|
Well-executed estimating can save thousands of pounds on a building services project and mean the difference between winning and losing a contract. However, accurate estimation requires precise inputs. That’s why a new maintenance specification really matters, says Graeme Craig of HVCA Publications.
The process of estimation has been undervalued for years because it is perceived by many in the building services industry to be a collection of arcane, unpublished and, by implication, ad-hoc techniques – in other words, it is regarded as something of a black art.
This, plus cruelly unflattering dictionary definitions of estimation – “a rough assessment”, “an approximation”, “calculation without measurement”, “an educated guess”, “a judgment based on imperfect data”, and so on – have devalued the process in the eyes of many building services professionals.
In fact, far from being imprecise guesswork, effective estimating allows the project team to reach a consensus and makes it far more likely that the M&E project will come in on time and to budget.
Regrettably, a large number of cost estimates for bids on construction projects contain errors. Too many errors on the plus side can be a major reason for a bid not being competitive. Mistakes on the minus side can appear better value at first, but cause the contractor to lose money if awarded the contract, especially if maintenance costs have not been accounted for accurately.
Getting the estimate right will save the entire construction team a great deal of heartache. But the right estimate relies on the right input information. Some contributors to inferior estimates could include:
• Miscalculating the amount of labour required for the job, both initially and on an ongoing basis.
• Failing to review building regulations, permits, and inspections.
• Giving too little consideration to the quality of workmanship required.
• Omitting items that the cost estimator considers to be minor (such as scaffolding, ramps and guardrails).
Help is at hand
To help the industry produce more accurate estimates, HVCA Publications – together with the Chartered Institution of Building Services Engineers, the Building Research Energy Conservation Support Unit, and what was then the Department of Energy – developed a Standard Maintenance Specification in 1990.
This provides a contractual standard against which to evaluate and enforce the highest standards for the maintenance of plant. A revised standard called “SFG20 – The Standard Maintenance Specification for Mechanical Services in Buildings” has now been launched as a searchable CDROM-based maintenance resource. When met, the criteria detailed in the SFG20 ensure safe, energy efficient plant operation and compliance with all current legislation.
This publication, now widely recognised as an industry standard, has a second benefit – helping to overcome the problems of inaccurate estimates. SFG20 clearly details the work involved in various jobs and, crucially, cross references with an accurate asset list which allows times to be allocated to each job listed, so producing a much more accurate costing proposition. HVCA members use it as a mandatory standard for both tendering and carrying out work, and organisations going out to tender use the standard as an integral part of the tender specification.
Using SFG20 makes tendering much clearer on both sides. By outlining the exact work involved in maintaining plant, it gives the estimator the clearest picture of the job. Secondly, the estimator can cite the SFG20 industry standard as a point of reference so the client knows exactly what has been taken into consideration and that the estimate is accurate.
SFG20 is compatible with several proprietary estimating software systems that automate the process of producing estimates. Designed to enable an estimator to work from bills of quantities (BoQs) or drawings, they usually include priced libraries that can be maintained and adjusted for individual estimates. A typical estimating software system includes:
• Pricing build-up from resources or rates database of an estimator's choice.
• Composite price build-ups for elemental pricing.
• Valuations software.
• Subcontractor analysis and comparison.
• User-defined filters for navigation and global editing of the BoQ.
• Data transfer to Microsoft Excel and Word.
• Data import from digital BoQs.
• User-definable report formats.
• Export to financial or planning software.
Top tips for estimating
Use SFG20 – as the industry standard, it ensures compliance with the highest standards as well as providing a comprehensive guide to the maintenance work required on plant. Contractors and customers recognise it, so it is a very good reference point when tendering for work.
Other things to consider are:
• Visit the project site – it sounds obvious but many estimators fail to do this!
• Avoid taking shortcuts or ‘guesstimating’, such as using square feet or cubic foot costs in place of details, and using lump sum figures picked out of the air.
• Include accurate haulage costs.
• Make sure you allow for realistic contingencies such as severe winter weather
• That said; do not include contingency items without good reason.
• Measure plans carefully.
• Refer closely to pay rates.
• And finally…check and double check the sums - poor arithmetical calculations of quantities, material and labour costs are one of the worst culprits in inaccurate estimates.
An accurate estimate
An accurate estimate should include:
• Labour hours.
• Material prices.
• Sub-contractor quotes.
• Labour rates, including National Insurance and other ‘payroll burdens’ such as insurance and pension contributions.
• Quantity takeoff - the foundation for a successful estimate depends upon reliable identification (takeoff) of the quantities of the various materials involved in the project.
• Indirect costs such as design fees, permits, legal fees, administration costs, temporary construction and temporary heat/cooling.
