What is construction estimation?

How does construction estimating software work?

A cost estimator uses operational estimating, which is building up operation costs based on first principles, which involves the cost total of equipment, labor, and materials.

Construction Estimation is the decision of how much it costs to construct a project. There are many factors that affect and participate in how much the construction project costs. Each of these factors or items must be examined, quantified, and cost priced. Before the actual construction, the cost estimate is prepared, much thought goes into the construction documents. The only person who can accurately determine the price of construction is known as an estimator. The estimator is one of the important people in a construction company.

There is much competition between construction firms when it comes to bidding for construction projects. A constructor must be able to provide estimates while also having space for profit margins. This is where an estimator’s job comes in; an estimator can visualize the cost of different areas of the project using project manuals and working drawings, which leads to a successful bid.

The working drawings include information about the location, design, construction, and dimensions of the project, while the project manual contains information about the bidding process. The estimator is responsible for the project’s scope, everything in the working drawings and project manual that will be used in bidding.

The estimation of a project’s cost includes integrating many field cost variables; the cost estimator must read the project manuals and working drawings carefully and make sure they are complete. No matter the variables, a correct cost estimate must be given by the cost estimator.

Clients reject overestimated costs, which can lead to a higher tender price. After a contractor is selected, the estimate should provide the basis for the project budget and control.

There are three main factors that could cause inaccurate estimates. They are:

  1. Inappropriate risk assessment.
  2. Inappropriate contract strategies.
  3. The human side of the cost estimator.


Types of Construction Estimation

Different types of estimates and the essential accuracy depend on the information available to the cost estimator. The following are the types of estimates:

Detailed Estimation

This involves the determination of the cost and quantity of requirements needed to complete a project. The requirements include equipment, construction labour, materials, and an estimate of the profit from the project. The cost estimator can only prepare a detailed estimate if he sees the complete project design.

Detailed Estimate must show estimated cost and quantities, the time required, equipment required, and the project complexity.

Assembly Estimation

In this type of estimate, there is a bid for group components rather than a bid for individual components of the project.

An example is the assembly of a light switch. This assembly includes a gang box, pole switch, a cover plate, wire nuts, and twenty feet of NM-B 12 gauge wire. The estimate is prepared by assemblies for the panels, lights, switches, and outlets rather than the determination of these components individually. An electrician installs the assembly.

Assembly Estimate is also useful for broad assemblies. Broad assemblies can be used for preparing an estimate for an entire building and a full warehouse in hours instead of days, unlike the detailed estimate, where the estimator prepares his estimates with the project designs. In Assembly Estimate, the estimator prepares his estimates with limited estimates based on preliminary designs.

Model Estimate

This estimate makes use of computer models to prepare estimates based on questions answered by the estimate. A model estimate is similar to an Assembly estimate. The only difference is the less input by the estimator in the model estimate.

A model estimate is complex, and care must be taken to ensure the model is similar to the project in which the model was developed.

Project Comparison Estimation

Project Comparison estimate is prepared by the comparison of the cost of the project to the completed project. The estimator makes adjustments for differences in the project after finding out the price of a similar project.

Square-Foot Estimate

This multiplies the square footage of a project by a cost per square foot and the project price adjustment due to the design difference.

Construction Cost Estimator.

Most construction cost estimators start their career developing experience and judgement. These abilities are essential to the success of an estimator. Cost estimators can not be taught expertise and determination, but they can be taught a suitable method of preparing estimates. They can gain experience and learn to be intuitive over time.


How does construction estimating software work?

Before the invention of personal computers and computer software, estimating was done with pen, paper, spreadsheets, and calculators. The process was stressful and was full of errors. It was labour-intensive as the size of the project increased.

Then through the ’80s and ’90s, the sales of personal computers increased. Software like Microsoft Excel put estimating in the digital world. Still, the software was not built for estimating, and estimators had to modify their estimating process to be able to work with the software.

In the late ’90s, the invention of the internet helped consolidate estimating, and takeoff tools were consolidated into a single platform, which helped increase efficiency.

Estimating has gone a long way, but in the next ten years, we will see more BIM-powered software. BIM( Building Information Modelling) helps with estimating and takeoff directly from the 3D-model of the project, assisting estimators in gathering information which they can’t collect in the real world.

No matter how large your construction company is, the construction estimating software can help increase your workflow efficiency and estimating accuracy. An easy way of finding out if you need the estimating software is to determine if the time worth estimating is worth the cost of the software. With software, you can complete complex projects in a day, unlike the manual process, which will take you days.

Some software support automated estimating processes. With automated estimating, you can save over six hours performing tasks. Many estimators are interested in software with automated estimating functionality and cost calculation.

When moving from a manual estimating process to using cost estimating software, the price might be mysterious. This is due to the type of license, recurring, and additional fees that buyers buying the software for the first time overlook.

Most cost estimating software have advantages of cost database, historical data analysis, visual assembly, proposal generator, reporting, 2D, and 3D takeoff. The software is also simple, reliable and easy to use for all levels. The software also offers cloud-based services.

Cloud pricing

Cloud pricing can be charged for the estimating software on an hourly rate, per minute or per second.

Unit Price

A contractor is paid for the quantity of each measured item during construction under the unit pricing law

Historical Data

This is the past earnings and revenue of a construction firm. It is called historical data because it has happened. You can learn more about former data on pricing with historical data.

Average Cost Pricing Rule

The average cost pricing rule allows companies to cover costs and earn their profits.

Cost Database

This is an electronic cost estimating information and pricing database that supports the cost estimating software.

Specialized Cost Estimating Software

This estimating cost software uses a spreadsheet layout similar to the Microsoft software.

This software helps with the increase in productivity of the cost estimator. The disadvantage the specialized cost estimating software has is that it is costly, and the user needs sheer commitment to set up and maintain the software.

Takeoff Software

This software allows users to determine the estimates from electronic drawings. It will enable the user to determine the length, breadth, and area of various components in a project.


  1. Drawings sent to one another electronically.
  2. It can keep track of where the quantities came from.


How do you calculate construction cost?

A cost estimator uses operational estimating, which is building up operation costs based on first principles. Which involves the cost total of equipment, labour, and materials. This method embraces all the time required for the equipment and labour to be used in the project.

To also confirm the cost plan accuracy, cost checking is activated. This is the execution of the cost-component component in the design process. This makes sure that the budget set at the stage of feasibility will equate to the lower tender acting as a basis of tendering.


How to Choose a Construction Estimating Firm

Suppose you are starting your search for an estimating firm. You must research and find a company with intuition, experience, and equipment to make precise estimates and takeoff.

There are a few things you should look out for when choosing an estimating firm.

  • Company Experience: Although every business has to start from the beginning. It is better to choose a construction estimating firm that has years under its belt.
  • Estimate Accuracy: Go through the company’s earlier projects for mistakes to assess their accuracy. If you find one, move on to the next company.
  • Diverse projects: The more the firm has been exposed to different projects, the better they adapt to any type of problem that comes up doing the project
  • Professional Associations: Ensure your firm belongs to professional associations for estimators that prove they have the skill and knowledge.
  • Method of estimating: Over ten years ago, cost estimating was done manually, but presently, estimating is done on software programs. Find a firm that uses the software. Accurate takeoff and estimate are important in cost estimating.


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