Introduction

What is estimating?

Estimating is the process of calculating, in advance, the quantities of the various items of work and the likely cost of a project from its drawings, specifications and current rates. The result, the estimate, is the expected cost before the work is done.

Why an estimate is prepared before construction

1. To know the probable cost, so the client can decide whether the project is affordable and worth doing.
2. To obtain administrative and financial approval and a budget. In Nepal, public work cannot start without an approved estimate and budget allocation (Public Procurement Act and Regulation).
3. To fix the cost estimate for tendering; bids are compared against it, and it helps judge abnormally low or high bids.
4. To prepare the bill of quantities and the quantities of materials, so purchase and storage can be planned.
5. To estimate the labour, equipment and time required, and prepare the work programme.
6. To control cost during the work and compare with the actual expenditure.
7. To decide the payment and fund flow, and to compare design alternatives.

Data required for an estimate

• Drawings: plans, elevations, sections, foundation and structural details, and schedules of doors, windows and finishes. Without complete drawings, quantities cannot be taken out.
• Specifications: the quality of materials and workmanship (for example cement mortar 1:4, M20 concrete, Fe 500 steel), so that the correct rate can be applied.
• Rates: the District Rate (published yearly by the District Rate Fixation Committee), the DUDBC norms for labour and material consumption, and local market rates for items not covered. Rates of materials, labour, transport (lead), and the contractor's overhead and profit are needed.
• Site data: site conditions, soil type, water table, distance of material sources (lead), and access.
• Quantities: the work quantities taken out item by item, using the units of IS 1200 / the Nepal standard methods of measurement.
• Other data: the applicable taxes (VAT 13%), contingency, price-adjustment and the contract conditions.

Estimating and costing means finding the quantities and the probable cost of work before it is done. Its main purposes are:

1. Probable cost: to know the total money needed, so the owner can decide on the project.
2. Approval and budget: administrative and financial sanction, and fund allocation, are given on the basis of the estimate.
3. Tendering: the engineer's estimate is the basis for inviting bids and for judging the reasonableness of the bids received.
4. Material, labour and equipment planning: quantities from the estimate give the materials to be ordered and the manpower and machines required.
5. Time scheduling: with the quantities and the productivity, the construction period and the programme are fixed.
6. Cost control: actual expenditure is compared with the estimate, so overspending is noticed in time.
7. Contract payment: the BOQ rates are used for interim payments and for valuing variations.
8. Comparison of alternatives: different designs or materials can be compared on cost.
9. Loan and cash-flow planning: banks and donors need a reliable cost figure.

An estimate is prepared before execution because no project can be approved, financed, tendered or managed without knowing its probable cost, quantities and time. For a municipal water supply project it matters for the following reasons.

1. Approval and budget: the municipal council must approve the programme and allocate funds (from its own revenue, provincial or federal grants, or a loan). The estimate gives the figure for the annual programme and budget.
2. Feasibility and choice of option: the estimate for the source, intake, transmission main, reservoir and distribution network allows comparing gravity versus pumping, or pipe materials (HDPE, GI, DI), and selecting the economical one.
3. Tendering: the engineer's estimate is the reference for tender evaluation under the Public Procurement Act, 2063. Bids much below or above it are examined.
4. Quantities of materials: pipes, fittings, valves, cement, steel and so on can be listed and procured in time, since pipes often have long delivery times.
5. Manpower, equipment and time: trenching, pipe laying and tank construction need planned labour and machines and a realistic schedule.
6. Cost sharing and tariff: the user committee's contribution and the water tariff are fixed from the capital cost.
7. Cost control: after award, progress payments and variations are checked against the estimate.

I agree. The estimated cost is a forecast made before the work, from drawings and current rates. The actual cost is what is really spent when the work is finished. The two are almost never equal because an estimate rests on assumptions that change in practice.

