Cost estimate is the tool to execute the task of cost management with flair. A proper construction cost estimate helps in managing the execution of a project within the funding limit. In Virginia a cost estimator plays a vital role in project cost management, as he not only report costs, but also interacts and provides input to design decisions at every stage of development.
A project estimate reflects the expected bid price of a responsible contractor in a normal competitive market. All costs that the contractor would expect to incur should be incorporated and identified in the estimate, including any allowance for construction period cost escalation that a contractor would build in to the bid amount. The construction cost estimate represents the “fair and reasonable” cost to the Government of Virginia.
The current cost of construction as of the date of the estimate requires to be shown. The base estimate should reflect current costs on the date the estimate is received. Escalation to bid date should be identified as an individual line item. The estimate should be submitted with detailed information along with complete drawings. Any construction element presented in the estimate should include its price and if it is shown in detail, it should also be priced in detail. It is important to note that "lump sum" or "allowance" figures are not acceptable for detailed elements. Project estimates comprise of all elements within the contractor's bid like bonds, insurance, hazardous abatement etc.
It is mandatory to provide separate estimates for new construction, alteration work and site work along with a separate estimate, summary sheet and supporting worksheets for each building and phase. A Cost Summary Sheet includes the project name, location, and type of estimate, estimator, building numbers, detail of codes, system or subsystem, quantity, subsystem cost, system cost etc.
It is also essential to develop a recapitulation sheet of the total project, listing each new building, each renovated building and site work that precedes the summary sheets. It shows actual award amount of any phases that have been previously bid, to present an accurate total at the time of submission.
A brief narrative should be provided including:
The estimator must review for accuracy of quantities, and reasonableness of unit costs. Confirming that level of detail is appropriate for the design submission stage is also necessary. It is significant to ensure that costs for each building, construction, phase, and renovations are properly separated and summarized, and that a recapitulation sheet is provided for the entire project. The cost model for each building should be provided and relative costs for each element should be realistic. Estimator should identify exceptions, if any. Proposed phasing and schedule should be reviewed and potential problems and opportunities for improvement should be identified.