ii
COMPUTERISED BUILDING COST ESTIMATING SYSTEM
MOFTI BIN MARJUKI
A project report submitted in partial fulfillment of the
requirements for the award of the degree of
Master of Science (Construction Management)
Faculty of Civil Engineering
Universiti Teknologi Malaysia
JULAI 2006
iv
To My parents, Marjuki Hj Abd Sallam
Whom once said
“ We’ve no wealth to give except encouragement to seek for knowledge……
For knowledge is the grates treasures of all. “
To my children Raudahtul Alya and Muhammad Aiman Asyraaf
“ let this be your inspiration to seek knowledge…..”
To my loving wife, Samsiah bte Sadli
For all the sacrifices, understanding and affection.
v
ACKNOWLEDGEMENTS
This master project was never an individual effort, but with combination
contribution of others who involved directly or indirectly. Among all involved in this
project , the author wishes to express the greatest appreciation to Dr. Arham Abdullah
and En. Zamri Ismail as the supervisors of this master project. With all the guidance
and advices given from both of the supervisor, this master was able to complete on
time. Their dedication and continuous assistances has led the author to strive for better
achievement in this master project.
The author wishes to express his gratitude to his family and friends for their
supports and cares. Last but not least, the author wishes to thank all those who have
contribute in one way or other in making this master project a possible one.
vi
ABSTRACT
Estimating is an important process in order to prepare cost estimating for a
proposed project. Cost estimate will give client an overview towards the total cost
needed to be spent based on design. Due to the importance of the cost estimate for a
proposed project, the utilization of computer to prepare cost estimate should therefore
be practiced. The entry of computer technology in the estimating practice is a major
event in the improvement of the traditional estimating method by reducing estimate
preparation time, reducing the amount of paperwork required for the conventional data
storage, and improving the quality of documentation. However, the actual use of the
computer varies. Some companies use the computer for all projects and others do not
use at all. The software are under-utilized due to its inefficiency in terms of difficulty,
cost and because the program does not match with the company’s style of estimate This
study is intended to identify estimating techniques used by contractors for cost estimate,
to identify problem causes using that techniques and to develop a computerized cost
estimating system for contractors. The study has found out that most of the contractors
were using approximate quantity estimating technique for their cost estimations using
computers. However, some of them still prefer to use manual technique as it is easier to
apply. Microsoft Excel is the popular software used by contractors to prepare estimate.
However, there are disadvantages in using Microsoft Excel is that users have to create
suitable format for each estimating work. A computer-aided-project-cost-estimating
system has been created to fulfill the needs mentioned. The result of this research was a
cost estimating system application named as COES (Cost Estimating System) With the
fulfill utilization Microsoft Access 2003 and other Microsoft Access functions, COES
has been able to produce cost estimating automatically. This system serves as a
systematic framework comprising elements of building works in order to help
contractors to prepare a more precise and systematic cost estimate.
vii
ABSTRAK
Penganggaran merupakan proses penting yang bertujuan untuk menyediakan
satu ramalan kos bagi projek yang dicadangkan.
Anggaran kos yang disediakan
membolehkan pihak klien mendapat gambaran secara kasar terhadap jumlah kos yang
perlu dibelanjakan berdasarkan rekabentuk yang disediakan.
Memandangkan
pentingnya anggaran kos kepada sesebuah projek yang dicadangkan, maka penggunaan
komputer untuk menyediakan anggaran kos perlu dipraktikkan. Kemasukan teknologi
komputer dalam amalan angggaran merupakan peristiwa utama bagi memperbaiki
kaedah anggaran dengan memendekkan masa penyediaan anggaran, mengurangkan
jumlah kertas yang diperlukan untuk menyimpan data, dan memperbaiki kualiti
dokumen.
Walaubagaimanapun, penggunaan komputer sebenarnya berbeza-beza.
Banyak syarikat menggunakan komputer untuk kebanyakan projek dan terdapat juga
syarikat yang tidak langsung menggunakan aplikasi komputer.
Perisian tidak
digunakan kerana kurang efisien dari segi kesukaran, kos dan program yang tidak sesuai
dengan kehendak syarikat.
Kajian ini bertujuan untuk mengenalpasti teknik
penggangaran yang digunakan oleh kontraktor dan membangunkan sebuah system
anggaran kos projek berkomputer untuk kegunaan kontraktor.
Kajian mendapati
kebanyakan kontraktor menggunakan kaedah kuantiti hampir untuk menyediakan
anggaran kos dan majoriti firma kontraktor telah menggunakan penggunaan aplikasi
komputer untuk kerja penganggaran. Namun begitu, terdapat sesetengah kontraktor
cenderung menggunakan kaedah manual walaupun kemudahan komputer telah
disediakan dengan alasan kaedah manual adalah lebih mudah dan senang dilakukan.
