KJC326

Chapter Six
ESTIMATING
6.1

ESTIMATING

An estimating is trial to judge the value size, cost etc or to forecast of what a job or
service is expected to cost. Normally it is generally based on similar works or projects
taken up in the past, making necessary amendments especially for the cost materials
and wages. The total cost of a work is made up of the cost of various individual
elements. The estimating of the total cost consists of:
(i)

Estimating the cost of the Individual Elements of the Cost.

(ii)

Building up the total cost, taking into consideration each individual

element of the cost concerned.

The cost of various individual elements may be under the work section of:
(i)

Preliminaries - which shall include insurance, progress photographs

report, warning sign, lamps, signboard, watchman, and etc.

(ii)

Main work - which shall include building, roads, water tanks, bridge, tower,
and etc.

(iii)

Internal services - which shall include air conditioning, fire extinguisher,

electrical installation, sprinkler

(iv)

External works - which shall include electrical mains comprise of

capital/service charge, sewerage, water supply, special foundations, site
work, surface drainage, road and paths, fencing and gates.

(v)

Advertisement

(vi)

Supervision

(vii)

Miscellaneous

(viii)

Professional fees - which shall include surveyor, designer.

(ix)

Contingencies - it is a sum entered to allow for possible additional work or

dayworks; assume it was 30% of the total cost estimated.

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6.2

OBJECTIVES OF ESTIMATING

The main objectives of estimating are as follows

gives prior indication of the economic viability of a particular project

to make a decision whether to proceed the project or not due to its cost

an estimate helps establish data for the purpose of comparing

estimating may help a new design to reduce the cost of the project, when the original
design is found uneconomical.

6.3

STAGES OF ESTIMATING

Traditional civil engineering projects can be divided into six stages

i)

Identification,

ii)

Appraisal,

iii)

Definition,

iv)

Approval,

v)

Implementation and

vi)

Operation.

Project Stage

Preliminary
estimate

Identification
Appraisal

Appraisal
estimates
Proposal
estimate

Definition

Approved
estimate

Approval
Pre-tender
estimate

Post-contract
estimate

Implementation
Achieved
estimate

Operation
Time
Figure 6.3 : Variation In Type Of Estimate With Changes In Project Stages
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Figure 6.3 shows the sequence of these project stages and indicates the types of
estimate used in each stage.
Preliminary estimate

an initial estimate at the earliest possible stages.

Based on crude indication of the project size or
capacity, to be used in planning stage.

Appraisal estimate

should include all costs which be charged against the

project in order to provide best estimate off anticipated
total cost.

Proposal estimate

based on a conceptual design and design study

specifications.

Approved estimates

proposal estimate was modified due to client's view

Pre-tender estimate

a refinement of the approved estimate based on the

definitive design work using the information provided in
the tender documents.

At this stage the estimate

should reflect the total capital cost of the project and all
the charges and fees and allowances or contingency
for the client's risk.
Post-contract estimate

a further refinement of the pre-tender estimate

Achieved cost

actual costs of the job in order to review performance

and provide data for future projects.

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6.4

TYPES OF ESTIMATING TECHNIQUE

The five common estimating techniques are summarised as follows :Global

a simple estimating technique which based on existence of data

from similar projects.

Factorial

a technique used widely on process plants where the key

components can be easily identified and priced and all other works
are calculated as factors of these components.

Man-hour

works is estimated in total man-hours and cost in conjunction with

plant and material costs.

Unit rate

based on bill of quantities, where the quantities if work are defined

and

measured

in

accordance

with

standard

method

of

measurement.
Operational -

based on all the constituents operations necessary to construct

the works and estimating the labour, plant and materials costs
together with the overheads.

Table 6.4 shows the five estimating techniques in terms of their project data
requirements and estimating data requirements.

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Table 6.4 : Main Estimating Techniques And Their Data Requirements

DATA
REQUIREMENTS
Project data

Global

ESTIMATING TECHNIQUE
Factorial
Man-hours
Unit rate

Operational

Completion
date

Completion
date

Completion
date

Completion
date

Completion
date

Location

Location

Location

Location

Materials

Size/
capacity

List of main
installed
plant items

Quantities

BQ (at least
main items)

Quantities

Simple
method
statement

Method
statement
Program

Key dates

Basic Estimating
Data
Potential
Problems,
Risks,
Uncertainties and
peculiarities of
the project

General
inflation
forecasts

General
inflation
forecasts

Materials
costs

General
inflation
forecasts

Market
trends

Market
trends

Market
Productivity's trends

Inflation
indices

Inflation
indices (for
historical
prices)

Overheads

Hourly rates

Achieved
overall
costs of
similar
projects
(adequately
defined)

Established
factorial
estimating
system

Materials
costs
Forecasts
Hourly rate
forecasts
Plant data

Recent
quotes for
main plant
items

Inflation
indices

Materials
costs
Labour rates
and
productivity's
Plant costs
and
productivities

Historical
unit rates for Overhead
similar work costs
items
Materials
Preliminaries costs
forecasts
Labour rate
forecasts
Plant capital
and
operating
costs
forecasts

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6.5

CONSTITUENTS OF ESTIMATE

The price of an item of work is made up of the following components: Cost of materials

calculate the materials required for the item of work and

allow for waste and delivery to site.

