Wolgast Blog

Ample Estimating Time Can Lower Price of Construction

Posted by Cory Sursely on 11/11/2013

Another Money Saving Tip for Construction Clients

TimeObviously, planning a construction project doesn’t happen overnight.  In most cases, the client has a set occupancy date when construction has to be completed either to satisfy a contract they have acquired or to meet their seasonal market (to name two).  During that construction project time frame, planning through completed project, there are five main activities that need to take place, which include design, cost estimating, obtaining regulatory approval, acquiring materials and construction. 

Because design is so important to get right before a shovel ever touches the dirt, it can sometimes take a little longer than expected with multiple revisions for some clients.  On the other end construction has to start by a certain date, so field operations will push to have materials ordered and permits in hand quickly, otherwise the building won’t be ready for that set occupancy date.  So what gets “crunched” in the middle?  The cost estimating, or in other words, the part that affects your pocketbook the most.

In any given industry, all business men or women are looking to cover their costs and make a certain profit.  Similarly, contractors in the construction industry are certainly trying to cover their costs and have high hopes that they may make a profit on any given project, therefore, when they aren’t given enough time to estimate the cost of materials and labor, they tend to round up to make sure that they at least cover their costs involved.  The guesswork created by this time crunch can make the price of the project inflated.  Alternatively, when subcontractors have enough time to determine the exact cost of materials needed and plan for the manpower it will take to cover the work, they’re able to feel more comfortable estimating exactly what their cost and profit will be and are then able to provide a more accurate, un-inflated price.  All subcontractors prefer to bid when there is adequate time to provide a safer, more satisfactory and competitive bid for all parties involved.

Estimating is a process with many steps.  Once the design is established (or in the case of Design/Build-- mostly established), the general contractor issues the plans to three or more subcontractors to request their bids on each trade.  The trades then in turn estimate the amount of material needed and make contact with their vendors and suppliers for the current cost of materials. Then the vendors need time to estimate their costs and provide a hard number to their subcontractor.  The subcontractor also looks at the plans to estimate the staff and hours needed to do their portion of the work.  Simultaneously, the subcontractor is most likely pricing several jobs at one time while trying to manage their work load.

Therefore, factoring in all the different trades involved in any given building project, allowing more time for bidding/estimating process to secure those hard, accurate numbers, a building owner can possibly save themselves tens-of-thousands of dollars.  So, it’s in every potential or current building owner’s best interest to start planning their construction projects early and prevent the time crunch during estimating.

Topics: Design/Build, the Wolgast Way, Scheduling, Good for Business, Risk Management