Every serious construction begins with the preparation and approval of cost estimates. These documents make it possible to very accurately calculate the cost of construction, as well as monitor the expenditure of funds in the construction of any structure. Estimating the construction is not easy. Errors are possible both with a private developer and with a contractor. After all, it is difficult to correctly take into account all items of expenditure, as well as unforeseen costs. For this reason, large construction companies create their estimated departments, and small companies turn to specialized organizations that know how to draw up an estimate.
What is an estimate and what is it used for?
What is an estimate? This is a financial document that is a mandatory part of the contract regardless of the form of ownership of the contractor. Estimating is carried out in two main categories of costs:
- purchase of building materials;
- performance of work.
At the same time, there are a number of organizational and technical issues that require careful study:
- construction terms;
- estimated scope of work;
- amount of materials;
- technologies used;
- number of workers;
- planning stages, volumes of financing.
In addition, cost estimates help to ensure that the work performed is strictly on schedule, which is important when conducting customer supervision, technical control. It should be noted that the process of budgeting fully pays off and justifies itself during the construction.
Budgeting allows the customer to carefully think through all the stages of the work, and if necessary, make amendments before the start of construction. This document allows construction companies to minimize bureaucracy and uncontrolled reproduction of electronic and paper documents. In addition, the availability of indicative estimates and the project allow the customer to set a tender among contracting organizations. And then control the quality of work and the amount of material compensation.
Quite often is the practice of ordering estimates from various design organizations. As a result, the client receives a number of estimates with a wide range of prices. This happens because different companies have different prices, suppliers, vehicles, and the number of employees. By comparing the estimates, you can easily understand where the differences are.
Construction organizations that are worried about their reputation can engage the customer in discussing the main positions of the estimate. At the same time, they will easily explain where it makes sense to save, and where it is pointless or even bad.
Sections of the estimate
Now that we have a general idea of what an estimate is, we can more specifically consider its content. It contains many items that might initially seem unnecessary. Experience shows that the presence of all positions is justified. An example is the cost of coordination, bureaucracy, obtaining permits from officials, and the operation of vehicles. These items of expenditure can make up to 15% of the total value of the object.
Mandatory positions include:
- development, preparation of the entire estimated package corresponding to the design decision;
- optimization, checking estimates, if they were ordered from a third-party organization;
- coordination, protection of estimates in organizations specializing in examinations.
Each estimate tries to cover unforeseen expenses, which can be up to 2%. Although in reality this figure can reach 5-10%. After discussion and approval, the estimate is approved and signed by the customer.
We hope that this article has helped you understand what an estimate is and where it is used.