Cost of labour

this is very uncertain factor, the output of labour varies

considerably accordingly to place of works, weather
condition, heights etc.

Cost of tools and plants

the cost should include

initial cost of machine

interest on capital cost

the economic life span of machine

maintenance

cost of transporting machine to site

number of hours machine is operated in one year

consumption of machines fuel cost

driver/foreman unskilled workers - wages

output of machine

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6.6

WORKED EXAMPLES

Example 6.6.1
(a)

Estimating Of Excavation Works (Manually)

Calculate/Estimate the labour cost of excavating 1 m3 soft soil and carting-away

to a distance not exceeding 200 m, if the cost of unskilled labour is RM20 per day
and allowing 15% for profit.

(b)

What will be the extra-over cost if the material is rock ?

--------------------------------------------------------------------------------------------------------------------(a)

Labour time involved in excavating 1 m3 of soft soil

1 1/3 hr

Labour time involved in carting-away 1 m3 of soft soil

1 1/3 hr

Total labour time involved

2 2/3 hr

RM 6.67

RM 7.67

8 hr

Labour time involved in carting-away 1 m of rock

1 1/3 hr

Total labour time involved

9 1/3 hr

RM26.83

RM19.16

The labour time costs RM20/8 hr (8 hr per day)

Labour cost for excavation 1 m3 of soft soil
= RM20/8 x 2 2/3
Labour cost for excavation 1 m3 of soft soil including 15% profit
= RM20/8 x 2 2/3 x 1.15
b)

What will be the extra-over cost if the material is rock ?

Labour time involved in excavating 1 m3 of rock
3

Labour cost of excavating 1 m3 of rock including 15% profit

=

RM20/8 x 9 1/3 x 1.15

The extra-over cost for excavating rock

=

RM26.80 RM7.67

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Example 6.6.1.a

Estimating Of Excavation Works (By Machines)

Determine the cost of excavating (equipment cost and labour cost) 1 m3 of soft soil
using JCB m3 capacity, abiding on the data below :1.

Cost of excavating

RM120,000

2.

Interest rate

10% per annum 5 years

3.

Life span of excavator

5 years

4.

Diesel

RM1/liter

5.

Lubricating oil

RM5/liter

6.

Driver

RM50/day

7.

Unskilled labourer

RM20/day

--------------------------------------------------------------------------------------------------------------------EQUIPMENT COST
Cost Of Owning Excavator
Cost of excavator

RM 120,000

Interest over 5 years - 120,000 x [10/100] x 5

RM

60,000

Repair and maintenance -RM120,000 x [1/10]

RM

12,000

Transportation to site

RM

6,000

RM 198,000

RM

- RM120,000 x [1/20]

Cost of owning excavator for 5 years

Cost of owning excavator for one hour
= RM 198,000/[5 x 200 x 8]

24.75

Cost Of Operating Excavator

Driver

RM 50.00

Unskilled labour

RM 20.00

36 liters of diesel - 1 x 36

RM 36.00

2 liters of lubricating oils - 5 x 2

RM 10.00

Cost of operating excavator per day

RM 116.00

Cost of operating excavator per hour - RM 116/8

RM 14.50

RM 39.25

Cost of owning and operating excavator per hour

= RM24.75 + RM14.50
Output of excavator per hour is 8 m3
Cost of excavating 1 m3 of soft soil per hour including 15% profit
=

RM [39.25/8] x 1.15

=
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Example 6.6.2

Estimating Of Formwork

Using Labour and Material Constants, prepare estimation cost for fixing one (1) piece
300mm x 300mm heavy duty car porch tile with 20mm thick of cement and total cost of
the proposed car porch tiles project abiding on data below. The project duration is
expected to be two (2) days and requires two (2) skilled workers and two (2) unskilled
workers.
Data:
1. White horse heavy duty tile (300mmx300mm)

= RM 1.80/piece

2. Cement

= RM 15.00/bag

3. Skilled worker

= RM 80.00/day

4. Unskilled worker

= RM 40.00/day

5. Profit

= 15%

-----------------------------------------------------------------------------------------------------------Material cost:
1. Tile:
a)Tiles

= 775 pieces

b)Waste (5%)

= 39 pieces

Cost of tiles

= 814 x rm1.80
= RM 1465.20
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2. Cement;
a) vol. of cement

= 0.3 x 0.3 x 0.2

= 0.0018m3

Total vol. of cement

= 775 x 0.0018
= 1.395m3

Cost of cement

= (1.395 x 28bag) x rm15.00

= RM 585.00

Cost of cement for fixing 1 piece heavy duty tile

Operating cost:
1. Workers;
a) Skilled workers

= rm585 / 775
= rm 0.75

= 2 x rm80.00
= rm160.00
= 2 x rm40.00
= rm80.00

b) Unskilled workers
Operating cost for fixing 1 pieces heavy duty tile

= (2 days x rm240) / 775

= rm 0.62

Cost of fixing 1 piece heavy duty tile and 15% profit

= (rm1.80 + rm 0.75 + rm 0.62)x1.15
= rm 3.17 x 1.15
= rm 3.65
Total cost of proposed project and 15% profit
= (rm1465.2 + rm585 + rm480)x1.15
= rm 2909.73

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