Estimators calculate the total costs of their specific trade to complete the project according to the project requirements. There are a lot of aspects to building a project, and all items must be accounted for by the estimator prior to construction for the project to be within schedule and budget. All items missed or omitted will cost and/or affect the schedule and will run some unexpected costs to one or more parties involved in the project. All items can be categorized at a high level as direct and indirect costs, which are broken out below.

Let’s look at an example of a simple scope of project and list all key items involved to have a completed scope. For this example, let’s look at adding a single ground floor washroom to an office space. For this exercise, we will omit the design process and assume the design is completed to perfection with no changes required during construction. We will not get into the details of each item, such as framing includes the lumber, nails, etc., we will only look at this at high level for this article.

Direct Project Costs

We will look at this exercise from the General Contractor’s point of view, on a lump sum competitive tender. The estimator will usually review the drawings and specifications to gather information and determine which sub-trades are required to complete the work. To keep the pricing as competitive as possible, the general contractor would most likely divide the scope into as many different silos as possible (please note some general contractors may self-perform certain scope to remain cost competitive, or a single sub-trade may self-perform multiple items). Listed here are some of the direct project costs, meaning items that are directly related to the construction of the new washroom:

1. Moving Company: If the space is occupied by the tenant and items need to be moved, it is common for the tenant/building owner to hire a moving company to relocate items located within the renovation space.
2. Demolition: Remove items required to accommodate the new space.
3. Asbestos removal. When the project site contains components with asbestos which will be affected, these need to be removed and disposed of properly.
4. Framing: Used to frame the new washroom space, and modifications to the existing space.
5. Ceiling: The existing ceiling will most likely need to be modified to accommodate the new walls and a new ceiling will be required for the washroom area.
6. Drywall and Finishing: New drywall or wall components will be required over the new framing being installed.
7. Painting: New and existing walls will require painting and patching of walls, where modifications were made.
8. Thermal Insulation. Even if the washroom is located without any exposure to the exterior walls, the new walls will typically be insulated to assist with acoustics and reduce noise transmissions.
9. Flooring: Required for new washroom area. Will also be required if the concrete underneath the flooring needs to be cut to accommodate the new plumbing drainage serving the new washrooms. This may exceed the area of the new washroom, depending on where the plumbing drainage tie-in point is located.
10. Non evasive locates: This is typically done by x-ray to determine there is no electrical wiring interfering with the location of the new plumbing drainage and to locate the existing building drainage, where the new washroom drainage will tie-in.
11. Concrete cutting: A specialty contractor is hired to cut the concrete floor to connect new washroom drainage piping to the existing drainage piping located under the concrete slab.
12. Excavation and Backfill: The soil underneath the concrete slab needs to be removed to allow for the installation of the new plumbing drainage piping. Backfill must also be provided upon the installation of the drainage piping to allow for new concrete to be poured.
13. Concrete: Concrete must be provided to replace the concrete removed for the installation of the plumbing drainage piping.
14. Plumbing: Plumbing is required for the new washroom. This would include the new plumbing fixtures, drainage piping, domestic water piping, vent piping.
15. Ventilation: The existing system will need to be modified so no supply air is distributed into the washroom, and exhaust air is taken from the washroom. This may include the relocation of diffusers and ductwork, along with the installation of new ductwork and a new exhaust fan.
    1. Air balancing would be required to balance the system and not have any issues with the heating, cooling and ventilation of the renovated space.
16. Fire Protection: The existing sprinkler system will need to be modified to accommodate the new walls installed for the washroom.
17. Controls: The existing HVAC control system will most likely need to be modified to accommodate the new airflows of the system. If a new exhaust fan is added, the existing control layout (graphics) will need to be modified to accommodate the new equipment. The control systems are typically not compatible with other manufacturers, therefore the building control system is typically limited to a very selected few contractors, or potentially limited to one contractor, depending on the system installed.
18. Electrical: The new washroom will require lights, receptacles, and power to the new hand dryer. This may include running wire from an existing panel, which may be a significant distance from the renovation area.
19. Roofing: If there is a new washroom, and the plumbing drainage venting cannot be tied into an existing plumbing vent due to the location, then a new plumbing vent will need to be installed through the roof. If the roof has a warranty, then the options for roofing contractors may be limited to the contractor who has the roofing warranty. Hiring another contractor will void the roofing warranty.
20. Specialties: The hand air dryer, soap dispenser, toilet paper holder, accessible washroom features, etc. will also need to be provided. These are commonly provided by specialty suppliers and installed by the general contractor, with connections, if required, by the applicable trades.
21. Fireproofing: There may fireproofing required for the project, which may be carried by individual sub-contractors or the general contractor.

