Local estimates are a type of reporting document, often necessary for construction, decoration and installation works. When planning construction, you should know exactly how much finance you will need to spend on performing certain types of work.
It is for this that there is an estimate documentation. Consolidated, object or local estimates are those documents that allow you to optimally plan and analyze the costs of both the contractor and the customer.
Estimates - what are they?
Estimates vary in purpose. So, for example, an estimate covering the whole range of works is called a summary, and when drawing up separate documentation for each stage (major construction, finishing work indoors, installation of heating and sewage, etc.), the estimate will be called an object or local one.
Currently, local estimates - this is far from a prerequisite when concluding contracts for the performance of work. But as a rule, the customer requires the contractor to provide estimates for review. After all, no one wants to overpay the extra money in the absence of information on what exactly is financed.
Local Budgeting Rules
The grounds for compiling local estimates are:
- construction projects, working drawings;
- the scope of work reflected in the statement of scope of work;
- estimated standards and prices for certain types of work;
- name and quantity of equipment involved in the work and reflected in the working documents;
- wholesale prices for furniture and equipment for the production of works;
- current prices for transportation.
If during the construction process previously unforeseen types of work are identified, which happens quite often, the contractor draws up an additional local estimate. An example of such an estimate can be found in accounting.
How to take into account the cost of work when drawing up estimates?
The cost of construction works consists of three main things:
- Direct costs.
- Estimated profit.
Direct costs are the sum of the cost of building materials, the wages of workers and the cost of operating equipment used to carry out the work.
Overhead costs are expenses that are not directly related to the performance of work, but create the necessary conditions. Their list includes: maintenance of engineering, technical, administrative personnel; maintenance workers,
construction site guards, and more. This also includes payment of holidays, social insurance for workers, compensation for equipment downtime for reasons independent of external factors. You can safely say: the shorter the construction time, the lower will be the cost of overhead contingencies.
Estimated profit consists of the funds necessary to replenish the organization’s budget, material incentives for employees and taxes.
Local estimates are always a maximum of attention, responsibility, knowledge of regulatory documents, the ability to correctly read project documentation. Sometimes only a specialist can do this. Therefore, the preparation of local estimates is best entrusted to professionals.