Perisian Microsoft Excel telah menjadi perisian popular kepada pihak kontraktor untuk
menyediakan anggaran kos.
Penggunaan perisian ini mempunyai kelemahan iaitu
penggangar perlu mencipta format dan membentukkan formula yang sesuai pada setiap
kali kerja penggangaran dilakukan.
Dengan ini, sebuah sistem anggaran kos projek
berbantukan komputer telah direkabentuk untuk memenuhi keperluan ini. Keputusan
viii
kajian ialah satu aplikasi anggaran kos bangunan yang dinamakan sebagai COES ( Cost
Estimating System). Dengan menggunakan sepenuhnya perisian Microsoft Access 2003
dan fungsi Microsoft Access yang lain, COES telah dapat menghasilkan sistem
anggaran kos bangunan secara automatik. Sistem ini akan menjadi rangka sistematik
yang merangkumi elemen-elemen kerja bangunan untuk membantu kontraktor untuk
menghasilkan satu anggaran kos yang lebih tepat dan bersistem.
ix
TABLE OF CONTENT
CHAPTER
TITLE
PAGE
TITLE
1
SUPERVISOR DECLARATION
i
RESEARCHER DECLARATION
ii
DEDICATION
iv
ACKNOWLEDGEMENTS
v
ABSTRACT
vi
ABSTRAK
vii
TABLE OF CONTENT
ix
LIST OF TABLES
xv
LIST OF FIGURES
xvi
LIST OF APPENDICES
xix
INTRODUCTION
1
1.1
Introduction
1
1.2
Background
2
1.3
Problem Statement
4
1.4
Aim and Objectives of the Study
5
1.5
Scope of Research
6
1.6
Importance of the Study
6
1.7
1.8
Research Approach
Research Strategy Chart
7
8
x
2
LITERATURE REVIEW
9
2.1
Introduction
9
2.2
Definition of Estimating
10
2.3
Proposed of Cost Estimates
11
2.4
Estimating and Project Management Roles
12
2.4.1
Project Management Estimating Responsibility
12
2.4.2
Estimator Responsibility
13
2.4.3
Estimator Skill
13
2.5
Types of Estimates
14
2.6
Method of Estimates
16
2.6.1
Preliminary Estimates
17
2.6.2
Intermediate Estimates
17
2.6.3
Final Estimates
18
2.6.4
Unit Method
18
2.6.5
Superficial Method
19
2.7
2.6.6 Cube Method
20
2.6.7 Storey-Enclosure Method
21
2.6.8 Appropriate Quantities
22
2.6.9
Cost Planning
23
2.6.10 Analytical Estimating
24
2.6.11 Cost Model
24
Construction Cost
25
2.7.1
26
Material Cost
2.7.2 Labor Cost
2.7.3
26
2.7.2.1 Direct Labor Costs
26
2.7.2.2 Indirect Labor Cost
27
Equipment Cost
27
2.7.3.1 Owning Costs
28
2.7.3.4
28
Operating Costs
2.7.4 Overhead Costs
2.7.4.1 Office Overhead
28
29
xi
2.7.4.2
2.7.5
2.8
3
Job Overhead
Profit
30
30
Factors Influence Estimating
31
2.8.1
Quantity Surveying
32
2.8.2
Costing the Quantity Take Off
33
2.9
Different Type of Costs
34
2.10
Tool and Methodologies for Cost Estimating
35
2.11
Summary
35
COMPUTER AND COST ESTIMATING
36
3.1
Introduction
36
3.2
Use of Computers in Construction
37
3.3
Computer the Estimating Tools
38
3.4
Computer Software for Production of Cost Estimates
38
3.5
Industry Programs
41
3.5.1
Masterbill 3 (MB3)
41
3.5.2
Ripac for Microsoft Windows
42
3.5.3
Builds Soft
43
3.5.4
General Cost Estimator for Excel 4.0
45
3.5.5
Goldenseal Estimating Software
46
3.6
Review of Software
48
3.6.1
System Features
48
3.6.1.1
Built Soft
50
3.6.1.2
Ripac
51
3.6.1.3
The Proposed Application (COES)
51
3.6.2
3.6.3
Screen layout/Graphical User Interface (GUI)
53
3.6.2.1 The proposed Application (COES)
54
Cost Effectiveness for Specific Software
54
3.6.3.1
54
Reliability of Software
xii
3.7
4
3.6.3.2 User-Friendliness
55
3.6.3.3
56
Sufficient Features of the Software
3.6.3.4 Maintenance
56
3.6.3.5 Number of Computer
57
Justification for Using Microsoft Access
57
ANALYSIS AND RESULT
59
4.1
Introduction
59
4.2
Data Collection
59
4.3
Data Analysis
60
4.4
Frequency Analysis
60
4.5
Average Index Analysis
61
4,6
Data Analysis
61
4.7
Section A : Estimating Model
63
4.7.1
Cost Estimating Method Applied by Company
63
4.7.2
Factors of Choosing the Cost
Estimating Method
4.7.3
Types of Cost Estimating Method,
Applied to the Project
4.7.4
64
65
Frequency the Sources of Unit Rate that
the Company Referred in Preparing cost
67
4.4.7.1 Catalogues or Supplier Quotation
68
4.4.7.2 Built Up Rate
69
4.4.7.3 Past Project
69
4.4.7.4 Past Experience
69
4.4.7.5 Elemental Cost Analysis
70
4.7.4.6
70
JKR’s Schedule of Rate
4.8
Adjustment before Applying the Sources of Unit Rate
4.9
Section B : Application of Computer in Preparing
Cost Estimating
71
72
xiii
4.9..1 The use of Computer to Prepare Cost Estimating
72
4.9.2
Standard Software used to Prepare Cost Estimate
73
4.9.3
Special Software used for Estimating
74
4.9.4
The Software used by company
76
4.9.5
The Advantages or Efficiencies of Computer
Software used in company for Preparing Cost
4.9.6
Estimating.
