elements, structural steel, interior finishes, elevator,
mechanical, electrical, and site work. It does not necessarily show a detailed
breakdown of these activities. The 80–20 rule applies to scheduling as it does
to estimating. A project summary schedule should exhibit 20 to 30
significant activities for the project, those being the 20% that account for 80%
of the time or effort. Several formats are available for creating a project
summary schedule. The format that is easiest to create and understand is the
horizontal time-scaled bar chart. Figure 17.1 is an example of a project
summary schedule for our commercial case study project. The detailed
schedule for this project is included on the book’s eResource along with
another summary schedule for the Vehicle case study project.
Man-hours can be used as a guide to determine general activity durations.
For example, suppose that the summary recap for foundation and SOG
concrete shows that it will take 1,897 man-hours to complete. The estimator
determines that the average crew will consist of six carpenters, three
laborers, two ironworkers, and two concrete finishers. The crew makeup will
vary depending on the specific task being done at a given time, but in
general there will be a 13-person crew for this work. The duration
calculations are:

(13 craftsmen) × (8 hours per day per person) = 104 man-hours

per day
1,897 man-hours ÷ 104 man-hours per day = 18 workdays
duration
Just short of four weeks: Checks? Yes

This then becomes the length of the bar on the summary schedule for
concrete, and the procedure is repeated for the remainder of the direct work.
Duration of subcontract activities is more difficult to determine. The best
method to determine subcontractor durations is to call major subcontractors
the general contractor has a relation with. This is similar to obtaining early
plug budgets, as was discussed in Chapters 14–16. Without that input, the
estimator may use either published estimating references or past similar
projects to determine typical durations for subcontracted activities. The
estimator must also be aware of any unusual or difficult situations that may
affect crew productivity and factor that into the summary schedule. As
indicated, many of the GC’s estimate line items are time dependent. After
completion of the summary schedule, the estimator can proceed with
populating the GCs estimate template.

Figure 17.1 Project summary schedule

Alternative techniques
There are three methods for developing a general conditions estimate. A first
quick and easy method is to calculate jobsite overhead based on a historical
percentage of the total direct costs prior to the addition of the final fee
(overhead and profit), for example 10%. While this method is used in
developing budget estimates, as discussed in Chapter 2, it is not
recommended for lump sum bidding because it may not account for some
project-specific items that will affect general conditions costs. For example,
estimates for industrial projects tend to have high general conditions costs
because of more field supervision, additional jobsite equipment, and the use
of precision small tools.
Another shortcut approach is to base the jobsite GCs estimate on a
historical monthly cost, such as $50,000 or $75,000 or $100,000 per month.
This also does not consider project nuances such as location, construction
cost, equipment requirements, etc.
The third and preferred method is to do a detailed estimate for all items
that will be required. This is the method that is discussed in this chapter. A
QTO is not required, because the quantity being used is generally the project
duration, or in some cases a portion of the duration. Some items, such as the
building permit, business taxes, or insurance, may be prorated as a
percentage of the overall cost of the contract and included as markups on
the summary estimate sheet and not within the jobsite GC’s cost.
Preparing a detailed estimate allows the estimator to analyze the needs of
a specific project and estimate costs accordingly. A good use of historical
percentages in lump sum estimating is to check the magnitude of the
detailed general conditions estimate to the anticipated bid amount. If the
project is such that the estimator would expect the general conditions to be
approximately 8% of the subtotal prior to the fee and it actually turned out
to be 11%, the team should determine why such a variation exists and
modify if necessary.

Elements of the general conditions estimate

The general conditions estimate template featured in this book is divided
into four parts: administrative expense, equipment, temporary construction,
and general operations. The general conditions template that we use is a
four-part form that lists many items that might be included as indirect costs
to a project. A live blank version of this complete template is included on the
book’s eResource. For most projects, only a portion of the line items are
used, but other different items might need to be added for some special
requirements or to satisfy company policies or contract requirements. The
GCs form also serves as a checklist to ensure that scopes have not been
overlooked.
Before proceeding with the general conditions estimate, an estimator
should thoroughly review CSI divisions 00 and 01 of the specifications and
any supplemental or special conditions of the contract to look for specific
requirements or limits that will affect how the costs are determined. As
previously discussed, the estimator also needs to determine the project
duration. The project owner of the case study specified a 20-month duration.
This defines the duration of several line items within the general conditions
estimate, such as the field supervision and staffing, job offices, and
temporary utilities. It also establishes the start and finish of the project
summary schedule shown in Figure 17.1.
When developing the general conditions estimate, an estimator should
keep in mind that jobsite overhead must be kept reasonably low so that the
final bid is competitive. Each of the pages of the general conditions
estimating form should be carefully examined to select a winning strategy
for this part of the bid. Figure 17.2 is a condensed form of the detailed four-
page general conditions estimate for the case study that is included on the
book’s eResource. The unused line items in the generic template have been
deleted to save space. Another detailed general conditions estimate for the
industrial case study is included on the eResource.
 Figure 17.2 Jobsite general conditions estimate

Because some members of the built environment confuse a general

contractor’s jobsite general conditions cost with their home office overhead
and consider them both part of the fee, contractors are often under pressure
to keep the jobsite GCs as low as possible. This is also part of activity-based
costing, which involves estimating and charging costs to specific work
activities wherever possible. Because of this, general contractors will attempt
to shift the jobsite general conditions exposure to direct work items (such as
compressors and welders to concrete and steel) or subcontractors (such as
mechanical hoisting to the mechanical subcontractor) wherever possible to
keep the overall GCs percentage on the lower range.

Administrative expense
The administrative expense page contains the field supervision and will
reflect most of the indirect labor. An insufficient amount of supervision will
be detrimental to the project, and too much could cause inefficiency. The
estimator should consult with the PM to determine the most efficient staffing
that will ensure continuity of the project. Quite often the PM slated for a
proposed project will prepare the GCs estimate with input from the project
superintendent and therefore have buy-in. The administrative expense sheet
prices the field management and supervision, office and field support
personnel, and material that are required to run a project field office
efficiently. The first section in “Management and Supervision” lists the
supervisory staff required for a project. Principal line items include:

Project manager,
Project superintendent,
Assistant superintendents,
Project engineers, and
Field surveyor and/or field engineer.

Projects the size of the case study typically will have the full-time services of
a project manager, three full-time project engineers (PEs), and a full-time
superintendent. Assistant superintendents usually are necessary only on
very large projects; two have been estimated for this project. The field
surveyor is an in-house company person who lays out the building corners
and grid lines. The project owner’s surveyor typically will have located the
property corners.
The PM’s effort will be needed full-time at the beginning of the project
when planning and controls are being developed and the project
management procedures are being established. Monitoring the controls,
administering the change order process, and processing pay requests occupy
the PM throughout the middle of the project. If project engineers are on the
staff, they will perform the day-to-day administrative duties such as
processing requests for information and submittals, handling document
control, and supporting the field supervision team. At the end of the project,
the project manager and all of the PEs will be busy again with close-out
activities.
The superintendent is a full-time field supervisor and often the chief
safety officer for the project. This project also uses home office safety and
quality specialists to support the project superintendent. Detailed
discussions of a project superintendent’s responsibilities are included in
Construction Superintendents, Essential Skills for the Next Generation. The
interested reader should look to a resource such as that for additional roles
of field superintendents. The superintendent will be on the project for its
entire duration. For the case study, this means that the time for the
superintendent is 20 months. Field surveying is the work of laying out the
building. The duration of the field surveying will be less than the total
project duration, and assistance will be provided by other personnel already
working on the jobsite such as the carpenter foreman.
The second section in the administration portion of the template lists
items primarily for site engineering staffing, scheduling, quality control, and
safety. A PE is commonly used to perform the day-to-day functions of
contract administration. These include estimating change order proposals,
monitoring cost controls, preparing status reports, conducting meetings with
the owner, design team, and subcontractors, processing requests for
information and submittals, and detailed duties relating to closing out the
project.
Three other line items that are used on most projects include planning and
scheduling, drawing reproduction, and safety/medical. Planning and
schedule development can be done either in-house or by a consultant, which
would result in both labor and material costs. A project owner usually
furnishes one hard copy set of drawings, and the general contractor
purchases additional copies as needed or prints their own from electronic
sources. Subcontractors purchase the sets that they need or rely on electronic
drawings. Safety and medical supplies are required for every job. The
company safety department should be able to provide guidelines about what
is needed, and historical data will help to determine typical costs for similar
types of projects. Job size and type will dictate whether or not items such as
additional engineers, concrete form-detailing, and/or professional surveying
will be required. Safety training for the case study will be in the form of a
weekly toolbox safety meeting, subcontractor orientation, and morning
stretch. Some projects have special safety requirements, and the cost will be
included in this section. Larger projects may require a full-time safety
and/or quality control inspector, but most projects typically rely on one day
a week visits from home office specialists.
The final section of the administrative page deals with the field office.
Typically, on lump sum projects, the project owner allows the contractor to
determine what is necessary to administer a project and include the costs in
the bid. The estimator should plan for the smallest staff that can do the work
effectively. Excessive GCs increase the total price and may result in a
noncompetitive bid or proposal. Many items are required for running the
field office, and these may include utilities, telephones, printer and copier,
and office supplies. Home office personnel may perform some of the duties
listed in this section, but costs are not typically estimated for them, because
they are included in the company overhead and are therefore part of the fee.
Some general contractor estimators include a small amount for public
relations, which is used at the discretion of the field supervision to enhance
relationships with the owner, architect, or neighbors or have a crew-
appreciation luncheon. This is especially relevant for private negotiated
projects.
Several line items on the administrative page and throughout the GCs
template are not used for every project. Lump sum projects need to be
staffed lean to be price competitive, and open-book negotiated projects will
utilize more of the GCs line items to comply with owner and contract
requirements. In our example, most of the unused items have been removed
for convenience.
 Quantities used on the administrative page are in units relative to the
overall project schedule rather than specific to construction activities.
Productivity factors are not an issue for project administration labor. Units
are listed in weeks or months, and the labor unit price is the weekly or
monthly pay of the position or line item. Many of the material items are
one-time costs, and the units are shown as lump sum (l/s or LS). Some items,
such as cellular telephones, are quantified as unit-months, which equals the
number of telephones on site for the number of months. If there will be eight
cellphone lines used for 20 months, the quantity is 160 unit-months, and the
material unit price will be the anticipated monthly bill per telephone line per
month.

Equipment
The equipment page is used to list any equipment that is not specific to a
given direct work activity but will be needed on the project. This includes a
jobsite pickup truck and often a forklift that is used for general purposes
throughout the work. Equipment owned by the general contractor is rented
to the job just as if it were acquired from a rental company. It was discussed
in previous chapters that equipment used for specific activities, such as
hoisting concrete tilt-up panels or structural steel erection or wood framing,
are priced as part of those activities and not shown on this equipment page.
This is a principle of activity-based costing.
Indirect equipment includes equipment that is used for multiple activities
on a project, such as a jobsite forklift. The estimator determines the number
of indirect units required and their duration. Extension is then a simple
multiplication of the quantity and the rental rate. Some items, such as a
welding torch, may be purchased, and the units are lump sum.
General contractors have found that for certain sites, a tower crane is
needed. While these cranes do not have the capacity to lift heavy items, they
will perform most of the lighter hoisting and can prove to be more
economical than other equipment that might be considered. The estimator
should include all costs associated with the tower crane on the equipment
sheet and price it for the duration of the general contractor’s direct work.
Due to its use for multiple work activities, the tower crane is considered a
piece of indirect equipment to be used throughout a major portion of the
project.
The lines in the center of the equipment page pertain to both tower cranes
and labor and material hoists. The estimator should make a special QTO and
recap page for these items, as they can be quite expensive. There are costs
associated with constructing a concrete base or footing and the erection and
dismantling of the equipment. The estimator needs to take the time to do a
detailed estimate on this type of equipment so all costs are included. The
process to develop detailed estimates for tower cranes and personnel and
material hoists was included in Chapter 13, along with sample estimates of
each. A question arises many times regarding who furnishes the heavy
hoisting, such as lifting mechanical air conditioning units to the top of a
roof. On a lump sum bid, subcontractors are typically responsible for their
own hoisting as well as any other equipment and tools needed to perform
their work. It may be advantageous for the GC to perform hoisting for
subcontractors, but this is an item to be negotiated after the project is won.
Estimated costs for the last four line items on the equipment page are
relatively consistent for most projects. Saw sharpening is a necessity for
most carpentry work, including concrete form construction, rough framing,
and finish carpentry. Saw sharpening is therefore often considered an
indirect job cost.
Small tools are those tools not furnished by the craftsmen but are required
for them to complete the construction work. As a general rule, these tools
are ones that cost less than a prescribed amount, commonly $500 apiece. An
example would be a portable power circular saw, which is used to build
forms as well as for rough and finish carpentry. Because these are minor
costs and used throughout the project, it is not practical to assign the cost of
hand tools to specific work activities. For this reason, small tool costs are
estimated as a proportion (commonly 2%) of the direct labor cost for the
project. Smaller projects may have a higher percentage. Most companies
have good historical guidelines for determining this cost. On open-book
negotiated projects, the estimator should review the special conditions of the
specifications regarding small tools. If an estimator calculates the small tool
percentage assuming a tool cost of $500 or less but the project owner
specifies the maximum cost at $250 or $1,000, a different percentage should
be used.
Consumables involve miscellaneous items like welding supplies or
continuous cleanup materials that are used for general purposes. The type of
project will influence this cost, and the estimator must be aware of what
they are. Discussions with superintendents will help in determining an
allowance to be used for consumables. Equipment fuel and maintenance is
another GCs item that is difficult to quantify. A generally accepted method
is to use 15% of the equipment rental cost as the amount needed for fuel and
maintenance.

Temporary construction
Temporary construction is the office and site facilities that will be used
during the construction process and then removed once the project is
complete. These items include field office trailers, tool trailers, utilities
installation, temporary roads, rubbish chutes, fences, and signs. The general
contractor’s estimator needs to find out what the rates are or anticipate
monthly bills, in the case of utilities, and the durations they will be needed,
usually the full schedule duration. Most line items will have only material
costs, but some labor is necessary for items such as setting up trailers. The
costs of some of the temporary construction items for our case study project
are based on:

Job office: It is typical to include rental of a single trailer or other

structure for the duration of the project. It should have adequate office
space for the superintendent, project manager, project engineer(s), and
a small conference room. Because the excavation for this project takes
up the entire city block, City Construction Company has chosen to rent
adjacent warehouse space for an office.
 Owner/architect’s jobsite office: This cost is not included unless
specifically required and defined in the front end of the contract
specifications.
Dry shacks: These are very simple trailers or rooms where the workers
can hang up wet clothes overnight to dry and have their lunch out of
the weather.
Warehouse: Required only for those projects with limited on-site
storage area such as our case study.
Tool shed: May be combined with the dry shack or a separate trailer for
larger projects with a lot of self-performed labor.
Trailer transportation: The cost to move the field office and dry shack to
and from the jobsite.
Trailer setup: The labor necessary to set the trailer on blocks and any
work necessary to make the inside usable for the field staff. This might
include building plan tables and structures on which to place office
equipment such as printers.
Saw line: Associated with predominantly wood-framed buildings.
These usually are employed on large projects where considerable
production sawing is required. The cost is the labor and materials to set
up a large saw and build tables for it, and sometimes a full-time
operator.

Not all line items on this page or any of the GC’s template pages will be
used for a specific project estimate. The estimator needs to determine which
ones will be required and develop typical costs for them according to the job
parameters. For example, large projects will require a sizeable telephone
system and jobsite radios. Renovation of a major high-rise building may
require a rubbish chute, and certain concrete pre-cast or tilt-up projects may
require a separate pre-cast yard other than the building floor slab. Some
typical items that will be required for the case study project are:

Temporary power hookup and distribution;

 Temporary lighting: In winter, to support second shift or allow
construction on cloudy days;
Project sign;
Layout and batter-boards: The markers that show the outside corners
and grid lines of the building;
Signs and barricades: For open trenches and pits; and
Fire protection: Fire extinguishers placed throughout the jobsite.

The estimator also needs to include monthly allowances for temporary

utilities. Projects that are built on a new site usually do not have services
available (water, electricity, sewer or communications), and the general
contractor must provide them. Temporary power is an expensive item.
Electrical subcontractors usually do not include this in their bid, and the
estimator should consult with one to determine what a typical temporary
power installation will cost. Temporary lighting and heating systems are
weather-related, and the estimator needs to anticipate their use. Job
communications, such as radios, are determined by the size of the project
and company policy.
Telephone installation is an item that requires input from the jobsite team.
The cost will depend on how extensive a system is needed and where the
lines are coming from. If the telephone lines will be used for data
transmission, the systems will be more extensive and expensive. Cellular
telephones have helped reduce this cost, but high-speed data landlines may
still be needed.
As is the case with many line items on the generic GCs estimate template
for any specific project, some of the site facilities line items are not
applicable to this case study project. The estimator, however, must
understand the conditions that may require them on other projects. For
example, if a project is being built on a site that retains a lot of surface water
during a rainy season, some temporary roads may be needed. Most sites will
have a project sign. The layout and batter-board line item contains the labor
and minor materials that the carpenters will use in helping the surveyor lay
out the building. Erosion control materials will be needed to prevent surface
water from leaving the project site and should be included in the general
conditions estimate. The jobsite may need to be fenced to keep the public
from entering the construction site. The cost of installing and removing the
fence should also be included in the general conditions estimate.
One item in the protection category required on all project sites is fire
protection. This covers the material cost of supplying fire extinguishers at
various locations on the jobsite. Usually, state safety requirements will
dictate how many and what sizes are needed. The cost is relatively modest,
but necessary for a complete estimate. All other protection items are
dependent on the jobsite conditions and the project owner’s contract
requirements.

General operations
The general operations section includes line items that are specified by the
project owner to be furnished by the general contractor and those that are
required to maintain the temporary facilities and other parts of the site. The
first section pertains to permits, licenses, and taxes. An estimator needs to
determine whether the building permit is to be paid for by the general
contractor and the cost included in the bid or whether the permit is to be
furnished by the owner. It is common for the owner to submit for the
building permit and pay for it. If it is the general contractor’s responsibility,
a call to the local building department or researching its web page will
provide the estimator with parameters for determining what the permit will
cost. Some cities have a published graduated rate schedule, and others
simply use a straight-line percentage calculation. If required by the GC, a
rule of thumb (ROT) for budgeting purposes is 1%. Most other permits, such
as plumbing and electrical, are furnished by the respective subcontractors,
and the cost will be included in their bids.
There can be other permits, such as demolition, jobsite environmental and
storm water control, excavation and grading, and foundation permits. Some
are part of the building permit requirements, and others may be in addition
to them. The estimator should become familiar with all of the permitting
requirements and make sure that he or she knows who will pay for them
and whether or not the owner requires these costs to be included in the
contractor’s bid or proposal and at what cost. The city requires the
contractor to pay to take portions of sidewalks and streets out of use. Street
use permit costs are the general contractor’s responsibility, as they are in
control of schedule and means and methods. Anytime a street is blocked off
for construction purposes, a street use permit must be obtained. The
estimator needs to find out what the unit cost is, extend it by the anticipated
duration, and include it in the estimate.
The line items below permitting on the blank template pertain to various
taxes. Similar to permits, an estimator must understand which taxes are
applicable to a project and how they are calculated. Usually a contractor’s
accounting department will have this information or be able to determine it.
State sales taxes, local sales taxes, and excise taxes will vary from one
location to another. Some states require that sales tax be included in the bid
price, while others exclude the sales tax from the price. There is no universal
procedure that can be applied to sales taxes, and the estimator must know
which ones apply to the specific location of the work. The case study is
located in a state that does not include sales tax in the bid price, so the
owner must determine and add this cost to contractor bids, but excise tax is
required. Information regarding specific building permit rates as well as
those for taxes, insurance, and bonds should be kept in the estimator’s
personal notebook. Taxes are often not included with the GCs but rather
considered as markups on the estimate summary sheet, as discussed in the
next chapter. This allows for automatic adjustment if bid day prices come in
higher or lower than expected. This information should be updated annually.
Because taxes are a percent of construction cost, many contractors include
them on the estimate summary page and not in the GCs estimate.
Performance and payment bonds are a requirement that will be stated in
the bid documents. Project owners may request separate quotes for bonds
identified as an alternate on the bid form and then decide at the time of
award whether or not they wish to purchase them. Bonds are obtained
through contractors’ bonding agents or surety, and estimators can obtain
rates from them. Bonds, if required, are also typically considered a ‘below-
the-line’ markup in that they are listed below the subtotal of direct and
indirect work on the estimate summary sheet.
Insurance is a requirement on most construction projects. Many owners
are specific about coverage, and the contractor’s insurance provider will
furnish either a quote or a method for calculating the cost. Two similar line
items are shown in this subsection, broad form and liability insurance. These
cover personal liability and property damage. Earthquake and flood
insurance is a specific choice of the project owner and in most cases is not
included in the general contractor’s bid. Similar to taxes and bonds,
insurance is often a ‘below-the-line’ markup on the estimate summary sheet.
The estimator can determine most general contractor material pricing by
getting quotes from suppliers and/or using historical information. A jobsite
should have a good source of clean, cool drinking water. Commonly one or
two insulated containers filled with ice water each day will be sufficient.
While this is minor, it is a cost and should be included in the bid. The
estimator must establish the average number of persons who will be on the
job to determine the number of chemical toilets required. Many state laws
are very specific about this. On most projects, the general contractor
furnishes chemical toilets for the subcontractors’ use as well. A good ROT is
to provide one chemical toilet per 10 on-site craftsmen, serviced twice
weekly. Separate restrooms for women, Americans with Disabilities Act
(ADA) accessible restrooms, and running hot water are considerations for
many jobsites today.
Specifications will dictate what inspections and testing are required. A
general contractor may be contractually responsible for all inspections and
tests required by a building department. If the owner’s requirements are
more than those of the building department, the contractor must satisfy the
contract requirements. Inspections usually are not a cost item if performed
by the building department but must be accounted for if done by an
independent agency and not paid by the project owner. An estimator must
review the general and special conditions of the contract to determine who
furnishes the testing for earthwork, concrete, roofing, and structural steel.
Some project owners assign the testing to the general contractor, while
many municipalities consider it a conflict of interest to do so. All other
inspections are part of subcontract work, and costs are included in their
respective contract prices. The estimator needs to research what these
requirements are and obtain unit prices or quotes from a testing agency for
any that are the contractor’s responsibility. A reasonable ROT rate for
testing and inspection if required of the GC is also 1% of construction cost.
Company historical data also may be helpful for this.
Ongoing jobsite cleanup, dumpster rental, and final cleanup are
significant jobsite GCs expenses on every project and finish out this last
section of the GCs template. An estimator who assumes subcontractors will
take care of all clean-up is shortsighted and should consult with the
superintendent on this and many other portions of the jobsite GCs estimate.

Summary
The general conditions estimate defines and prices the jobsite overhead
(indirect work) for a specific project. It lists all of the indirect labor, material,
and equipment that are required to manage, supervise, and complete work
activities. When developing the jobsite overhead estimate, the estimator
must be aware of what the contract requires. For example, a full-time
superintendent is usually required to be on the job for its entire duration.
Other items, such as the jobsite pickup, will not be defined but are left up to
the bidder to determine whether or not they are needed. The GCs template
we relied on lists numerous potential indirect work items. For a typical
project, only some of the line items will be necessary. This generic listing
can be used as a checklist as well as a pricing template, similar to a grocery
list. An estimator is encouraged to use these forms and modify them as
needed. For example, a contractor may be more inclined to use an
extending-boom forklift in lieu of a boom truck or light crane. The rental
rates are different, and the estimator may want to add a specific line item to
the template for this equipment to make sure it is not forgotten on future
projects. After all of the direct work labor, material and equipment,
subcontractor plugs, and jobsite GCs are calculated, they will be posted to
the estimate summary in preparation of adding markups, which is discussed
in the next chapter.

Review questions
 1 What does the general conditions section of the estimate represent?
 2 What are indirect work items?
 3 What are the titles of each of the four pages of the general conditions
estimate?
 4 How does the general conditions section of the estimate relate to the
general conditions of the specifications?
 5 What is another name for the general conditions part of the estimate?
There are multiple uses of the term.
 6 Why should the general conditions be estimated in detail rather than
using a percentage of the project costs?
 7 How are taxes and insurance commonly estimated?
 8 What is the basis of costing of the building permit?
 9 What is the basis of costing performance and payment bonds?
10 What is the advantage of placing percentage add-ons such as permits,
taxes, insurances, and bonds on the estimate summary sheet rather
than in the general conditions estimate? There are a couple of good
answers here.
11 Why might a negotiated project have a higher GCs percentage than a
bid project?

Exercises
1 Develop an administrative estimate for a project involving two
buildings with an estimated cost of $7 million each. Both buildings will
be constructed at the same time but on opposite ends of a large site;
2,500 feet apart. Project durations for both buildings are 28 weeks, and
they will be done concurrently but have a one-month stagger-start.
2 Prepare an equipment estimate of an eight-story high-rise building over
two stores of underground garage that uses a tower crane and
personnel and material hoist. Assume the project will be completed in
one year. Each of the eight floors will cost approximately $2 million to
build. Expand this for a complete jobsite GCs estimate. Make whatever
assumptions necessary.
3 Obtain the building permit rates from your nearest major city and
determine the permit cost for a building with an estimated construction
contract amount of (A) $3.3 million (B) $10 million, and/or (C) $60
million.
4 City Construction Company prepared their general conditions estimate
based on a 20-month preliminary schedule, from mobilization through
receipt of a certificate of occupancy, which is a common approach.
Explain why this approach is flawed – in that they might come up short
in this portion of their estimate.
5 What is an expected percentage range of GCs for a lump sum
commercial project?
6 Compare the industrial project’s general conditions estimate with its
site logistics plan and summary estimate, all located on the book’s
eResource. Do the three documents match? What changes would you
recommend to make them more coordinated?
18 Estimating markups

Introduction
Estimate markups, also known as below-the-line markups, pertain to the
overall total estimated cost of direct and indirect work. The addition of the
markups to the cost of the work will be the contract amount if the project is
won or negotiated. These include the general contractor’s (GC’s)
contingency, liability insurance, taxes, fee, and others. Many of these were
introduced along with general conditions in the last chapter. The fee
represents the project’s portion of the home office overhead and profit
(OH&P). Home office overhead covers the basic services provided to each
project by the company’s home office. Home office OH&P is also known as
fee. This includes accounting services, sales, estimating, the home office
facilities, cost of project managers (PMs) and superintendents between jobs,
and the salaries of the home office personnel including corporate officers.
The fee is only one markup that is placed below the line in the estimate
summary; there are several others. All of the estimated costs above the line
are considered costs of the work, which have been the focus of the last
several chapters of this book. Similar to fee, other items below the line are
percentage add-ons to the estimate and are volume dependent and therefore
are variable costs. Labor burden is applied to direct and indirect labor only,
not to the entire direct cost subtotal. Labor burden is not applied to material
costs, and subcontractors are expected to have covered their own labor
burden in their bid prices. Different burden rates should be applied to direct
and indirect labor. Labor burden was introduced in Chapter 10. Typical
percentage add-ons that will show up below the line on a construction
summary estimate include contingency, liability insurance, excise tax, fee,
labor burden, sales tax, and bonds. The ‘line’ we refer to in estimating is a
horizontal line on the estimate summary page that separates the cost of the
work from markups. The estimate summary page will be discussed more
thoroughly in the next chapter.

Risk assessment
There are numerous potential risks that can be influenced by the project
design, the client, subcontractors, design team, and other internal and
external sources that can influence a contractor’s estimated and final fee.
The greater the risk, the higher is the estimated fee. If the risks are too great,
there might not be any fee that would make the job attractive. Risks are also
resolved for the contractor by purchasing insurance, bonding subcontractors,
increasing estimating contingencies, or taking on a joint venture partner for
a specific project. A project that has too great a risk or combination of risks
may not be pursued as a business decision of the contractor. Contractors
may choose to raise their estimated fee on one particular project for a
variety of reasons, including:

To provide a practice bid, although this is expensive to do and

potentially dangerous if the contractor accidently becomes low bidder;
Market conditions allow a higher fee;
The type of work is not the contractor’s specialty;
Disproportional requirement for direct craft labor;
The client may be a high-risk client that is prone to lawsuits;
The construction documents are not complete, although some
contractors would see this as a change order opportunity;
Tight schedule mandated by the client, possibly with liquidated
damages;
Other risky contract clauses, such as slow payment terms or high
retention withheld;
 To provide a courtesy bid to a client they do not want to offend, if they
have a sufficient backlog; and/or
If the project is difficult or complicated, it may require a higher fee due
to associated risks.

Contingencies
The estimator may want to include a contingency below the direct cost total
line or added to the fee. Contingencies are appropriate for negotiated
projects where design information may be limited; contingencies generally
are not used on competitive lump sum bids. If GC ‘A’ includes a contingency
with its bid but GC ‘B’ does not, B has an improved chance of becoming the
successful low bidder. The bidder is being asked to furnish a price for the
work as defined in the contract documents. It is the project team’s duty prior
to executing the contract to make sure that the project scope of work has not
been increased. This then minimizes the need for a contingency add-on. An
explanation of some of these different contingencies follows, and their
relative ranges with respect to design completion are reflected in Table 18.1.

Design contingency: This is usually held by the owner and protects

them from contractor estimate increases due to design discrepancies,
especially early in the design process, such as design development
documents. This is also known as lack of design definition or ‘design
creep’. An example would be that the owner always intended to include
window coverings and had told their architect to include them, but the
architect forgot or just hasn’t gotten to that level of detail yet. During
development of multiple budget estimates by a preconstruction GC, the
estimator may include this contingency line item in the budget, but at
contract time, it would likely roll over to the project owner.
Document contingency: Similar to design contingency, this would also
be held by the project owner but is intended more for errors discovered
in the documents after the project has been bid. This category could
also be known as document inconsistencies. For example, anchor bolts
were shown for all of the columns but missed in the foundation wall or
a requirement to acoustically insulate all interior office walls was not
called out. For a negotiated guaranteed maximum price project, the GC
may want control of this contingency to cover ‘minor’ changes, but
‘major’ changes likely still would result in change orders to the owner.