Reasons:

• Change in rates: prices of cement, steel, fuel and wages rise or fall between the estimate and construction (price escalation).
• Quantity changes: variations in design, site conditions (for example rock found in excavation, or a different soil) change the quantities actually executed.
• Measurement and calculation allowances: estimates use standard norms and wastage allowances, but real wastage and productivity differ.
• Unforeseen events: floods, landslides, strikes, delays, shortage of materials, or the need for extra safeguards.
• Variation orders and additional work requested by the owner.
• Human and approximation errors in taking out quantities, and omitted items.

Estimates carry contingency (usually 3 to 5%) for such uncertainty. A careful estimate can come close to the actual cost, but exact equality is a matter of chance. Therefore the actual cost is controlled by revised or supplementary estimates when the difference becomes large.

The estimated cost is normally close to the actual cost only when the design is complete and the rates and site conditions do not change.

Estimated cost is never the actual cost

Estimated cost is a forecast made before the work. Actual cost is only known when the work ends. They differ because:

• rates of materials, labour and fuel change with time;
• site conditions (soil, water table, access) differ from those assumed, changing quantities;
• design changes, variation orders and extra items appear;
• wastage, productivity and supervision differ from norms;
• unforeseen events (weather, strikes, delays) add cost;
• measurement and approximation errors exist in the estimate.

A contingency of 3 to 5% is added to cover this, but exact equality is not expected.

Data required for estimating

• Drawings: plans, elevations, sections, foundation and structural details, and schedules of doors, windows and finishes. Without complete drawings, quantities cannot be taken out.
• Specifications: the quality of materials and workmanship (for example cement mortar 1:4, M20 concrete, Fe 500 steel), so that the correct rate can be applied.
• Rates: the District Rate (published yearly by the District Rate Fixation Committee), the DUDBC norms for labour and material consumption, and local market rates for items not covered. Rates of materials, labour, transport (lead), and the contractor's overhead and profit are needed.
• Site data: site conditions, soil type, water table, distance of material sources (lead), and access.
• Quantities: the work quantities taken out item by item, using the units of IS 1200 / the Nepal standard methods of measurement.
• Other data: the applicable taxes (VAT 13%), contingency, price-adjustment and the contract conditions.

Purposes of estimating

1. To know the probable cost of the project and decide on its feasibility.
2. To obtain technical, administrative and financial approval and budget allocation.
3. To prepare tender documents, the engineer's estimate and the bill of quantities.
4. To plan the materials, labour and equipment needed, and the work schedule.
5. To fix the period of completion and the cash flow.
6. To control cost by comparing actual expenditure with the estimate.
7. To determine the rate and payment for variations, and compare design alternatives.

An estimate is never the actual cost

An estimate is a forecast prepared on the assumption of the present rates, the drawn quantities and standard norms. In real work these assumptions change:

• Rate variation: market prices and wages change from the time of the estimate; the District Rate itself is revised every year.
• Quantity variation: unforeseen site conditions (rock, loose soil, water) and design modifications change the executed quantities.
• Productivity and wastage: actual consumption of materials and labour differs from norms.
• Unforeseen events: delay, weather, strikes, shortage of material.
• Errors and approximations in measurement, and the limited accuracy of preliminary estimates.

Hence, an allowance for contingency is made, and when the difference becomes large a revised or supplementary estimate is prepared. The estimate is therefore a guide for decision and control, not an exact record of cost.

Estimate

An estimate is the calculation of the probable quantities and cost of a work before construction, based on the drawings, specifications and current rates.

Quantity survey

Quantity survey (quantity surveying) is the process of measuring and calculating the quantities of the different items of work and materials from the drawings, and arranging them in a bill of quantities. It is the first step of estimating. It is also used later to measure the completed work for payment.

Estimated cost versus actual cost

The data required for a detailed estimate are:

1. Drawings: plans, elevations, sections, foundation and structural details, and door, window and finishing schedules, with dimensions.
2. Specifications: the quality and standard of materials and workmanship of each item (mix proportions, grade of concrete and steel, brick class, finish).
3. Rates: District Rates, the DUDBC norms (consumption of materials and labour per unit of work), and the rate analysis of each item, including transport (lead) and overhead.
4. Quantities: item-wise measurements, taken out by a standard method (long wall-short wall or centre line) with units as per IS 1200 / Nepal practice.
5. Site information: soil condition, water table, location of material sources and lead, availability of labour and water.
6. Provisions and taxes: contingency, work-charged establishment, VAT (13%), and price adjustment as applicable.
7. Time and contract conditions: the construction period and the conditions that affect the cost.

