Estimation Costing and Valuation Unit 1

Estimation Costing and Valuation Unit 1

1. ESTIMATING AND COSTING Unit 1

2. Definitions Estimation is the Technique of Calculating or Computing the various quantities and the expected expenditure to be incurred on a particular work or project. The following Requirements are necessary for preparing an estimate: Drawings like plan, elevation and sections of important points. Detailed specifications about workmanship & properties of materials etc. Standard schedule of rates of the current year.

3. Needs for Estimation and Costing Estimate give an idea of the cost of the work and hence its feasibility can be determined i.e, whether the project could be taken up with in the funds available or not. Estimate gives an idea of time required for the completion of the work. Estimate is required to invite the tenders and Quotations and to Arrange contract. Estimate is also required to control the expenditure during the execution of work. Estimate decides whether the proposed plan matches the funds avail or not.

4. Procedure for Estimating

5. Data Required To Prepare An Estimate

6. Data Required…. Drawings: If the drawings are not clear and without complete dimensions the preparation of estimation become very difficult. So, it is very essential before preparing an estimate. Rates: For preparing the estimate the unit rates of each item of work are required. For arriving at the unit rates of each item. The rates of various materials to be used in the construction. The cost of transport materials. The wages of labour, skilled or un-skilled of masons, carpenters, mazdoor , etc.,

7. Data Required…. Specifications: A. General Specifications: This gives the nature, quality, class, work and materials in general terms to be used in various parts of work. It helps no form a general idea of building. B. Detailed Specifications: These gives the Detailed description of the various items of work laying down the quantities and qualities of materials, their proportions, the method of preparation workmanship and execution of work.

8. Quantity Estimating Methods The quantities like earth work, foundation concrete, brickwork in plinth and super structure etc., can be workout by any of following methods: a) Long wall – Short wall method b) Centre line method

9. Long wall – Short wall method In this method, the wall along the length of room is considered to be long wall while the wall perpendicular to long wall is said to be short wall. To get the length of long wall or short wall, calculate first the center line lengths of individual walls. Then the length of long wall, (out to out) may be calculated after adding half breadth at each end to its center line length. Thus the length of short wall measured into in and may be found by deducting half breadth from its center line length each end.

10. Center line method This method is suitable for walls of similar cross sections. Here the total center line length is multiplied by breadth and depth of respective item to get the total quantity at a time. When cross walls or partition or verandah walls join with main wall, the center line length gets reduced by half of breadth for each junction. Such junctions or joints are studied carefully while calculating total center line length. The estimates prepared by this method are most accurate and quick.

11. Types of Estimates i. Detailed Estimate ii. Approximate Estimate

12. Detailed Estimate The preparation of detailed estimate consists of working out quantities of various items of work and then determine the cost each item. This prepared in two stages: Details of measurements and calculation of quantities b) Abstract of Estimated cost

13. UNITS OF MEASUREMENTS The units of measurements are mainly categorized for their nature, shape and size and for making payments to the contractor and also. The principle of units of measurements normally consists the following: a) Single units work like doors, windows, trusses etc., is expressed in numbers. b) Works consists linear measurements involve length like cornice, fencing, hand rail, bands of specified width etc., are expressed in running meters (RM) c) Works consists areal surface measurements involve area like plastering, white washing, partitions of specified thickness etc., and are expressed in square meters (m2) d) Works consists cubical contents which involve volume like earth work, cement concrete, Masonry etc are expressed in Cubic metres .

14. Details of measurements and calculation of quantities

15. Details of measurements and calculation of quantities

16. Details of measurements and calculation of quantities

17. Details of measurements and calculation of quantities

18. Details of measurements and calculation of quantities

19. Measurement Sheet

20. Abstracting The main functions of an Abstract of an Estimate : (i) The total estimated cost of the project can be known. (ii) The various items of the work to be carried out to complete the project can also be known. (iii) The abstract of estimate creates a part of a tender document from which a contractor can arrive at the total construction cost of a project after applying his own rates. (iv)It is the basis on which percentage tenders are called after excluding the amounts of contingencies, etc. (v) The bills of work done are also prepared on the basis of abstract of estimate.

21. Bill of Quantities The abstract form is commonly known as the bill of quantities and the process of writing the bill of quantities is called the billing. A bill of quantities indicates a document which lists all the items necessary for the complete construction of the project. Each item of the bill of quantities includes a brief description of every item together with its estimated quantity. Main function of bill of quantities is to provide a basis on which tenders can be obtained from the prospective contractors and the bills of quantities, when priced, afford a means of comparing the various tenders obtained from different contractors for the same job. The rates mentioned in the bill of quantities can be used to assess the value of work as executed and they help in preparing the revised estimate, if found necessary. However, the quantities mentioned in the bill of quantities should be accurate as far as possible so as to narrow down the gap between the estimated and actual figures.

