ESTIMATING

COSTING ,VALUATION ,RATE

ANALYSIS AND SPECIFICATIONS
 COST ESTIMATION

• ESTIMATION : Estimation requires a through knowledge

of construction , cost of materials , labour , in addition to
the skill , experience etc.

• It consist two task (1) Determining probable cost (2)

Determining probable time

• COST ESTIMATE : Cost estimate = quantity of item

multiplied by unit cost of the item
NEED OF ESTIMATING AND COSTING

• Estimate gives an idea of cost of the work , idea of time

required .

• Estimate is required to invite the tender .

• It is also required to control the expenditure , and decides

whether the proposed plan matches the funds available
or not .
 Procedure of estimating
and costing

• Preparing detailed estimates .

• Calculating the rate of each unit of work .

• Preparing abstract of estimate.

• DATA REQUIRED :
• 1.Drawing 2. Previously executed similar
projects 3. Scale of present project ,
locations , availability of funds and resources .
4. Specifications , rates of each unit of work .
• ESTIMATOR : An estimator is expected to work more closely with all
project participants to predict a more accurate estimate . We must be
able to see the details of project ,quantity of materials and prevailing
market rates etc .

• Through understanding of drawings , specifications ,class of work and

materials.

• Construction project cost

• Project cost= direct cost + indirect cost (overhead cost )

• Direct cost (DC): The cost and expenses that are incurred for a specific activity
are termed as direct cost (material, labour , equipment ).

• The cost that are spent on a specific activity can also be classified as :

• 1. Time related cost : Cost spent or incurred along the activity duration .

• 2. Quantity proportion cost : Cost spent or incurred in proportion to the

quantities consumed.

• 3. Fixed cost : Cost that are often incurred once at a specific point of time.
• Indirect cost (IDC): 1. SITE OVERHEAD 2. GENERAL OVERHEAD
• SITE OVERHEAD: It is site related cost like establishment of offices at site,
housing for project staff, store and first aid . It also includes the cost of
items that are not directly related to a specific work package. Generally site
overhead is estimated as 5-15 % of total direct cost.

• GENERAL OVERHEAD : These are the cost that cannot be linked to a

specific project but are used to support the overall company activities .
eg. salary of lawyers , directors etc. generally general overhead cost can be
estimated as 2-5% of direct cost .

• TYPES OF COST ESTIMATES

 EXPECTED
TYPES OF UNITS OF
LEVEL OF DETAILS %
ESTIMATES MEASUREMENTS
ERROES

Conceptual 0 - 30 % of construction
cost documents are 10 - 20 % cost/unit
estimates available

30 - 80 % construction
Semi detailed
documents are 5 - 10 % Assembly cost
estimates
available

80 - 100 % of design
Detailed cost drawing and
2-4% Quantity take off
estimates specifications are
available
 Conceptual cost estimate
• It is also known as rough estimate , preliminary estimate ,
feasibility estimate , analogy estimate . It is generally considered
as basic for all the cost estimate .

• FEATURES OF CONCEPTUAL COST ESTIMATE :

• Absence of exact or detailed data as well as shortage of time .

• It is primarily a fusion of art and science of estimation .

• REQUIRED DOCUMENT :

• Complete cost analysis of previous similar structures .

• Detailed project scope and preliminary specifications for proposed

project .
• Example of cost estimate : Estimation of a school building .

• Suppose a school building for 400 students capacity is to be

constructed .

• Conceptual cost estimate : unit cost that is cost/student will be

calculated using previous project data and
total cost = unit cost * no of students

• Semi detailed estimate: Estimates for rooms and labs etc will be
calculated.