Table 18.1 Contingency values

Contingency types Estimate type

Budget GMP Lump sum
Owner contingencies:
Design contingency 10–20% 5–10% NA
Document contingency (1) NA 10% 5–10%
Permit contingency NA 1% 1–3%
Scope contingency 5–10% 5% 0–2%
Unforeseen conditions (1) NA 10% 5–10%
Contractor contingencies:
Escalation contingency NA 2–3% included in cost
Estimating contingency 5% 1/2–1% included in profit
Construction contingency NA 2% included in profit
Totals: (2) (2) (2)
Notes: (1) Document and unforeseen conditions are a combined 10%.
(2) Most of these contingencies are not cumulative, it is generally
either one or another, or they function independent of each other.

Permit contingency: During permit review by the authority having

jurisdiction, often the city, the permitting agency may require changes
to be made to the documents that the architect had not anticipated. This
fund would also be under control of the owner unless the project was
design-build, and then the contractor would hold this contingency line
item. Examples would include requirements to revise city sidewalks
which are adjacent but not directly impacted by the new project or
protection of significant trees or not allowing work during evenings or
on the weekend.
Scope contingency: The owner wants to add additional scope, such as
one floor of the building had been shelled but now finishes have been
added, or the owner’s program changes, and instead of a dry laboratory
a new scientist has been hired who requires a wet laboratory. No one is
at fault for these occurrences, and there would be no way for the
contractor to have estimated for them. This is also known as ‘scope
creep’. This can be one of the largest values of change order dollars. The
owner would again be in control of this contingency fund.
Unforeseen conditions contingency: During earthwork activities,
unsuitable soil or buried debris may be discovered that the GC could
not have anticipated. This is also the case with remodeling projects,
when rot or asbestos might be discovered. The design documents
attempt to discover these situations, and language is often included in
the contract to attempt to shift responsibility to the contractors, but this
is difficult to uphold. This is another owner-controlled fund.
Escalation contingency: Similar to design contingency, a negotiated
preconstruction GC will include this line item in its budget. Economists
can only make educated guesses as to what inflation may occur in the
following years, so the amount to assign to this line item is very
subjective. It is also very difficult to define what is covered – for
example, increases in prices of copper pipe and electrical wire or steel
tariffs – and when the contingency would either be realized or
removed. Natural disasters have a way of substantially increasing the
cost of equipment such as an emergency generator. There is no way a
contractor could have anticipated this in its bid. It is this author’s
recommendation to project owners that they control this fund as well
and require the contractors to prove that escalation occurred.
Estimating contingency: Estimating is a blend of art and science, and
the contractor will not estimate every item exactly correct. This
contingency will show up as a below-the-line add-on in a GC’s
estimate on negotiated projects more than bid projects. Even for
 negotiated projects, a case can be made that the contractor/estimator is
the expert, and if they cannot estimate accurately, they are not earning
their fee. An example would be missed scope such as concrete shown
on the mechanical drawings but not on the structural drawings.
Additional examples would be if a subcontractor pulls its bid or a
subcontractor suffers financial default.
Construction contingency: Even with very good construction
documents and a thorough and complete estimate, things happen in the
field that fall under the contractor’s control or are part of their means
and methods and are not subject to an owner change order. This may
be the case with poor subcontractor performance, schedule delay, or a
rained out concrete slab that requires repair. Because negotiated private
project owners tend to remove contingencies from the contractor’s side
of the ledger, estimators may find ways to build in estimating and
construction contingencies within their budgets or guaranteed
maximum prices (GMPs) but not necessarily label them as such.

Insurance
The contract terms will dictate what types of insurance a contractor must
provide and the insurance limits the policy must cover. Similar to our
discussion of performance and payment bonds later, the estimator will send
the bid documents to the contractor’s insurance company when they first
arrive in the contractor’s office, especially Construction Specification
Institute divisions 00 and 01 concerning the special conditions of the
contract. Insurance types and areas of coverage are covered more thoroughly
in a construction project management book such as Management of
Construction, A Constructor’s Perspective. The reader should look to a
resource such as that for expanded coverage. Some of the more common
types of insurance and their approximate markup rates include:

Liability insurance: The most common insurance type carried by all

contractors, which protects from claims made by third parties. An
 average rate is 1%, less for larger GCs and higher for smaller GCs or
specialty contractors.
Equipment floater insurance: Protects the contractor against financial
loss due to physical damage to equipment from named perils or theft.
Coverage is for owned, leased, and rented equipment not operated on
streets and highways.
Automobile insurance: Protects the contractor against claims from
another party for bodily injury or property damage caused by
contractor-owned, leased, or rented automobiles and equipment
operated over the highway. Coverage may include damages to the
automobiles and equipment.
Umbrella liability insurance: Provides coverage against liability claims
exceeding that covered by standard general liability or automobile
insurance. For example, a contractor may have a general liability
insurance policy covering up to $2 million per occurrence and an
umbrella policy covering up to $50 million per occurrence.
Workers’ compensation insurance: Protects the contractor from a claim
due to injury or death of an employee on the project site. Workers’
compensation insurance is no-fault insurance in which the employer
cannot deny a claim by an insured employee, and the employee cannot
sue the employer for injuries sustained on the job.
Errors and omissions insurance: This is typically provided by design
professionals and protects the project owner due to potential building
failures.

In addition, on certain projects, the owner will require builder’s risk

insurance or property insurance. This is in addition to typical liability
insurance, and the estimator must price it accordingly. Builder’s risk
insurance is a policy that protects the owner against financial loss due to
damage to the uncompleted project. The project owner may provide this
insurance, or the general contractor may be required to furnish it. Regardless
of which entity provides the insurance, the other party will want its interests
protected, will customarily be named as an ‘additional insured’, and should
have a chance to read the policy. It is important to realize that this is an
additional cost to the contract and treat it accordingly. If the GC is required
to provide builder’s risk insurance, the percentage add-on markup may be in
the range of 0.1% to 0.2% of the estimated construction cost.

Taxes
Business and occupation (B&O) tax or excise tax is a markup based on the
total contract amount and covers the taxes for doing business in a state, city,
and county where the project is located. Most states and many cities have
some sort of B&O, but their rates and applications vary considerably.
Construction company accounting departments can usually furnish a
percentage markup rate for the estimator to use for business taxes. The case
study in this book is being constructed in the area where City Construction
Company normally works, and a combined state and city 1% markup for the
B&O taxes has been factored in. If the project is in a state and city where the
contractor does not normally work, the estimator must also determine the
costs for a business license and add it to the markup or include it in the
general conditions estimate, as well. Sales tax becomes an issue in an
estimate in three different places:

Items that do not become a permanent part of the project, such as

concrete form material, also known as temporary structures;
Equipment rental; and
Sales tax on the full contract value.

The estimator needs to understand the procedures for sales tax in the state in
which the project is being constructed and apply those procedures
accordingly. When purchasing form material, for example, the unit prices
used may need to include sales tax. If a construction company’s historical
information is used as the basis for pricing, it typically includes appropriate
sales tax. However, if vendor pricing or estimating references are used, sales
tax may not be included. Equipment rental also is subject to differing state
rules regarding sales tax. At the location of the book’s case study, equipment
that is rented without an operator is subject to sales tax, while equipment
that is rented with an operator is considered a subcontract and is not subject
to sales tax. Both of these sales tax examples (formwork and equipment) are
part of the cost of the work and are factored above the line.
When tendering a final bid, the inclusion or exclusion of sales tax below
the line on the total cost may be a matter of state law. Some states require
that sales tax be added to the contract amount to calculate a bid total, and
others leave it out. Some states tax labor only, and others tax materials only.
This becomes an important issue when a contractor is estimating a project in
a state other than its home location. In addition to state sales tax, the
estimator needs to determine if any local sales taxes apply. Washington
State, where the case study was constructed, does not require sales tax to be
included in the bid or contract, but the GC still invoices the client monthly
for state sales tax and pays the state on behalf of the project owner. This
qualification and exclusion is an important item to note in the qualifications
and assumptions document discussed in Chapter 2. The bottom line with
taxes is that it is complicated and inconsistent, and the estimator must do his
or her research before finalizing the estimate summary sheet.

Home office overhead and profit

Home office overhead for general contractors varies, depending mostly on
the contractor’s size and volume. For small to medium-size contractors, it
ranges from about 3% to 7% of the total contract cost. Larger general
contractors have a home office overhead as low as 1% to 2%. The contractor
for our case study project has an annual volume of $400 million and
anticipates $6 million in home office overhead; therefore, a 1.5% home office
overhead percentage needs to be covered by each project undertaken. Home
office overhead is only part of OH&P. A fee of just 1.5% covers this project’s
proportional share of home office overhead but does not return any
additional profit. This is known as the breakeven fee. A higher fee is needed
beyond the breakeven fee if a profit is to be returned to the company’s
ownership. The breakeven fee for our case study would therefore be:

$43.4 million × 1.5% = $651,000

There are several considerations for determining the profit to include in

the project bid. The first priorities for the general contractor are to cover
home office overhead and to limit the risk of losing money. The biggest
single risk for the general contractor is whether or not its direct labor will
achieve the productivity that was used in the estimate. Some GCs limit this
risk by subcontracting all or most of the work and then managing the
subcontractors. The risk then shifts to the contractor’s jobsite management
capabilities and the technical capabilities and financial condition of the
subcontractors. The downside is that a contractor which is innovative in
performing direct work benefits by generating savings, which are added to
the profit. When all of the work is subcontracted, the contractor will not
typically realize savings beyond the profit figured in its original estimate.
There are several factors to consider in calculating an appropriate fee. Some
of these include:

1 The fee may be influenced by the amount of estimated direct labor. The
fee must first include the home office breakeven point, as discussed
earlier, and then add a desired amount of profit. A profit goal that is
about 50% of the direct labor cost is considered adequate protection
against possible labor estimating errors or labor cost overruns. This is
saying that if the estimator missed the labor estimate by half, they will
still come out even. Using the total direct labor for our case study
project, the labor risk the profit needs to cover would be as calculated
here.

$3 million × 50% = $1.5 million profit

 $1.5 million profit/$43.4 million cost = 3.5% profit goal

Adding this to the 1.5% breakeven home office overhead requirement

results in a fee of 5% of the subtotal estimated cost prior to adding B&O
taxes and insurance. Although this feels low, it might be appropriate in
a competitive market.
2 Another approach to fee determination is to factor in the earning power
of the project superintendent and PM. This is also known as their
opportunity cost. The capability of the team to organize and run a
project successfully, including keeping costs under control and
maximizing profit potential, are factors that should be considered. The
PM and superintendent are soft assets with earning power. They are
expected to earn a profit for their company. In many cases, the
superintendent and PM may not be known at bid time, but the type of
project usually dictates the capabilities required. For example, a very
large job that has a high labor risk will require a very experienced
superintendent and project manager. If they cannot realize a profit of
$20,000 per month each on project ‘A’, then the contractor should pass
on it and pursue project ‘B’. An experienced project engineer (PE) can
be added to this equation as well. A highly skilled superintendent and
PM for a job with a 20-month duration should therefore generate a
profit of:

2 supervisors × $20,000/month × 20 months = $800,000 profit

$800,000/$43,400,000 cost = 1.8% profit goal

Note that this is considerably less than the required labor protection
calculated in the first method. Combined with home office costs, this
represents only 3.3% of the estimated cost of the work before business
taxes and insurance are added. This would be considered a reasonable
fee on a very large project but may be a little low for the commercial
case study and current market conditions.
 Other fee determination methods should also be considered. A job
that is straightforward and is largely done by subcontractors has a
lower risk, and the work of the superintendent is primarily that of
ensuring that the subcontractors perform in accordance with the
contract documents. A PM or project PE will do much of the
subcontract documentation work, and the superintendent can be one
who has less experience but is working to increase his or her
knowledge. Smaller projects that employ mostly subcontractors can be
built successfully with a team of lesser experience. In these instances,
the estimator may decide that an opportunity cost fee of only $15,000 a
month for each is warranted.
3 A company’s backlog of work also enters into the fee consideration. The
estimator and the officer-in-charge (OIC) usually discuss the company’s
backlog and decide how important the project is. If the backlog is low,
they may decide they need the job and propose a lower fee. If the
backlog is high, they might decide to use a higher fee. If they do not
win the bid, at least they have responded reasonably, which usually
keeps them on the owner’s preferred bid list for future projects.
4 A survey of market conditions is also used to determine the fee. When
the company’s backlog decreases, it usually is low for an entire class of
competitors. Consequently, all of them probably will be bidding to get
work and use lower fees. The contractor has to be careful not to bid the
job so low that there will not be any profit at completion. There is a fine
balance between keeping personnel occupied on a project at almost any
cost versus losing money. The final decision rests with the OIC.
5 The bid team also must assess the availability of personnel to supervise
the construction activities. If all of the contractor’s key personnel are
committed to other projects, a higher fee may be proposed to cover the
cost of hiring a new superintendent and possibly some other key field
people and promoting PEs to become PMs, all of which can be risky if
not performed diligently.
6 The contract type can significantly influence the fee decision. Lump
sum projects have increased risk for the contractor and deserve more
 fee than a cost plus project. A project with a guaranteed maximum
price is somewhere in between. There are many contract issues and
contract clauses that can raise or lower the fee, such as liquidated
damages and definition of reimbursable costs in the AIA A102 contract,
Articles 7 and 8. If there are additional opportunities for home office
costs to be considered job cost and therefore reimbursable, this allows
money to be moved from the home office general conditions to jobsite
GCs and allows a lower fee, all the while retaining the same profit goal.
7 The construction company owners have invested their personal money,
also known as ‘equity’, in the company and expect a high rate of
return, likely greater than 15% return on equity, for what everyone
considers a risky business.

The estimator should review the project with the OIC in detail before bid
day. This will help the OIC to assess risk in relation to determining a fee. If
the project is straightforward and is the type that the contractor normally
undertakes, the risk is relatively low and a modest fee can be used. If the
work is a new type for the company or there is a very large direct labor
force, the risk is high, and the fee should reflect this. At this stage, the
estimator prepares the bid summary for bid day. For the case study the team
has decided to use a fee of 4.5% based on the following:

The home office overhead (HOOH) is currently running about 1.5% of

total work under contract. This is the breakeven fee but with 0% profit,
which is unacceptable to the company’s equity partners.
The high direct labor risk coverage combined with HOOH produces a
fee of 5%.
The subcontract work is significant, which lowers risk.
An experienced project team’s earning power for 20 months, combined
with HOOH, reflects a fee of 3.3%, which feels too low.
The company’s backlog is reasonably strong but could use more work
for the upcoming year.
 Market conditions seem to indicate that projects are being bid with fees
in the range of 4% to 6%.
The project’s direct cost is $43.4 million and, at 20 months, is larger and
longer than most in this marketplace; therefore, a fee on the lower end
is anticipated.
The work is the type that the company normally performs, and a
project manager and superintendent with this experience are available
to build the project.

In this case, the CEO decides a 3% profit keeps the fee at the lower end of the
market range and competitive. It also is within the earning power of an
experienced superintendent and project manager. A fee calculation of 4.5%
(1.5% overhead + 3% profit) is therefore entered on the pre-bid day summary
estimate.
Contractors set many goals, including building quality projects, meeting
schedules, keeping everyone safe, and developing a good reputation with
clients and subcontractors. But contractors are also in the business of
making a profit. Construction is risky and is not a ‘not-for-profit’ industry.
Project managers will be reminded of their fee goals throughout the course
of construction on their projects by the home office. One of the unique
aspects of construction is that the true fee will not be known until the
project is complete. In the home office, corporate executives will not know
what the total yearly profit will be until the year is complete and all job
costs and revenues have been factored, along with the actual home office
general conditions expenditures.

Additional markup considerations

When preparing the estimate summary form for bid day activities, the
estimating team should verify markup requirements from the owner-
provided bid documents. Frequently, the project owner will ask for markups
that the general contractor intends to use for change orders. This can become
an issue because the owner may assume that the stated markup includes
those of subcontractors, while the general contractor assumes that they do
not. If there is a question, an estimator should submit a request for
information to get a clarification. Sometimes an owner also will require
markups the general contractor plans to use for subcontractors. The
estimator must ensure that he or she understands the contractual markup
structure prior to finalizing the bid, as it can have an effect on how the final
fee is determined. Procedures for sales tax should also be reviewed.
In general, a jobsite general conditions estimate that is about 5% to 10% of
the total expected bid is considered adequate for a project. Is the amount
calculated by the estimator within a reasonable range? Straightforward
projects can be built with a little less field management, and 8% might be
considered high. On bid day, this should be discussed with the OIC, as it
may affect what, if any, adjustments are made. The pre-bid day summary
estimate for the case study shows a jobsite overhead exceeding 11%, which
feels high but is appropriate for this type of job. The project is longer than
many and includes the cost of a tower crane, which increases its general
conditions estimate significantly. If a project is difficult, a higher jobsite
overhead will be required. On some heavy civil and industrial projects, the
general conditions can be as high as 15% due to additional management and
supervision and expensive specialized construction equipment. In early
budget estimates, general conditions may be added to the estimate summary
as a percentage add-on or markup. But any project that proceeds into or
beyond the schematic design phase will warrant a detailed line-item general
conditions estimate, as was prepared in Chapter 17.
Not all contractors approach how they estimate for labor burden the
same. As presented in Chapter 10, labor burden is a combination of labor
taxes imposed by the government and labor benefits, which may be
associated with labor unions or a particular contractor’s choice. Some
contractors utilize loaded wage rates in their estimates, especially early
budget estimates, where labor burden is combined with the actual wage the
craftsman receives. In this case it is difficult to modify the burden percentage
rate for an entire project, which may be required in a competitive bid
environment on bid day. Other contractors split out the labor burden and
use a combined or blended rate, which may combine all crafts together into
one percentage markup, such as 55% for union crafts, or split the burdens out
between different crafts, such as 50% for cement masons and over 70% for
ironworkers. Merit shop craftsmen are typically lower, such as 30% to 40%
for a labor burden markup.
Labor burden for indirect labor, such as the PM and superintendent, is at a
considerably lower rate than crafts, approximately 35%. Some contractors
will split the markup out for indirect labor separate from craft labor, and
other contractors will combine the two into a blended rate. In the case of a
closed-book lump sum bid project, the owner usually cannot audit the
contractor’s accounting books and will not know or have influence on how
labor burden is applied. But a project owner in an open-book negotiated
project will likely have audit capabilities, and the rate for labor burden
should be stipulated in the contract and verification of how it is accounted
for will need to be addressed.
Performance and payment bonds are typically a below-the-line markup.
In fact, bonds are below the bottom line in that they are usually excluded
from the base bid and contract amount and are an additive alternate if
chosen by the project owner. The estimator should have sent the bid
documents to the contractor’s surety when they first arrived in the office.
The surety will gauge the risk level of the project with the contractor’s
backlog and available bonding capacity. A graduated bond scale similar to
the example here will be sent to the estimator to be posted in the bid room
and factored into the computer dedicated to calculate the final bid amount.
A rule-of-thumb performance and bond rate is 1% of the contract amount.
But because of the graduated bond schedule, smaller projects (and smaller
contractors) have higher bond rates and larger projects (and larger
contractors) have lower bond rates. Also, an individual contractor’s bond
rate is indicative of their success, reputation, and financial standing. Those
with more have lower rates, and those with less have higher rates. Bond
rates are not flat percentages, such as 0.75%, but rather are determined from
a graduated scale and are dependent on project size, project complexity and
risk, and the strength of the contractor providing the bid. Lower bond rates
can result in a second low-bidding contractor being awarded a project if the
project owner elects to include the bond alternate with the combined base
bid.

Sample general contractor’s graduated bond schedule

Contract price: Cost per $1,000 of contract price:
$1 to $100,000 $30
Next $400,000 $20
Next $1,000,000 $15
Next $2,000,000 $10
Next $2,000,000 $7
Next $2,000,000 $6
Over $7,500,000 $5

A sample bond calculation for a $5 million project using this graduated

schedule is as follows and, coincidently, results in a total bond cost of just
over the rule of thumb rate of 1%. A smaller project would have had a
higher percent, and a larger project would have had a smaller percent total.

Bond cost example for $5,000,000 project

Contract price: Cost per $1,000: Extension: Total:
$1 to $100,000 $30 $30 × 100 = $3,000
Next $400,000 $20 $20 × 400 = $8,000
Next $1,000,000 $15 $15 × 1,000 = $15,000
Next $2,000,000 $10 $20 × 2,000 = $20,000
Next $2,000,000 $7 $7 × 1,500 = $10,500
Total: $5,000,000 = $56,500 = 1.1% bond cost
 Most GC sureties will require the GC to also obtain performance and
payment bonds from their subcontractors, especially the major
subcontractors or those above certain bid amounts, such as $50,000. But
different than the GC’s bond being an alternate add-on, the subcontractor
bonds will need to be factored into their bid prices. If the owner chooses to
have the GC purchase a bond and agrees to the additive bond amount, the
owner will not also agree to purchase bonds on the subcontractors for
benefit of the GC. General contractors on negotiated projects may be able to
have the owner pay these added costs, but only if discussed before the
contract is executed.

Summary
In this chapter we introduced many different markups or percentage add-ons
that a contractor may put ‘below the line’ on an estimate summary form.
There are many factors a contractor will consider regarding which markups
to include and at what percentage and where in the estimate to include
them. The general conditions estimate template discussed in the last chapter
allowed for some of these to be included there, but most contractors apply
these percentages on the total cost of construction – including direct,
indirect, and subcontract costs – and therefore inclusion on the estimate
summary form may be the most effective application. Evaluation of project
risks plays an important role in markup decisions. Contractors can choose to
accept risks, mitigate them, share them with project owners, insurance
companies, and subcontractors, or increase markups such as fee and
contingencies. There are a variety of contingencies applicable to a
construction estimate; some of them are managed by the project owner and
some by the contractor. Contingencies generally decrease as design
progresses, and negotiated projects have higher contingency markups than
do lump sum bids – if they have any contingency at all.
There are also several different types of insurances that contractors may
either choose to purchase or may be required by the contract. Some of the
most common ones include liability, builder’s risk, and worker’s
compensation, which is typically part of labor burden. Different states and
cities will also require sales and business or excise tax, also known as B&O
tax. The estimator must research not only the contract requirements with
respect to insurance and taxes but also local jurisdictions and include
applicable rates.
Profits are not what contractors add to the bottom of construction
estimates; they add a proposed fee. But for some participants in the built
environment, they see the fee as all profit. The fee is also known as the
‘margin’, or generically the ‘markup’. As discussed in this chapter, the fee
first needs to cover home office overhead, and any money remaining after all
costs and overhead is accounted for may be considered gross profit. Net
profit for the company is determined after deducting taxes from gross profit.
Net profit is also known as pure profit or after-tax profit.
Additional potential markups include jobsite general conditions costs (for
early budget estimates only), labor burden, and performance and payment
bonds. General conditions and labor burden are not fees but are costs of the
work. Bonds often are stated as bid alternates and are on the bid form below
the bottom line and not added to the base bid. Public bid projects tend to
require bonds more than do private projects. All of the markups discussed in
this chapter have been carried forward to the estimate summary sheet,
which will be discussed in the next chapter.

Review questions
1 Placing labor burden below the line on the estimate summary versus
incorporating it above the line in loaded wages provides the contractor
with what advantage?
2 What is the advantage of estimating general conditions on a detailed
line-item basis versus plugging it in as a percentage markup?
3 What effect on the bottom line does reordering the liability insurance,
fee, excise, and contingency markups have? Assume a $20 million
 construction cost and 1%, 5%, 1%, and 2% markups, respectively.
4 Where is the ‘line’ drawn in our ‘above-the-line’ and ‘below-the-line’
discussions?
5 List three items included in home office overhead and three items
included with jobsite general conditions.
6 What are the components of the fee?
7 What are four factors to consider in determining the fee?
8 Who on the contractor’s estimate team typically makes the final
decision on markups?
9 Of all of the markups discussed in this chapter, which one would not be
considered a cost of the work?

Exercises
 1 Many reasons why a contractor might choose to increase its bid fee
were discussed in this chapter. Why might a contractor choose to lower
a lump sum bid fee or negotiated proposal fee?
 2 If a contractor suspects a project might be risky to pursue, they have
several options available to them. What might some of those be?
 3 What is the minimum fee, in both dollars and percentage of
construction contract, a general contractor would need on an upcoming
$10 million bid project? Assume the following parameters:

$100 million expected yearly corporate volume

3% home office overhead budget
Owner’s equity is $4 million
This project is estimated to have $1 million in direct craft labor
This project is expected to last 12 months
There is a full time project manager and superintendent without a
project engineer
Cost accounting is performed out of the home office
 Construction company equity owners expect a 15% return on
equity

 4 How would your answer change in Exercise 3, if:

A Market fees are at 7%,

B This was a negotiated project,
C The GC will perform $1.5 million in direct labor, and/or
D The GC has sufficient backlog and is submitting a complementary
bid to a past client?

 5 Where would an estimator choose to order the fee markup on the

estimate summary form on an open-book negotiated project proposal?
 6 Determine what business taxes are required for a general contractor in
your local area.
 7 Calculate the bond cost and percentage of contract for the following
three projects utilizing the graduated bond schedule included in this
chapter or another one you may have access to: (A) $2,000,000 project,
(B) $7,300,000 project, (C) $25,000,000 project, and/or (D) $100,000,000
project.
 8 In Table 18.1 we stated that not all of the contingencies were additive.
Why not? Add together the high-end range of each type of contingency.
What is the total percentage? What would happen to a project’s pro
forma (look ahead to Chapter 23) if an owner includes this cumulative
amount?
 9 Provide another example for each of our contingency categories.
10 Prepare a spreadsheet comparing the various markups included on the
book’s three case study projects. What similarities and differences
exist? Is one more accurate than another?
19 Estimate summary

Introduction
The estimating work has progressed from initial document review to
quantity take-off (QTO) and pricing recapitulation (recap) of the self-
performed work. Order of magnitude (OM) estimates have been developed
for subcontractor work, and the project summary schedule and general
conditions estimate are complete. Pre-bid day markups have been factored
on this detailed work. This concludes the first eight steps of the lump sum
estimating process shown in Figure 1.1. The two remaining steps represent
work that is done on bid day. It is now time to complete the estimate and
determine a pre-bid day total based on the information developed thus far.
The completion process is an excellent time to review the work, not only for
its completeness but to check transferred numbers. Even though an
estimator has diligently performed all reviews and error checks during the
development of the estimate, a final review and check is warranted. We
introduce the estimate summary page in this chapter and populate it with all
of the estimating work accomplished thus far, including:

Direct work pricing recaps,

Subcontractor OM plug estimates,
Detailed jobsite general conditions estimate, and
Pre-bid day markups.
In addition to filling out the pre-bid day summary estimate, there are several
other activities to prepare the bid room and estimate team for the busy
activity of successfully completing a lump sum bid. This chapter completes
everything right up to bid day and our next Chapter 20 captures all of the
actual activities that occur on bid day. All of these pre-bid day activities are
reflected in the top half of Estimate Elements Figure 19.1.

Final document review

The first part of completing the estimate is to conduct a thorough review of
the bid documents including all addenda. This should be done in the same
order that they would have been read before beginning the estimating work;
that is, looking at the invitation for bid, instructions to bidders, the bid form,
and any supplemental and special conditions. The bid form is especially
important because it defines what pricing is required and how the bid is to
be tendered. This is also a time to verify that the markups proposed on the
estimate summary form and with the bid conform to contract requirements.
Markups were discussed in the last chapter.
 Figure 19.1 Estimate elements

Another item that may be requested is unit pricing for a given list of work
activities. These are more common for industrial and heavy civil
construction, but occasionally a project owner of a commercial project will
request them. Unit price determination will be discussed in Chapter 23, but
the estimator should know that if requested, their inclusion is required in
order to tender a qualified bid.
The next part of the document review is the drawings that were used for
estimating. These are the ones that were marked up as items were
quantified. The estimator should look at each drawing to verify which work
items are self-performed and which ones are to be subcontracted. It is very
important to look at the mechanical, electrical, and civil drawings because
they may have items, such as concrete pads for transformers or air
conditioning units, that the general contractor (GC) is to construct and may
not be shown on the architectural and structural drawings. During the
drawing review, the estimator should ensure that all items of direct work
have been marked. It is not necessary to perform another dimensional check
of the quantities, but rather to make sure that all items of work have been
quantified. Those items not marked should be double-checked as required
and verified as not having been estimated, and a miscellaneous QTO and
recap sheet should be prepared for them. All of the sections and details
should be reviewed thoroughly. Sometimes an element on a plan was
marked as taken-off, but the section or detail was not. While the information
in the estimate may be correct, the detail may show things that are different
than the estimator thought. When finished, all sections and details that
pertain to self-performed work should have been marked. This is an
especially important check.
Some additional items in the specifications should be verified. Typically,
specification sections are basic standards that are modified for a specific
project. Additional specifications are included on some drawings, and the
estimator must ensure all are accounted for. Much of the specifications
concern standards to which the work is to be performed and the methods to
accomplish it. For most projects, the labor productivity used in the estimate
is adequate to cover minor variations in the specifications. A quick scan will
verify this. The estimator should also pay attention to the material
specifications. For example, 3,000 pounds per square inch (psi) concrete may
be required for footings and slabs-on-grade, while 4,000 psi may be required
for elevated decks, and the estimator must ensure that the proper quantities
have been priced.
Once the document review has been completed and any miscellaneous
items have been identified, it is time to review the estimate sheets. Every
sheet should be reviewed to ensure the totals that are to be used are double
underlined. The estimator should ensure that each double underlined total
has been circled, signifying that it has been transferred to the next
applicable sheet in the estimate, and check that sheet to ensure the number
was transferred correctly. A spot check should be done to make sure the
spreadsheet formulas are working properly. Finally, the assembly unit costs
(such as $/SF, $/CY, $/SFF, $/ton, and/or $/MH) at the bottom of the recap
sheets should be checked to determine if they are within a reasonable range
for the work to be performed.
At this point, the estimate should be ready for the final summary. All
totals on the recaps and summary recaps should be double underlined, and
those that have been transferred from a recap to a summary recap should be
circled and all pricing forwarded to the estimate summary page. The
estimator then submits the estimate to the project manager (PM) or chief
estimator for review. A properly prepared estimate file makes it easier to
spot errors or anomalies that may need to be corrected. The reviewer can
spot other items that the estimator may have overlooked or work procedures
that may not have been considered.