22. Approximate Estimate The  approximate estimate  is done in order to find out an approximate  cost in very short time before starting the project. The  estimation  is made before selecting the final specification and design of the project.

23. Method of Approximate Estimate The approximate cost of a building can be found out by the use of any one of the following six methods: (i) Service-unit method (ii) Square- metre method (iii) Cubic- metre method (iv) Typical-bay method (v) Approximate quantities method (vi) Empirical equations for materials and manpower.

24. Roads It mainly consists of four items and the approximate cost of these items are worked out and then added together to obtain the approximate cost 1. The cost of Land Acquired 2. The cost of Excavation, embankment and drainage 3. The cost of pavement 4. The cost of other structures such as culverts, bridges, etc. Irrigation canals: The unit to be adopted for finding out the approximate cost of an irrigation canal may be one of the following: (i) area of land under the command of canal; or (ii) per kilometer length. Water supply and sanitary projects: For such projects, the unit to be adopted to arrive at the approximate cost may be one of the following: (i) area served by the project (ii) population served by the project.

25. Mode of Measurement The methods and units of measurements for civil construction works are mainly categorized for their nature, shape and size and for making payments to the contractor. The principle of units of measurements normally consists the following: units of measurement a) Single units work like doors, windows, trusses etc., are expressed in numbers. b) Works consists linear measurements involve length like cornice, fencing, handrail, bands of specified width etc., are expressed in running meters (RM)

26. Mode of Measurement c) Works consists areal surface measurements involve area like plastering, white washing, partitions of specified thickness etc., and are expressed in square meters (m2) d) Works consists cubical contents which involve volume like earth work, cement concrete, Masonry etc are expressed in Cubic metres .

27. The rules for measurement of each item are invariably described in IS – 1200. However, some of the general rules are listed below: 1. Measurement shall be made for finished item of work and description of each item shall include materials, transport, labour , fabrication tools and plant and all types of overheads for finished the work in required shape, size and specification. 2. In booking, the order shall be in sequence of length, breadth and height or thickness. 3. All works shall be measured subject to the following tolerances. Linear measurement shall be measured to the nearest 0.01m. Areas shall be measured to the nearest 0.01 SQM Cubic contents shall be worked out to the nearest 0.01 cum. 4. Same type of work under different conditions and nature shall be measured separately under separate items. 5. The bill of quantities shall fully describe the materials, proportions, workmanships and accurately represent the work to be executed. 6. In case of masonry (stone or brick) or structural concrete, the categories shall be measured separately and the heights shall be described as: From foundation to plinth level From plinth to first floor level From first floor to second floor level and so on.

28. Contingencies The term “contingencies” indicates the incidental expenses of miscellaneous character which cannot be classified under any distinct item sub-head, yet pertain to the work as a whole. To meet such unforeseen expenses an additional amount of 3% to 5% of the estimated cost of the works is provided in the total estimate. Miscellaneous incidental expenses which cannot be classified under any sub-head or item, are met from the amount provided under contingencies. For example, suppose there is an item in estimate for cement plastering 1:4 with neat cement finish, but during execution, it is desired to provide nosing at the end of the steps. As there is no allocation of funds for this small work, the cost of such work may be met up from the contingency fund. But in case an expenditure is necessary due to change of design or due to increased volume of work, and whose cost cannot be covered from the contingency fund, supplementary or revised estimate are submitted for its sanction before taking up the work. If there is any saving against the amount provided under contingencies, this amount my be utilised with the sanction of the complement authority to meet the expenses of extra items of work. The provisions for contingencies cannot be diverted to any new work or repair which is not provided in the estimate and of which cost exceeds ₹ 2000/- without the sanction of superintending engineer.

29. Contingencies are downside risk estimates that make allowance for the unknown risks associated with a project. A construction contingency, as it relates to a build project, is a percentage of a contract value set aside for unpredictable changes in the scope of the work. The estimated costs of the known-unknowns is referred to by cost estimators as cost contingency. Contingency "refers to costs that will probably occur based on past experience, but with some uncertainty regarding the amount.

30. Work charged Establishment charges The work changed establishment will include the temporary establishment as are employed for the execution or the immediate technical supervision or departmental stores in connection with the specific work. Work charged staff may be technical person or an under staff of technical person to assist him at work site, guard, etc. But work charged staff does not include non-industrial employees such as the typist, draftsman, clerk, etc. Every payment made to a member of the work charged establishment whether on account of his wages or actual travelling expenses is charged to the work estimate on which they are employed. For such work charged establishment an amount of 1.5% to 2% (according to P.W.D.) of the estimated cost of the works is provided in the estimate. Generally, the work charged persons are employed on monthly basis or temporary basis according to the progress of work. Their services lasts for the sanctioned period but may be continued on fresh sanction. Their services are terminable by one month’s notice for one year continuous service. But for less than one year service, 14 days’ notice is required to terminate their services.