How can you make your construction estimates more competitive?

Three Things to Think About Before Estimating a Job: Job Knowledge: Understanding the job itself is crucial. Knowing exactly what you're estimating helps you avoid unnecessary steps, which can save money. Market Awareness: Research how similar jobs are being done. New methods might be available, allowing you to achieve the same outcome in a more cost-effective way. Future Needs: Consider the long-term perspective. Certain tasks might seem unnecessary now, but may be required later in a different form. Think ahead and plan accordingly.

Clarity of scope is absolutely the most paramount factor in estimating. Taking the time to fully delineate who is responsible for what can circumvent some of the most impacting potential tensions and costly delays. A job is won or lost at bid time.

In my experience, dive deep into project specifics, leveraging advanced analysis tools and historical data to refine your understanding. Innovate by integrating real-time market trends and material costs, ensuring your estimates not only match the project's scope but also anticipate future variables. This approach not only sharpens your competitive edge but also demonstrates your commitment to precision and foresight in project planning.

1. Diligently review the contract documents and familiarise with the project scope, 2. Ask relevant questions and request for clarification during the prebid period, 3. Price the job based on the knowledge of the construction stages and processes involved guided by prevailing market conditions and future project needs and associated risks.

Knowing the scope of work should be the highest priority on your list which is going to take very skilled and experienced field workers and general managers production managers and superintendents.

How can you make your construction estimates more competitive? It depends on how you are going to use your construction estimates. There are two types of Estimates, one is Parametric or Stochastic or Order of Magnitude Estimate and the second is Deterministic Estimate (Class 4 and 5 as per AACE Recommendation). If your estimate is Order of Magnitude Estimate for initial appraisal then you should be very careful to add inflation, location factor and any other price variations including international foreign currency changes. If you want to use this estimate for tender purposes you need to take the actual quantity take off from the Tender drawings and consider Employer's specific contractual requirements, as per preambles in the BOQ.

Leverage cutting-edge data analytics and AI tools to sift through extensive historical project data, ensuring your cost estimations are grounded in reality and reflective of current market conditions. Expand your research beyond traditional sources, tapping into a wide network of industry insiders, online forums, and specialized databases for the most up-to-date insights on labor, materials, and technology trends. This multifaceted approach not only enhances the accuracy of your estimates but also positions you as a forward-thinking leader in competitive bidding.

Between 50 to 60% of the project's overall cost relates directly to materials and equipment hence reliable data on these two is important. Prevailing market rates for the materials, labour and equipment will eventually determine how profitable the project becomes to the contractor.

reliable data is the bread and butter of any good estimates. it is important to keep up to date prices of materials and labor. it is also important to be knowledgeable of current methodologies. with this data will surely be able to create an accurate estimate that is close to the actual cost.

Suppliers & subcontractors, these provide costs and rates in the region and in real time. I wouldn’t depend so much on publications. The rates here are usually promotions to drive sales. I am not sure they’ll stay that way for long.

Know the client, know the site and constraints, never price what you cannot deliver, know your supply chain, have your supply chain on your side and treat them fairly

Adopt a mix of estimating methods tailored to project specifics, using machine learning for precision and agile techniques for flexibility. This approach boosts bid competitiveness and demonstrates your capability to manage diverse construction challenges efficiently.

Estimation is the reflection of the project because every organisation considers the budget before going ahead with any project. During the initiation stage of the project, estimation is based on the rough order estimates, then details estimates are prepared during planning & cost estimation stage. The different types of estimates are parametric estimates, analogous estimates, bottom-up estimates. Analogous estimates are followed when we have past estimates of similar projects.This method is quick & takes less time than other methods. Parametric estimates are based on unit price involving statistical calculation. It uses mathematical models. Bottom-up is the most accurate & detailed method of estimation & it takes more time to develop.

Choose estimating software that aligns with your project requirements, customizing it for optimal efficiency. Utilize its features—formulas, databases, reports—to streamline calculations and improve analysis. Effective tools elevate productivity and precision in your estimates.

One thing I've found helpful is that before submission, rigorously review and refine your estimates, correcting any inaccuracies and aligning them with benchmarks and expert feedback. This ensures reliability and enhances your estimates' credibility.

Reviewing should be a reflex. You don’t want to send an estimate where you “mistakenly” put the rate of a VOLUME on an AREA,

Analyze market trends, client needs, and competition to tailor your bid, highlighting your unique strengths and value proposition. Adjust pricing, quality, and service to stand out, enhancing your bid's appeal and winning potential.

Alternative Materials and Methods: Explore alternative materials, construction methods, and design approaches that offer cost savings without sacrificing performance. This could involve substituting materials with lower-cost alternatives or using prefabricated components to reduce labor costs.