Completing the estimate summary

The bid summary template is used for summarizing the work and
calculating the total estimated cost. There are a variety of different layouts
for this document used by contractors, but they all include the basic
concepts we describe here. Our bid summary template is laid out in five
sections. Starting at the top, the first section is for entering the totals from
the general conditions estimate. The lines are already labeled to conform to
each of the four pages of the general conditions estimate. The second section
is for listing the amounts from the various self-performed work packages.
The line descriptions are blank, and the estimator enters appropriate
descriptions as numbers are ready to be transferred. Different projects may
have different descriptions, but standard Construction Specification Institute
categories or assemblies should be used whenever possible. The total bid
shown on the bottom line, once determined, is the one that will be tendered
to the project owner.
The estimator may fill in the bid summary in a variety of fashions. Some
will start the sheet at the beginning of the estimating process and fill it in as
various sections are completed, while others will wait until all self-
performed work, subcontractor OMs, and general conditions have been
estimated and fill it in all at once. Whatever system the estimator chooses,
consistency should be used for all estimates.
When transferring numbers from pricing recap or summary recap pages
to the bid summary, only the total man-hours, labor, and material amounts
are transferred. A summation formula in the far-right column will calculate
the total cost. This total is then checked against the total on the recap sheet
to make sure they both match. This serves as an additional guard against
transposition errors of numbers. The transferred numbers on the recap
sheets are circled, and the total is also circled when it has been verified that
the total of the transferred numbers is correct.
The third section of the bid summary serves to add necessary adjustments
to the direct labor. Labor burden is a cost that is in addition to the base wage
rate being earned by employees and was discussed in Chapters 10 and 18.
Contractors have different ways of determining labor burden, and it is the
estimator’s responsibility to know the basis of his or her company’s
calculations. A common way is to cost all labor within the estimate, both
direct and jobsite indirect, using unburdened rates, that is, those without
fringes and payroll taxes. Labor burden can range from 30% for merit shop
craftsmen to as high as 75% for certain union trades, such as ironworkers.
Some companies calculate a blended percentage markup to be used for all
work, which is based on an average crew mix used throughout the company.
This percentage is used for the jobsite administration labor as well as for the
trades, and the entire labor burden is considered a material item.
Understanding how labor burden is calculated is crucial for the estimator
in that it affects what wage rates are used throughout the entire estimate.
Our case study GC, City Construction Company, has chosen the method of
treating fringes and payroll taxes as a material item; they determined a
company-wide average that is 55% of direct labor and 35% of indirect labor
and extended these on the summary sheet. Their calculation of labor burden
is:

Labor burden on direct labor: $3,093,199 × 55% = $1,701,259

 Labor burden on indirect labor: $2,844,140 × 35% = $995,449

Other lines in the labor section apply to special situations. If a jobsite is at

a remote location, travel and subsistence costs may be incurred; then the
estimator would need to calculate these costs for any affected direct labor. If
the project is in another city where labor is readily available, there are no
additional costs. Wage rates for some labor categories may increase during
construction of the project, often after the first of June each year. The
estimator needs to determine the increase and add it on the appropriate line
if necessary. The project summary schedule should be reviewed to determine
how much of the work will be done prior to the increase and how much will
be done after award. Figure 19.2 shows the completed pre-bid day bid
summary with estimates forwarded for jobsite general conditions and direct
work. The labor burden on direct and indirect labor has also been calculated
and input, but no adjustments have been allowed for labor increases or
travel expenses because our case study project is not affected. A live blank
version of this estimate template is included on the book’s eResource.
 Figure 19.2 Pre-bid day summary estimate

Summary estimate
An important part of estimating is to compare the pre-bid day summary
estimate with the rough order of magnitude (ROM) estimate that was
developed when the project documents first arrived in the contractor’s
office. If there is a significant difference, the estimator needs to compare the
components of the ROM against like components of this summary estimate
to determine where differences exist. Totals that are within a reasonable
variance (±10%) validate that the ROM and detailed estimate match. When
creating a pre-bid day summary estimate, the estimator should prominently
mark the top of the summary as “Pre-bid”. This is extremely important so
that it does not get used for the final bid. Figure 19.2 shows a summary
estimate marked as a “Pre-bid” estimate.
The summary estimate is created from the information that has been
developed to this point. The self-performed work and the jobsite general
conditions already have been transferred from their corresponding estimate
pages, and labor burden calculations and adjustments have been made.
These parts of the estimate will remain the same on subsequent bid day
summary estimates. Competitive subcontractor and major supplier pricing
usually have not been received when the summary estimate was generated.
The estimator should use the total from the subcontractor list on the OM
plug estimates developed in Chapters 14–16 (see Figure 16.3). The total from
that list is transferred to the appropriate line in the fourth section of the
summary sheet, as shown in Figure 19.2. This completes all the self-
performed work, job site overhead, and subcontracts, and the estimate is
now ready for the pre-bid day markups.
Two other lines in this section are not used for this summary page but
may be required in the final bid. On bid day, a very low bid may be received
from a subcontractor with whom the general contractor has not worked. At
first, there may be a tendency to disregard this bid as being unrealistically
low, but it must be considered that the GC’s competitors have also received
this bid and may use it. The greatest risk to the contractor is that the bid was
made in error, and the subcontractor may either decline to do the work or
may suffer bankruptcy while work is in progress. The GC may decide to
require the subcontractor to furnish performance and payment bonds as one
potential means of financial protection. An anticipated cost of these bonds
would then be entered on the subcontractor bond line. The subcontracts
section is subtotaled and, as before, includes the subtotal of the previous
section.
Preparing the estimate for bid day
As the time for tendering the bid approaches, things can get hectic in the bid
room. This makes the process especially vulnerable to errors. Much can be
done ahead of time by setting up a universal bid summary template and
modifying it for the particular project being bid. In most instances,
modification will not be necessary, and the first run bid estimate can be used
to check all calculations.
All calculations on the summary sheet are straightforward, and the
formulas should be entered in the appropriate cells. All lines should sum
across to the total column, and columns should sum down. In addition, the
sum of the labor and material column totals should equal the sum of the
total column. A physical check mark or ‘OK’ is a responsible ‘checks and
balances’ effort from the estimator. Although the computer is an essential
estimating tool, checking these totals with another calculator is a
worthwhile estimating quality control check. The final preparation of the
estimate summary page, including anticipated costs for all direct work,
subcontractor plugs, general conditions, and markups, will lead into an
efficient bid day process discussed in Chapter 20.

Pre-bid day setup

Setting up the bid room
Most general contractors have a designated room that is used on bid day
specifically for processing subcontractor bids, determining the final price,
making last minute adjustments and forwarding information to a person
who will deliver the bid to the designated location. This is commonly called
the bid room. It should be organized so that it will be functional for the work
that needs to be done on bid day. The bulk of the setup is done the evening
before bid day.
First, the lead estimator will make sure that all proper documents are in
the bid room. This includes the complete set of drawings that were used to
create the estimate and the owner’s project manual, including the
specifications and all addenda. Many times, subcontractors or major
suppliers will call in with last minute questions, and someone on the bid
team must be able to provide answers immediately. A complete set of bid
documents in the room will reduce the time needed to research an answer
and respond. Also, some subcontractor bids may list exclusions, and the bid
team will need to review the documents to evaluate their impact.
A properly labeled bid package containing a signed original bid form and
all documents to be tendered should be prepared. The documents are put
into an envelope that is left unsealed. The bid form should be filled in
completely with all requested information except the final price(s). Failure to
do this can be a basis for disqualification. A copy of the signed bid form will
be filled in with the final price on bid day, then copies of all submitted
documents attached to it. This then becomes the contractor’s record copy of
the bid.
A very important item on the bid form is acknowledgement of all
addenda issued during the bidding process. It is the GC’s responsibility to
know how many addenda have been issued and to make sure all
information has been incorporated into the bid. On bid day, the bid takers
must verify that subcontractors and major suppliers have seen all addenda,
or if they have not, that they are willing to do the work for their bid prices
as submitted. Failure to acknowledge all addenda – or any other
inconsistency in the bid documents – may disqualify the contractor,
especially for public projects.
Other documents that need to be in the bid room are all the bids and bid
forms from the subcontractors that have been received prior to bid day.
Many subcontractors will submit a form to the GC listing conditions and
qualifications of their bid and leave blank the cost amount, which is
provided on bid day. The estimator must be familiar with each of these bid
forms to ensure that they conform to the bid documents. If they do not, a
choice must be made whether to disqualify subcontractors or suppliers or to
get them to bid according to the documents.
 A relatively large stack of bid proposal forms should be prepared for
recording the subcontractor telephone bids. See Figure 20.1 in the next
chapter; a live version is also included on the book’s eResource. Most of the
bid proposal forms will be given to the bid takers on bid day, and some will
remain in the bid room for early receipt of bids. It is a good idea to fill in the
title block of the bid form with the project name so the bid taker can easily
recognize which forms are to be used for your project.
Written instructions should be prepared for the bid takers. They should
indicate the number of addenda issued and emphasize the need to ensure the
subcontractor’s bid is correct and that it fully conforms to the drawings and
specifications. In some cases, alternate pricing or certain price breakdowns
will be asked for. These instructions should be brief but complete. Many
subcontractor bids may be received via electronic mail on bid day. These
bids must be managed like those received by telephone. One or more
computers may be needed to receive vendor bids by e-mail. The estimator
should assign the receipt of e-mail bids to certain bid takers.
It is common that the final bid summary is completed on a computer. Two
computers are recommended, so that if one crashes the other is ready to take
its place. The previously prepared summary estimate with all the general
conditions, self-performed work, and related information should be loaded
onto both computers. All markup percentages should also be entered.
Operations on both bid summaries should be thoroughly checked using
fictitious numbers. Most estimate summary forms began as Excel
spreadsheets. It is easy to move rows and columns, and occasionally
formulas get crossed. Once it is deemed that they are operating correctly, the
words “Final Bid” should be typed at the top.
Other computers may be used for subcontractor bid evaluation. The
proper forms should be loaded and their operations checked. All forms on
the computers should be properly titled. In addition to computers, one or
two adding machines, preferably with tapes, and a hand calculator should be
available in case they are needed for evaluation purposes. This old-school
system still has a place in construction. The work pace will become more
intense as the time for bid submission approaches, and the potential for
errors to occur increases. At some point, all access into and out of the room
should be limited, so the bid room must be supplied with everything needed
to complete the work.
Subcontractor bid evaluation spreadsheets should be made up for use in
the bid room. All OM subcontract estimates are entered onto the worksheet
and noted as a ‘plug’. This signifies that the number is a GC-generated OM
estimate that should only be used if no other bids are received in a
specification section. Subcontractor quotes received early may also be posted
to the spreadsheet at this time. The complete detailed estimate should be
readied for the bid room. There should be an OM estimate for every section
of the subcontractor or for major supply items on the spreadsheet. Some
subcontract prices may include work that is in the direct work estimate, and
the bid team must be able to evaluate quickly how to handle this situation.
The total from the first run summary estimate should be on hand for
comparing to the early runs of the final bid that will be done on bid day.

Bid forms
The owner’s bid proposal form received with the initial request for quotation
is at the heart of the bid tendering process. This is the first page that the
project owner sees upon reviewing the bids. In addition to the price, the
owner will look for completeness and professionalism by the bidder. Any
information that can be filled in ahead of time should be done. It is crucial
that the bid form be completed in its entirety and done neatly so that it is
easy to read. It is especially important that the final price be neat and
readable. Many project owners tend to customize their contracts, and their
bid forms may require a variety of information. A typical bid form may
contain any or all of the following:

Project name,
Spaces for the total bid amount,
Signature line,
Spaces to acknowledge addenda,
 Cost of a performance and payment bond add alternate,
Spaces for any desired breakdown costs of the bid,
Spaces for any desired alternate prices and/or unit prices,
Proposed change order markups by the GC and subcontractors,
Treatment of sales tax,
Time of completion or duration of the project, and others.

The signature page should have all of the information typed in ready for the
officer-in-charge (OIC) to sign. It is a good idea to have the OIC sign the bid
form the day before bid day. Sometimes he or she will be called out of the
office on an urgent matter and may not be available to sign the document
until after the bid runner has left for the tendering site.
Some project owners are very specific about the envelope in which the bid
is to be tendered. It may need to be a certain size and have a very specific
label. On occasion, an owner will include the envelope label with the bid
documents. All documents requested must be in the bid envelope. These
might include a project summary schedule, bid bond, and company financial
statement, and on occasion, a request will be made for value engineering
(Chapter 5) suggestions.
A bid bond is a type of bond that assures the owner that if the low bidder
withdraws a bid after bid opening, the cost difference between the low bid
and that of the next lowest bidder will be paid by the bonding company.
This difference is usually limited to 5% of the total bid amount. The bid bond
is often therefore known as the 5% bid bond. The bonding company usually
furnishes it at no cost. If the GC cannot furnish a bid bond, they may be
required to provide other bid security, such as a certified check or cashier’s
check, with the bid. It is important that either the bond certificate or check, if
required, be in the bid envelope at the beginning of bid day. Bid security is
required for most public projects but rarely required by private owners.
Some project owners, in lieu of a bid proposal form, include a contract
within the request for quotation that includes instructions for the general
contractor to fill in the price(s) and sign it. If it is accepted, the owner
executes the contract and returns a copy to the bidder. This style of bidding
usually limits further negotiation, and the contractor must ensure that the
bid is complete, contractual terms are acceptable, and the work can be
accomplished successfully and profitably. In some cases, private owners will
interview the contractor after the bid but prior to executing the contract to
make sure all work has been included and that they feel comfortable with
the relationship.

The bid day team

An important part of the bid day organization is the makeup of the bid day
team. Each person or position has specific responsibilities, and when the
team is well coordinated, even the most difficult bids are easier to complete.
Some positions require more than one person, and multiple positions may be
handled by the same person on smaller projects. The quantity of team
members that are needed will depend on the size and complexity of the
project. Personnel requirements and duties of each position are as follows:

Officer-in-charge: An executive officer of the company who is a

financial decision-maker. He or she will make the final review of the
estimate, oversee the bid day activities, and make any last-minute
adjustments to the final bid, including all markups and the fee
percentage.
Project manager: The person who will eventually manage the project if
it is won. The PM may or may not have been involved in the estimating
process. He or she reviews the estimate and the project with the
estimator and monitors the subcontractor bidding process. Specific
areas of focus include construction schedule, jobsite general conditions
estimate, and best-value subcontractor selections.
Chief estimator: The person who is ultimately responsible for the
quality of the company’s estimating procedures. He or she may or may
not take an active role on bid day but is always available for problem
solving and assessing special conditions.
 Estimator: The person who is responsible for preparing the estimate. He
or she reviews the estimate and project with the PM and the OIC and
manages the subcontractor bid receiving and evaluation process. The
estimator determines the low bidder for each subcontractor and
supplier category and establishes the cutoff point for posting bids. He
or she reviews the selection of low bidders with the chief estimator or
PM prior to final posting. The estimator may also be the project
manager who will be assigned to the project if the contractor is
successful.
Bid posters: One or more individuals who receive the subcontractor bid
information from the bid takers and post it on the bid evaluation work
sheets(s). These positions are usually accomplished by the
aforementioned team members.
Bid takers: Personnel who receive subcontractor or major supplier
telephone bids and record them on the bid proposal forms. They
immediately forward the information to the bid room. These are often
project engineers brought in from other jobsites to assist on bid day.
Bid runner: The person who will deliver the final bid. He or she will
take the bid documents in their envelope to the location for tendering
the bid, coordinate the bid room time with the owner’s clock, fill in the
final price, seal the bid and deliver it. If the owner specifies a public bid
opening, the bid runner usually stays and records the results.

Only critical personnel should be in the bid room as the pace of the work
becomes more intense. As the time for bid submission approaches,
subcontractor bids will be received at an increasing pace, and the last few
minutes can be extremely hectic. The personnel within the bid room need to
be able to work without distraction. At a certain point, the door to the bid
room is closed, and all others, such as the bid takers and clerical personnel,
should not be allowed in. Bids should be received through a slot in a door or
window. This procedure allows the estimator, project manager, and OIC to
maintain control and avoid making a catastrophic last-minute error.
Subcontractor bid evaluation procedures
The primary work of bid day is receiving and evaluating bids from
subcontractors and major suppliers. Bids are posted as they are received, and
the volume dictates the need for good procedures so the lowest bids and
combinations can be determined quickly. As the bid time approaches, the
frequency of bids increases, and fast decisions must be made. Certain bid
posting formats aid in carrying out the evaluation process so that the best
bids can be determined during this period. Two methods have proven
reliable for accomplishing this. One method is to use spreadsheets for
positing and evaluating bids. The second method is to use an individual bid
analysis sheet also known as a bid tab for each work item or specification.

Figure 19.3 Subcontractor pre-bid day posting sheet

 Spreadsheets are usually used for manual operations where personnel are
posting bids by hand. The spreadsheet is made using one or more large
accounting sheets. Boxes that represent each work specification section are
laid out on the sheet and are sized to include the pertinent information
expected to be received. The boxes are also known as bins. Figure 19.3 is a
partial spreadsheet prepared pre-bid day by City Construction Company
ready for posting and evaluating bids for the case study project. Two
optional formats are presented in Chapter 20.
The boxes laid out on the spreadsheet may not be of equal size, because
the amount of information will vary depending on the specification section.
Also, more bids will be received for some work sections than for others. For
example, more bids can be expected for the drywall than for skylights, and
drywall contractors are more likely to submit combination bids or to bid on
more than one specification section. Thus, more columns will be needed in
the drywall box than for the skylights. Each box is titled with the
specification section number and work description. A sequential bin number
is written into the top left corner. Boxes are sized to show the name of the
bidders, their price(s), and any short pertinent notes. No other information is
necessary on the spreadsheet. It is preferable for the boxes to be laid out in
the general order of the specifications, starting from the upper left corner of
the sheet, with each succeeding work section below the last one to the
bottom of the page. This is the arrangement shown in partial Figure 19.3. It
becomes easier to find particular work sections this way than if they were
placed randomly. Modest-size projects will require only one spreadsheet,
while more complex ones may need two or three. When multiple
spreadsheets are required, it is a good idea to have a separate bid poster for
each one.
The advantage of the spreadsheet is that it is easy to review many
subcontract categories at same time. The team can also diagnose key bins
that contain combination bids. Empty space or an extra spreadsheet should
be available for quickly calculating the best bid combination. Typical
combination bids on commercial projects include site work (excavation,
utilities, pavement), finishes (drywall, paint, insulation, ceiling tile), and
mechanical (HVAC, plumbing, fire protection). The bid evaluation
spreadsheet is set up the day before bid day. Once prepared, all OM
estimates are entered into their respective boxes, and the vendor name plug
is used. This tells the bid team that if no bids are received in a particular
category, then the OM number may be used so a bid total can be calculated.
Utilizing in-house GC plugs on bid day is also a risk factor for the
contractor. Any subcontractor bids that were received early are also entered
into their respective boxes.
Some bid teams prefer to use an individual sheet for each work section
rather than one large spreadsheet, and they are worked similarly. Individual
bid evaluation sheets can be worked manually or electronically. Evaluation
sheets for each specification section are made up and titled with the section
number and description, and a bin number assigned to them as well. As on
the spreadsheet, OM numbers are entered as plugs, and any pre-received
bids are also written in. The sheets are then put into the bid room ready for
bid day. The estimator needs to decide which method to use and define the
procedures accordingly. It must also be decided how many bid posters are
needed and how many sheets each one can manage. It is important that
these sheets are readily available for review by the estimator and others,
who will constantly be monitoring the process, and safeguards are in place
so that they will not be misplaced. The evaluation sheets must not be
removed from the bid room during bid day.
Bins also correspond to physical places where all posted subcontractor
and supplier bid forms are kept during bid day. They may be anything from
accordion files to built-in cubbyholes. They are numbered sequentially and
correspond to the bin numbers on the spreadsheets. As the bids are posted
and reviewed by the estimator, they are then put into the bins, where they
can be quickly accessed during the bidding process. When reviewing the bid
evaluation sheets, the estimator may need more information, especially
regarding combination bids or exclusions. He or she can pull the bid forms
from the bins, find the ones for specific vendors, and review their proposals
quickly. This system helps the bid team to make informed decisions very
fast. It is important that the estimator sets these systems and procedures in
place the day before bid day.

Summary
An estimate is near completion when a final check has been made of the
work and cost figures have been entered onto the estimate summary sheet in
preparation for bid day. A thorough document review is performed to
ensure that all components of self-performed work have been properly
quantified and priced. Estimate pages are scanned to make sure all usable
totals are double underlined, signifying that they have been checked, and all
of these totals are circled, indicating that they have been transferred to the
next summary level.
A key point in this process is validating the results. This is done by
making a first run summary estimate and comparing the results against the
ROM estimate developed at the beginning of the process. The pre-bid day
summary is prepared prior to the receipt of market subcontractor bids and
utilizes the total of the OM plug estimates developed in Chapter 16.
Anticipated markup percentages are entered, which results in the total
estimate. This summary is validated if it compares within a reasonable range
to the ROM estimate. It is very important that the summary estimate be
prominently marked as “Pre-bid” and that it is not confused with subsequent
totals before the final summary page is produced in the bid room on bid day.
During the development of the summary estimate, all calculations on the
summary sheet are checked for proper ranges and operations. Cells
containing formulas are then locked to avoid inadvertent entry of other
numbers on bid day. A final summary sheet containing above-the-line totals
for general conditions, direct work, and labor burden is then made up in
preparation for use on bid day. The subcontractor OMs and markup
extensions will not be carried forward on the final bid day estimate
summary sheet in preparation for bid day activities.
 A key to tendering a complete and accurate bid is organizing the bid day
process. Much of this work is done on the evening before bid day. The
estimator is responsible for ensuring that the proper documents are in the
bid room, the computers are set up and spreadsheets are operating properly,
and other materials are ready for use. Spreadsheets for the subcontract bid
evaluation and the bid proposal forms are prepared and sufficient copies
made for bid day. Instructions for the bid takers and the bid runner are
written, and personnel are recruited for both jobs. The bid package is made
up and readied for delivery by the bid runner. The original bid form is
signed by the OIC, and copies are made for the bid package and for use in
the bid room. A properly labeled envelope is prepared, and all documents to
be submitted are readied, with the bid form original on top. The estimator
verifies that all personnel needed to complete and tender the bid will be
available on bid day. In addition, office personnel are alerted so they know
how to route telephone calls and keep visitors away from the bid room. A
well-organized bid day process will keep last-minute stress to a minimum
and ensure that a complete and accurate bid is tendered. In our next chapter,
we discuss the exciting bid day process, including error-prevention
techniques.

Review questions
1 The estimate summary form is organized into five general sections.
What does each section represent?
2 How are the general conditions and direct work subtotals checked?
3 What percentage range is used as a guide when comparing the total of
the general conditions estimate against the total bid amount?
4 What is labor burden?
5 When would an amount be entered for a subcontractor bond?
6 What is a pre-bid day estimate, and how is it used?
7 What is the function of the pre-bid day estimate on bid day?
 8 List five documents that should be put into the bid room in preparation
for bid day.
9 What types of documents typically go into the bid package to be
delivered to the owner?

Exercises
1 Determine the percentages of the pre-bid day total that are attributable
to the direct work versus that from subcontractors from our case study.
Use the direct work after the addition of the labor burden. How might
these percentages be useful as a guide on similar estimates?
2 It is customary for the OIC to take the pre-bid day estimate home the
evening before bid day. What type of information would he or she be
checking for? What other documents related to the estimate might they
also be interested in reviewing?
3 How might a GC be ‘sure’ they will receive subcontractor bids on bid
day?
4 Prepare a wage check from the Vehicle project’s summary estimate. Is it
within a reasonable range? What labor craft does it most closely
match?
20 Bid day process

Introduction
After the first run summary estimate has been prepared, the remaining work
toward tendering a bid to the project owner is represented by steps 9 and 10
of the lump sum estimating process shown in Figure 1.1. Step 9 is receipt,
evaluation, and totaling of the competitive quotations or bids from
subcontractors and major suppliers. Step 10 is entering the subcontractor
total onto the bid summary, making any necessary adjustments to markups,
and then completing and tendering the bid form. All this work is done on
bid day. Bid day can be chaotic, especially as the time for bid submission
approaches. A well-organized bid room will retain order and reduce a
tendency to panic in the last few minutes. Setting up the bid room a day
ahead of time helps to impart order to the process such that everyone
involved can perform his or her assigned duties efficiently, as was discussed
in the last chapter.
Most project owners prescribe a specific bid tendering process. Many
contracts have been lost because the general contractor (GC) did not
explicitly follow procedures. This may be anything from submitting the bid
late to improperly filling out the proposal form or not supplying other
requested documents with the bid. Some owners even define the envelope
and label for submitting the bid.
Requests for quotation may require submission of other information after
the initial bid has been tendered. Frequently, the owner will ask for a list of
major subcontractors and the value of their work, either with the bid or
within a short time after the initial bid was tendered. Public owners may
require a two-envelope bid in which the GC submits first a statement of
compliance with minority subcontracting requirements and, if acceptable,
can then submit a bid price. The important thing is that regardless of what
an owner’s requirements are, a well-organized process on bid day will
ensure that they are met.
Preceding bid day, all the direct work estimating (Chapters 6–13) is
required to have been completed. Order of magnitude estimates have been
created for subcontract work (Chapters 14–16), and a project summary
schedule and general conditions estimate are also prepared (Chapter 17). The
first run summary estimate has been completed with anticipated markups
and reconciled with the rough order of magnitude estimate, which was
developed in Chapter 2. The estimator has prepared the bid room and
assembled the owner’s bid package with all required documentation and a
signed copy of the bid form. The bid room is ready to receive and evaluate
subcontractor bids, fill in the subcontractor bid totals on the bid summary,
and complete and deliver the owner’s bid form to the tendering site. All of
this was reflected in Figure 19.1.
Bid day activities occur in three places. The bid takers, who are people
throughout the contractor’s office, will be receiving and recording
subcontractor and supplier telephone prices on bid proposal forms. The bid
room team posts the bids on the evaluation sheets, determines the low
prices, completes the bid summary, and forwards the total(s) to the bid
runner. The bid runner, who is located near the tendering site, receives the
final numbers from the bid room and completes the bid form. He or she then
delivers the bid package to the project owner’s specified location and learns
the results, if it is a public bid opening.
The bid team leader, either the estimator or the project manager (PM),
must control the tempo of bid day. As the tendering deadline approaches,
the atmosphere becomes stressful, and emotions can destroy the entire
process and jeopardize the final bid. A smooth bid day operation minimizes
emotional effects and results in the best possible bid being tendered on time.
At the beginning of bid day, the team captain should make sure that the
organization is in place and that all team members understand their duties.
Doing this will help make the work of tendering the bid go smoothly and
provide the bid team some time for final strategizing. The team leader
should verify that the officer-in-charge (OIC) will be present in the bid room
during the hour prior to the time the bid must be submitted.
A few things remain to be done after the bid has been tendered, regardless
of whether the contract was won. These are issues involving the bid
opening, vendor queries, preparations for post-bid interviews, and record
keeping. In addition, whether or not the bid was won, an effort should be
made to glean information from the estimate that will be useful in preparing
future estimates. Another important issue is post-bid negotiations with
private owners. Understanding the project owner’s position helps the
contractor develop a plan for the post-bid interview. There are many ethical
estimating issues raised before, during, and after the bid process. These
topics are the focus of our next chapter.