• Detailed estimates : Estimates in accordance with detailed

drawings and specifications will be prepared .
 Types of method of conceptual estimation
1. Unit cost method 2. Factor method 3. Simulations

UNIT COST METHOD :

Unit cost is generally prepared using previous
project data , hence it is necessary that estimator
should have cost per unit for previously same
type of completed project .
Unit cost = ( A + 4B + C ) / 6
Also called weighted unit costs .
A = Minimum unit cost of previous project
B = Average unit cost of previous project
C = Maximum unit cost of previous project
• Question : Use the weighted unit cost to determine the
conceptual cost estimate for a proposed project of parking lot that
is expected to contain 135 parked cars . Previous data of similar
project is given .
Project no
Unit cost
Cost in Rs No of Cars
( Rs/Unit )

1 466580 150 3110.53

2 290304 80 3628.81
3 525096 120 4375.8
4 349920 90 3888.0

5 290290 60 4321.5
6 657206 220 2987.3
7 291718 70 4167.4
8 711414 180 3952.0
• Solution
 Detailed estimate

• It can be owners estimate , engineers estimate or contractor

estimates . Detailed estimates is prepared at the end of design
phase .

• Owners estimate : It is a rough estimate made at conceptual

state to make investment decision .

• Engineer’s Estimate : It is done to determine the expected

cost of the project , used to form contract bid document for
bidding purpose. It is also used to evaluate the various design
alternatives and to look for methodology and construction .

• Contractors estimate : It can determine more accurate value

and can also be used to calculate cost of the project .
 Valuation

• Valuation is the technique of estimating or determining the fair

price or value of a property such as a building , a factory , other
engineering structures of various types , land etc .

• By valuation the present value of a property is determined .

• The present value of property may be decided by its selling price ,

or income or rent it may fetch.
Purpose of valuation

• Buying or selling property

• Taxation

• Rent fixation

• Security of loans or mortgage

• Compulsory acquisition
 DEPRECIATION
• Depreciation is defined as the loss in value of an asset with
the passage of time .

• The main purpose of the depreciation is to provide for the

recovery of capital that has been involved in the possession
of the physical property .

• Types of depreciation :
• 1. Physical depreciation

• 2. Functional depreciation

• 3. Contigent depreciation
• Physical depreciation : Depreciation resulting in physical
losses of an asset is known as physical depreciation .

• Cause : The primary cause of physical depreciation is

wear and tear because of its constant use and
deterioration due to action of elements such as corrosion
of pipe , chemical decomposition etc.

• Functional depreciation : It is often called OBSOLESCENCE

is defined as the loss in value of the property due to change in
fashion , design or structure or due to inadequacy to meet the
growing demand , necessity for replacement due to new invention
being more economical and more efficient etc .

• Contigent depreciation : 1. Accidents ( due to negligence )

2. Diseases (pollution of water ) 3. Diminution of supply ( natural
gas , electricity , water etc ) .
 Difference between depreciation and obsolescence

DEPRECIATION OBSOLESCENCE
This is the functional loss in the value of
This is the value of property due to wear
property due to change in design , structure ,
and tear .
fashion , utility demand etc .

It depends upon its original condition , It depend upon the technological

quality of maintenance and mode of use . advancement etc .

It varies with age . Not dependent on age .

There are several method for calculating No method is suitable for calculation of
depreciation . obsolescence
• Salvage value ( Resale value ): It is the value of the property at
the end of its period without being dismantled . Salvage value
implies that the property has further utility .

• SCRAP VALUE : The value of a property realised when it

becomes absolutely useless except for sale as junk is its scrap
value . The utility of article is assumed to be zero .

• BOOK VALUE : It is defined as the value of the property shown

in the account books in that particular year that is the original
cost less total depreciation till that year .
 Methods of calculating depreciation

• 1. Straight line method

• 2. Declining balance method
• 3. Double declining balance method
• 4. Sum of the years method
• 5. Sinking fund method
 Straight line method
• In this method the property is assumed to loss value by a constant
amount every year . At the end of life , the salvage value (or scrap value )
is left .

• Note : This method is recommended for all the equipments which have
constant demand and do not face any obsolescence during their useful
life . It is widely used in the case of all civil engineering applications .
• Question 1 : The original cost of an equipment is Rs 10000. Its
salvage value at the end of its total useful life of five years is Rs
1000. Its book value at the end of two years of its useful life ( as per
straight line method ) will be…….

 Rate analysis
• Purpose :

• 1. To determine the current rate per unit of an item of

work at the locality .

• 2. To examine the variability of rates quoted by

contractors .

• 3. To ascertain the quantity of materials and labour

strength requires to complete the project .

