While creative architectural designs might seem like an easy job, there is a lot going on behind the scene. Whether it is a simple house or a stadium, there is a lot of effort and teamwork behind every construction. The most important issue when it comes to construction management is determining the budget for a project. Cost estimation is critical in every project development, as it will define whether a project is affordable or not, and based on that forecast, MEP engineers and estimators can make budgetary and feasibility preparations to keep it under budget. Of course, Contractors and owners both worry about the financial impact of cost overruns and failing to complete a project. That’s why they devote their time and effort to estimating how much a project will cost before deciding to move forward with it. Cost estimation is also considered as a time-sensitive process because prices of materials and employees’ wages are constantly changing in time.
In order to estimate a project cost, MEP engineers must first know the scope of work, then it comes the traditional approach which is the following:
A well-defined project plan can make the cost estimations more accurate and having multiple estimations during the pre-design and design phases are standard practices. These estimations get more accurate when the level of definition of a projected increase. There are five system levels of estimation that have been classified by the American Society of Professional Estimators.
The purpose of this level is to do a study based on the historical information, of course with some adjustments made to match the project specifications. That study will determine the overall feasibility of the construction when the project is still just at the design stage and has not yet been developed.
Based on the level one budget, this level helps make the cost estimation a little bit more accurate thanks to the provided schematics. At this level, the designer will have the opportunity to try various designs to find the perfect fit for the projects’ budget.
Design Development is the phase where budget conformance is confirmed thanks to the finalized design, the scope of work and the selected materials. At this level, a great amount of accuracy is added as design documentation gets more detailed.
At this level, funding allocations are confirmed and the construction cost is verified once again along finishing the design. Assessment of the project value is done taking into consideration such forgotten costs as permits or insurance. This final cost estimate will then be used to evaluate the subcontracting pricing during the bid phase.
This level estimate develops the probable cost of the project in order to prepare and submit a contract to an owner.
In conclusion, price estimation is extremely important and can be challenging for beginners and new engineers; however, MEP engineers can get better in time thanks to years of experience and hard work.