Principles of units of measurement

Every item of work is measured and paid in one unit, chosen by the nature of the work, as per IS 1200 and the Nepal standard practice:

1. Work in one dimension (length governs, section fixed) is measured in running metre (m): e.g. cornice, skirting, pipes, railing.
2. Work in two dimensions (thickness fixed) is measured in square metre (m²): plastering, flooring, painting, formwork, half-brick wall.
3. Work in three dimensions is measured in cubic metre (m³): excavation, concrete, brickwork, masonry.
4. Small, countable items are measured in numbers (nos.): doors, fixtures, W.C.
5. Items sold by weight are measured in kg, quintal or tonne: reinforcement, structural steel.
6. Items that cannot be measured are paid as lump sum (L.S.).
7. Measurement is of the net finished quantity in place; deductions are made for openings and voids as per the rules; dimensions are taken to two decimal places (mm precision for areas); the unit of measurement is the same as the unit of payment.
8. The description includes all work, materials and incidental labour necessary to complete that unit.

Data required for a detailed estimate

1. Complete drawings (plans, sections, elevations, details).
2. Specifications of materials and workmanship.
3. Rates: District Rate and DUDBC norms for rate analysis.
4. Site data: soil, lead, water, labour availability.
5. Item-wise quantity calculation, then abstract of cost.
6. Contingency, taxes and overhead provisions.

Estimating and costing

Estimating is calculating the quantities of the items of work and the materials required, from drawings and specifications. Costing is finding the cost of these quantities by multiplying them with the proper rates (rate analysis), and adding overhead, profit, contingency and taxes. Together they give the probable cost of a project before construction.

Principle of units

Each item of work is measured in the unit that suits its geometry, and that same unit is used for payment:

• Length (m): cornice, skirting, railing, pipes, drains.
• Area (m²): plastering, flooring, painting, formwork, roofing sheets.
• Volume (m³): excavation, concrete, brick and stone masonry, filling.
• Number (nos./set): doors, windows, W.C., lighting points.
• Weight (kg/tonne): reinforcement, structural steel.
• Lump sum: items that cannot be measured.

The measurement is of the net work in place; the description of the item covers materials, labour and tools included in the rate.

In some DUDBC items skirting is also paid per m² by area of the finished strip; the unit stated in the item description governs.

The measurement of the shutters is taken over the frame opening (rebate included), and the frames are measured separately in m³ or running metre.

Note: in new work, asbestos-cement sheets have largely been replaced by CGI or colour-coated sheets, but the unit remains m².

(i) Pointing work

• Measurement: the exposed face of the masonry joints is measured as a surface area, length x height, after deducting openings (as per the rules, deduct openings above the limit; add reveals where pointed).
• Unit of measurement and payment: m². The type of pointing (flush, ruled, struck, weathered), the mortar mix and the wall type are stated in the item.

(ii) Steel reinforcement

• Measurement: the bars are measured from the bar bending schedule: cut length of each bar (including bends, hooks and laps as per design) multiplied by the number of bars, and then converted to weight with the unit weight $w = d^2/162$ kg/m (d in mm).
• Cover, bends and development lengths are included in the cut length. Binding wire, spacer bars and chairs are included in the rate (or allowed as about 1% extra, as per the specification).
• Different diameters are given separately.
• Unit of measurement and payment: kg (or quintal / tonne), supplied, cut, bent, placed and tied.

Standard SI units used in estimating are m, m² and m³. Useful conversions: 1 m = 3.281 ft, 1 m² = 10.764 ft², 1 m³ = 35.315 ft³ = 1000 L, 1 ropani = 508.72 m².

Civil works

Sanitary works