Computer-Aided Cost Estimation Part 1
Collaborating with cost estimators is an important part of the early stages of any construction project. An accurate cost estimation allows contractors to maximize profits by establishing the building cost for the contractor who can use this information to provide a quote to the owner or investor. There are an array of methods for attaining accurate cost estimates, but computer-aided cost estimations are arguably the most accurate and fully featured.
Computers are powerful tools for crunching numbers and visualizing data that can help us determine important cost metrics for construction projects. In this two-part series, our Florida contractor lawyers will explore computer-aided cost estimation and discuss how this method of cost estimation can increase profitability on your projects.
The Value of Computer-Aided Cost Estimation
Cost estimates are extremely beneficial for contractors, and new advancements in cost estimation software systems have helped increase the accuracy of these estimates substantially. Today, there is an array of different computer-aided systems including simple spreadsheets and highly sophisticated integrated systems that utilize internet connectivity to actively consider design and price negotiations.
Although the financial barrier of entry for this technology can be steep since cost estimators are tasked with maintaining the system, training employees to use it effectively, and purchasing computer hardware, these cost estimates save time and money. Employing cost estimators who utilize these systems can be more expensive depending on the firm’s familiarity with computer-aided cost estimation software systems.
The Computer-Aided Cost Estimation Process
If you decide to hire cost estimators who specialize in these types of systems, it’s important to understand how this process works. Generally, the process for utilizing computer-aided cost estimation software systems includes:
- The design data is submitted to the software system. If a similar design has already been processed or exists in the archival data, the program will automatically retrieve the project information for reference.
- This data is examined by a cost engineer who then modifies the project data by adding and deleting components as needed. If your project is similar to one already in the system, the cost engineer may not need to apply many updates, thus saving time.
- The cost estimator calculates an estimate utilizing the unit cost method of estimation. Productivities and unit prices are retrieved and applied to the cost estimate resulting in only the latest price information being considered.
- The cost estimator submits a summary which is then reviewed for errors.
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Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.