Estimating Procedure

1)  Items and Units 

From the drawings (and with the help of specifications) estimator prepares list of the activities to be performed. This constitutes the list of items which further forms the basis for bill of quantities, Activities could be 

• line out, 
• excavation for foundation, 
• foundation  concrete, 
• masonry, and 
• timber work RCC work, etc. 

For each item a suitable unit is chosen which will be the basis of measurement for estimating and later on for the basis for tendering and making payment to the contractor. Units chosen for measurement are 

• length/width/height for say pipe line, kerb etc., 
• area for plastering, painting, 
• volume for masonry, earth work, concreting etc., and 
• number for items like wash hand basis, water closets. 

In addition to these units provisions are made on lump sum /job basis for those items which are not on measurement wise. 

2)  Taking off the Dimensions 

For all the items listed as above the appropriate dimensions are taken off the drawing and the quantities are worked out in the respective units with due allowances for deductions for the portions where the work is not done e.g. openings for doors and windows. The result of the two above steps is a list of items together with their quantities and the units. The items are further priced at the rates per unit of item which are built up on the consideration of resources required for unit of items. Each item of the construction requires 

• materials, and 
• labour and equipment. 

It is necessary to build up material rate, labour rate and equipment rate for each item. 

3)  Materials Rate 

Estimator should know the quantity of material (of specified requirement) for each unit item. This is worked out on the basis of specifications of the item. Price of the material is obtained from the quotations from the suppliers. Over and above the price of procuring the material it is necessary to add expenditure to account for: 

• transport of the material, 
• loading and unloading, 
• handling on site, 
• storing, watch and ward, and 
• wastage to cover breakage, losses, inevitable pilferage etc. which may vary from 2% to about 10%. 

Information on the above points enables us to build up the cost of materials required for unit item. 

4)  Labour  Rate 

Labour rate for a unit item depends on the category and number of labour employed. Category depends on the trade (carpenter, mason, bar bender etc.). Number of labour depends on the quantity of item and pullout of labour per unit time a working day. Labour output is the most uncertain pan. It depends on the factors like skill of the worker, site organisation, weather conditions and many other factors which are often beyond the control of supervisor. Records of labour output for all the trades have to he kept on site for many years noting varying conditionals under which they are observed. A comprehensive lists of unskilled, semi-skilled  and skilled time are compiled. These lists are helpful in working out the labour components (in terms of labour days) for each unit Item. The estirrlator has then to calculate cost of the labour per head per day viz. the labour rate. This depends on the following factors: 

• Basic wage primarily governed by the prescribed  minimum wages or fair wages. 
• Payment for inclement weather when the labour reports to work but cannot assigned any work or can do work only for a part of the day due to unfavorable weather heavy rains. 
• Paid holidays. 
• Expenditure incurred on travel, labour camps. 
• Overtime payment. 
• Sickness benefits. 
• Insurance. 
• Any other payment as per statutary requirement. 
• Conveyance of labour. 

Generally the payment for items (b) to (i) are included as a percentage of the basic wage. 

5)  Equipment Rate 

On the lines similar to the labour rate, equipment rates are also calculated. Equipment hours required for an item depend on the quantity of the item and the output of the equipment under the conditions of use. The equipment rate can be worked out either on the basis of equipment hour or the unit output of the item. Equipment rate is based on 

• Cost of Capital Investment. 
• Depreciation. 
• Cost of Fuel & Lubricants. 
• Repairs & Maintenance. 
• Salaries of Operators & Helpers. 
• Allowance for possible idle time. 
• Insurance. 
• Any other related expenses. 

On he basis of cost of materials, labour rate and equipment rate the unit rate for each item is worked out, which is then used for working out the cost of the item. For items which are not amenable to accurate measurement lump sum provision is made on the basis of past experience or the judgement  of the estimator about the work content. 

The cost worked out as above constitutes the cost of the work portion. To this are added the following costs: 

• Expenditure on surveys, data collection, design, drawings and estimating. 
• Land Acquisition. 
• Establishment required grind the execution of work. 
• Allowance for unforeseen works that may be found necessary in the course of execution. 
• Overhead expenses to be incurred on the site as well as in head office. 

All the costs mentioned above add up to the total cost of the project. 

6)  Project  Approval 

Project report together with the estimate of cost must receive the approval of the competent authority. For the construction projects taken up by PWD two types of approval are sought for. 

a) Administrative Approvals 

This is the first stage approval. It is obtained from the competent authority of the user department. Thus when Health Department wants to construct a hospital it approaches the PW Deptt to take up construction of the hospital building. PWD carries out feasibility studies. Prepares the layout and rough drawings and specifications on the basis of which approximate cost estimates are prepared as explained in the earlier paragraph. These approximates  and drawings are forwarded to the user department for approval. This is known as administrative approval and is an indication of acceptance of the proposals by the user department and its commitment to make the funds for the project available by PW Deptt. 

b) Technical Sanction 

On receipt of the administrative approval the PW Deptt takes up the work of detailed design, drawings and estimates as a first step to take up construction. Detailed report comprising designs, drawings, specification and estimates of cost have to be approved by the competent authority of PW Deptt. For the construction of works like roads, bridges, river valley works etc. administrative approval and technical sanction are obtained from the competent authority of P.W. Deptt. The technical sanction indicates approval to the technical soundness and estimated cost, prepared as detailed.