Stage 3 of 7 · Estimate

Estimating and bills of quantities

Turn measured quantities into a priced bill of quantities and a tender sum.

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Price the bill from resources Bid schedule for the Ashbrook estimate with concrete and masonry sections and priced rates

Output: Priced bill of quantities and estimate summary
Module: Estimating and BOQ
Documents: Bill of quantities (BOQ)
Estimate summary
Basis of estimate
Standards and references: RICS NRM1
RICS NRM2
DIN 276
GAEB DA XML
CSI MasterFormat
UniFormat

What it is

Estimating turns measured quantities into a price. Each bill position gets a rate, built up from labour, plant, materials and subcontract costs, and the estimate then adds preliminaries, allowances, risk and margin. Estimates are prepared at several stages, from an order-of-magnitude figure on floor area to a fully priced bill for tender, and each stage carries a different level of accuracy.

The estimate decides whether a project goes ahead and at what price a contractor bids. It becomes the basis for the budget, the cash flow forecast and the valuation of variations. A clear basis of estimate, stating inclusions, exclusions and assumptions, protects both sides when the scope is later questioned. Feedback from actual site costs into future rates is what makes an estimating team more accurate over time.

Who does it

Estimator: Builds rates, prices bill positions and prepares the estimate summary.
Quantity surveyor or cost manager: Prepares cost plans for the client and checks contractor prices against them.
Planner: Provides the programme that time-related preliminaries and resource levels depend on.
Commercial or estimating manager: Reviews risk, allowances and margin and approves the final figure.
Specialist subcontractors: Supply quotations for packages the main contractor does not price in-house.

How it runs

Confirm scope and basis
Record the documents priced, inclusions, exclusions and assumptions before pricing starts.
Structure the bill
Set out the bill hierarchy to the required method and classification, using measured quantities from takeoff.
Build or select rates
Price each position from cost database items, assemblies or crew rates, adjusted for location and productivity.
Price preliminaries
Split general items into time-related and fixed costs, using the programme duration.
Add allowances and contingency
Record provisional sums, prime cost sums and risk contingency separately from measured work.
Apply markups and roll up
Add overheads and profit and produce the summary that management and the client will see.
Review and adjudicate
Check totals against benchmarks, review key risks and approve the tender figure or cost plan.

How it differs by country

United Kingdom: RICS NRM1 sets out order of cost estimates and elemental cost plans for the client side, and NRM2 governs the measured bill. Preliminaries are commonly priced under NRM2 headings, with provisional sums defined or undefined.
Germany: DIN 276 defines the stages of cost determination, from Kostenrahmen and Kostenschätzung to Kostenberechnung, Kostenanschlag and Kostenfeststellung, linked to HOAI work stages. Contractors price bills (Leistungsverzeichnis) exchanged in GAEB, and BKI publishes building cost reference data.
France: Contractors price the DPGF for lump-sum lots or the BPU and DQE for unit-price contracts. The economiste de la construction prepares cost estimates for the design team at each phase.
United States: Estimates are usually organised by CSI MasterFormat divisions, with UniFormat used for early system-level estimates. General conditions and general requirements are priced separately from direct work.
International: Under FIDIC Red Book the contractor prices a bill of quantities that is remeasured, while under Yellow and Silver Book design-build and EPC forms the contractor prices a lump sum and carries more quantity risk.

Common mistakes

Pricing without a written basis of estimate, leaving no record of what was included when scope is disputed.
Including waste in both the quantity and the rate.
Pricing preliminaries as a percentage rather than from the programme, which hides the cost of delay.
Burying contingency inside rates, so it cannot be managed or drawn down transparently.
Using national average rates without adjusting for location, market conditions and the date of the price.
Never comparing completed project costs with the estimate, so the same errors repeat.

In OpenConstructionERP

Module: Estimating and BOQ

In OpenConstructionERP the Bill of Quantities module is the hierarchical BOQ editor where positions, quantities and roll-up live. Assemblies & Calculations and Labor & Crew Rates build composite rates, and Estimating Methodologies supplies per-country hierarchies and cascading markups. Preliminaries prices time-related and fixed items, Allowances & Contingency tracks provisional sums and contingency, and Estimate Rollup gives the headline figure. Conceptual Estimate covers early order-of-magnitude stages, Basis of Estimate drafts inclusions and exclusions, and Post-calculation reconciles actuals into productivity factors for the next job.

Bill of Quantities · Assemblies & Calculations · Labor & Crew Rates · Estimating Methodologies · Preliminaries · Allowances & Contingency · Estimate Rollup · Conceptual Estimate · Basis of Estimate · Post-calculation

The app runs at openconstructionacademy.com/app for course learners.