• 4. To revise the schedule of rates due to increase in the

cost of materials and labour or due to changed in
situations .
 Measurement of materials

• Units of measurements : The units of measurements are mainly

categorised for their nature , shape and size and for making payments to the
contractor . The principle of units of measurements normally consist the
following :

• 1. Single unit work like doors , windows , trusses etc are expressed in
numbers .

• 2. Works consisting of linear measurements involve length like cornice ,

fencing , hand rail , bands of specified width etc and are expressed in running
meters ( RM ) .

• 3. Works consist of areal surface measurements involve areas like plastering ,

white washing , partitions of specified thickness etc are expressed in sqm
(m^2).

• 4. Works consisting of cubical contents which involve volumes like earth

work , cement concrete , masonry etc are expressed in cubic meters ( m^3 ).
 Units of Units of
Sl No Particular of items
measurements payments

Earth work:
Cum Per cum
1. Earth work in excavation
1 Cum Per cum
2. Earth work in filling in foundation trenches
Cum Per cum
3. Earth work in filling in plinth
Concrete Per cum
Cum
1. Lime concrete in foundation Per cum
Cum
2. Cement concrete in lintels Per cum
Cum
2 3. RCC in slabs Per cum
Cum
4. CC or RCC chujja , sunshade Per cum
Cum
5. Cement concrete in bed Per running
Cum
6. RC sunshade ( specified width and height ) meter

Damp proof course ( DPC )

3 Sqm Sqm
(THICKNESS should be mentioned )

Brick works
1. Brick work in foundation
2. Brick work in plinth
4 3. Brick work in super structure Cum Per cum
4. Thin partition walls
5. Brick work in arches
6. Reinforced brick work ( RB Work )
 Units of Units of
Sl No Particulars of items
measurement payments

Stone work
5 Cum Per cum
Stone masonry
Wood work
1. Door sand window frames or chowkhats , rafters
beam Cum Per cum
6 2. Shutters of doors and windows ( thickness Sqm Per Sqm
specified ) Numbers Per number
3. Doors and windows fittings ( like hinges , tower
bolts , sliding bolts, handles )

Steel work
1. Steel reinforcement bar etc .. in RCC and RB work Quintal Per quintal
2. Bending , binding of steel reinforcement Quintal Per quintal
3. Rivets , bolts and nuts , anchor bolts , holding Quintal Per quintal
7
down bolts Quintal Per quintal
4. Iron hold fasts Quintal Per quintal
5. Iron railing ( height and type specified ) Sqm Per Sqm
6. Iron grills
 Roofing
1. RCC and RB slab roof ( excluding steel ) Cum Per cum
2. LC Roof over and inclusive of tiles or bricks or Sqm Per sqm
8
stone slab etc . ( thickness specified )
3. Centering and shuttering formwork Sqm Per sqm
4. AC sheet roofing Sqm Per sqm
Plastering , paints and finishing :
1 Plastering cement or lime mortar ( thickness and
proportion specified )
2 painting Sqm
9 Per sqm
3 white washing , colour washing , cement wash
( number of coats specified )
4. Distempering ( no of coats specified )
5. Painting , Vernishing ( no of coats specified )

FLOORING
1. 25 mm cement concrete over 75 mm lime
concrete floor ( including LC )
10 Sqm Sqm
2. 25 MM OR 40 MM CC Floor
3. Doors and window sills ( cc or cement mortar
plain )
11 Rain water pipe / plain pipe 1 RM PER 1 RM

12 Steel wooden trusses NUMBER PER 1 NO

13 Glass panels ( supply ) Sqm Per sqm

14 Fixing of glass panels or cleaning Numbers Per no

 Method of estimation
• Method 1: Separate or individual wall method

• In this method long walls are measured out to out and internal or cross walls in to in .

• To calculate the quantities , length so obtained is multiplied by breadth and the height of
wall .