Subcontractor and supplier bids

As the bidding deadline approaches, some subcontractors and suppliers will
quickly give their prices and minimal information so they can proceed with
calling other bidding general contractors. The information can be too
incomplete for a comprehensive evaluation. When this happens, someone in
the bid room may be required to call the subcontractor or supplier back and
get the remaining information – a time-consuming and sometimes difficult
task. If the bid room activity level is high, there may not be time to do this,
and a quick decision must be made whether to use the subcontractor or
supplier’s bid.
When receiving a call, the bid taker should initially indicate that he or she
will ask the questions, thus pacing the call. The bid taker must be aware that
subcontractors and suppliers have other calls to make and are motivated to
get off the call quickly. Most subcontractors and suppliers know what
information GCs need and will provide it. Conversely, some subcontractors
may want to be over-detailed, which takes too much of the bid taker’s time
and restrains him or her from receiving other bids.
Subcontractors and suppliers may elect to submit their bids either by
mail, e-mail, or hand-delivered hard copy. When using mail, a bid form or
scope letter is received that lists the terms and conditions of the bid,
including exclusions and inclusions, and has blanks for pricing. The
estimator should review the form to ensure that it conforms to the bidding
requirements and to the GC’s subcontracting procedures. If there are
discrepancies, the estimator or PM must attempt to resolve them before bid
day. If a subcontractor is firm on his or her conditions, a decision must be
made as to whether to use that particular bid. The subcontractor or supplier
then calls in prices on bid day, and the bid taker either enters the price on a
copy of the submitted form or fills in a regular bid proposal form and
attaches it to the subcontractor or supplier’s form.
Subcontractor and supplier bids are recorded on bid proposal forms like
the one shown in Figure 20.1. The bid team leader must stress the
importance of filling out the form completely and correctly. The following
describes the individual items on the bid proposal form and their
importance:
Figure 20.1 Subcontractor phone bid form

Firm: The name of the subcontractor or supplier should be filled in

completely. Sometimes there are different companies with similar
names, and filling in a partial name may not define adequately which
company submitted the bid.
Job: Identifies the project for which the bid was received. This is
especially important on days when more than one job is being bid by a
GC.
Vendor’s telephone number and quoted by: This provides a contact if
the bid team has any questions.
Bid item/inclusions: It is very important to list all of the specification
sections and inclusions. This will also be a factor in writing the
subcontract or purchase order. The bid taker should also repeat the
price(s) back to the bidder to verify that it has been recorded correctly.
Addenda numbers: This verifies that the specialty contractor has
submitted a complete bid. If this is not done, it provides the vendor
 with an opportunity for negotiating for more money if he or she is the
low bidder.
Per plans and specifications: A “yes” answer by vendors along with
verification of all addenda reduces their opportunity to try to raise their
price when executing a contract. So long as the vendors have had the
opportunity to review the project owner’s bid package, they are
responsible for all items of work affecting them.
Exclusions and clarifications: These should be brief, and while many
items may be obvious, they should always be written down.
Alternate or unit prices: Not all bidders will be required to submit
alternates or unit prices complying with the GC’s bid to the project
owner, but these are helpful for buyout if successful.
Received by: The bid taker on the GC’s team who received the bid.

All construction materials should be quoted free on board or freight on

board (FOB) jobsite, which means that the cost includes the shipping. If the
general contractor is requested to purchase owner’s equipment as part of the
project, the suppliers of the equipment rarely include shipping. The GC
should accept prices only with a freight allowance added; otherwise,
separate shipping bids will have to be solicited, which sometimes can be
difficult to obtain.
After receipt of the call and completion of the form, the bid taker
forwards subcontractor and supplier bids to the bid room. Early on bid day
when the activity level is low, bid takers can deliver the bid proposal forms
when convenient. As the deadline approaches, the frequency of calls may
make it more difficult to send the bids to the bid room. It is always
important for the bid takers to be available full time to receive bids during
the last two hours before the deadline, as this is when the activity is most
intense. The bid team leader should monitor the bidding activity and, as it
gets more intense, should designate a separate person to pick up bid proposal
forms from the bid takers. This allows the bid takers to receive bids
uninterrupted and ensures that all prices are delivered to the bid room
expeditiously.
Posting subcontractor and supplier bids
The bid posters receive the bids in the bid room from the bid takers and post
the relevant information on the bid evaluation sheet. Notes should be just a
few words such as “excludes doors” or “includes section 099000”. More detail
tends to clutter the evaluation spreadsheets. If the bid team needs more
information, the bid forms are in the bins, available for review. Figure 20.2
shows three bids received for masonry specification section 042200 that
appear close to each other. Single bid tab number 4, or bin 4, was utilized in
this case, as the GC did not anticipate any other complicated bids with this
scope. Although Adobe had the low initial quotation, their bid was
incomplete, and City Construction Company went with S&J Masonry on bid
day. They specialize in landscape pavers, which is a much larger scope, and
were successful in that area in this case. Adobe’s bid will not be discarded
but may be used later for buyout opportunities.
Some subcontractors or suppliers may submit pricing for more than one
specification section of work. Their price may be a single amount that
includes several sections or may list the individual sections and a cost for
each. A typical example might be wall insulation, drywall, and acoustical
ceilings. Some bidders will supply an individual price for only one of these
sections, while a drywall contractor may include two or three all in a single
bid. The team must determine whether the combination bid is lower than
the sum of other individual bids. These can be easily seen, evaluated, and
noted on the bid evaluation spreadsheet. Figure 20.3 illustrates how a
combination bid may look. Other scopes that may be bid separately or in
combination would be several areas of site work or mechanical combined
with plumbing and fire protection.
 Figure 20.2 Individual subcontractor and supplier bid evaluation sheet

There are some cases where three or more specification sections are
involved. Some subcontractors or suppliers will bid on a single section,
while others may bid on two or more of them. Prices may be individual or
combined. When this occurs, the estimator usually evaluates them by
making separate boxes on the spreadsheet of the various combinations and
listing the prices in them. Estimators ‘know’ what scopes may be bid as
combinations from experience or from talking with potential bidders prior to
bid day. Figure 20.3 shows how combination bids are entered onto the
individual bid evaluation sheet. In this case, Dunham Drywall bid a
combination package that was slightly less than if the GC had utilized the
low bidder in each of these four categories. This detailed analysis facilitates
the bid day process, but if the GC becomes low bidder, there are many
different opportunities for further analysis, which may result in a lower and
more complete combination. Bid shopping, as discussed in the next chapter,
is unethical and may be illegal in the case of publicly financed construction
projects. But buyout, or buying-smart, is not unethical, especially in the
private construction industry.
If multiple computers are being used for bid evaluation, the bid captain
should consider putting the mechanical bids on one and the electrical bids
on another. Typically, during the last minutes before the deadline, many
electrical and mechanical bids are received. With a few minutes to go, the
bid captain may decide to select all other bids except the mechanical and
electrical and have someone monitor the other incoming bids in case a
significantly lower one is received. The bid team will then concentrate on
evaluating the mechanical and electrical bids. These divisions can contain
several combinations, and if subcontractors are lowering prices and
providing alternate pricing in the last few minutes before the bid is due, the
team needs to be able to make quick informed decisions.

Figure 20.3 Combination subcontractor bid day spreadsheet

Whichever bid evaluation method is used, the posting of bids is essentially

the same. A designated team member receives bid proposals from a bid taker
and posts the subcontractor’s name, price, and any pertinent notes on the
spreadsheet. Notes are kept to an absolute minimum and must be brief so as
not to clutter the evaluation process. Once posted, the bid poster writes the
designated bin number in the box at the lower right-hand corner of the bid
proposal form and puts it into the appropriate file. The use of bins makes it
easy for a team member to find and review all the bids of any specification
section during the bidding process. Bins may also commonly be referred to
as bid tabs. They are a tabulation of vendor bids for a given work category.
Bid tabs are used by the project team after a project is won to reevaluate the
bids for other combinations or situations which may result in an even lower
price. This is part of buyout and will be discussed in Chapter 24.
It is important for the bid team to be aware of the pace of a typical bid
day. The case study has a bid time of 2:00 p.m. Subcontractor and supplier
bid activity will be relatively slow until midmorning. This time is used to
post previously received bids and make sure the organizational work is
complete. From midmorning to about noon, the frequency of bidding will
increase but will still be at a manageable level, and a single bid poster can
probably handle the work. The entire bid team, including the bid takers,
typically works through lunch. From noon until about 1:30 p.m., the bid
frequency will increase, and more bid posters may be necessary. Bids during
this time typically will be from subcontractors and suppliers of all
specification divisions, but usually there will still be only a few for the
mechanical and electrical work. The bidding level will become very intense
during the last half-hour, when most of the bids for mechanical and
electrical are received.

Evaluating subcontractor and supplier bids

The bid team must be prepared to determine quickly which the best prices
are and when to decide on a posting cutoff point on bid day. For most of the
bidding, the subcontractors and suppliers submit prices for single categories
of work, and determining the low price is straightforward. Besides
combination bids, previously discussed, the bid team needs to be aware of
the specific inclusions and exclusions of each bidder. While most of them bid
in accordance with the plans and specifications and note all addenda, some
will exclude pertinent items that may result in them incorrectly but
apparently having the low bid. The bid team must identify these situations
and decide whether to call the vendor and get them to include the item or to
disqualify their bid. This then becomes an ethical issue, which we will
discuss in the next chapter.
Special care must be exercised if a subcontractor bids the work that the
general contractor typically performs. While both prices reflect the same
scope of work, there are differences in how each treats variations. For
example, a general contractor’s cost for concrete reinforcing steel
installation has some flexibility in it, and any minor discrepancies that are
encountered are just part of the job. Usually the cost to correct them can be
absorbed with minimal impact to productivity. A subcontractor, on the other
hand, bids the job as shown, and any discrepancy will be an extra cost. If the
delivery of any direct installed material is interrupted, the general contractor
can usually shift manpower to another task or even another project
temporarily. The subcontractor cannot do this and will charge extra for
every interruption. The estimator should discuss the inclusions and
exclusions with each subcontractor.
It is important for the bid team to keep on top of subcontractor and
supplier bid evaluations so that the final minutes of the process remain
under control. At about one hour before the bid is due, the team captain
should determine the state of bid coverage and proceed with calculating an
early bid total. The low bid in each bin is transferred to the bid day
subcontractor list. General contractor-prepared plug numbers will be placed
on the subcontractor list only for those sections for which no bids have been
received. The subcontractor list is totaled and checked, and this amount is
then transferred to the bid summary. Both pages are prominently marked
“First Run Bid”. This designation differs from the pre-bid day summary
estimate discussed earlier. Each successive total is more accurate than the
last. Just as the pre-bid day summary was more accurate than the rough
order of magnitude early budget, this first run bid is more accurate than the
previous day’s preliminary total using all in-house plug values.
The earlier the first run bid total is generated, the more likely GC plug
numbers will continue to be used. As each succeeding total is made, most of
the plug numbers will be replaced by market-driven bids. The final bid run
ideally should have no plug numbers in the subcontractor list, or if it does,
they are for small work categories with low risk.
The first run bid is used as a baseline on bid day. First, it is compared with
the previous day’s summary estimate total to see if the two are reasonably
close. If they are not, the bid team must quickly search for a transposition
error. As the day progresses, the bid captain may make several more bid
totals, numbering each one successively. They will then be compared with
the previous total to see that they are still reasonably close and there are not
any significant swings. Each progressive total should be printed so that key
members of the bid team can review it for potential errors. As time
progresses, there is less opportunity to analyze differences between in-house
subcontractor plugs and market quotes. Further analysis can be done after
the bid has been tendered.
At a predetermined time, usually about 15 minutes before the deadline,
the bid captain declares a cutoff for receiving bids for most specification
sections. Low bids in each bin are double underlined and entered onto the
subcontractor list. A bid team member receiving bids for closed sections
compares them to the selected low bid. Only significantly lower bids are
now called to the attention of the bid captain. If a bid is received for a work
section that has been closed which is lower than the one already declared,
an adjustment is made on the ‘cut and add’ column of the subcontractor list.
The bid poster determines the difference between the bid used and the new
bid received. This amount is entered into the cut and add (+ or –) column on
the proper line of the subcontractor list, and a revised total is calculated.
Figure 20.4 shows the bid day subcontractor list for our case study project
and illustrates how the cut/add column is used.
 Figure 20.4 Final subcontractor bid day list

After reviewing the subcontract bids for the case study, the bid captain
and the OIC have noticed two very low prices from subcontractors with
whom the company has no prior experience. A quick discussion ensues
about the validity of these bids and the risk of lack of performance, and the
bid captain and the OIC decide to add an amount to bond these
subcontractors. This provides some financial protection in case one or both
default in the performance of their work. The gravity of this decision may
cause the GC to not be the low bidder, but the bid captain and the OIC have
decided to take that chance and added $9,000 to cover the cost of the bonds.
This is entered in the subcontractor section of the bid summary.
During the last few minutes of subcontractor bidding, the frequency of
mechanical and electrical bids typically increases. As bids are submitted, the
subcontractors may ask how their prices look. Bid takers must be instructed
not to answer these questions, as they may not be in the best interests of the
GC. This is also a bid day ethical issue. A bid poster is assigned to each of
the remaining open bins, and the bid captain monitors them closely. A few
minutes before the bid must be forwarded to the bid runner, the remaining
categories are closed out, the prices are entered in the subcontractor list, and
a bid total is determined. The OIC then makes a decision regarding any
adjustments including the final fee markup, and the final bid total is
calculated. The bid captain forwards the total to the bid runner, and a final
run is printed. The final bid summary for our case study project is shown in
Figure 20.5.
Subcontractor bids may continue to be received after the bid room team
has made their cutoff. Some bids will even be received after the owner’s bid
time. These can be valuable during buyout, and the bid takers should
continue their diligent process of documenting their receipt. The bid captain
will eventually post these to the spreadsheets and file the bids in their
respective bins. The potential use of these late subcontractor bids will be
discussed in the next chapter.

Delivery of the bid

About an hour before the time for bid submission, the bid captain gives final
instructions to the bid runner. The project owner’s bid form is reviewed so
that the bid runner knows exactly what is to be filled in. Directions to the
bid submission site are given, clocks are checked to ensure that the bid
runner has the correct time, and communication procedures are established.
The bid runner uses a cellular telephone or portable computer for receiving
the final information that is to be entered onto the bid form.
The bid runner is sent to the bid submission site well in advance of the
time when the bid must be submitted. An allowance for unusual traffic
conditions should be made to ensure that the runner arrives on time. Once
the runner arrives at the bid submission site, he or she should contact the
bid captain and inform the bid room of the time required to submit the bid.
The bid captain should then instruct the bid runner to call back at a
designated time to receive the final bid price.
The final bid amount is to be read to the bid runner by the bid captain and
written onto the original and all copies of the bid form. The number should
be read back to the captain for verification. The bid package will then be
placed into the prepared envelope, sealed, and delivered to the project owner
at the designated bid submission site. The bid runner also will note the exact
time the bid was turned in; often bids are time-stamped by the recipient. If
the bids are to be opened publicly, the bid runner usually remains at the bid
site and records the bids that are received. The results are then reported back
to the bid captain.
 Figure 20.5 Final bid day summary estimate

After the bid has been submitted, all of the bid room documents,
including spreadsheets, interim bid totals, subcontractor bids, and other
documentation is neatly gathered and organized. This completes the lump
sum bidding process.

Validity of verbal prices

Verbal bids taken by telephone should constitute commitments by the
bidders. The fact that these bids were in response to a request for quotation
makes them a price for which the subcontractor should be willing to sign a
contract. If a subcontractor backs out after a bid has been tendered, the GC
who won the project is still required to perform the work for the bid price.
Either the low subcontractor must do the work for the price they bid, or the
GC will have to find another subcontractor who will. That may be difficult
to do.
It is rare that a subcontractor backs out of a bid commitment. There are
cases where a major error might have been made resulting in the bidder
submitting an unusually low price. On bid day the bid team may choose to
contact the subcontractor and ask for verification of his or her bid and
review all inclusions and exclusions. This is also an ethical issue. The
subcontractor might be told that the price looks to be out of line without
indicating which way or by how much. Whether to use the low price and
hope it is not in error or to query the subcontractor is a decision that must
be made. If a subcontractor has made an error, a corrected price may be
provided, and the bid team can hope that all other general contractors also
have been notified. There is no guarantee the subcontractor will do this or
the other GCs will acknowledge the change. A low-bidding subcontractor
may also attempt to later raise its bid, qualify its bid, or pull its bid after a
competing or unsuccessful GC has informed them how low they were. All
these potential scenarios raise ethical questions.

Bid opening
The opening of the bid by a project owner may be done in one of two ways.
If it is opened in the presence of the bidders and the results announced
immediately, it is a public bid opening. A private bid opening is when the
owner elects to open the bids without the bidders being present. Private bids
are opened at the owner’s convenience and may be done on bid day or later.
Owners frequently state in the bid documents when they intend to enter
into a contract regardless of whether or not the bid results are announced.
Public projects, such as highways or government buildings, usually are
required by law to have a public bid opening. The timing of the opening is
specified in the bid documents. It is also a requirement that the contract be
awarded to the lowest responsive, responsible bidder. Responsive means that
the bid conforms to ALL requirements specified in the invitation for bid, and
responsible means that the construction company is qualified to construct
the project. This may appear to be a subjective judgment and may result in a
bid protest. Bid results are published in either a government document or a
recognized trade journal.
Private owners have the option of selecting a public or private bid
opening and usually will indicate which is to be used in the bid solicitation
documents. They decide the timing of the opening and whether to make the
results available to all bidders. In some cases, it is stated in the bid
documents that the owner retains the right not to award to the lowest
bidder. In some cases, the owner might reject all bids because they exceed
the project budget. A new round of bids may be requested after some design
modifications or the owner may select one of the bidders and contract for
help in developing construction alternatives to try to reduce costs, similar to
value engineering discussed in Chapter 5.

Post-bid day
If the general contractor is not the low bidder, an analysis should be
performed to determine why the bid was too high. When doing this, it is
assumed that everyone had essentially the same total for the subcontractor
and supplier bids. It is risky for a subcontractor to provide a preferred quote
to one GC; other contractors will find out. The self-performed work should
be analyzed to see if the most efficient construction methods were planned.
The fee should be examined in relationship to the difference between the
GC’s bid and that of the successful bidder. Many times, this will be the
deciding factor. It may be that another contractor wanted to establish a
relationship with this owner and used a lower fee. Another contractor may
have determined that the project has a high potential for change orders and
decided to bid a low fee, with the intent of making money on them. Or the
low bidder may have made an error. Contractors often feel their own price
was the correct one and any lower bids were in error. Whatever the reason,
this is a chance for the estimator and PM to get a feel of the bidding methods
of the competition (market conditions) so that appropriate adjustments can
be made on the next bid effort.
Many private owners conduct a post-bid contractor interview. The two or
three lowest bidders are asked to review the project with the owner and the
architect. The intent is to make sure that they have included all the work
that is required by the contract documents. The project owner also may
want to determine the contractor with whom he or she feels most
comfortable.
If the general contractor was second bidder or even a close third, the
estimate should be retained until the owner executes a contract with the low
bidder. On occasion, conditions may change such that the low bid is rejected,
or the parties cannot agree to contract terms. The bid documents should be
researched to see if there is a specified period that the bid is to remain valid.
The estimate should be kept at least for this time-period, and if the
contractor was second bidder, consideration might be given to keeping the
files until the project is built. If the low bidder should default, the owner
may want to hire the second bidder to finish it. Having the estimate
available will save estimating time. Once it is deemed that a bid estimate is
no longer needed, the estimator should review it for possible historical or
reference use and input it into the company’s database.

Summary
Bid day is the day the final bid is completed and submitted. Early in the day,
the bidding activity usually is relatively quiet. As the day progresses, the
activity generally increases and can be very intense just before the final bid
is submitted. The bid captain must have procedures in place for controlling
traffic into the bid room and making sure that each team member
understands his or her duties. It is important for bid takers to understand
what information is needed and to make sure that proposal forms reach the
bid room in a timely manner. Bid posters are assigned to process bids for a
group of specification sections. Clear and concise instructions are given to
the bid runner, who will deliver the bid to the location designated by the bid
instructions and remain at the site to retrieve results if it is to be a public
opening.
As the bid time approaches, the bid captain determines when a first run
bid total is to be made. Low subcontractor bids at the time are used on the
subcontractor list, and those items for which no bids have been received
retain GC plug numbers. The total is compared against the prior day’s
summary estimate total that was made using subcontractor order of
magnitude plug estimates. The bid captain determines how many
preliminary bid totals will be made and when they will be done. As the bid
time approaches, the final numbers are reviewed with the OIC, who decides
if any adjustment should be made to the bid. Once this is determined, the
bid summary total is forwarded to the bid runner, who completes the bid
form, seals the envelope, and delivers it to the owner.
There is some wrap-up work to do after the bid. Prices not posted should
be reviewed and filed. Bid proposals are removed from the bins and filed in
order by their specification sections with the bid evaluation sheets on top.
The final bid summary and electronic files are backed up. This completes the
bidding process.
Certain work needs to be completed after the bid has been tendered to the
owner. Subcontractor queries must be handled with care, so that the
contractor, if awarded the contract, is not put into a disadvantageous
position. Upon notification of a post-bid interview, the contractor must
consider the owner’s methods of doing business and develop an interview
plan accordingly. Lastly, whether or not the contract was won, the estimate
should be gleaned for its use in future estimates. As in the actual bidding
process, ethics remains an issue after the bid is submitted.
Record keeping also must be considered. Most bids have a time period for
which bids are to remain valid. The estimate should be kept for at least this
time period, and if the bid team believes that there is a situation where the
low bidder may be rejected or other negotiations will ensue, then the records
should be kept until it comes to conclusion. If the project is like other work
that the company does on a regular basis, the records may be kept for future
reference. Additional pre-bid, bid day, and post-bid day ethical issues are
evaluated in the next chapter.

Review questions
 1 Name three positions that are required on the bid team.
 2 What is the responsibility of the officer-in-charge?
 3 List three activities which need to be done for bid day to run smoothly.
 4 On a bid day that is expected to be moderately busy, how should the
estimator anticipate the activity level to change from the start of the
day until time to tender the bid?
 5 Who records bids coming in from the subcontractors and suppliers, and
on what form?
 6 What are the consequences of the bid form not being filled in
completely?
 7 What are combination bids, and how are they evaluated?
 8 Who evaluates the bids and determines which ones will be used in the
final bid?
 9 When should a preliminary bid day total be made, and why?
10 What are two common methods for the owner of a project to open
bids?
11 Is the owner of a private project required to award to the low bidder?
Why might they choose not to?
12 Can the owner of a private project conduct a public bid opening? Why
would they choose to do that?
13 How long should the bid files be kept for an unsuccessful bid?

Exercises
 1 Have you participated in bid day at your place of employment? What
was your role? Was your firm successful? Would you like to one day be
bid captain?
 2 Other than rebar installation, what are some work packages a GC may
typically self-perform but choose to hire a subcontractor for if their
proposal is complete and more competitive?
 3 Is it ethical to use subcontractor bids received after bid time?
 4 Assume there are ten minutes left before a bid is due and you are the
lead estimator. The OIC is gathering information on whether to make a
last-minute adjustment and has come to you for input. What factors do
you believe you need to address in your response? List each one and
state why it should be considered. With only ten minutes available,
your answers need to be quick, clear, and concise. Each answer should
be no more than two sentences long.
 5 Congratulations, you were the lower bidder, but five minutes after the
owner’s bidding deadline, a key subcontractor whose price was used in
your bid claims error and withdraws its bid. This is a $200,000 impact
that will move you out of first place. As the estimator, what do you do
now? Write a paragraph on considerations and a recommended course
of action to take.
 6 What are some of the issues you would consider when preparing for a
post-bid interview with the owner?
 7 Other than drywall, what are some areas for which several
specification sections may be bid separate or combined and a bid day
subcontractor spreadsheet should be prepared to facilitate this
comparison?
 8 Fill in the available information on a sub bid proposal form from the
following call by a vendor. What other information is needed, and who
should call him or her back? Four addenda have been issued. List five
mistakes in this telephone proposal.
“Hi, this is Joe at M & B, (255) 555–4430. My price for the insulation
is $262,500. I have seen two addenda; Good-bye.”
 9 Prepare an argument why the estimator either should or should not on
bid day take the boxed-in quote presented at the end of the cast-in-
place concrete systems in Chapter 11 for forming the elevated concrete
slabs.
10 Looking only at Figure 20.4, what are the potential costs or bid risks for
the GC, and what are the risks for the project owner?
11 Prepare a list of the advantages or disadvantages of the GC using the
direct work estimate on bid day for doors/frames/hardware from
Chapter 12 compared to the alternate bid received from Klose for the
same scope.
12 Why should the estimator stay with the concrete pump cost of $15/CY
already included in the direct work estimate and not modify concrete
costs with the concrete pump quote (Figure 13.2) received on bid day?
Part VI

Advanced topics
21 Estimating ethics

Introduction
We now enter into the last section of this book, Part VI, which focuses on
more advanced estimating topics and applications of construction cost
estimating leading into the next phase of construction, project management.
In this chapter, we discuss ethical issues faced by subcontractors, general
contractors (GCs), and project owners. Issues involving ethical questions are
raised before bid, during bid day, and post-bid. In the next chapter, several
estimating technology tools are introduced. Many of these connect to our
previous topics as well as connecting estimating to project management.
Chapter 23 introduces a variety of other types of estimates prepared by
estimate and construction teams, and our final chapter bridges the gap from
estimating to project management.
A contractor’s ethical behavior affects their reputation among other GCs,
project owners, subcontractors, the city, and potential employees – both
positively and negatively. Ethical awareness is embedded in all aspects of
construction, including safety and quality control. Ethics are moral
standards used by people in making personal and business decisions. They
involve determining what is right in a given situation and then having the
courage to do what is right. Each decision has consequences, both to the
contractor and to their subcontractors, suppliers, and customers. The focus
of this book has been estimating expected construction costs, and this
chapter addresses ethical issues during pre-bid, bid day, and post-bid
processes.
Pre-bid day ethics
There are many instances before bid day that may raise ethical questions for
all parties. We present some of these in the form of questions in this section
and throughout this chapter rather than including them all at the end in the
form of exercises. This allows the reader to ponder potential answers – often
there is no one exact correct answer for all instances.

Ethics 1: Should a GC partner with a subcontractor and agree to

only work together in pursuing a project? Will other
subcontractors still bid to the GC, and if their prices are more
cost-competitive, should the GC use them and ignore their
informal partnership?
Ethics 2: Would it be ethical for a GC and architect to have pre-
bid clarification questions, just between those two firms, and not
have the results documented in bid addenda available to all
contractors? Would your answer change if this were a bid or
negotiated project?
Ethics 3: Is it ethical for a GC to market the project owner or
architect pre-bid?
Ethics 4: General contractors and subcontractors discover many
inconsistencies and errors in the bid documents when preparing a
detailed estimate. Should they hold back their questions until
post-bid or bring them up during the bid cycle?
Ethics 5: Some contractors ask many questions during the pre-bid
meeting. Some contractors will not ask any questions until after
the bid is awarded. Other contractors will pull the owner or
architect aside during the pre-bid walk-through and ask questions
one-on-one. What are the advantages and disadvantages of each
of these scenarios, and are these strategies ethical?
Ethics 6: Is it fair for an owner and their design team to issue
large addenda the day before or even the day of a bid and expect
 that the GC has “informed all bidding subcontractors and
suppliers” (or similar language typically included in the
addendum)?
Ethics 7: Most contractors will diligently schedule their estimating
process, as was discussed in Chapter 1. Most contractors would
prefer to get the bid turned in and either proceed with the project
or move on to the next opportunity. But there is always one firm
that cannot seem to get organized and will ask for a bid
extension. Should project owners allow this?
Ethics 8: A concrete pipe supplier contacted a utility contractor
who was preparing a bid for a major sewer project and offered
discounted prices if the contractor purchased the needed pipe
from the supplier. Was the supplier’s action ethical?
Ethics 9: The site work for the construction of a medical clinic
was unit priced. During review of the contract drawings, the
estimator determined that the quantity shown on the unit price
bid sheet for asphalt pavement was considerably less than what
would be required for completing the project. The estimator
decided not to notify the project owner and to inflate the unit
price for the asphalt bid item because of the anticipated overrun.
Was the estimator’s action ethical?

Bid day ethics

General contractors may find themselves a victim of bid day bid shopping;
this can occur without them instigating it or even knowing about it. Your
firm may be the most ethical in town, but subcontractors will find out from
other GCs where they stand, and your firm may unwillingly become
involved in bid auctions. This happens when subcontractors determine from
a bidding contractor how their prices were in relation to those of their
competition. Some general contractors will divulge this information to
bidders. This is a way of driving subcontractors’ prices down and thus
lowering the GC’s own bid to the owner. This is known as bid shopping and
is considered unethical. Subcontractors expect general contractors to treat
their bids as confidential information until the subcontracts are awarded.
Subcontractors will also ask a GC, apparently innocently, “how their price
looks” and engage in a bid day auction on their own.
The intent of the lump sum bidding process is for bidders to submit their
lowest and best price the first time for specific scopes of work. By bid
shopping, general contractors are implying that subcontractors did not
submit their best price and have the ability to lower their prices for the
work. Some subcontractors will respond accordingly to win the work.
Others will stand with their original bids. The question then arises as to
whether the subcontractor who engaged in the bid shopping process really
submitted the best price to start with or whether a sacrificial contingency
had been included. The other condition is that the subcontractor may have
submitted the best price initially and consequently by lowering it may not
be able to complete the work for the reduced price. Yet a third condition is
that the subcontractor is in financial trouble and is trying to increase cash
flow to avoid insolvency. Any of these situations could result in the
subcontractor defaulting during the course of the work, which could
increase the GC’s risk exposure for both short- and long-term potential cost
increases.

Ethics 10: Should a GC communicate with a potential owner on

bid day or, vice versa, should the owner communicate with the
GC? What might some of these communications entail?
Ethics 11: A reverse bid action is where GCs post their bids
electronically with the project owner for all competitors to see
pricing simultaneously. Contractors then raise or lower their
prices not necessarily on the expected cost of the work but to beat
the competition. Is this fair?

Post-bid ethics
Many activities can and do continue after the bid has been turned in which
may involve questionable ethical situations for the project owner, designer,
general contractor, and subcontractors. In this section we have described just
a few of these potential issues.

Subcontractor and supplier inquiries

After a bid has been tendered, subcontractors and suppliers will begin
calling and inquiring about how their bids compared against their
competition. Answering them too soon after the bid has been tendered can
cause problems for the winning GC. If a subcontractor is told that its price
was low and the owner awards to the general contractor, the subcontractor
will expect to be awarded a contract also. There are times, however, when a
reevaluation of subcontractor bids uncovers a combination that changes the
results, and the subcontractor ends up not being the low bidder. However, if
the subcontractor was told that it submitted the low bid on a public project,
the subcontractor may have legal recourse if not awarded the subcontract
from the general contractor. The estimating team must be very cautious
about responding to subcontractor and supplier inquiries regarding their
prices until final subcontractor and supplier selections have been made.

