Construction Cost Analysis for Cost Estimate of Labor & Material using Construction Estimating Software

by Perry on September 9, 2010

This portion focuses on the estimator that performs construction cost analysis of any cost estimate that breaks down almost every single cost component or cost item part that makes up either a system or is a stand alone material part.  This process actually applies labor and material cost to the individual material part, unless it is a labor only cost item.  This discussion also breaks labor for a material part, down to man hours/unit of measure of the material part, using a production rate to perform the labor. The type of contractors that usually perform this type of cost analysis task are often SELF-PERFORMING Contractors, sometimes know as specialty contractors. It is extremely important that you listen to the video discussion 07 Detailed Estimating Material Quantity with Cost and Labor Quantity with Labor Hourly Cost using man hours, man days, man weeks, man months, crew hours, crew days, crew weeks, crew months, etc.

There are two schools of thought regarding the path you follow regarding estimating technology .  One being that: a) do you need a construction cost estimating software program or  b) just a manual spreadsheet since the concept is fairly simple.  That choice is ultimately yours, but an issue you really need to consider, most importantly, is accuracy of the math.  That has been the number one problem with manual spreadsheets (computerized or not) ; not really the problem with the manual computerized spreadsheet, but really the human operator of the computerized spreadsheet. Since computerized manual spreadsheets are so customizable, they are really easy to destroy the formulas, macros, etc., without even knowing that you have corrupted its’ math calculations.  Who needs that!!!!!  With a mainstream construction estimating software program, you want to do what you know best, Producing a Cost ESTIMATE and not have to sweat the math computations.   However, even with mainstream construction estimating software programs, still the old adage applies: “garbage in = garbage out”.
So now onto the material quantity takeoff portion that focuses on the features needed for efficient takeoff with a construction estimating software program. Any construction estimating software program must have features that breaks down a material item COST into material, equipment, vendor, miscellaneous cost category, and labor for those who self perform labor. All of these cost categories must have the ability to apply a custom unit of measure along with cost for the material item.  There should also be a feature for applying a waste factor as well as having the ability to create your own formulas with your own wording. Often times you takeoff materials by one unit of measure but price by another, therefore you must have the ability to have one quantity takeoff unit of measure that will convert of a different unit of measure for pricing purposes. Good example is sand for masonry; you take it off in cubic yards, but then you convert it to tons for pricing.

Besides all these features, it is the opinion of AskTheEstimator.com, that you MUST be able to create your OWN data. With our 20 years experience consulting with thousands of companies in the world of construction trades/industries, the most successful users of construction estimating software programs are the ones that create their OWN data, their way.  However, we are very well aware that many companies out there are not well equipped with either experience to create their own appropriate data or time to create their own data, therefore, any construction estimating software program must have a large library of prepackaged data for the various types of trades.  BUT, be aware that most of the prepackaged data will need to be customized to your way of doing business.

It is also extremely important to note that NOT all construction management or construction estimating software programs are the same.  There are major differences you will need to consider. Here are some features that you will need for Detailed Estimating Material Quantity with Cost and Labor Quantity with Labor Hourly Cost using man hours, man days, man weeks, man months, crew hours, crew days, crew weeks, crew months.

Needed Features (minimum) for :

  • Must be able to create your OWN data
  • Must be able to create your own estimating code numbers like specification (spec) book sections (divisions/subdivisions)
  • Must be able to create your own cost item numbers or letters
  • Must be able to create your own user definable formulas with your own wording
  • Must be able to apply user definable formulas to any cost item
  • Must be able to create user definable work:  systems, or kittings, packages or assemblies
  • Must be able to over-ride any original cost item formula in a work system, and have the ability to apply a more logical user definable formula for the cost item in the logical work system for that cost item (CRITICAL)
  • Must be able to create your own cost items
  • Must be able to perform very fast takeoff of items to equate to 4-6 (400%-600%) estimators production
  • Must be able to interface with electronic digitizers for paper plans or electronic plan measuring programs
  • Must be able to automatically total the estimate
  • Must be able to manipulate unit cost or lump sum cost AND description of an estimate item on the fly without having to touch the master item in the database.
  • Must be able to add a miscellaneous item on the fly for any estimate without having to create it in the master database list.
  • Must be able to add user definable markups
  • Must be able to create independent estimates EASILY
  • Must be able to view estimates in a user-definable format
  • Must be able to print estimates in a user definable format
  • Must be able to sort estimates in a user definable format
  • Must be able to export data to a variety of output formats
  • Must be able to add user definable columns that may or may not be part of a calculation
  • Must be able to view cost as well as selling price on-screen as well as in print
  • Must be able to create material, equipment, vendor, misc. cost cat, and labor cost categories for a material item
  • Must be able to create your own unit of measure for a material item
  • Must be able to apply a waste factor on a material item
  • Must be able to convert a material takeoff item from one unit of measure (UOM) to another UOM
  • Must have a prepackaged library of databases for various trades or general contractors, although, your OWN customized data will make you much more successful and competitive.
  • Would be a beneficial if you can compare past quotes/pricing from multiple previous estimates from subs to get an average for that type of system
  • Must have the ability to calculate labor by the unit cost, man hour, man days, man weeks, man months, crew hours, crew days, crew weeks, crew months
  • Must have the ability to use labor rate tables for the master database.
  • Must be able to build user-definable craft members for user-definable crews for the database as well as an estimate
  • Must be able to manipulate crews in an estimate without changing the master database
  • Must be able to manipulate rate tables in an estimate without changing the master database
  • Must be able to build a crew on the fly for an estimate
  • Must be able to crew rate table on the fly for an estimate
  • Must be able to use different rate tables on different items in an estimate
  • Must have the ability to manipulate the unit cost as well as the description of the quoted system.
  • It would be beneficial if a construction estimating software program could check multiple estimates on a single Labor unit cost item that includes production rates as well as hourly cost.

If you need any help with the evaluation of any estimating program or would like to discuss this subject further, please review our services page.  Or if you would like to see a free demonstration of what you need to expect from a construction estimating software program for Detailed Estimating Material Quantity with Cost and Labor Quantity with Labor Hourly Cost, please CLICK HERE.

Recently, we came across a really good estimating takeoff software program for screen takeoffs of construction systems.   It is not an estimating software system, but a compliment to the estimating process for take-off of construction systems. Essentially, it is a measuring takeoff program of electronic plans that are in pdf, tiff, jpeg, cad formats, bmp, cpc formats, etc. The Estimating Takeoff Software program for screen takeoff would be a huge benefit for Microsoft Excel® spreadsheet users since the program starts and saves your takeoff in Excel®. You can be find it at: Reiter & Company, Inc. 1-800-482-1014         www.reiterandcompany.com/takeoff

GREAT Takeoff Software VIDEO

Thanks again for visiting AskTheEstimator.com

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