• For long wall

• Long wall length out to out =centre to centre length + half breadth on one side +
half breadth on other side = centre to centre length + one breadth

• For short wall

• Short wall length in to in = centre to centre length - one breadth

• It is applicable for symmetrical footing either side all along the walls , also for this
centre line remain same for superstructure and for foundation and plinth .
• Question : Figure represent the plan of superstructure wall of a
single room building of 5m* 4m and section A-B represents the
cross section of a wall with foundations . Estimate the quantities
of : 1. Earth work in excavation in foundation 2. Concrete in
foundation 3. Brick work in foundation 4. Brickwork in
superstructure.
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• Method 2: Centre line Method
• Sum - total length of centre lines of walls , long and short has
to be found out.

• Find the total length of centre line of wall of some type long
and short having same type of foundations and footings and
then find the quantities is by multiplied the total centre line
length by the respective breadth and height .

• In this method , the length will remain same for execution in

foundation , for concrete in foundation for all footings and for
superstructure ( with slight difference when there are cross
wall or no of junction ) .

• For buildings having cross on partition wall , for each and every
junction , half breadth of the respective item on footing in to be
deducted from the total centre length .
• Question : Estimate by centre line method the quantities of the following items of a
two room building .

• 1. Earth work in excavation in foundation . 2. Lime concrete in foundation 3.

First class brick work in foundation 4. First class brick work in lime mortar in wall.

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Section CD
 Estimation of labour
• Normally a building is made up of many different systems broken down into smaller components
and are associated with responsibility of individual workers or crew .

• Crew is the team of workers which can be of same trade on a composite composition of
different trades.

• Question : Find duration of interior and exterior painting activities for quantities of 440 sqm ,378
sqm respectively using crew production rate 11 sq.m/hr and 14 sqm /hr respectively . Assume
that only after interior paint , exterior paint can be done .

• Solution :
for interior Painting
44 tone
Time required
27hL
Time required fr exterior Painting 377yd

Total Time required to 127 67J dey 8 375 digs

per day
Assuming 8 hrs of work
Thank you
Specification
 Specification
• The general meaning of specification stands for specific description
of a particular subject.

• An engineering specification can be defined as the detailed

description of all workmanship and materials which are required for
execution of work in accordance with the drawings .

• Since the drawings provided not furnish the details of different items
like the quality and quantity of materials and workmanship , it is
imperative to convey all these relevant data for materials and
workmanship in a separate contract document which is known as
specifications.

• The specifications combined with drawings define the structure

completely .

• Specification is an essential part of engineering contract.

 Objectives of specifications
• The specifications clearly illustrate the quality of materials , the workmanship
desired and method of doing workout serves as a guide to the contractor as well
as supervising staff to the best satisfaction.

• As the rate of work is based on the specifications , this enables the contractor to
quote the contract rate of work in a tender.

• The specification clearly describes quality and quantity of different materials

required for construction work, the contractor can arrange the same in time and
complete the work within scheduled time. It also gives opportunity for the owner
to check the quality of materials conforming to specifications avoiding any dispute
with the contractor.

• The Total cost of the project is governed by specifications.

• It also specifies the equipments ,tools and plants to be engaged for work and thus
enables to procure them before hand.

• Specification is essential and legal contract document and is required for court
cases or arbitration .
Preparation of specification

• As the specifications play an important role in the

execution of quality work ,they must be
concise ,clearly worded and free from any ambiguity
anywhere from the study of specifications, one can
easily understand the nature of the works and what
the work shall be.

• It must convey the complete information in order to

avoid any dispute and must be straightforward to be
easily understood by contractors.

• It should be fair to both the parties and all likely

difficulties and hazards should be mentioned.

• Two types of specifications :- 1. General specification

2. Detailed specifications
• General specifications : very short description of
different parts of work specifying materials, proportions , quality
etc in general terms. It serves as guide to prepare the
approximate estimated cost of work. This does not form a part of
contract document . e.g. : for foundation and plinth work in a
building shall be of first class brickwork in 1:6 cement mortar
over 1:4:8 cement concrete.

• Detailed specifications :it specify the qualities,

quantities , and proportion of materials , the method of
preparation and execution and method of measurement of work .
The detailed specification of different item of work are prepared
separately and described what the work shall be and how they
shall be executed and constructed . They must be written clearly
in compact and concise form avoiding repetition and ambiguity .
The detailed specifications form an important part of contract
document and they are legal document for arbitration or court
cases.
Thank you