Ethics 12: Do subcontractors bid the same price to all of the GCs?
Do they give some preferential bids? Why would they do this?
What risks are the subcontractors taking? How does the GC
respond if they discover that they did not receive the same bid
from a subcontractor as did their competitor GCs?

Many public bid projects require the GC to list its chosen subcontractors
on the bid form – at least the major categories such as mechanical and
electrical. This is intended to eliminate the potential for a successful GC to
shop subcontractor bids post-bid day. But by listing the subcontractors, the
GC has seriously impacted their opportunity to verify that the best-value
subcontractor will be awarded the bid.
 A subcontractor who has canvassed other GCs, especially those that were
not in contention for the project, may find out their exact bid placement.
This is not an ethical violation, and the third or fourth placed GC will earn
future favors by informing the subcontractors. They also do not want the
subcontractors to be unfairly ‘shopped’ by the low-bidder. Not all GCs,
however, receive bids from the same subcontractors or may not analyze the
subcontract pricing in the same way. There is no obligation by the winning
contractor to execute a subcontract with the specialty contractor who
believes their bid is low but has not yet been verified by that GC, especially
in private work.
Sometimes a bid team member will let subcontractors or suppliers know
where their prices stood if they are totally out of contention. This is done
without divulging the low bidder and by indicating an approximate
percentage difference from the winning bid rather than stating the low price.
The GC feels they are doing the subcontractor a favor. Release of any
subcontractor bid results should wait until the owner has issued a notice of
intent to award a contract.
When conducting a subcontractor and supplier bid review, the project
manager or estimator must make sure that a vendor that bids more than one
item is willing to contract for only one item at the price bid. Also, vendors
that bid a single price for a combination should be queried for a breakdown
by specification section and asked the same question. Working the bids by
the estimator may result in a lower combination cost. The difference
between this cost and the bid used is commonly known as buyout and is in
effect a potential savings for the GC; this is different than bid shopping. A
buyout analysis may result in a different vendor being the low bidder. Clear
notes should be made regarding how the buyout was determined and
attached to the subcontractor list in the bid files. This way, if the contract is
awarded, the project team has a record of all price determinations. Buyout
will be discussed in more detail in Chapter 24.
Some GCs, upon winning a bid, will attempt to issue subcontracts or
purchase orders for a few percent less than the price submitted by the lowest
bidders. This would be known as ‘buying down’, which is different than
‘buying smart’ or ethical buyout. When the subcontractors complain, they
are told that if they want the work, they will sign the subcontract for the
stated amount. This may work initially, but eventually this GC will have
difficulty being low on future bids because the subcontractors and suppliers
will add a percentage to the bids that they know the general contractor will
force out of them. This is similar to bid shopping, which was discussed
earlier. Although the construction industry is large, in each city or county it
is a close community. Treating subcontractors unfairly will not bode well in
the long run for a GC’s reputation. Your author shares this mantra with
young project engineers and project managers: “You will need a favor from
each subcontractor at some point; if not on this project, then the next one.
Don’t burn any bridges.”
Buying subcontractors fast when they are too low is also a strategy for
some GCs. This is essentially an attempt to tie them to their bid day price
before the subcontractor has realized its error and potentially withdraws its
bid. Bid bonds (somewhat) protect against this, but they do not exist on all
projects. There are differences between the terms ‘buying down’, ‘buying
fast’, ‘buying smart’, and ‘bid shopping’ during the buyout process. Some are
solid professional practices and others are unethical.
In Chapter 20 we shared that subcontractor bids will continue to trickle in
after the chief estimator has come to his or her total. Some phone calls and
electronic bids will even continue after the owner’s bid time has arrived.
Once a successful bid is announced by the owner, that GC will benefit from
additional bids that may have only been sent to its competitors.

Ethics 13: Is it ethical to use late subcontractor bids (a) on a public

project, (b) on a private project, and/or (c) if the GC did not
receive a valid bid in that category and used its own plug
number?
Ethics 14: Is it ethical for a private project owner to utilize a late
GC bid? Would your answer change if it was a public or private
bid opening? Would your answer change if you were the low
bidder at (a) bid time or, conversely, (b) post-bid time?
Post-bid negotiations with the project owner
The owner may issue revised bid documents that change or add only a
minor amount of work and ask one or more contractors to submit a revised
bid price. These may be in response to late receipt of requests for
information or value engineering (VE) proposals. They may also be a
strategy of the owner and its designer. Without saying so, the owner
essentially is auctioning the project to the contending GCs. The owner is
asking them to take a second look at the project and submit a new and
presumably lower bid. Often these ‘changes’ in the documents are minor, yet
because all GCs will now know each other’s previous bid amount (in a
public bid opening) they may price the ‘change’ as needed to win the
project. We have seen prices reduced even though the ‘changes’ obviously
add work. The contractor submitting the lowest price usually wins the
project.

Ethics 15: Is it ethical on a private project for a GC to

communicate with the project owner post-bid to find out how
their price looks and/or inquire whether there is anything else the
project owner needs?
Ethics 16: Some private owners request voluntary VE proposals to
be submitted with GC bids. There is a strategy from the GC’s
perspective whether they respond with much detail on this open
request. Some owners may then collect all of the VE proposals,
share them with all of the GCs, and ask for new pricing. This is
obviously an example of a reverse bid auction as well. How
should GCs respond to this request?

Another approach used by some private owners is to request a ‘best and

final offer’. The owner often indicates that the project is over budget and
requests the contending contractors to review their bids and submit best and
final offers. The contractors each must decide how badly they want the
project and whether to lower their prices. The best and final offer approach
is legal in private work and often part of the contracting process. An owner
may believe that the bidders did not submit their best bids, and this method
is used to obtain the lowest possible price. During the initial bid, GCs
generally do not increase their fees, because it may take them out of
contention. Upon being asked for a new price, they usually examine
combinations of vendor bids and the self-performed work to see how much
they can reasonably reduce their bid and still make a fair profit. Fee
reduction is considered the last choice, depending on the results of the other
reviews. Lowering prices places risks on all of the parties. Any reduction in
price by the GC and its subcontractors must be recovered at some point
during the course of construction, often in the form of change orders or
claims.
Some project owners bid the mechanical and electrical work direct as
separate contracts. During post-bid negotiations, they may attempt to assign
these contracts to the general contractor for no additional fee. Administering
these contracts can cost money by extending the jobsite overhead, and the
contractor deserves a profit for doing so. The risk from preselected
subcontractor performance usually is lower, and a reduced fee may be
requested by the owner.
During post-bid negotiations, the contractor needs to determine issues
that they are willing to concede and those that are not negotiable and to
gain an understanding of the owner’s objectives. The contractor may want
the work and yield to the owner’s demands to the point of not being able to
do the work profitably. An owner may try to obtain as many concessions
from a contractor as possible. This is again a risky move for all parties,
including the subcontractors.
Bid projects are often accompanied with bid protests. A bid protest is a
complaint from an unsuccessful GC (or subcontractor) indicating that the
low-bidder did not follow the rules exactly and should be disqualified.
Infractions could be due to a late bid, not completing the bid form properly,
or an unqualified bidding contractor. These are very difficult situations for
the project owner. If the owner agrees and disqualifies the low-bidder, that
firm in turn will now file its own bid protest. This can go on for some time
and eventually the entire bid may need to be thrown out. When this
happens, unfortunately, all contractors know the price to beat and again this
results in a bid auction and the ‘successful’ re-bidder will have often
underpriced the project and will need to find other ways to make up for
their losses, such as change orders or claims.

Summary
A contractor’s reputation is greatly influenced by the ethical standards of
their leaders and employees. In this chapter, we have discussed ethical issues
related to cost estimating. For additional discussion of construction ethics,
the reader may want to review Professional Ethics for the Construction
Industry, by Mirsky and Schaufelberger.
During the pre-bid phase, contractors and owners need to practice good
faith and fair dealing in the solicitation and preparation of bids and
proposals. Project owners need to ensure that all prospective bidders have
the same information relative to project scope and conditions. General
contractors need to treat subcontractors’ price proposals as confidential and
not disclose the information to other subcontractors. Anyone engaged in
contract procurement needs to avoid the perception of favoritism.
During bid day, GCs must avoid bid shopping by not disclosing the
subcontractor ranking for specific scopes of work. Subcontractors’
willingness to work with a GC is greatly influenced by their perspectives
regarding how they will be treated by the contractor. During the post-bid
process, GCs need to be careful about responding to subcontractor and
supplier inquiries until final subcontractor and supplier selections have been
made. General contractors often select best-value subcontractors rather than
the lowest-price subcontractors. Private owners may wish to engage in post-
bid negotiations with the selected GC. The contractor needs to decide which
issues they are willing to concede and which they are not.
Review questions
1 Describe a method that the owner might use to get a contractor to
lower their bid after the time the bid was tendered.
2 Why would a subcontractor give a lower price to one GC and/or,
conversely, a higher price to another GC?
3 Why would an unsuccessful bidding GC share subcontractor quotes?
4 How should a young project engineer who has been asked to assist a
bid team and receive subcontractor telephone quotations be instructed
to respond to subcontractors attempting to find out where their price
stands?
5 In a private owner project, is it acceptable to use a subcontractor whose
quote was received after the GC has forwarded its bid to the bid
runner?

Exercises
 1 The important topic of ethics has been threaded throughout this book.
Look back now on our previous chapters and create a table of ethical
issues and/or questions. Propose ‘answers’; however, realize that there
are many potentials, and some are better than others. Present and
debate these in class, maybe through the use of small groups. Can you
develop a consensus for each one?
 2 State your thoughts about the following ethics issues. Include the
reasoning for your conclusions.

a Bid shopping,
b The post-bid auction process, and
c Issuing subcontracts for amounts below the low bidder’s price.

 3 What is a ‘reverse bid auction’? Have you been involved in one of

those? Was it successful for the project owner? Was it successful for the
 GC?
 4 What are the differences and similarities between these terms:
collaborative, contractual, ethical, fair, friendly, legal, moral, and
responsible?
 5 Assume that only one subcontractor bid was received for roofing on a
project. After award to the general contractor, that subcontractor
indicates they have a bid error. What should the general contractor do?
If they re-bid that section, is that ethical? Should they just try to
negotiate with one favorite subcontractor, or maybe another bidder?
Should the general contractor notify the owner? If they rebid that
portion of the work and the new bid price is less than the pulled quote,
should the GC or owner realize the benefit? What if the new bid was
higher?
 6 Sixteen boxed-in ethical questions and scenarios were raised in this
chapter. Prepare answers for each either as topics to debate in the
classroom or as homework assignments to be turned in.
 7 When a subcontractor asks how their price stacked up on bid day, how
should this question be answered?
 8 If the subcontractor is low and inquires about their price after the bid
has been tendered, how should the question be answered?
 9 Which subcontractors and suppliers would a project manager buy out
quickly, not because their price was too low but because of schedule?
10 List at least three steps involved in an ethical buyout process. You may
need to look ahead to Chapter 24 to answer this question, or to another
project management book.
11 What would happen to a GC who violated some of our ethical
questions, such as contacting an owner during the bid on a public
works project?
22 Technology tools

Introduction
Technology has completely changed how estimators do their jobs. Though
the basic concept of estimate creation has not changed, computers, digital
databases, web-based applications, design and construction integrated
software, cloud access and capability, electronic contract documents, and
mobile devices are now being used for cost estimating. Consequently,
estimating efficiency and speed have improved dramatically from this
adoption of technology. The purpose of this chapter is to introduce some of
the technology tools that can be used to develop a cost estimate. The
principles used in developing an estimate are similar to those discussed in
previous chapters, but use of technology has accelerated the process.
Design drawings and specifications typically are issued as electronic PDF
files. The drawings can be scaled and quantities of work measured, as
discussed in Chapter 6. On-Screen Takeoff (OST) and Bluebeam can be used
to determine quantities of work from the PDF drawings, eliminating the
need for manual take-off. Both tools are discussed in this chapter. A
multidimensional building information model (BIM) can also be used to
determine quantities of work and is also discussed. Specialized estimating
software or Microsoft Excel with an estimating database of unit prices can
then be used to prepare the estimate.
To assess the use of estimating technology tools, the authors conducted a
survey of 38 estimators in the Northwest to determine which tools they are
using. Most were using OST and Bluebeam for quantity take-off (QTO), and
both are discussed in this chapter. Excel was the most popular software for
developing estimates using techniques discussed in previous chapters. Sage
Estimating was the most popular specialized estimating software, followed
by WinEst and Beck Technology’s Destini Estimator. Each of these tools,
except Excel, is also discussed. Use of drones for estimating, estimating
databases, and subcontractor solicitation are the final topics addressed. New
technology tools and upgrades to existing tools are being launched
frequently, so estimators need to be aware of the changes on the market as
they select appropriate tools for their work.

Estimating software
Estimating software is designed to streamline and improve the process of
creating estimates. It is available in many varieties, ranging from simple
spreadsheet templates to cloud-based software promising transparency and
collaborative experiences. Estimating software companies can give
customers access to their technology either by installing their products on
computers or servers the customer owns or by providing web-based
applications that can be assessed by multiple mobile devices.
The power of an estimating software lies in the features that improve the
take-off and pricing processes for users. Different software companies
package and design these features differently. Digital take-off capabilities
often are sold in separate software packages from estimating tools. The core
technology of take-off tools is to use digital copies of the project plans to
measure material, quantity, and part requirements and organize the data in a
list or spreadsheet. Estimating capabilities typically provide pre-built
estimating templates and a pricing database that can be combined with the
take-off quantities to create estimates of direct costs. Estimates for jobsite
general conditions and markups discussed in Chapters 17 and 18 would still
need to be added.

Sage Estimating
Sage Estimating is an on-premises estimating software that enables users to
build estimates using data from their QTO or by connecting with eTakeoff
Dimension for two-dimensional (2D) take-off. The estimator can send the
take-off information directly to the estimate through eTakeoff Bridge. Using
the Bridge, the estimator can send the take-off information directly to the
estimate without manual intervention like copying or pasting. Default costs
for labor, material, subcontractor, equipment, and other categories are
automatically calculated and included in the estimate, as shown in Figure
22.1.
Once the items are on the spreadsheet, the estimator can customize the
estimate to conform to conditions of the project. Labor and equipment
production rates can be manipulated to reflect jobsite conditions, and the
Sage Estimating database allows the estimator to enter their own pricing and
provides tools for updating the pricing. Users may also use updated cost data
from commercially available cost databases, such as RS Means Data Online
or The Guide, discussed later in this chapter.
Advanced versions of the estimating software link to RS Means Data
Online and integrate with three-dimensional (3D) modeling software by
Autodesk to use a BIM for QTO. Sage Estimating, eTakeoff, and Autodesk
have combined efforts to enable estimate development by concurrent use of
both 2D and 3D content. The look and feel of the software are very similar to
that of Excel, because it is a spreadsheet-based product. The use of eTakeoff
Bridge to extract model data is shown in Figure 22.2.
In addition, Sage Estimating has a buyout module that can be used to
solicit quotations from suppliers and subcontractors. Additional information
on Sage Estimating can be found at www.sage.com/en-us/products/sage-
estimating/. The QTO tool eTakeoff Dimension is similar to On-Screen
Takeoff and Bluebeam, discussed later in this chapter. Users perform the
take-off with their mouse after scaling the drawings. Information on
eTakeoff Dimension can be found at
https://etakeoff.com/products/dimension-overview/.
WinEst
WinEst is an on-premises database-driven estimating system that helps
estimators manage and integrate estimates. Key features are QTO, cost
estimating, audit trails, and reporting. Users can set up estimates from
scratch or use a project-type template that follows company standards for
general conditions and indirect costs. Estimates can be organized using
either MasterFormat or Uniformat. The software has systems for QTO from
paper drawings and electronic drawings and an interface with On-Screen
Takeoff. Each line item and assembly in WinEst can be assigned to a
task/activity identification and exported to Primavera or Microsoft Project
for scheduling. Additional information on WinEst can be found at
https://gc.trimble.com/product/winest.

Figure 22.1 Sage Estimating spreadsheet

 Figure 22.2 QTO with eTakeoff bridge

Destini Estimator
Destini Estimator is an on-premises or cloud-hosted estimating system that
enables multiple users to access and work on estimates at the same time. It
supports disconnected workflows so that the estimator has access to the
estimate in the office, on the jobsite, or in between. The software integrates
QTO with a cost database to create estimates formatted to meet the user’s
needs. This includes both 2D and 3D take-off. The software also keeps track
of which estimate updates were created by which users of the software. The
software has internal tools for performing 2D QTO from electronic
drawings, and it integrates with BIM 360 or Navisworks enabling the
development of a QTO from a BIM. Additional information on Destini
Estimator can be found at https://beck-technology.com/destini-estimator/.

On-Screen Takeoff
OST is a software that enables the user to streamline the take-off process by
measuring quantities of work directly from electronic drawings with a few
clicks and drags of a computer mouse. The user sets the scale of the drawing
in the software and traces the area or length to be measured with the mouse.
The mouse can also be used to count objects such as windows and doors and
measure volumes. The software then determines the length or area measured
and populates a table with the appropriate quantity. Once measured, the
quantified section of the drawing will be colored to avoid the potential for
double counting of any scope. Those sections not colored are clearly
identified as needing measurement. OST seamlessly exports data into Excel
and other estimating software. Additional information about OST can be
found at www.oncenter.com/products/on-screen-takeoff.

Bluebeam
Bluebeam Revu is a PDF markup and editing software that can be used to
develop QTOs, including measuring lengths, areas, perimeters, diameters,
and volume, as well as count objects. An example is shown in Figure 22.3.
Before any accurate measurements can be taken, the user must calibrate
the measurement tool. This can be done by entering the scale of the drawing
(if known) or by selecting the distance between two known points. After the
drawing scale has been selected, the user determines the measurement
desired, such as length or area, and uses the mouse to determine the
measurement. The measurements and markups taken are stored in a
Bluebeam Revu Markup List that can be linked to an Excel spreadsheet.
Once the QTO has been completed, pricing for the general contractor’s
direct work can be performed as discussed in Chapter 10. Additional
information on Bluebeam Revu can be found at www.bluebeam.com/.
 Figure 22.3 QTO with Bluebeam Revue

Building information models

BIM is an industry term for an integrated database containing parametric
information and design documents for the entire project. The data stored in
a BIM are used to create 3D projections of the project, as illustrated in
Figure 22.4. These models contain dimensional properties such as area,
count, perimeter, and volume that can be used to develop QTOs of project
components needed to create cost estimates. A BIM developed in the early
stages of the design will not be highly detailed but can be used for
preliminary conceptual cost estimates. As design decisions are made and
incorporated into the model, it can be used for estimating quantities of work
for final cost estimates.
Assemble, which is one of the products included in Autodesk’s
Construction Cloud, contains multiple cost tracking functions, including a
quantification tool that allows users to extract real-time project updates
from the model and organize it for use in QTO and estimating. This instant
access to quantities can be organized based on user defined parameters, but
the most commonly used organization is the MasterFormat developed by the
Construction Specification Institute and discussed in Chapter 2. Once the
QTO has been completed, pricing can be added to complete the estimate.
Information on Assemble can be found at
https://construction.autodesk.com/products/assemble.

Use of drones
A drone is an unmanned aircraft. Essentially it is a flying robot that can be
remotely controlled or fly autonomously through software-controlled flight
plans in its embedded systems, working in conjunction with onboard
sensors and the Global Positioning System (GPS). A drone’s capability to
accurately survey areas of land is an essential benefit of utilizing drones in
construction. On a construction site, drones can assist with pre-construction
site review, aerial surveying and mapping, and measurement of excavation
depths and material stockpiles. They provide a bird’s eye view of expansive
project sites that is not ascertainable from the ground.

Figure 22.4 Building information model

Drone software systems can provide convenient and time-saving desktop

or mobile device access to jobsite conditions and help facilitate rapid
assessment and response to developments in the field. In addition to GPS
and high-resolution cameras, drones can be equipped with advanced
technologies, such as LiDAR (light detection and ranging), which is a remote
sensing pulsed laser to detect objects and measure distances. With the right
software, users can integrate imagery and data into BIM or other 3D models
or use drones in conjunction with other tools, such as land-based 3D laser
surveying and equipment and inventory tracking devices.
Drones are particularly useful in measuring quantities of work on
highway projects, especially those in remote areas. They can also provide
aerial photographs of the project site to enable the estimator to fully
understand the existing site conditions and any access restrictions to be
encountered. The photograph of the tower crane shown in Figure 16.1 was
taken from a drone.

Estimating databases
Many estimating databases are commercially available. They include pricing
averages for a variety of systems and materials. The collection of equipment,
material, and labor costs is especially helpful for developing cost estimates
for projects in new markets, for which the estimator may not have historical
cost data. Materials, tasks, and equipment are easily searchable inside the
database software. An estimating software system can take the quantities of
work that have been determined separately and apply the database unit
prices to develop direct cost estimates. The challenge for the estimator is to
ensure that the unit price data reflects contemporary market conditions at
the project location.

RS Means Data Online

Many estimators are very familiar with the RS Means series of construction
cost guides. The guides have been combined into a cloud-based database
that can be accessed to create unit price, assemblies, or square foot cost
models for developing construction project cost estimates. Instead of using
city cost index numbers to modify the database values for local conditions,
the user can enter the project zip code to convert the cost data to reflect local
pricing. The cost data is updated quarterly, and predictive analytics are
included to predict project construction costs up to three years in the future.
Information on the RS Means Data Online can be found at
www.rsmeans.com/products/online.aspx.

The Guide
The Guide includes current building material prices organized by the 2014
MasterFormat and based on Northwest prices, current in-place common
construction assemblies, and square foot costs for common building types.
The data is updated semiannually based on market surveys. The cost and
other information contained in The Guide are derived from local material
suppliers and subcontractors. Also included is a regional directory of
material suppliers and subcontractors.
The Guide was introduced in Chapter 11. It was developed for commercial
and multi-family construction but is also applicable to residential
construction. It is used by many construction education programs because
the format is practical and easily translated into use in class projects.
Information on The Guide can be found at www.bestconstructionsite.com/,
and a more detailed description is included on the book’s eResource.

Subcontractor solicitation
One of the first things that an estimator should do when preparing an
estimate is to get subcontractors and suppliers involved. This involves
notifying them that a project is being reviewed and that the general
contractor would like their quotations on bid day. In the past, this task was
done either by telephone calls or individual e-mails. Today, this notification
often comes from the general contractor’s website and project management
software for managing the solicitation process. One technology tool used by
some general contractors in the Northwest is Building Connected. It is a
service for prequalification of subcontractors as well as for soliciting and
evaluating quotations. Information on the tool can be found at
www.buildingconnected.com/subcontractor-construction-network/. Some
general contractors post contract drawings and specifications on their
websites for subcontractors and suppliers to download and review, while
others place the contract drawings and specifications in electronic plan
rooms for subcontractors and suppliers to access.

Summary
The use of technology tools to support the preparation of cost estimates has
greatly increased during the past decade. As a result, estimating efficiency
and speed have improved. Estimating software has been developed that
enables improved take-off and pricing processes for users. The three
estimating software vendors discussed in this chapter are Sage Estimating,
WinEst, and Destini Estimator. Each has different features, but all basically
combine a spreadsheet with a cost database to enable estimation of direct
costs for individual scopes of work.
On-Screen Takeoff and Bluebeam are software products that are used by
many estimators for QTO. Building information models provide 3D
projections of construction projects that also can be used for QTO with
software such as Assemble. Drones can be used for site investigation and
QTO for projects in remote areas or for horizontal projects such as highway
construction.
Several electronic cost databases are available for pricing the quantities of
work. Both RS Means Data Online and The Guide are discussed.
Subcontractor quotations are also used in developing cost estimates.
Procurement systems such as Building Connected can be used by general
contractors in the solicitation and evaluation of subcontractor quotations.
The use of technology is always changing. New systems are being
developed continually, and the estimator needs to be apprised of the latest
technology tools.
Review questions
1 What is the difference between an on-premises estimating system and a
cloud-hosted estimating system?
2 What are the two digital QTO tools described in the chapter? What is
the primary benefit that they provide to an estimator?
3 What is the basic process for determining a QTO using Bluebeam
Revu?
4 Why are drones sometimes used to support preparation of a cost
estimate?
5 What challenge does an estimator face when using a commercial
estimating database for pricing work items in a cost estimate?
6 What type of digital tool might an estimator use in soliciting price
quotations from prospective subcontractors?

Exercises
1 You are preparing a cost estimate for the construction of an office
building using a digital estimating software. What factors would you
consider in deciding whether to use a MasterFormat or a Uniformat
organizational structure for the estimate?
2 Destini Estimator estimating system allows multiple users to access and
work on estimates at the same time. Describe a situation where this
capability would be useful.
3 You are an estimator providing preconstruction estimating support for a
new office building. The designer has developed a BIM to illustrate
design concepts as design decisions are made. How could you use the
BIM to develop preliminary cost estimates? How would you use the
BIM to develop the final cost estimate?
4 You are developing a cost estimate for the construction of a highway in
a remote area of Alaska and have obtained a drone to help with
preparing the estimate. What type of information would you expect to
 obtain from use of the drone? How would the information help in the
preparation of the cost estimate?
5 Are you currently using any of the technology tools discussed in this
chapter or tools that are not addressed? What are the advantages and
disadvantages of technology tools that you are using?
23 Other types of estimates

Introduction
Can a house builder develop an estimate for an industrial manufacturing
facility? Can an apartment developer create an estimate for a warehouse?
Does a contractor who specializes in tenant improvement projects have the
tools necessary to estimate a downtown high-rise? The answers: Both yes
and no. Many of the procedures utilized to measure the concrete in a spot
footing, call a vendor for a current quote, and apply necessary markups are
consistent in whichever type of construction project is being estimated.
There are some differences, however, that require consideration. In most
instances, these differences are used by a contractor to gain a competitive
advantage. If general contractors (GCs) do not have experience constructing
oil refineries, they generally are not qualified to bid on this type of project. If
contractors had an opportunity to estimate a few similar projects, they
would learn that the tools required are similar, except that instead of
measuring square yards of carpet, they are measuring lineal feet of pipe.
This is, of course, an oversimplification. The message is that estimators
should not be afraid of trying. They will often be surprised that many of the
tools necessary to estimate new types of projects or materials are already in
their toolbox. The business decision to take on a different market, however,
typically is made by a company executive, not the estimator.
It would be nearly impossible in one book to cover ALL types of estimates
in detail. We have chosen a lump sum commercial process for this book for
our mixed-use case study, as it has many interesting elements compared to
other types of estimates. In this chapter, we will briefly introduce a variety
of other common estimates developed either by the staff estimator or the
project manager during the construction process. Estimating is a process,
whether the estimate is a budget, a lump sum bid, a heavy civil unit price, or
a guaranteed maximum price (GMP) proposal.
Budget estimates are developed for projects early in the design process or
for those projects that need to start construction before the design can be
finalized. Cost-plus contracts are used when the scope of work cannot be
defined. All the contractor’s project-related costs are reimbursed by the
owner, and a fee is paid to cover profit and contractor overhead. A GMP
contract is a cost-plus contract in which the contractor agrees not to exceed
a specified cost, but cost accounting is open-book and savings are subject to
a pre-agreed split. Unit price contracts are used on heavy civil or industrial
projects when the exact quantities of work cannot be defined. The designer
estimates the quantities of work, and the contractor submits unit prices for
each work item. The actual installed quantities required are measured and
multiplied by the bid unit prices to determine the final contract price. Lump
sum contracts are awarded on the basis of a single lump sum estimate for a
specified scope of work. The lump sum estimating process is the one that
was featured throughout this book.
In addition to these major estimate types, this chapter will introduce a few
different types of estimates, including pro formas, residential, allowances,
bid alternates, pay requests, change order proposals, monthly forecasts, and
as-built estimates. Many of these estimates tie into and rely on a current
company database maintained by the staff estimator. Much of the material
from this and the next project management (PM) chapter has relied upon
Management of Construction Projects, A Constructor’s Perspective. The
reader is suggested to review that resource for additional discussions on
other types of estimates and more-advanced PM processes.

Budgets and guaranteed maximum price

estimates
Budget estimates
In Chapter 2, we introduced and compared the three major types of
commercial construction estimates, including budgets, lump sum, and
guaranteed maximum prices. Budget estimates are developed throughout the
design process of a construction project. Early in the programming phase,
the owner usually establishes a tentative project scope and a preliminary
budget. The project budget includes both the estimated construction cost and
other estimated owner costs. As design decisions are made and drawings
created, additional budget estimates are prepared to ensure that the project
being designed can be constructed within the owner’s established budget. If
the budget estimates indicate that the construction costs will exceed the
owner’s budget, the owner has two choices – either reduce the project scope
or increase the budget. These budget estimates may be prepared by the
designer, by an estimating cost consultant, by a construction management
consultant, or by the GC, as one of the preconstruction services discussed in
Chapter 5.
The accuracy of budget estimates is a function of the degree of design
completion. Budget estimates are based on $/square foot of floor area (SFF)
for the complete project or major Construction Specification Institute (CSI)
division or assembly but rarely include any quantity take-off (QTO). Budget
estimates are typically prepared as a cost-plus percentage fee or cost-plus
fixed fee basis. Because there is considerable uncertainty in preparing budget
estimates, the final estimate value should be rounded to the nearest hundred
or thousand dollars. Presenting a budget estimate that shows dollars and
cents may create a false impression regarding the accuracy of the estimate.