Indirect Project Costs

Besides from the direct project costs, there are a lot of other costs associated with the project which the estimator needs to have the project completed successfully. Some of the items below may apply to the general contractor, and/or specific sub-trades. This is where items must be coordinated prior to submitting pricing so there are no omissions or double up of items in the project. Here is a list of key indirect items:

1. Building permits: Building permits are required when constructing or renovating certain aspects of a building. These could be a general building permit, however there may be plumbing, ventilation, electrical, or other permits required, depending on the project location.
2. Insurance: When the building is under construction or renovation, the contractor in charge of the work is responsible to provide insurance to protect the building.
3. Bonding: Depending on the project owner, preferences of the owner, or the amount of the project, bonding may be required to provide an insurance for the owner and all parties involved to protect the project.
4. Temporary utilities: Temporary utilities, such as power, temporary washroom facilities, etc. may be required, depending on the utilities available on-site and the utilities required to complete the work.
5. Tools: Small tools will be required to perform the job, which need to be accounted for and even if the tools will be used for other projects, there is still a portion of the tool cost and consumables which need to be allowed for on the project.
6. Rentals: Equipment may be required to complete the work, which contractors typically rent due to miscellaneous reasons. One common item being rented is a scissor lift to accelerate the productivity of the work on-site. On a small project like this one, it may be cost competitive for the general contractor to rent one scissor lift and let all sub-trades involved use it since the renovation space is relatively small and there wouldn’t be place for much more than one scissor lift. While there is a cost associated with the rental of scissor lift, the productivity increase will offset of the cost of the rental.
7. Overhead: Contractors have overhead like any other businesses and these costs must be accounted for within the project since this is their main source of revenue. This includes for vehicles, fuel, vehicle insurance, management salaries, office space, etc.
8. Contingencies: Depending on the quality of the drawings and specifications, along with the risks associated with the project. Contractors will often allow a contingency (usually a percentage of the price) to allow for items which may be required, in which they are aware they may not be fully paid for. This is done to prevent loses on the project.
9. Final Cleaning: Once the project is completed, the owner will want to space to be clean to use his new area. This final cleaning is commonly the responsibility of the contractor to provide.

Critical Items to be accounted for as an estimator

As a seasoned estimator, items which are not on the drawings, and critical to the completion of the project are to be accounted for. This may include a list of potential items required with a risk associated with each item, and the probability of the event happening to calculate the financial risk associated with the item, to allow for a contingency on the project.

Often when submitting a price on a bid and spec project, the estimator only has a single visit to the construction site, if he is fortunate enough to attend the site visit, and a very limited amount of time to review all documents and establish a price for the project. This is why there are often variances in pricing as the project may be viewed differently by different estimators, and based on their experience, different methods of completing the project. It is also critical for the successful contractor to complete a handover meeting between the estimating and project management team. The estimating team should be involved in the contract negotiations along with the project team as they were the ones involved in visualizing the project when completing the estimate.

Keep in mind that estimators cannot account for all additional items required which are not shown as they would never be cost competitive and would never secure tenders in the bid & spec world as it is also the low bid which secures the project. There is a common saying in the industry not to spend too much time with an estimate as you will add too many items and will price yourself out of the job. Often estimators will meet with the project management team involved on similar completed projects to see where things went well, and the lessons learned. A mistake once is a lesson learned, if it happens more than once it becomes a habit.

Estimators will also assist to quantify the items required for changes during the construction period to assist the project management team.

Other Remarks

Often small projects are given a very tight timeline to complete since the scope as seen by the owner is simply adding a washroom and should be achievable in a few days. While this looks possible on paper as it’s simply adding a washroom, you can see based on the items listed above there is a significant amount of work required. There are items which cannot be moved faster, such as concrete curing, you cannot install the flooring if the concrete has not cured yet as this will create bigger issues. Another item to keep in consideration when scheduling these is that not all trades will be available to work in the space at the same time. It is physically impossible to have 15 trades people working in a 10’ x 10’ space and be productive.

There are often talks about which type of project would be served by this, either a bid and spec project, or a construction management project. There are advantages and disadvantages to each type of project, which will be reviewed in a future article.

Even if we didn’t mention the architects or engineers in this example, we were simply presenting the construction side of the aspects. We will elaborate more in future articles about the entire process of a construction process.

Conclusion

While adding a simple washroom may look like a simple task, there can be a lot of items involved to have the project completed properly. This is why it is critical to have competent companies hired which have the experience required to complete the project. Estimators often must rely on their experience to account for all items required to complete the project as not all items may be indicated on the plans and specifications.

If your looking for assistance with estimating on your projects, do not hesitate to contact us by email at [email protected] to see if we can assist you with your project. We provide disruptively precise budgets for your projects. Know what the cost of construction is upfront, not when your design is completed and sacrifices have to be made.