Guaranteed maximum price estimates

Cost-plus construction contracts are often used when the exact project scope
of work has not been defined. Many project owners select the construction
contractor early in design development to take advantage of the contractor’s
expertise and to foster early teaming between the design and the
construction organizations. Most cost-plus contracts are awarded using the
negotiated procurement process that was introduced in Chapter 3.
In a cost-plus contract, all of the contractor’s project-related costs are
reimbursed by the owner, and a fee is added to cover profit and company
overhead. The fee may be a fixed amount or a percentage of project costs, or
it may include an incentive component. Many cost-plus contracts contain a
GMP that is negotiated between the contractor and the owner. Any costs
exceeding the GMP are borne by the contractor. Some of these contracts
contain a cost-sharing clause that provides for a sharing of cost savings
between the owner and the contractor. If the final project cost is less than
the GMP, both parties benefit and share the savings, such as 75% to the
owner and 25% to the contractor.
The GMP is often developed using drawings that are about 90% complete
for the site work and substructure and about 50 to 60% complete for the
superstructure and finishes. This would correspond to design development
documents discussed earlier in the book. The GMP includes the estimated
cost of constructing the project and the fee requested by the contractor.
Because the drawings are more complete with a GMP than with a budget,
the estimator will perform as much QTO as possible, especially related to
structural work. Subcontractor plug estimates will be developed on an
assembly or $/SFF basis, and the GMP will include allowances for systems
not yet defined, such as interior finishes. A GMP estimate for a concrete tilt-
up project that connects with some of our previous examples is included as
Figure 23.1.
 Figure 23.1 Guaranteed maximum price estimate summary

Developer’s pro forma

One use of early general contractor budgeting services is to support the
owner with early overall budget preparation. A project owner who is in the
business of designing and constructing or improving property for the
purpose of renting or sale is known as a developer. The developer’s pro
forma is a complicated equation with many variables and is often
customized by different developers for different projects. The pro forma can
be thought of globally as the financial analysis necessary to determine
whether the project ‘performs’ and is a viable real estate investment. The
bottom-line anticipated construction budget prepared by the GC’s estimator
or PM is just one element in the developer’s pro forma. Input to the pro
forma is often part of the GC’s preconstruction services. The bank requires
the pro forma to be included with the developer’s construction loan
application package. Internal development equity partners and potential
external investors also rely on the pro forma as a financial decision-making
tool. A very rough ‘back-of-the-envelope’ pro forma is developed early in
the process. The pro forma continues to be refined and modified all the way
through the development process and even through construction completion
and into occupancy. The pro forma combines many cost estimates and
compares the estimated cost of the project to the expected value. If the
projected value is 10–15% greater than the estimated cost, then the project is
likely a ‘go’, whereas if the expected costs approach or exceed value, then
the project is a ‘no-go’. This concept is also known to developers as ‘Does it
pencil?’ – or does the real estate development investment make sense?
Either way, the developer may go back into the pro forma and change one or
more of the variable values or modify the design to achieve a different result.

Heavy civil unit price bids

Unit price contracts are used when the exact project scope cannot be
determined, but a quantity can be estimated for each element of work. The
project designer or an estimating consultant provides an estimated quantity,
and the GC determines the unit price. The actual contract value for each unit
price item is not determined until the project is completed. The actual
quantities of work are measured during construction, and the cost is
determined by multiplying the quantity used by the unit price submitted by
the GC. Unit price contracts are extensively used for heavy civil projects,
such as highway, airport, transit, utility, and environmental cleanup projects.
Most unit price bid forms contain both lump sum and unit price bid items. It
is not unusual to see 100–200 separate line items for which the GC must
develop stand-alone pricing. An example unit price bid form for a small
utility project is shown in Figure 23.2. The values shown in italics are
entered by the GC after completing an estimate for the work.
To determine a unit price for each bid item, the estimator needs to
estimate both the direct and indirect costs associated with each bid item. The
direct cost includes the labor, material, equipment, and subcontractor costs
associated with each item. This involves developing a work package cost
estimate, similar to the one shown in Figure 16.2, for each bid item. The
estimated direct cost for every line item is then entered on a summary
estimate. Figure 23.3 shows a summary estimate for the bid form shown in
Figure 23.2. Then the indirect costs are added to determine the final unit
price for each bid item. The indirect costs include both general conditions
(project indirect) and margin (company overhead and profit). A separate
general conditions estimate was developed for the project using the process
described in Chapter 17. The estimated value of $37,668 was proportionately
distributed across all bid items in Figure 23.3. A margin of 16% was then
applied to each bid item by summing the direct cost and the general
conditions for the bid item and multiplying the sum by 16%. Company
overhead was estimated to be 8%, and the desired profit on this small project
was set at 8%, which resulted in a margin rate of 16%.
 Figure 23.2 Heavy civil bid proposal

Figure 23.3 Heavy civil summary estimate

To complete the bid form in Figure 23.2, the general contractor entered the
unit price values from the last column in Figure 23.3 in the unit price
column. The planned quantity was then multiplied by the unit price values
to determine the total amount values. The total bid was determined by
summing the total amount values. The contractor submitting the lowest total
bid would be selected for award. If the actual quantities installed during
construction vary from the bid quantities, the contract value is adjusted
utilizing the unit prices.

Residential
There are many differences between estimating techniques used by the
residential construction industry and those of the commercial construction
industry. This book has emphasized the tools and techniques most common
for the commercial industry. Many of the previous chapters describe this
process. Most of these techniques could also be used on residential projects.
The differences can best be explained by dividing the residential contracting
industry into two significant segments; the small custom builder and the
large tract home developer.
The small builder may be a one-person firm who specializes in custom
home construction or remodeling projects. The owner may also be the lead
carpenter and the accountant. He or she may not have the expertise or the
staffing to prepare detailed cost estimates. Estimating is limited to the
knowledge that the GC estimated the last 2,000 square foot home at $200 per
square foot, and therefore this one should be about the same. The builder
may self-perform much of the work and does not cost-code time or material
invoices. He or she does not estimate or invoice for general conditions. The
small residential contractor seldom competitively bids work to owners. A
larger fee is customary for smaller GCs, which is expected to cover
equipment replacement and home office costs. The contractor will usually
have one preferred subcontractor or supplier in each category of work. An
independent builder generally does not get competitive subcontractor
quotations. The small residential GC may not have an in-house unit price
database. At the end of the year, if the contractor made money, he or she
will usually proceed in the same fashion the next year. But if they lost
money, they would not know exactly where and how. This is one of the
reasons that there is such a high failure rate among residential contractors.
 A small residential contractor would benefit from the use of a simple
estimate summary form, as shown in Figure 23.4. This form is broken down
using CSI divisions. Even estimating according to the assemblies method, as
was introduced in Chapter 2, for budgets and the GMP proposal would be
better than just using a square foot number based on the previous year’s
projects.
Larger residential contractors or developers may construct several tracts
of 200 homes each per year and are known as speculative (spec) home
builders. They build houses on speculation of sale and are therefore also
considered developers. Spec builders generally subcontract most of the work.
Their direct crews often are limited to one superintendent per tract and
maybe a couple of cleanup or warranty crews. They typically obtain
competitive bids on all of the work. They may not have the allegiance to
particular subcontractors that is common with smaller custom home
builders. These residential contractors usually perform very limited detailed
quantity take-off. They generally rely on lumber suppliers to perform their
own take-offs from the drawings. The large spec builder has a smaller
percentage margin than does the smaller custom builder because it can
distribute the overhead costs across more projects. The larger firm’s business
success tends to be greater than the smaller one-person firm. The larger
builder’s greatest risk is to become over-extended with too many unsold
homes and be exposed to adverse economic swings. The smaller residential
GC often can fall back on remodel projects during these situations. The tract
developer typically utilizes many more project management tools than the
smaller custom home builder, including maintaining a historical estimating
database.
 Figure 23.4 Residential estimate summary

The benefit that the larger residential contractor could realize from the
detailed estimating techniques discussed earlier in the book would be the
ability to prepare better in-house estimates prior to requesting subcontractor
bids on a tract of homes. Early estimates would allow them to forecast a
development’s success better and to guide the designer toward designing
homes that fit within a project’s pro forma. The contractor would also be
better suited to analyze subcontractor change order pricing and to prepare
accurate estimates for buyers who desire custom changes to a standard tract
home.
 The general contractor for the Lee Street Lofts case study project is a
custom builder but benefits from the services of an outside estimating
consultant. The detailed estimate for that project is included on the book’s
eResource.

Allowances and alternates

Allowances included in any type of estimate (budget, lump sum bid, or
GMP) can be to everyone’s advantage. If items of work are not fully
designed, such as floor covering or landscaping or window treatment, use of
a reasonable allowance within an estimate as a placeholder is better than
taking a guess and risk at what the scope might cost once it is fully
designed. Then, after the work has been designed and competitively priced
by a subcontractor and a firm cost is known and agreed, the allowance is
incorporated into the contract value via change order.
Bid alternates were briefly introduced in Chapter 20. Project owners may
request bid alternates to be included on the bid form. These items may be
added or deducted from the base bid proposal. The purpose of requesting bid
alternates may be either to know the true value of a potential added item or
area of work or to allow the owner to adjust the project scope if the bids
come in under or over the allotted budget. For example, a project owner may
not be sure whether or not it has sufficient funding to complete the second-
floor interior finishes of a building. As a contingency, the owner could list
finishing the second floor as an additive alternate on the bid form. If the bids
are higher than anticipated, the owner may choose not to award the
alternate and leave the second floor unfinished or ‘shelled’. On the other
hand, if the bids are lower than anticipated, the owner may choose to award
the alternate along with the base bid.
Because the contractors do not know which, if any, of the bid alternates
will be accepted, they need to estimate them correctly or ‘straight’. Each bid
alternate needs to be a stand-alone price including all direct and subcontract
costs and markups. On bid day, the contractor needs to set up the bid room
to allow for analysis of the bid alternates by a separate bid day estimator.
When posted to the bid spreadsheet, subcontractor quotations need to also
be reviewed for the value of any alternate pricing. Failure for a GC to
submit the requested alternate prices may result in a public project owner
rejecting the contractor’s bid as nonresponsive. Selection of acceptable bid
alternates by the owner may change the order of the general contractors’
bids. The initial low bidding contractor may end up as second low after the
owner has chosen the acceptable alternates. Private owners may use a choice
of additive and/or deductive alternates as a means of selecting the GC they
prefer to work with.

Project management estimates

Estimators are not the only ones who prepare cost estimates. There are many
team members – including the architect, owner, bank, superintendent, and
others – who ‘estimate’. Some students will tell us, “I don’t want to be an
estimator; I just want to be the boss; a project manager.” Well project
managers estimate every day in a variety of fashions. If you are involved in
the construction industry at any level, you will be required to estimate. Here
we present just a few estimating activities of the PM, often assisted by the
jobsite project engineer and sometimes by the home office staff estimator. A
few of these are also expanded on in the next chapter.

Pay requests
Construction project managers are responsible for many jobsite operations,
but getting paid for the work performed is one of the most important. A PM
may have all of the tools necessary to earn a profit on a job, but if the
project owner does not pay for the work, the contractor will not be able to
realize a profit. Some PMs do not acknowledge the importance of preparing
prompt payment requests. This is especially true with many subcontractors.
If a payment request is not submitted on time, the contractor will likely not
be paid on time. Cash management is essential, or the GC may find that
they are unable to pay suppliers, craftsmen, or subcontractors. The
importance of a positive cash flow is also discussed in the next chapter.
Project managers must be able to manage jobsite cash flow to be effective
contributors to the operation of the construction company.
Processing pay requests is one of the most important aspects of
construction financial management for the PM. There are many aspects of
construction management that relate to and are involved with the pay
request process, including contracts, schedule of values, retention, and lien
management. Every GC project manager and subcontractor PM prepares a
monthly pay request. This very important PM responsibility is an estimate
of work performed or expected to be performed by the end of the month.
Some members of the built environment industry may use different terms
for this important topic, such as pay estimates, invoices, bills, draws, and
progress payments.
The pay request often starts with the schedule of values submitted with
the bid on bid day or proposal and expands on that as necessary to support
the project owner’s requirements. Being paid on time should be one of the
top priorities for any contractor, and whatever they need to do to help that
process to stay cash-positive should be done.

Change orders
The process of estimating change orders is very similar to that explained in
previous chapters for bid and negotiated estimating processes. Detailed
quantity take-offs, pricing for the general contractor work, and collection of
usually one subcontract price in each area of work is similar. The general
contractor gathers all input and prepares the change order proposal (COP).
This includes subcontractor estimates as well as estimates for anticipated
direct labor and material costs. This takes a form similar to a bid summary,
as shown in Figure 23.5. The contract may dictate the form, and if so, the
general contractor should have evaluated it prior to submitting the original
bid. There are numerous forms the COP coversheet can take. Some of the
important points that should be covered on any pricing or proposal form
include:

COPs are numbered sequentially;

The COP description should be clear;
Direct labor, hours, labor burden, and supervision costs are itemized;
Direct material and equipment costs should be summarized;
Subcontract costs are listed separate from direct costs;
Markups including overhead (home office vs. field), fees, taxes,
insurance, and bond are all clearly shown; and
A line for the owner or architect to sign approval is provided.

The project manager usually only gets one opportunity for additional
compensation for a differing site condition, so the estimate needs to be right
the first time. Owners have an understandably difficult time accepting
resubmittals of the same COP because the GC left out one subcontractor’s
price from the tabulation or a math error occurred. The estimator or PM
should do everything possible to ‘sell’ the COP, similar to pay requests, as
mentioned earlier. Some of the attached backup to the one-page COP
summary might include:
Figure 23.5 Change order proposal

The originating request for information or submittal;

Portions of relevant drawings and specification sections;
Subcontractor and supplier COPs and quotes;
All detailed QTO and pricing recap sheets; and
Related letters, memos, meeting notes, daily diaries, or phone records;
also,
The GC should require the same detail from its subcontractors.
The ultimate goal for the contractor with respect to COPs is to have them
approved. The easiest way to achieve this goal is to play it straight with
respect to pricing direct and subcontract work. Overly inflated prices will
only delay the process. Quantity measurements are to a large degree
verifiable, and they should not be inflated. Wage rates paid to craft
employees are verifiable and should not be inflated. Subcontractor quotes
should be passed through as-is without adjustment (unless incomplete) from
the GC to the project owner. The subcontractors and suppliers should
practice the same procedures with their second and third-tier firms.
How much is a fair markup? Markups can include a lot of items.
Generally, they are percentage add-ons to the direct cost of labor and
material associated with change orders. Markups on change orders could
include line items such as:

Fee on direct work,

Fee on subcontracted work,
Jobsite general conditions or administration costs,
Home office overhead,
Supervision and foreman costs,
Labor burden, including labor taxes,
Detailing,
Builders’ risk insurance and liability insurance,
State sales tax and business or excise taxes,
Small tools and consumables,
Bonds,
Cartage and material handling,
Cleanup,
Dumpsters or rubbish removal,
Safety,
Cost of preparing the change order proposal estimate, and
Hoisting.
It is possible to see a series of markups that could double the cost of the
direct work. Project owners and architects get frustrated with these add-ons.
They do not understand why they have to pay more than the direct costs.
Many of these items are required, and sometimes it is just the presentation
that makes it difficult to sell. Quite often GCs (and subcontractors) are asked
to propose markups with their bid proposal. This helps to minimize a lot of
arguing after the first big change order is received. Some markups are listed
in the bid documents. This is another reason to carefully read the special
conditions of the specifications and contract prior to preparing the estimate.
Some designers will try to bundle the subcontractor and GC markups
together to prevent markups on top of markups.
Generally, the fee markup for commercial GCs will fall in the range of 4
to 8%. This rate is usually the same percentage fee that was used on the
original estimate. Home office overhead costs are usually included in this
fee. Jobsite general conditions are not allowed unless they can be
substantiated on individual change issues or can be proven to extend the
project schedule.
Subcontractors receive higher fees because their volume is generally less
and because their risk, which is estimated by the ratio of direct labor to
contract value, is higher. Subcontractors may receive 10% fee and an
additional 10% overhead. Again, both of these markup calculations will
depend upon how many of the items indicated in the suggested list are
anticipated to be included in the base estimate, or are in the fee or overhead,
or are allowed in addition to the fee.
Rarely is there a project that does not require change orders. Fair play will
improve the process for all principal contracting parties including the GC,
subcontractors, suppliers, design team, and owner. This can be achieved
using open-book estimates with verifiable quantities and pricing systems.

Claim preparation
Claims are the result of either unresolved change order proposals or
construction losses discovered after project completion. A subcontractor or
GC realizes after the project is complete that they lost money and may
submit a claim requesting the difference between the estimate and the actual
costs. Claims can be very difficult to prepare and substantiate, and even
more difficult to resolve.
Some of the types of costs contractors may attempt to recover in a claim
are the difference between estimated and actual costs and losses in
productivity due to multiple change orders, schedule compression, or
schedule delay. One of the easiest types of costs to recover in a claim
situation, if allowed by contract, is extended jobsite general conditions. If
the contractor can show that it had estimated and/or was spending $270,000
per month for general conditions and the job was either delayed or put on
hold for weeks or months, then a math calculation would likely result in a
fair reimbursement for these costs. For example:

Estimated general conditions: $270,000 per month @ 20 months or

$5,400,000
Actual project duration due to delay: 22 months
Extended general conditions: 2 months (22 less 20) @ $270,000 or
$540,000

Many contractors will also attempt to recover home office overhead costs
for schedule delays, asserting that they lost the opportunity for additional
work during these types of delays. This is one of the most difficult items for
the contractor to successfully negotiate. Many contracts specifically do not
allow recovery of these costs through the use of a ‘no claim for delay’
clause, which is not enforceable in some states.

Monthly cost forecasts

Most GC project managers and subcontractor PMs prepare a monthly cost
and fee forecast that is submitted to upper management. This very important
PM document reports actual costs incurred and forecasts or estimates the
remaining work to be performed.
There is rarely, if ever, a ‘perfect estimate’. Many construction projects
will not proceed ‘exactly’ according to the original plan and schedule,
despite management’s good intentions. Continually comparing actual costs
recorded against the estimate will discover variances that warrant attention
and potential adjustment by the project team. The contractor cannot wait
until the project is finished to find out if it made money. At that time, there
is nothing that can be done to fix the problem. Costs may exceed the
estimate for a variety of reasons, including estimating errors, subcontractor
performance, equipment breakdowns, labor productivity, and others. Once
the reason for the cost overrun is understood, the plan or process may need
to be adjusted or modified by the jobsite team, and hopefully the cause was
discovered soon enough to implement an adjustment. Some of the corrective
actions or ‘fixes’ might include change of means and methods, change of
personnel, change orders to the project owner, back charges to
subcontractors, and others.
The PM is responsible for developing a monthly forecast for the project
that will be shared with the superintendent, officer-in-charge, and the
contractor’s bonding and banking stakeholders. The owner may be copied
with the monthly forecast in the case of a negotiated open-book cost-plus
contract. This forecast includes line items for all areas of the estimate, cost to
date, and estimated cost to complete. Each of the major areas of work
receives a separate forecast page, and each of those are broken down for all
categories of work. The monthly forecast estimate should be as detailed as
the original detailed estimate was. The forecast is essentially a complete new
project estimate developed by the PM each month.
The process in developing the cost forecast is a series of mathematical
calculations, and each forecast provides a more accurate projection of what
the costs will be at construction completion compared to the original
estimate before the project started. The forecast spreadsheet utilizes a simple
series of Excel rows and columns. Development of the monthly project
management cost forecast is as simple as:
 Cost incurred to-date + Cost to-go = Forecast total cost
Current forecast − Original bid or current contract value =
Variance +/−
Original fee +/− Variance = New projected fee

It is a good practice for the PM to include a narrative with the monthly

forecast explaining the significant differences from the previous month’s
forecast, as well as a work plan for continuing or improving performance
throughout the remainder of the project. One important rule of construction
cost reporting is that the financial reports must be consistent to allow the
home office a clear picture of project progress, as well as for them to develop
confidence in the jobsite team. The management team cannot afford to wait
until the project is complete to measure and report the overall project cost. It
is not only too late to take corrective action, but it is also too late to
accurately determine why the team deviated from the plan.

As-built estimates
Project managers should prepare an as-built estimate before completely
demobilizing from the project site. Dividing the actual costs spent or hours
incurred by the actual quantities installed creates as-built unit prices. If
estimators and managers do not assemble as-built data throughout the
course of construction or near the completion of the project, they never will.
A lot of work went into tracking actual costs accurately. This is valuable
input to the company’s ongoing ability to improve its estimating accuracy.
Input of as-built unit prices to the contractor’s estimating database is
necessary on every job if the database is to remain current.
Construction professionals are usually too busy and excited about starting
the next project to develop as-built estimates. As-built estimates, like as-built
drawings and as-built schedules, are important historical reporting tools.
Collecting actual cost data helps to develop better future estimates, but
coupling those costs with the actual quantities to develop actual unit prices
is better. The units calculated are those that are likely to be used to estimate
with in the future, be they $/SF of contact area, $/EA, $/Ton, $/CY, or $/SFF.
Assemblies analysis would also be beneficial for future budget estimates.
These figures can help with developing the contractor’s database as well as
providing the estimator with better data to use in the future.

Database updates
An estimating database is a collection of unit prices and productivity rates
for a variety of construction materials and systems. The price or rate given is
usually an average of many prices input for that specific area. As discussed
in the last chapter, there are many different types of databases, which can be
used for a variety of different purposes. There are several computer-
generated software systems available that allow a contractor to prepare their
own customized database. There are also ready-made databases, all filled
out, that are commercially available.
The advantages of commercially available databases are that they provide
unit prices for firms or individuals that do not have their own unit prices.
These figures are of course averages and therefore not necessarily applicable
for a contractor to use on a specific project. It is recommended that each
estimator develop a database of historical costs. The disadvantage of a
company database is that it will have included prices from different types of
projects averaged together. An estimator will need to be able to throw out
the highs and the lows and sort through the unit rates to select the values
that best apply to the specific project being estimated.
The best database is an in-house one that is continually maintained by the
construction company’s chief estimator. Historical as-built estimating data
are input to the database on an ongoing basis. The ability to sort out specific
types of projects makes them more usable. Many contractors will have two
sets of databases: One used to competitively bid work and one used for
budgets, negotiated proposals, or change order estimates.
Summary
Although the case study chosen for this text was a mid-sized commercial
construction project, the processes presented for budgeting, lump sum
bidding, or proposing a GMP on negotiated projects can be applied to many
other different types of projects. Contractors bidding on heavy civil projects
customarily utilize quantities prepared by the project owner’s estimator, and
the GC inputs its unit prices to calculate the total bid. Residential estimators
typically do not perform detailed take-offs and estimates but could benefit
from many of the detailed steps followed by successful commercial
estimators. Estimating bid alternates requires careful organization from the
bid team on bid day. The owner may choose an alternate that may alter the
order of the successful bidders, so each alternate should be estimated
accurately and stand-alone.
The monthly pay request is one of the most important estimates any PM
prepares. Being paid on time facilitates a positive cash flow, on which all
contractors rely. Change orders should be estimated and detailed to allow
the PM or estimator to successfully sell the change to the owner. The PM
also prepares a revised project estimate each month that forecasts the total
cost and updates the expected fee. This monthly fee forecast is an important
cost management tool prepared for the contractor’s front office and its
financial stakeholders. Project managers should take the time to develop as-
built estimates, which can be input back into the company’s estimating
database. Databases that are too generic or mix together too many different
types of construction peculiarities may not be accurate enough to use as a
tool to prepare competitive lump sum bids.

Review questions
 1 Why should bid alternates be estimated straight?
 2 How does a small residential general contractor estimate?
 3 Why do larger residential developers not have select subcontractors
they use on every project?
 4 What similarities might exist between commercial and residential
estimates?
 5 What is the difference between a lump sum bid and a unit price bid?
 6 How does an estimator determine the unit price for an individual bid
item on a unit price contract?
 7 List four types of markups that may be found on a change order.
 8 Why should change orders have extensive backup attached to them?
 9 What is the difference between a change order proposal and a claim?
10 What is an as-built estimate? Why is one prepared?
11 Who should prepare an as-built estimate?
12 How are as-built estimates related to databases?

Exercises
 1 Using a cost data guide, such as Means or The Guide, prepare an
assemblies estimate for a 2,000 square foot single story residence with
at least 20 line items. Apply all of the appropriate markups.
 2 For the residential assemblies estimate prepared in Exercise 1, prepare a
list of at least five assumptions and allowances that were used to
develop the estimate.
 3 Without the benefit of drawings or specifications, would the estimate
from Exercise 1 be considered a budget, or a guaranteed maximum
price, or a lump sum bid? If your answer was budget, what changes to
the estimate and documents would be necessary to transform the
estimate into a GMP? What additional changes would be necessary to
transform the GMP into a lump sum bid?
 4 Prepare a change order for the case study project for an additive scope
change valued at greater than $100,000. Include all backup necessary to
sell the change.
 5 Assume the case study was put on hold for three months during the
middle of construction (after the roof is on but before the interior
finishes are started). Prepare a claim requesting three months’ worth of
additional jobsite overhead and impact costs due to the work stoppage.
 6 Prepare a stand-alone estimate for a bid alternate such as adding a
freight elevator for our case study, from the lowest garage floor up to
and including the roof.
 7 Is it ethical for a private project owner to select a combination of
additive and deductive alternates to move their preferred bidder to first
place?
 8 Why might a project owner want to see the negotiated GC’s monthly
cost forecast?
 9 Would a project owner be allowed to see a lump sum GC’s monthly
cost forecast?
10 If you were presenting an open-book negotiated estimate to a repeat
client, what further breakdown in costs would you make to the GMP
presented in Figure 23.1?
24 Construction project
management applications of
estimates

Introduction
The preparation of a successful estimate for some estimators may be the end
of their task. But for the construction company, the estimating step is just
one of the very early phases of the construction management process, as is
reflected in Figure 24.1. The goal of most project managers (PMs) is to return
a clear profit to their firms for their respective projects. Estimating is one of
the most important steps to obtain work and therefore is an important
element for generating profits for the construction firm. A jobsite team may
not be able to provide a profit if the estimator is not successful in the
preparation of a competitive and complete bid or proposal. This chapter
discusses the use of estimates as PM tools. The estimate document itself is an
important tool for the PM and the superintendent. It is important that they
participate in developing the estimate. Their individual inputs regarding
constructability and their personal commitments to the estimate are
essential to ensure not only the success of the estimate but also the ultimate
success of the project. This has been a book focusing on the estimating
process and not the PM process, but the two are connected, as this chapter
shows. Project management and financial management concepts are
explained more fully in several books focused just on those topics, such as
Management of Construction Projects, A Constructor’s Perspective and Cost
Accounting and Financial Management for Construction Project Managers,
and the interested reader may look to resources such as those for expanded
coverage.
In this, our final chapter, we will introduce many of the PM tools and
processes that are a direct byproduct of the construction cost estimate,
including:

Subcontractor buyout,
Scheduling,
Pay request,
Cost loaded schedule and cash flow curves,
Cost control, and many others.

The buyout process

Project buyout is the process of awarding the subcontracts and procuring
materials being furnished by the general contractor and comparing the
actual costs to the estimated costs. The purpose is to determine the status of
the project with respect to the contractor’s original estimate. A form such as
the one illustrated in Figure 24.2 can be used to buy out the project and
compare buyout costs with estimated costs.
 Figure 24.1 Estimate transition into project management

Figure 24.2 Buyout log

Receiving numerous subcontractor quotations on bid day can be a hectic

and error-prone event. Even with good estimating practices, it is still
possible to make errors receiving, reviewing, posting, and selecting the
proper subcontractor bids. Several decades ago, the introduction of the fax
machine and, later, electronically transmitted quotes and submission of early
bid qualifications has helped the general contractor (GC) minimize these
errors.
Because of the volume of subcontractor quotations received at the last
minute – and some are received after the bid has been forwarded to the bid
runner – it is possible for the GC to receive subcontractor quotations that
are lower than the ones used in the bid. If the GC is successful with its bid
and receives some late quotations, the company may improve its position
during the buyout process. In addition, some subcontractors may not get
their quotations out to all of the bidding contractors before the bids are due
to the project owner. After the successful GC has been declared, it may also
benefit from bids that were not received at all on bid day, especially on
private projects.
Is it ethical for the contractor to use these late quotations? Most in the
private industry believe that it is acceptable. What is not ethical is bid
shopping or asking subcontractors to drop their price to meet or beat
another quotation. This was discussed in Chapter 21. Some public project
owners require the GC to name its subcontractors with the bid, and
therefore these late bids provide the contractor with minimal benefit.
Subcontractors should be selected based on the value that they contribute
to the project team. Selection solely on price often leads to problems with
quality and timely execution. A subcontractor proposal analysis form, or bid
tab, like the one illustrated in Chapter 20 can be used to assist in
subcontractor selection. The PM wants to ensure that the intended scope of
work is included in the price quotation and uses an analysis form to
compare all proposals for each scope of work. Prior to selecting the
successful specialty contractor for each scope, the PM should conduct pre-
award meetings for the major or risky subcontracted areas. Some of the
firms he or she should buy out first include:

Those with the highest values, such as mechanical and electrical;

The contractors that will mobilize first, such as earthwork and utilities;
The longest material delivery lead times, such as elevators, hollow
metal door frames, and storefront glass;
The direct materials that will be needed first, such as structural steel
embeds and concrete reinforcement steel; and
The suppliers with the longest shop drawing process, such as structural
steel.
The project manager’s goal is to employ the specialty contractor or supplier
whose bid matches the estimate and does not have obvious errors in its
estimate. The PM and the estimator, and potentially the project
superintendent, should meet with one specialty firm at a time and discuss
bid-related issues:

Review the drawings and specifications to ensure the correct scope of

work was considered in preparing the proposal.
Review any exclusions listed on the proposal.
Discuss any questions submitted with the proposal or raised by a same-
discipline firm during the bid cycle.
Review all the addenda.
Discuss the size of the specialty contractor’s proposed work force and
anticipated schedule.

Based on the results of the pre-award meetings and annotated subcontractor

proposal analysis forms, best-value subcontractors are selected for all scopes
of work that will not be performed by the general contractor’s workforce.
Each subcontract value is then entered in the project buyout log shown in
Figure 24.2.

Correcting the estimate

Is any estimate perfect? Generally, the answer is no. Subcontractor posting
errors were discussed previously. Even with good estimating practices, there
may still be errors within the direct work portion of the estimate as well.
Before the estimate is input into the accounting system and the construction
team begins to monitor and control costs against it, the estimate should be
corrected. It will be much easier and more fruitful for the jobsite project
management team to monitor, control, and report against an estimate that
has been adjusted and input as correctly as possible.
 If a surplus results from the buyout and the estimate correction process,
the PM can set up a cost code designated as ‘yet-to-buy’ to reflect the dollars
that have not yet been assigned to a cost control activity code. Even long
after the buyout process is complete, additional errors or missed activities
may show up, to which some of this surplus can be applied.
Unfortunately, the subcontractor buyout and estimate input process may
result in the identification of an estimate shortfall. This is not good news to
the construction team, but it is valuable information to have early. It is not
wise to reduce the value of work activities just to cover this shortfall. Trying
to meet an estimate that cannot be met will discourage the construction
team. The shortfall should be reported in the same ‘yet-to-buy’ category, but
as a negative entry. It is important that the home office management team
knows that there may be a problem and that it is not being hidden.
Ultimately the original estimated fee may therefore be at risk.

Construction schedule
In addition to estimating, scheduling is one of the primary functions of the
construction project management team, as well as quality and safety
controls. The detailed construction schedule is reliant on a detailed estimate.
The project superintendent should be involved with development of a
construction schedule, because it is his or her ‘plan’ or ‘means and methods’
that will ultimately play an essential role in the success of a construction
project. Summary schedules for proposal purposes can be produced without
completion of the detailed schedule, but utilizing the detail for backup makes
the summary that much more accurate. Superintendents and schedulers rely
on the estimated direct work man-hours, which were discussed in Chapter
10. These hours, in combination with anticipated crew size, allows the
superintendent to dial in on accurate schedule durations. Input from
subcontractors is essential to achieve buy-in for the schedule. This is a
collaborative versus a top-down approach to construction scheduling that
most of today’s successful construction superintendents will practice. A
summary schedule for the commercial case study was included as a figure
earlier in the book. The detailed schedule for that project, along with a
summary schedule for the industrial project, are included on the book’s
eResource.

Schedule of values and pay request

One of the most important project management functions is to get paid for
the work performed. A project manager may have all the tools necessary to
earn a profit on a job, but if the owner does not pay for the work, the
contractor will not be able to realize a profit. Some project managers do not
acknowledge the importance of preparing prompt payment requests. This is
especially true with many subcontractors. If a payment request is not
submitted on time, the GC will not likely get paid on time.
The first step in developing the pay request is establishing an agreed-upon
breakdown of the contract cost, or schedule of values (SOV). An example
schedule of values is shown in Figure 24.3. Often the contract will require
that a schedule of values be submitted for approval within a certain time
after executing the contract, for example, two weeks. This schedule should
be established and agreed upon early in the job, well before the first request
for payment is submitted. But forcing the issue too early, before accurate
subcontract figures have been established because of the buyout process,
may cause excessive revisions and explanations in the SOV. If this is done,
the PM may be spending the entire job reconciling the payment requests.
Unfortunately, many lump sum bid projects require the SOV to be submitted
along with the bid, and any subsequent adjustment or correction may not be
allowed.
Development of the SOV begins with the summary estimate. That
estimate is first corrected for the actual buyout values, which were shown in
our Figure 24.2 example. These calculations are shown in the left three
columns of Figure 24.3. This third column would be the schedule of values
used on a guaranteed maximum price (GMP) negotiated contract because
the general conditions and fee are listed separately. On a lump sum contract,
the general conditions and fee would be distributed proportionately across
all payment items. The SOV the PM would submit in the lump sum case is
the far-right column of the Figure 24.3.
Some contractors try to combine scopes into single line items. In this way,
they believe that they can possibly overbill, or they can hide the true
subcontract values from the project owner. The SOV should be as detailed as
is reasonable. The project manager should do all that is possible to assist the
owner in paying completely and promptly; nothing should be hidden. At a
minimum, the major Construction Specification Institute (CSI) divisions
should be used as line items. Major subcontractors should be listed where
possible. Separate building components, building wings, distinct site areas,
and separate buildings, phases, or systems should be individually shown in a
detailed SOV.
Some project managers advocate hiding the fee and general conditions or
front loading them. This is more prevalent with bid contracting than with
negotiated work. In the case of an open-book project, these items should be
listed just as they would be in the project cost accounting system. The
schedule of values should look like the final estimate. Trying to explain
during an audit or a claim situation why the cost of the concrete tilt-up
panels was stated as $200,000 in the pay estimate but was only $100,000 in
the original estimate will be difficult. Spreading, but still hiding, the fee and
general conditions as a weighted average over the schedule of values may be
fair, but it will be more difficult for the owner to track lien releases.
Receipt of timely payment is one of the most important responsibilities of
the project manager. The exact format for submitting payment requests will
vary depending on the type of contract. A schedule of values is used to
support payment applications on lump sum contracts and fee payments on
cost plus contracts. The PM is responsible to develop the payment request,
make sure payment is received, and subsequently see that the subcontractors
and suppliers are paid. The most common billing practice is to request
payment at the end of each month. The PM must gather all of the costs and
prepare the monthly request that is submitted to the architect or owner for
approval. This process should start on the 20th of the month. Subcontractors
and major suppliers should be required to have their monthly invoices to the
PM at that time. If payment has not been received on time, the project
manager should contact the owner to determine the cause. The financial
relationship with the owner and the project is the PM’s responsibility. The
same scenario holds true with respect to subcontractors and suppliers. The
GC’s PM ensures that they are paid promptly. Owners may withhold a
portion of each payment to ensure timely completion of the project. This is
known as retention. The retention rate is specified in the contract. Liens can
be placed on a project if subcontractors or suppliers are not paid for their
labor or materials. To preclude liens, owners require lien releases with
payment applications.

Figure 24.3 Schedule of values

Cost-loaded schedules and cash flow curves

Cash management is essential, or the general contractor may find that they
are unable to pay suppliers, craftsmen, or subcontractors. Good cash
management skills, just like good communications skills, are essential if one
is to be an effective project manager. The cash flow curve and the cost-
loaded schedule are direct by-products of a detailed estimate combined with
a detailed construction schedule. There are several reasons for cost loading
the schedule and producing a cash flow curve. Often, it is one of the first
things the project owner will ask of the PM and may be specifically required
by the construction contract. The cash flow curve is a graphical estimate of
when the contractor expects to have work in place and the estimated cost of
that work. The curve provides a forecast to the owner and the bank of
anticipated monthly pay requests to be made to the contractor for the
completed work.
The first step in development of the cash flow curve is the cost-loaded
schedule, which is very easy to prepare. The estimated costs (as corrected,
bought out, and input to the accounting system) are applied across the
schedule activities. If an activity will take five months and its value is
$100,000, $20,000 is spread over each of the five months. Costs such as
insurance, taxes, and fees should be distributed proportionately over the
entire project. Jobsite general conditions can be factored in a variety of
ways, but we will leave that to its own chapter in another PM or financial
management book. The cost data are summed at the bottom of the schedule
for each month to develop anticipated monthly expenses. The likelihood of
the GC being billed by each material supplier and subcontractor according
to any anticipated schedule is somewhat remote. The result of spreading the
estimate across the construction schedule is a document known as a cost-
loaded schedule. This is often an Excel spreadsheet or may be produced by
scheduling software programs such as Microsoft Project or Primavera P6 by
Oracle. Plotting the monthly or cumulative cash flow curve is then a simple
next step from the cost-loaded schedule.

Cost control
Cost control begins with assigning cost codes to the elements of work
identified in the work breakdown phase of developing the original cost
estimate. Work breakdown was discussed in Chapter 1. These cost codes
allow the PM to monitor project costs and compare them to the estimated
costs. Cost codes usually are a numerical assignment to work activities that
allow accurate tracking of estimated and scheduled costs and times to which
activities can be recorded. These numbers generally are consistent
throughout a construction firm. The objective is not to keep the cost of each
element of work under its estimated value but to ensure that the total cost of
the completed project is under the estimated cost. The cost control process
involves the following series of steps:

Cost codes are assigned to each element of work in the cost estimate.
The cost estimated is corrected based upon buyout costs.
Actual costs are tracked for each work item using the assigned cost
codes.
The construction process is adjusted, if necessary, to mitigate cost
overruns.
Actual quantities, costs, and productivity rates are recorded, and an as-
built estimate is prepared and input back into the company’s estimating
database for use on the next estimate.

While all costs should be monitored, the items that generally involve the
greatest risk are:

Direct labor,
Equipment cost or rental, and
Jobsite general conditions or administration.

It is possible to lose money on material purchases, but with good estimating

skills, it is not probable, and the risk is not as great as with direct labor. The
same holds true with subcontractors. They have quoted prices for specific
scopes of work, and the subcontractors therefore bear the risk associated
with their labor and equipment.
It is difficult to control costs if the project manager does not start with a
detailed estimate. For example, let us assume there was a $10,594 labor cost
overrun on the case study’s 56,160 square foot slab-on-grade. The assemblies
cost analysis shown in Figure 24.4A does not provide enough detail to
identify the cause. Project managers should use a more detailed cost
breakdown, as shown in Figure 24.4B, to determine the cause of the cost
overrun.
Now it is easy to see that the problem is not with the laborers placing the
slab; the majority of the overrun is with rebar placement and concrete
finishing. Why did this happen? Maybe the rebar had fabrication errors.
Maybe the slab got rained on. Maybe personnel changes were necessary.
Maybe the estimate was too low. There could be a variety of reasons. The
point is that the PM and the superintendent can now focus on evaluating
these specific issues.
To be able to control costs, they must be tracked and compared against the
corrected estimate. The first step is to record the actual costs incurred and
input the information into a cost control database. Cost codes are used to
allow comparison of actual cost data with the estimated values. There are
several types of cost codes used in the industry. The best system to use on
most projects is the coding system selected for the detailed estimate. This
will also be the same coding system utilized for the as-built estimate and
input into the company historical estimating database. Many construction
firms have adopted a version of the CSI MasterFormat system for their
internal cost codes.
Depending upon the size of the construction firm, the type of work, and
the type of owner and contract agreement, the construction company may
perform job cost accounting in the home office or in the field. Generally, the
smaller the firm and the smaller the contract value, the more likely all
accounting functions will be performed in the home office. On larger
projects, the project may have a jobsite accountant or cost engineer. The
type of contract and how it addresses reimbursable costs may affect where
the construction firm performs the accounting function. For example,
assume a project is a $15 million mid-rise speculative office building that has
a negotiated GMP contract that allows for all on-site accounting to be
reimbursed. It may be more cost effective to perform accounting out of the
home office with the assistance of the accounting department, but according
to the terms of the contract, the owner will not pay for it. The interested
reader may look to a construction cost accounting and financial
management book for an in-depth discussion of the financial operations that
happen at the jobsite level.

Figures 24.4A and B Cost control analysis

Regardless of where the cost data are collected and where payment is
made, most accounting functions on a project are the same. The process
begins with a corrected estimate. Actual costs are then incurred, either in
the form of direct labor, material purchase, or subcontractor invoice. Cost
codes (those matching the estimate) are recorded on the time sheets and
invoices and routed for approval. After the invoices are approved, the cost
data are input into the cost control system.
One important aspect of this phase of cost recording is the accurate
coding of actual costs. If costs are intentionally or accidentally coded
incorrectly, the project team will not know how they are doing on that
specific item of work. All costs should be recorded correctly to provide the
PM an accurate accounting of all expenditures. Accurate recording will not
only help with cost control, but it will also provide a more realistic as-built
estimate, which will be used to update the company’s estimating database
and help prepare better estimates in the future.
Control of direct labor and equipment rental costs is the responsibility of
the superintendent. The key to getting the field supervisors involved in cost
control is to get their personal commitment to the process. One successful
way for the PM to do this is to have the superintendent actively involved in
developing the original estimate. If the superintendent said it would take
four people working two weeks to form a concrete foundation wall, he or
she will often see to it that the task is completed within that time.
Work packages are a method of breaking down the estimate into distinct
packages or systems that match measurable work activities. For example,
spread footings, including forming, reinforcing steel, and concrete
placement, could be a work package. The work is planned according to the
number of hours in the estimate and monitored for feedback. When a system
is complete, such as footings or slab-on-grade, the project manager and the
superintendent immediately know how they are doing with respect to the
overall estimate. To be able to do this, the field supervision needs to have
been provided the estimated costs, both in materials and man-hours, for
each work package. The advantages of estimating using unit man-hours over
unit prices for labor were previously discussed in Chapter 10. Field
supervisors think in terms of crew size and duration. They do not think in
terms of $1.19 per square foot. Estimating in this manner also makes for an
easy transition into project management.
Which items should the project team track? The 80–20 rule applies here, as
it does throughout our discussion on construction cost estimating. Twenty
percent of the direct work activities account for 80% of the man-hours and
therefore present 80% of the risk for the estimator and the contractor. The
PM should prioritize those activities with the greatest risk. The estimate
should be reviewed to identify those items that have the most labor hours or,
in the case of equipment rental, the most cost. Work packages should be
prepared for those items that the project manager and the superintendent
believe are worthy of tracking and monitoring. The foreman who is
responsible for accomplishing the work should develop and take ownership
of each work package. Foremen are the last planners and in the best position
to achieve cost objectives.

Additional project management applications

There are many different aspects of PM that rely on detailed and accurate
construction cost estimates. This is not a book on PM, as stated earlier, and
we have limited space to guide the reader through this natural transition.
The previous sections cover the primary PM tools of the project estimate,
and here we list a few other and more current PM estimate and cost related
topics.
Activity-based costing is the process of applying home office and jobsite
indirect costs to departments and projects and direct construction activities
if possible. Activity-based costing focuses on identifying what cost drivers
have impact on cost objects and the degree to which they add value to the
project.
Lean construction techniques focus on processes to improve construction
costs and eliminate waste by incorporating efficient methods during design
and construction. Whereas activity-based costing identified what the cost
drivers are, lean focuses on how those costs can be reduced or managed
efficiently. There are many aspects of lean, including just-in-time deliveries,
target value design, value engineering, pull planning, last planner, supply
chain material management, and others.
Time value of money is an economic study comparing past, present, and
future values of money using a series of formulas and spreadsheets and
relying on several factors such as interest rates, inflation rates, investment
years, and other variables. This is relevant to estimating and project
management, as monetary factors such as inflation, escalation, and interest
factor into the preparation of a cost estimate – knowing when the work will
be performed and management of pay requests, change orders, and financial
close-out – or when the contractor expects to receive payment for work
performed.

Summary
Developing a good estimate is the most important activity for the estimating
team. Without securing a contract, the project manager will not have a
project to manage. The ultimate success of the estimating efforts, though,
will be measured during the construction of the project. If the estimate was
prepared properly, the project management activities such as schedule and
cost control are much easier. There is not any such thing as an error-free
estimate or schedule. One of the first responsibilities of the project
construction team is to buy out the project and to correct the estimate so
that it is a workable tool during construction. Getting paid on time is an
important PM function, and development of an open-book detailed SOV
with the corrected estimate is a good means of facilitating timely payments.
This same concept holds true with change order development and
negotiation.
The cash flow curve is developed from the estimate and the schedule,
which is a tool used by the project owner, who may in turn need to provide
a pay request forecast to the bank. The corrected estimate and schedule will
result in a more accurate cash flow curve. The cost control management
aspect of the construction project takes the corrected and bought-out
estimate and monitors it against actual costs incurred and adjusting as
required. The foreman’s work package is an important tool in managing field
labor costs.

Review questions
 1 What is the difference between bid shopping and buyout?
 2 Why might a project manager want to buy fast?
 3 Why is it to everyone’s benefit to postpone establishing the pay request
schedule of values until after buyout is complete?
 4 Why might the bid estimate not be correct?
 5 Why should both the project manager and superintendent be involved
with creating the original bid estimate and schedule?
 6 The cost codes on a project should be the same as what other types of
codes? There are several.
 7 Who prepares a cost control work package?
 8 Do craftspeople care if a project or an activity is completed within
budget and on time?
 9 How does the 80–20 rule relate to cost control?
10 What is the riskiest and most difficult part of the estimate to control?

Exercises
1 Assume the following buyout values for the case study project. Begin
with the final bid estimate developed in Chapter 20 and develop a
buyout log similar to Figure 24.2. You will have to look at examples
presented earlier in the book and make a few derivations and
assumptions to complete this exercise.
• Buy reinforcement steel: $1,150 per ton
• Install structural steel and metal deck: $2.7 million
• Landscaping and irrigation: $790,000
Average $110 per cubic
• Unit price for supplying concrete:
yard
U.P. of 45 cents per SF of
• Concrete finishing subcontractor:
slab
• Package plumbing and HVAC: $3,960,000
• Package roofing, traffic control, and
$1,625,000
waterproofing:
 • Storefront, excluding purchase of punch $3.2 million
windows:
• Elevators, including cab upgrades: $1.2 million
2 Using the buyout values in Exercise 1, develop a new schedule of values
for our case study project that was shown in Chapter 20.
3 Revise the lump sum schedule of values (as shown in the right column
of Figure 24.3) by combining items to create a l0 line-item schedule of
values. This is exclusive of Exercise 1.
4 Revise the lump sum schedule of values (as shown in the far-right
column of Figure 24.3) by front-end loading all the fee and general
conditions and other markups to the areas of self-performed general
contractor work. This is exclusive of Exercise 1.
5 Utilizing the buyout log developed in Exercise 1, if the project was to
finish with exactly those buyout values equaling as-built costs, and all
other estimated costs were to equal actual costs (which is unlikely),
prepare a fee forecast for the project. What would the final fee for City
Construction Company be? Would the owner realize any project
savings? How would those savings be reflected in the final contract
amount?
6 How would your answers differ to Exercise 5 if this were an open-book
negotiated project with a 75–25% savings split favoring the project
owner?
7 If you were presenting an open-book pay request to a repeat client,
what additional detail/line items would you make to the GMP SOV
Figure 24.3, Column 3?
8 Assume you are the project manager for the Dunn case study project.
Utilize the direct work example and subcontract options presented
earlier in this book and make an argument why you would perform the
(A) elevated CIP deck formwork with your direct work forces and/or
why you would choose to subcontract that work, or (B) install the
doors, frames, and hardware, either self-performed or subcontracted.
Appendix
Estimating resources

A logical step from the initial drawing review is to work breakdown

schedule (WBS) and quantity take-off (QTO) and cost estimating. An
understanding of the language and abbreviations associated with contract
documents and estimating is critical. All construction estimators must be
able to successfully speak this language.

Table A.1: Estimating symbols and math conversions

Table A.2: Inch to foot conversions
Table A.3: Waste and lap estimating allowances

Table A.1 Standard conversions

• Area = Length × Width

• Volume = L × W × Height (or depth)
• 12 inches (12 in or 12″) = 1 Foot (1FT or 1′) or 1.0 Feet
• 1′ × 1′ = 1 Square Foot (SF)
• 12″ × 12″ = 144 Square Inches = 1 SF
• 1′ × 1′ × 1′ = 1 Cubic Foot (1 CF)
• 10′ × 10′ = 100 SF = 1 CSF = 1 Square (SQ), common with
roofing
• 3′ = 1 Yard (YD) = 36″
• 3′ × 3′ = 9 SF = 1 Square Yard (1 SY), common with floor
covering or asphalt
 • 1 YD × 1 YD = 1 SY
• 3′ × 3′ × 3′ = 27 CF = 1 Cubic Yard (1 CY), common with
concrete and earthwork
• 1 YD × 1 YD × 1 YD = 1 CY
• 1″ × 12″ × 12″ = 1 Board Foot (1 BF), common with framing
lumber
• 1000 BF = 1 MBF (thousand board feet)
• 4′ × 8′ = 32 SF, standard size of one sheet of plywood
• W30 × 80 is a structural steel wide flange beam or column with
a depth of 30″ and
weighs 80#/Lineal Feet (LF), formerly WF or ‘I’ or ‘H’ beams
• 6″ × 6″ × ½″ Angle Iron or <, or “L” weighs 19.6 #/LF
• HSS: Hollow Steel Structure, formerly Tube Steel (TS), [], such
as 4 × 4 × 1/4
• 43,560 SF = 1 Acre (AC)
• 2,000 Pounds (#) = 1 Ton (TN)
• 5,280′ = 1 Mile

Table A.2 Inch to foot conversions

Inches Feet Inches Feet

1 0.08 7 0.58
2 0.16 8 0.67
3 0.25 9 0.75
4 0.33 10 0.83
5 0.41 11 0.91
6 0.50 12 1.0
For example if we measured 55′-2″ this would converted to 55.16′
Or 2′-10″ would be converted to 2.83′
Table A.3 Miscellaneous waste and lap allowances

Material Add*
Concrete 3 to 5 to 7% for waste
Wire mesh 10% for lap
10% for lap for rough estimates, see
Rebar
specifications for exact lap
Structural steel 15% for gussets and plates
Framing lumber 10% for waste
Plywood 5 to 10% for waste
Building papers and
10% for lap
vapor barriers
Finishes such as carpet
10% for waste
and tile
20% to convert from bank yards (BY) to
Gravel
truck yards (TY)
Earth backfill 30 to 50% to convert from BY to TY
* Note: Waste and lap are dependent upon selected materials and contractor methods
References

The construction estimator or construction management enthusiast may want to refer to some of these
other resources. We referenced many of them in the book and utilized others for our research.

Allen, E. and Lano, J. (2019). Fundamentals of Building Construction: Materials and Methods (7th ed.).
Hoboken, NJ: John Wiley and Sons, Inc.
Assemble (https://construction.autodesk.com/products/assemble).
Bluebeam Revu (www.bluebeam.com/).
Building Connected (www.buildingconnected.com/subcontractor-construction-network/).
Destini Estimator (https://beck-technology.com/destini-estimator/).
eTakeoff Dimension (https://etakeoff.com/products/dimension-overview/).
Guide Building Construction Material Prices (www.bestconstructionsite.com).
Holm, L. (2019). 101 Case Studies in Construction Management. New York: Routledge.
Holm, L. (2020). Construction Contract Documents, Including Plan Reading Essentials and Extensive

Lists of Abbreviations and Construction Glossary Terms. Washington, DC: Amazon.

Holm, L., Schaufelberger, J., Griffin, D. and Cole, T. (2018). Construction Cost Estimating: Process and

Practices (2nd ed.). Buford, GA: LAD Custom Publishing, Inc. Predecessor for this book.
Holm, L. and Schaufelberger, J. (2020). Construction Superintendents, Essential Skills for the Next

Generation. New York: Routledge.

Holm, L. (2019). Cost Accounting and Financial Management for Construction Project Managers. New
York: Routledge.
Migliaccio, G. and Holm, L. (2018). Introduction to Construction Project Engineering. New York:
Routledge.
Mirsky, R. and Schaufelberger, J. (2014). Professional Ethics for the Construction Industry. New York:
Routledge.
On Screen Takeoff (www.oncenter.com/products/on-screen-takeoff).
Peterson, S. and Dagostino, F. (2019). Estimating in Building Construction (9th ed.). New York:
Pearson.
RS Means Construction Cost Data. Rockland, MA: Gordian, Inc. Published annually.
RS Means Data Online (www.rsmeans.com/products/online.aspx).
Sage Estimating (www.sage.com/en-us/products/sage-estimating/).
Schaufelberger, J. and Migliaccio, G. (2019). Construction Equipment Management (2nd ed.). New
York: Routledge.
Schaufelberger, J. and Holm, L. (2017). Management of Construction Projects, A Constructor’s

Perspective (2nd ed.). New York: Routledge.

Schaufelberger, J. and Lin, K. (2014). Construction Project Safety. Hoboken, NJ: John Wiley and Sons,
Inc.
Steel Construction Manual (www.aisc.org/Steel-Construction-Manual).
Ticola, V., editor-in-chief. (2017). Walker’s Building Estimator’s Reference Book (31st ed.). Lombard, IL:
Frank R. Walker Company.
WinEst (https://gc.trimble.com/product/winest).
Glossary

Many of the terms used in the book are expanded on here. A few additional industry-standard
construction management terms have been included as a valuable tool for the construction estimator.

Activity-based costing process of applying home office and also jobsite indirect costs to
departments and projects and direct construction activities if possible
Addenda additions to or changes in bid documents issued prior to bid and contract award
Additive alternates alternates that add to the base bid if selected by the owner
Agreement a document that sets forth the provisions, responsibilities, and obligations of parties to a
contract. Standard forms of agreement are available from professional organizations; also known as
contract agreement
Allowance an amount stated in the contract for inclusion in the contract sum to cover the cost of
prescribed items, the full description of which is not known at the time of bidding. The actual cost
of such items is determined by the contractor at the time of product selection by the architect or
owner, and the total contract amount is adjusted accordingly
Alternates selected items of work for which bidders are required to provide prices outside of the
base bid amount
Amendments see addenda
American Institute of Architects a national association that promotes the practice of architecture
and publishes many standard contract forms used in the construction industry
Application for payment see progress payment request
As-built drawings contractor-corrected construction drawings depicting actual dimensions,
elevations, and conditions of in-place constructed work
As-built estimate assessment in which actual costs incurred are applied to the quantities installed to
develop actual unit prices and productivity rates
Assemblies analysis determining the cost estimated per unit of work or assembly, such as dollars
per cubic yard of concrete, and comparing the result with similar data from other projects
Assemblies cost estimate a semi-detailed estimate that requires quantity take-off of bulk in-place
systems, such as foundations, and applies a unit price for all work associated with that system,
including labor, material, and subcontractor
Associated General Contractors of America a national trade association primarily made up of
construction firms and construction industry professionals
Bank cubic yard a measure of the volume of soil in its natural, undisturbed condition
Base hourly wage that portion of a worker’s gross hourly pay that does not represent deductions for
fringe benefits or payroll taxes
Best and final proposal the final proposal submitted by a contractor in a negotiated procurement
process after the owner has discussed the previous proposals received with each contractor
submitting one and has issued any clarifications or changes to the request for proposal
Bid bond a surety instrument that guarantees that the contractor, if awarded the contract, will enter
into a binding contract for the price bid and provide all required bonds
Bid documents drawings, specifications, and contract terms issued to general contractors to be used
for developing a bid for the defined work. Bid documents are not always the same as the final
construction documents
Bid form the form issued by a project owner on which contractors submit their bids
Bid procurement process selection of a contractor based upon a lump sum bid
Bid room location where a general contractor’s bid team processes subcontractor and supplier
quotations and determines the final bid price
Bid security money placed in escrow, a cashier’s check, or a bid bond offered as assurance to an
owner that the bid is valid and that the bidder will enter into a contract for that price
Bid shopping unethical contractor activity of sharing subcontractor or supplier bid values with
competitors in order to drive down prices
Bid summary the estimating form onto which all previously priced work and subcontractor bid
totals are entered and markups and the final price calculated
Bid tab box on subcontractor posting spreadsheet for a specification section or system and also
location of vendor bids for a single category of work
Bin physical location where posted subcontractor and supplier bid forms are stored on bid day
Boilerplate standard contract language that owners include in most of their contracts
Bridging delivery method project delivery method where the owner or architect engages designers
to create a conceptual design and design-build subcontractors finish the design conforming to that
criteria; also known as design-assist delivery method
Budget control log spreadsheet used to monitor changes of materials or scope throughout the design
process and the budget implications of those changes
Budget cost estimate preliminary estimate based on early design documents
Builder’s risk insurance protects the contractor and owner in the event that the project is damaged
or destroyed while under construction; similar to the owner’s property insurance
Building information models or modeling computer design software involving multi-discipline
three-dimensional overlays improving constructability and reducing change orders
Burden see labor burden
Buyout the process of awarding subcontracts and issuing purchase orders for materials and
equipment
Buyout log a project management document that is used for planning and tracking the buyout
process
Cash flow curve a plot of the estimated value of work to be completed each month during the
construction of a project
Change order modifications to contract documents made after contract award that incorporate
changes in scope and adjustments in contract price and time
Change order proposal a request for a change order submitted to the owner by the contractor or a
proposed change sent to the contractor by the owner requesting pricing data
Chief estimator the head of the estimating department in a construction firm
Claim an unresolved request for a change order
Close-out the process of completing all construction and paperwork required to complete the project
and close out the contract
Conceptual budget estimate cost estimates developed using incomplete project documentation;
may also be a programming budget estimate
Concrete reinforcement steel round steel bars or rods that handle tension loads imposed on
concrete elements
Construction documents detailed drawings and specifications corresponding with lump sum
bidding
Constructability analysis an evaluation of preferred and alternative materials and construction
methods
Construction documents the agreement, general conditions, special conditions, drawings, and
specifications
Construction joint the interface or meeting surface between two successive placements of concrete
Construction management agency delivery method a delivery method in which the client has
three contracts: one with the architect, one with the general contractor, and one with the
construction manager. The construction manager acts as the client’s agent but has no contractual
authority over the architect or the general contractor
Construction management at-risk delivery method delivery method in which the owner engages
a construction management company early during design, and when the design is complete, that
contractor guarantees the final cost of the project – subject to approved change orders; also known
as construction manager/general contractor delivery method
Construction Specifications Institute the professional organization that developed the 16-division
MasterFormat that is used to organize the technical specifications, now 50 divisions
Contingency amount applied to an estimate to cover unknown issues and incomplete bid documents
Contract a legally enforceable agreement between two parties; also, an agreement
Control joint joint cut into a concrete slab to control where cracking occurs
Corrected estimate estimate that is adjusted based on buyout costs
Cost codes codes established in the firm’s accounting system that are used for recording specific
types of costs
Cost estimating process of preparing the best educated anticipated cost of a project given the
parameters available
Cost indices numerical values that reflect the variation in price levels at different geographic
locations, economies of scale, and/or different time frames
Cost-loaded schedule a schedule in which the value of each activity is distributed across the
activity, and monthly costs are summed to produce a cash flow curve
Cost-plus contract a contract in which the contractor is reimbursed for stipulated direct and
indirect costs associated with the construction of a project and is paid a fee to cover profit and
company overhead
Cost-plus contract with guaranteed maximum price a cost-plus contract in which the contractor
agrees to bear any construction costs that exceed the guaranteed maximum price unless the project
scope of work is increased
Cost-plus-fixed-fee contract a cost-plus contract in which the contractor is guaranteed a fixed fee
irrespective of the actual construction costs
Cost-plus-percentage-fee contract a cost-plus contract in which the contractor’s fee is a percentage
of the actual construction costs
Cost-reimbursable contract a contract in which the contractor is reimbursed stipulated direct and
indirect costs associated with the construction of a project. The contractor may or may not receive
an additional fee to cover profit and company overhead
Craftsmen or craftspeople nonmanagerial field labor force who construct the work, such as
carpenters and electricians, also crafts or craftspeople or tradesmen
Davis-Bacon wage rates prevailing wage rates determined by the U.S. Department of Labor that
must be met or exceeded by contractors and subcontractors on federally funded construction
projects. Other public agencies may also require prevailing wages
Deductive alternates alternates that subtract from the base bid if selected by the owner
Design-build delivery method or contract delivery method where the project owner has only one
contract with a designer-builder that is responsible for the complete design and construction of a
project
Design development documents the plans and specifications when they are about 75–80% complete
Detailed cost estimate extensive estimate based on definitive design documents. Includes separate
labor, material, equipment, and subcontractor quantities. Unit prices are applied to material
quantity take-offs for every item of work
Differing site condition some condition of the project site that is materially more adverse than as
depicted in the contract documentation and could not be seen by a visit to the site, for example,
encountering a buried water line where none was shown in the contract drawings
Digitizer computer tool used to measure quantities from two-dimensional drawings
Direct construction costs labor, material, equipment, and subcontractor costs for the contractor,
exclusive of any markups
Eighty-twenty rule on most projects, about 80% of the costs are included in 20% of the work items;
also 80-20 rule
Electronic mail internet tool for sending communications and attached documents; also e-mail
Escalation percentage added to an estimate to account for anticipated cost increases over time
Estimate schedule management document used to plan and forecast the activities and durations
associated with preparing the cost estimate; not a construction schedule
Estimating database collection of historical labor and material unit prices, which can be applied to
quantities in future estimates
Estimator a person charged with preparing a cost estimate
Fast track schedule a schedule that shows construction of a project starting before the entire design
is completed. Construction of the foundation would be started as soon as the foundation design is
complete, even though the remainder of the building design is not finished
Fee contractor’s income after direct project and job site general conditions are subtracted; generally
includes home office overhead costs and profit
Footprint the ground upon which a building is situated
Foreman direct supervisor of craft labor on a project
Free on board an item whose quoted price includes delivery at the point specified. Any additional
shipping costs are to be paid by the purchaser of the item; also known as freight on board
Fringe benefits that portion of the gross hourly pay that is deducted for payment of benefits such as
retirement, health insurance, and life insurance
General conditions a part of the construction contract that contains a set of operating procedures
that the owner typically uses on all projects. They describe the relationship between the owner and
the contractor, the authority of the owner’s representatives or agents, and the terms of the contract.
The term also is used to describe jobsite overhead costs
General contractor the principal party to a construction contract who agrees to construct the
project in accordance with the contract documents
General liability insurance protects the contractor against claims from a third party for bodily
injury or property damage
Geotechnical report a report prepared by a geotechnical engineering firm that includes the results
of soil borings or test pits and recommends systems and procedures for foundations, roads, and
excavation work; also known as a soils report
Guaranteed maximum price contract a type of cost-plus contract in which the contractor agrees to
construct the project at or below a specified cost
Home office overhead contractor’s operating costs that are not related to specific projects
Indirect construction costs expenses indirectly incurred and not directly related to construction
activity, such as project or home office overhead
Indirect equipment construction equipment that is used for multiple purposes on a project, such as
a tower crane, and cannot be charged to a single construction activity
Integrated project delivery method fairly new contracting method where the project owner,
architect, and general contractor all sign the same contract agreement and share risks equally in
financial, safety, schedule, and quality performance
Invitation for bid a portion of the bidding documents soliciting bids for a project; also instructions
for bidders, also invitation to bid
Jobsite general conditions costs field indirect costs that cannot be tied to an item of work but that
are project specific and, in the case of cost reimbursable contracts, are considered part of the cost of
the work
Jobsite overhead see jobsite general conditions cost
Just-in-time material delivery a material management approach in which supplies are delivered to
the jobsite just in time to support construction activities. This minimizes the amount of space
needed for on-site storage of materials; an element of lean construction
Labor and material payment bond a surety instrument that guarantees that the contractor (or
subcontractor) will make payments to his or her craftspeople, subcontractors, and suppliers
Labor burden markup of labor wage rates to account for worker benefits and labor taxes
Labor taxes markup of labor wage rates to account for payroll taxes required by the government
such as workers’ compensation insurance, unemployment insurance or tax, Social Security, and
Medicare; see also labor burden
Laydown areas areas of the construction site that have been designated for storage of construction
materials that are being stored until they are used in the construction of the project
Lean construction techniques process to improve costs and eliminate waste incorporating efficient
methods during both design and construction; includes just-in-time deliveries, target value design,
value engineering, pull-planning, and other elements
Letter of intent written authorization from a project owner to a general contractor or general
contractor to a subcontractor directing them to proceed with some facet of construction, often
preconstruction services or material ordering, after which a construction contract will follow
Liquidated damages an amount specified in the contract that is owed by the contractor to the owner
as compensation for damaged incurred as a result of the contractor’s failure to complete the project
by the date specified in the contract
Loose cubic yards a measure of the volume of soil after it is excavated and expands or swells; also
known as truck cubic yards
Lump sum contract a contract that provides a specific price for a defined scope of work; also known
as fixed-price or stipulated-sum contract
Major supplier vendor who supplies fabricated material or a large amount of material for a
construction project
Markup percentage added to the direct cost of the work to cover such items as overhead, fee, taxes,
and insurance
MasterFormat a numerical system of organization developed by the Construction Specifications
Institute that is used to organize contract specifications and cost estimates; formerly 16 divisions
and now 50 divisions
Material supplier vendor that provides materials but no on-site craft labor
Mixed use development real estate development or project that involves three or more uses or
functions such as office, retail, hotel, apartments, and/or entertainment, among others
Negotiated procurement process selection of a contractor based on a set of criteria the owner
selects
Nonreimbursable costs contractor costs that are not reimbursed by the project owner under the
terms of a cost-plus contract
Notice to proceed written communication issued by the owner to the contractor, authorizing the
contractor to proceed with the project and establishing the date for project commencement
Officer-in-charge general contractor’s principal individual who supervises the project manager and
is responsible for overall contract compliance
Open shop a nonunion firm, or one that has not signed a contract with a labor union, also known as
merit shop
Order-of-magnitude estimates general contractor’s cost estimates for subcontracted scopes of work
Overhead expenses incurred that do not directly relate to a specific project, for example, rent on the
contractor’s home office
Payment bond see labor and material payment bond
Payment request see progress payment request
Payroll taxes that portion of the gross hourly pay that is used to pay federal and state
unemployment insurance or taxes, Social Security, Medicare, and workers’ compensation insurance;
also known as labor taxes
Performance bond a surety instrument that guarantees that the contractor will complete the project
in accordance with the contract; it protects the owner from the general contractor’s default and the
general contractor from the subcontractor’s default
Plan center or room location where bid documents are available for review by both general
contractors and subcontractors
Plug estimates see order-of-magnitude estimates
Post-tension concrete concrete that utilizes post-tension cables in lieu of, or in addition to, rebar;
the PT cables function similar to rebar and handle tension
Pre-bid conference meeting of bidding contractors with the project owner and architect; the
purpose of the meeting is to explain the project and bid process and solicit questions regarding the
design or contract requirements
Pre-cast concrete concrete cast or fabricated, typically in an offsite yard or warehouse, that is then
delivered to the jobsite as needed and erected with methods similar to erecting structural steel
Preconstruction agreement a short contract that describes the contractor’s responsibilities and
compensation for preconstruction services
Preconstruction conference meeting conducted by owner or designer to introduce project
participants and to discuss project issues and management procedures
Preconstruction cost or fee the amount of money charged by a general contractor or
preconstruction agent to perform services such as budgeting and scheduling
Preconstruction services services that a construction contractor performs for a project owner
during design development and before construction starts
Premium time that portion of a worker’s wage that represents the cost of overtime
Pre-proposal conference meeting of potential contractors with the project owner and architect; the
purpose of the meeting is to explain the project, the negotiating process, and selection criteria and
solicit questions regarding the design or contract requirements
Prequalification of contractors investigating and evaluating prospective contractors based on
selected criteria prior to inviting them to submit bids or proposals
Pricing recaps form used by estimators to price the quantities of work determined during quantity
take-off
Profit the contractor’s net income after all expenses, including home office overhead, have been
subtracted
Pro forma financial analysis of a real estate development, such as a tract of homes, to predict the
anticipated costs and revenues
Programming budget estimate budget estimate prepared during the programming phase to assess
the financial feasibility of a project and to identify anticipated funding requirements; may also be a
conceptual budget estimate
Progress payment request document or package of documents requesting progress payments for
work performed during the period covered by the request, usually monthly
Progress payments periodic (usually monthly) payments made during the course of a construction
project to cover the value of work satisfactorily completed during the previous period, also pay
estimates
Project control the methods a project manager uses to anticipate, monitor, and adjust to risks and
trends in controlling cost and schedule
Project engineer project management team member who assists the project manager on larger
projects. More experienced and has more responsibilities than the field engineer, but less than the
project manager. Responsible for management of technical issues on the jobsite
Project manager individual on the jobsite team responsible for overall project performance
especially those tasks related to administration and documentation; may also be the project
estimator
Project manual a specification volume usually containing the instructions to bidders, the bid form,
general conditions, and special conditions; it also may include a geotechnical report
Property damage insurance protects the contractor against financial loss due to damage to the
contractor’s property
Public–private partnership delivery method a construction delivery method in which a public
agency partners with a contractor or developer to reduce costs and lawsuits and ultimately save
taxpayer money
Purchase orders written contracts for the purchase of materials and equipment from suppliers
Quantity recaps form used by estimators to group like items, such as reinforcing steel or concrete,
from several quantity take-off sheets
Quantity take-off one of the first steps in the estimating process to measure and count items of work
to which unit prices will later be applied to determine a project cost estimate
Recapitulation the form upon which tabulated quantities or work are listed and priced
Reimbursable costs costs incurred on a project that are reimbursed by the owner. The categories of
costs that are reimbursable are specifically stated in the contract agreement
Request for proposal document containing instructions to prospective contractors regarding
documentation required and the process to be used in selecting the contractor for a project
Request for qualification a request for prospective contractors or subcontractors to submit a specific
set of documents to demonstrate the firm’s qualifications for a specific project
Request for quotation a request for a prospective general contractor, subcontractor, and/or supplier
to submit a quotation for a defined scope of work
Rough order-of-magnitude cost estimate a conceptual cost estimate usually based on the gross size
of the project. It is prepared early in the estimating process to establish a preliminary budget and
decide whether or not to pursue the project
Savings split a clause in a guaranteed maximum price contract that provides a formula for sharing
the savings between the owner and the contractor if the final cost of construction is less than the
guaranteed maximum price
Saw joint slab-on-grade concrete cracking method involving sawing recently placed concrete into
grids and then often associated with caulking the saw joints at a later time
Schedule of values an allocation of the entire project cost to each of the various work packages
required to complete a project. Used to develop a cash flow curve for an owner and to support
requests for progress payments; may also be required to accompany a bid or negotiated cost
proposal
Schematic design budget estimate a budget estimate that is prepared at the completion of schematic
design
Schematic design documents the plans and specifications early in the design process. They typically
consist of sketches and preliminary drawings
Self-performed work project work performed by the general contractor’s work force rather than by
a subcontractor
Semi-detailed cost estimate an estimate that is prepared during design development that includes
estimates for some components based on quantity take-off and estimates for other components
based on order-of-magnitude estimates
Short list the list of best-qualified contractors developed after reviewing the qualification of
prospective bidders from a long list. Only the contractors on the short list are invited to bid or
submit a proposal
Soils report see geotechnical report
Special conditions a part of the construction contract that supplements and may also modify, add to,
or delete portions of the general conditions; also known as supplementary conditions
Specialties building materials specified in CSI division 10 such as toilet accessories and fire
extinguishers
Specialty contractors construction firms that specialize in specific areas of construction work, such
as painting, roofing, or mechanical. Such firms typically are involved in construction projects as
subcontractors; also known as trade contractors
Statement of qualification documentation submitted by a contractor in response to a request for
qualifications; the statements of qualification are evaluated by the owner to determine the best
qualified contractors from whom to solicit proposals
Subcontractors specialty contractors who contract with and are under the supervision of the general
contractor
Subcontractor call sheet a form used to list all of the bidding firms from which the general
contractor is soliciting subcontractor and vendor quotations
Subcontracts written contracts between the general contractor and specialty contractors who
provide craft labor and usually material for specialized areas of work; also known as subcontract
agreements
Substantial completion state of a project when it is sufficiently completed that the owner can use it
for its intended purpose
Substructure the portion of a building that is constructed below ground, usually the foundation,
basements, and potentially the slab-on-grade
Summary schedule abbreviated version of a detailed construction schedule that may include 20 to
30 major activities
Superintendent individual from the contractor’s project team who is the leader on the job site and
who is responsible for supervision of daily field operations on the project
Superstructure the portion of a building that is constructed above ground
Supplier see material supplier
Target value design lean construction process where the project budget is established before design
begins and each element of the construction project is given a portion of the design, like a piece of
pie, and the each design discipline must stay within that budget
Technical specifications a part of the construction contract that provides the qualitative
requirements for a project in terms of materials, equipment, and workmanship
Tilt-up concrete construction a method of concrete construction in which members, usually walls,
are cast horizontally and then tilted into place after the forms have been removed
Time and materials contract a cost-plus contract in which the owner and the contractor agree to a
labor rate that includes the contractor’s profit and overhead. Reimbursement to the contractor is
made based on the actual costs for materials and the agreed labor rate times the number of hours
worked
Traditional project delivery method a delivery method in which the client has a contract with an
architect to prepare a design for a project; when the design is completed, the client hires a
 contractor to construct the project
Truck cubic yards see loose cubic yards
Uniformat a system for organizing a cost estimate that is based on building systems
Unit price contract a contract that contains an estimated quantity for each element of work and a
unit price; the actual cost is determined once the work is completed and the total quantity of work
measured
Value engineering a study of the relative value of various materials and construction techniques to
identify the least costly alternative without sacrificing quality or performance
Work breakdown structure a list of significant work items that will have associated cost or
schedule implications
Workers’ compensation insurance protects the contractor from a claim due to injury or death of
an employee on the project site
Work package a defined segment of the work required to complete a project
Index

access doors 115, 155

activity based costing 158, 159, 212, 306
addenda 33, 239, 240, 250
add-ons see markups
administrative expense 212–4
agency construction management delivery method 27
agreement see contract agreement
allowance 289
alternate bid item 29, 289
American Institute of Architects or AIA 31, 33, 49, 56
anchor bolts 70, 95
application for payment 290, 300–3
as-built estimate 294, 295
assemblies check 144, 151, 169, 236
assemblies pricing 175, 284
assumptions see qualifications and assumptions
Autodesk 273, 277
automated estimating techniques or automated quantity take-off see estimating software

backlog 227
bank cubic yards 72–5, 193
bar joist see structural steel bar joist
beam connections 95, 96
best and final offer 269
bid: bond 242; captain 249, 255, 257; day 248–62; delivery 257, 258; documents 229, 240; error 259, 260;
ethics 259, 266, 267; form see bid proposal form; opening 259; package 240; poster 243, 251, 255;
procurement method 29; proposal form 240–2, 249–51, 286; room 240, 243, 248; runner 243, 249;
security see bid bond; shopping 268; tab 244; taker 240, 241, 243, 248, 249; team 242, 243, 245, 248,
249
bin 244, 245, 254
blended labor burden rate 131, 132
blocking or backing 106
Bluebeam 276, 277
board foot conversion 105
bonds see bid bond or performance and payment bond
budget: cost estimate or budget estimating 17–21, 51, 282, 283; estimate narrative see qualifications and
assumptions; options log 51
builder’s risk insurance 225
building: envelope see envelope; information models or modeling 277, 278; permit see permit;
substructure see concrete substructure; superstructure see superstructure; systems 66, 67
Building Connected 280
business tax 225 see also taxes
buyout 297–300
buyout log 298, 299

cabinetry or cabinet tops 111, 112, 181

Carpenters Training Center case study project 88, 141, 284
carpentry 103–19
case study project see Dunn Lumber case study project
cash flow curve 303
cast in place concrete 65–77, 80–4, 138–40, 144
ceilings 180
change order 290–3
change order proposal 290–2
chief or lead estimator 37, 41, 42, 243 see also estimator
chief operations officer 40
City Construction Company, fictitious case study contractor 11, 12
civil work see heavy civil
claim 293
clarifications see qualifications and assumptions
collaborative delivery method see integrated project delivery method
combination bid 252, 253
commissioning 189, 190
composite wage rate 128
computer estimating see estimating software
conceptual cost estimate 18
conceptual design 49
concrete: beams 81, 82, 139; columns 81, 82, 138; elevated slabs 83, 139, 140; equipment see equipment
cost; finishing 77; formwork 68, 135, 136, 140; foundations 66–75, 135, 136, 164; patch and sack 139;
pricing 134–46; pump 71, 76, 138, 161, 162; sawing 76, 77; slab on metal deck 84, 85, 139;
substructure 63–79, 176; superstructure see superstructure; take-off 63–91; walls 82, 83, 139
ConsensusDocs 31, 56
constructability analysis or review 52, 53
construction: contingency 223, 224; document estimate 22, 23; document phase 49; management
consultant see agency construction management delivery method; manager-at-risk delivery
method 28; organizations 38–40; project management see project management
Construction Specifications Institute or CSI 6, 7, 19, 33, 34 92, 103, 110, 116, 117, 173, 207, 208
consumables 215
contingencies or contingency 21, 22, 222–4
continuous footings 67–75
contract: agreement 31–3, 228; considerations 26–36; documents 32–5
contractor see general contractor
contractor equipment companies 159
contractor-owned equipment 159
conveying equipment 185
corrected estimate 300
cost: code 303–5; control 303–6; forecast or monthly cost or fee forecast 293, 294; indices 18
cost-loaded schedule 303
cost-plus contract 30, 283
cranes or hoisting 88, 136, 142, 143, 149, 158, 162–7, 214
curbs 197

database or database updates 134, 279, 280, 295

design-build delivery method 28
design-build subcontractors 184
design: contingency 21, 222; development estimate 21, 22; development phase or development
documents 49, 50; team 32
Destini Estimator 276
detailed cost estimate 22, 23
developer 18, 285
differing site conditions see unforeseen conditions
dimensional lumber 104
direct labor 123–33
dock levelers 182
document contingency 222
document review 63, 64
doors, door leafs, door frames, and door hardware 113–15, 154, 155, 178, 179
drawing types 32, 63, 64
drawing views 32, 33
drones 194, 277, 279
drywall see gypsum drywall
Dunn Lumber case study project 11, 12

eighty-twenty rule or Pareto’s eight-twenty rule 6, 107, 208, 306

electrical work 188, 189
elevator 185, 189
embedded steel 70, 71, 95
engineered lumber 107
envelope 173–83
equipment: cost 149, 152, 158–70, 214, 215; lease agreement 159, 160; rental companies 159, 160; sources
159, 160
escalation contingency 223, 224
estimate: correction 300; schedule 4, 5; summary 234–47 see also summary estimate; types 17–25
estimating: contingency 21, 223, 224; markups see markups; process 3, 4, 123, 124, 173; pyramid see

estimating process; risks 44, 45; software 64, 272–81; steps see estimating process; team 4, 5
estimator 37, 41, 42, 92, 111, 240, 243
ethics 265–71
exclusions see qualifications and assumptions

fast track construction 28

fee 221, 222, 226–9, 260, 292, 293
field engineer see project engineer
field office or job office 38, 215
final bid summary 257, 258
final document review 234–6
fine grading 68
finish carpentry 110–13, 154
finishes and finish subcontracted scopes 180–2
fire extinguishers 116, 155, 216
fireproofing 177
fire sprinklers or fire protection 184, 187–9
floor covering 112, 180, 181
footing drain system 68
forecast 293, 294
foreman 41, 128
formwork see concrete formwork
foundations see concrete foundations
framing or carpentry framing 104–8
framing hardware 107, 108, 152
free on board or freight on board 251
fringe benefits see labor benefits

general and administrative cost see overhead costs

general: conditions 31, 33; conditions estimate see jobsite general conditions cost; contractor 37–47,
123, 174; liability insurance 224; operations 217, 218
geotechnical report see soils report
grade beams see continuous footings
graduated bond schedule 230
grout 89, 142, 149
guaranteed maximum price contract 30, 31, 56
guaranteed maximum price estimate 282–4
Guide see The Guide

gypsum drywall or wallboard 106, 176, 252, 253

hardware room see door hardware

heating, ventilating and air conditioning see mechanical
heavy civil unit price bids or heavy civil cost estimate 192–203, 285–7
heavy timbers 106
historical cost data 135, 295
hoisting equipment see cranes
home office or home office overhead or home office overhead and profit 38, 39, 41, 226–9
hourly rates see wage rates

indirect construction costs see jobsite general conditions cost

indirect equipment 214
inspections 218
insulation 178
insurance 218, 224, 225
integrated project delivery method 28, 29
interview 260
invitation to bid or instructions to bidders 29, 259

jobsite layout plan 55

jobsite overhead or general conditions cost 38, 207–20, 229

kitchen equipment 117

labor: benefits 130, 131; burden 129–32, 221, 229, 230, 237; cost see direct labor; productivity see

productivity; taxes 129–31

landscaping 198
laydown area see jobsite layout plan
lean construction techniques 50, 51, 158, 306
Lee Street Lofts case study project 12, 13, 196
letter of intent 54, 56
liability insurance see general liability insurance
life-cycle cost 53
liquidated damages 228
loaded wage rates 131, 132
lockers 117
loose cubic yards 72–5, 193
lump sum: bid or contract 29, 30; estimate 30; estimating process 3, 4

market conditions 227, 228, 260

marking the drawings 64, 236
markups 221–33, 292, 293
masonry 176, 252
mass excavation and backfill 192, 193
MasterFormat 6, 19, 20, 33–5, 304 see also Construction Specifications Institute
material cost or material pricing 134, 135
Means see RS Means

mechanical work 8, 186, 189

metal decking 99, 100, 149
millwork 111
miscellaneous steel 97, 99, 148, 149

negotiated procurement method 30

Nelson studs or lugs 84, 96
not in contract see qualifications and assumptions
not to exceed amount see guaranteed maximum price estimate
numerical rounding 18

officer-in-charge 40, 227, 242

On-Screen Takeoff 276
opportunity cost 227
order-of-magnitude or OM estimate 173–6
organization chart 38–40
oriented strand board 108
overhead costs or overhead and profit 221 see also home office and jobsite general conditions cost
overhead doors 179
owner contingency 222, 223
owner’s representative or agency construction manager 27

paint 180
partitions see gypsum wall board and wood wall framing
pavement 197
pay request or payment request see application for payment
payroll taxes see labor taxes
percentage add-on see markups
performance and payment bond 217, 230, 231
permit 217
permit contingency 223
personnel and material hoist 167, 168
pile caps see spot footings
piling 75, 194, 195
planning 32, 54, 55
plug estimate 184, 185, 201, 245, 255 see also order-of-magnitude estimate
plumbing 186, 187, 189
post-bid: day 259, 260; ethics 267–70; negotiations 269, 270
post-tensioned concrete or post-tensioned cables 89, 90, 139
pre-award meeting 260
pre-bid conference 29
pre-bid day 240–5, 265, 266
precast concrete 80, 84–9, 140–3
precast concrete tilt-up panels see tilt-up concrete walls
preconstruction 48–59; agreement or contract 55, 56; estimate or fee 56, 57; phase 49, 50; services 50–5,
285; team 50
premium time or overtime 128
prequalification of contractors 30, 43
pressure treated lumber 104
prevailing wage rates or Davis Bacon wage rates 33, 132
pricing: methods 30, 31; factors 136–8; recap completion 168, 169
procurement methods 29, 30
productivity or productivity factors 125–7
pro forma 18, 285
programming budget estimate 17, 18
programming phase 17, 18
progress payment see application for payment
project: based organization chart 38, 39; delivery methods 27–9; engineer 41; item list 9; management
37–47, 289–95, 297–308; management attributes 37, 38; management applications of estimates 297–
308; manager 37, 40, 212, 227, 243; manual 33; summary schedule see summary schedule; team
member responsibilities 40–2
property damage insurance see builder’s risk insurance
public bid opening 259
punch windows 115, 155, 178
purchase order 268

qualifications and assumptions 23, 24, 251

quality control plan 53–5
quantity recap see recapitulation sheet
quantity take-off or quantity take-off process 63–7
quantity take-off form 64, 65

recapitulation or recapitulation sheet or recap sheet 123, 125, 126

reinforcing steel or rebar 69, 70, 136
reinforcing steel unit weights 69, 70
request for proposal 30
request for quotation 29, 248
residential cost estimate 287–9
responsible bid 259
responsive bid 259
risk analysis or risk assessment 44, 45, 221, 222
risk management or risk mitigation 42
rodding off 68
rolled structural steel shapes 93–6
roof accessories 116
roofing 108–10, 152, 177
rough carpentry 103–8, 151–4, 176
rough-order-of-magnitude cost estimate 18, 238, 239 see also budget cost estimate
rounding see numerical rounding
RS Means 273, 279

safety plan 55
Sage estimating software 273–5
sales tax see taxes
saw sharpening 214
schedule or scheduling 32, 33, 52, 300
schedule of values 290, 300–2
schematic design 49
schematic design budget estimate 18–21, 24
scope contingency 223
self-performed work 147–57
semi-detailed cost estimate 21
sheeting or plywood sheeting 108, 109, 152
shoring 83, 84, 139, 193, 194
shotcrete 139
siding 108–10, 152, 177
signage 116, 155, 197, 198
Simpson hardware see framing hardware
site: improvements 197, 198; specialties 198; utilities 195, 196, 200
slab-on-grade 7, 8, 75–7, 137, 208, 304, 305
small tools 214, 215
soils report or geotechnical report 33, 193
special conditions or supplemental conditions 31, 33
specialties 116, 117, 155, 181, 182
specialty contractors see subcontractor
specifications or technical specifications 31, 33–5
spot footings or spread footings 67–75, 126
spreadsheet 244, 245
square-foot or square-foot of floor cost estimate 18, 95, 104, 187, 203
square foot of contact area 68, 83, 135
storefront or curtain wall 115, 178
striping 197, 198
structural excavation and backfill 71–5, 193
structural steel 92–102, 147–51; bar joist 96, 97, 148; beams 95, 96, 147, 148; columns 93, 94, 147, 148;
hoisting 163 see also cranes; trusses 96, 148; weights 94
subcontracting plan 42, 43
subcontract or subcontract agreement 268
subcontractor: bid 249–57; bid evaluation 243–5; bid packages 54; bid posting 251–4; equipment 160;
exclusions 251; inquiries 267, 268; list 200, 201, 255, 256; proposal form 249–51; quotation see

subcontractor bid; quotation evaluation see subcontractor bid evaluation; selection 43, 44;
solicitation 280; work or subcontractor scopes 174–6
substructure see concrete substructure
summary: estimate 238, 239; recapitulation sheet 143–5; schedule 208, 209
superintendent 37, 40, 41, 55, 212, 213, 227
superstructure 8, 80–91, 176
supplemental conditions see special conditions
swell factor see loose cubic yards
systems pricing see assemblies pricing

target value design 51, 52, 54

taxes 217, 225, 226
technical specifications see specifications
technology tools 272–81
temporary construction 215, 216
temporary utilities 216
testing 218
The Guide 127, 134, 147, 279, 280
tilt-up concrete walls 86–9, 140–3, 162, 163
Timberline see Sage estimating software
time value of money 306
toilet accessories 116
toilet partitions 116, 182
tower cranes 163–7, 194, 214; dismantling 166; erection 165; foundations and infrastructure 164;
operations and maintenance 165, 166
traditional project delivery method 27
truck cubic yards see loose cubic yards
trusses see structural steel trusses or wood trusses

unforeseen conditions or unknown site conditions 223, 290

Uniformat 18, 19, 66, 67
unit man-hours 125, 127, 147, 148
unit price bid 198, 199, 235, 282, 285–7
unit price contract 30
utilities see site utilities

value engineering 51, 53, 54, 269

value engineering log 54
vapor barrier 76, 77
Vehicle Loop Maintenance Facility case study project 14, 15
verbal prices 258, 259
vinyl plank flooring 112

wages or wage rates 127–9

walks 197
wallboard see gypsum wallboard
wall framing see wood wall framing
waste allowances 110, 310
waterproofing 109, 177
window blinds 117, 182
windows and window pricing 115, 154, 155
WinEst 273, 276
wood: columns and beams 104, 151; door and window headers 106; flooring 112; hoisting 163 see also

cranes; joist 104; paneling 112, 113; siding see siding; trusses 107, 152; wall framing 106, 151 see
 also rough carpentry
work breakdown structure 6–9, 303
workers’ compensation insurance 130, 225
work package 198, 199, 306