77
4.9.5.1 Complete work in Shorter Time
77
4.95.2 User Friendly
78
4.9.5.3 Quality of Work Done
78
4.9.5.4 Efficiency
79
Problem Faced when using
Standard Software in Preparing Cost Estimate
4.10
4.11
5
80
Problem faced when using the Computer Software
to prepare the Estimating
80
Summary of Analysis and Result
81
MODEL DEVELOPMENT METHODOLOGY
83
5.1
Introduction
83
5.2
System Requirements
84
5.3
System Component and Architecture
86
5.4
Database Conceptual Design
86
5.5
The Conceptual Estimate Methodology
91
5.6
Conclusion
93
xiv
6
7
8
MODEL IMPLEMENTATION
94
6.1
Introduction
94
6.2
Database Implementation
94
6.3
Preliminary Database
95
6.4
Main Module
99
6.5
Conclusion
100
SYSTEM VALIDATION
102
7.1
Introduction
102
7.2
Prototype
102
7.3
Use the Prototype
103
CONCLUSION AND RECOMMENDATION
114
8.1
Conclusion
114
8.2
Research Contribution
114
8.3
Recommendation for Future Research
115
REFERENCES
APPENDICES
117
xv
LIST OF TABLES
TABLE NO
TITLE
PAGE
2.1
Types of Cost Estimates
16
4.1
Respondents Percentage
62
4.2
Method use for Preparing Cost Estimating
63
4.3
Factors of Choosing Cost Estimating Method
64
4.4
Cost Estimating Method used for Several Types of
Contract
4.5
Degree of Frequently used the Sources of Unit Rate in order
of Preparing Cost Estimate
4.6
66
68
Option of any Adjustment or no need any Adjustment
in Applying Resources of Unit Rate
71
4.7
Computer used in Preparing Cost Estimate
72
4.8
Standard Software used to Prepare Cost Estimating
73
4.9
Special Software used in Preparing Cost Estimating
75
4.10
Types of Special Software used in Preparing
Cost Estimating
4.11
4.12
76
Efficiencies used Special Software in Preparing
Cost Estimating
77
Problem usually faced when Using Standard Software
80
xvi
LIST OF FIGURES
FIGURE NO
TITLE
PAGE
2.1
Research Strategy Chart
8
2.1
Superficial Method
20
2.2
Cube Method
21
3.1
Sample Interface Masterbill3 (MB3)
42
3.2
Interface Ripac for Windows
43
3.3
Four Level Estimating System In Build Soft
44
3.4
Interface Trade Breakup (level 2)
44
3.5
Interface of Rate Breakup (level 3)
45
3.6
Sample Interface of General Cost Estimator
46
3.7
Interface Goldenseal Startup Guide
47
3.8
Interface Goldenseal Estimates
47
4.1
Respondent Percentage
62
4.2
Percentage of Method use for Preparing Cost Estimating
63
4.3
Percentage of factors Choosing Cost Estimating Method
65
4.4
Frequently used the Sources of Unit Rate in order of Preparing
Cost Estimate
4.5
Percentages of any Adjustment before Applying Resources
of Unit Rates
4.6
72
Percentage of Standard Software used by Contractor in
Preparing Cost Estimating
4.7
70
74
Percentage of used Special Software in Preparing Cost
Estimate
75
xvii
4.8
Rating Scale Efficiencies used Special Software in Preparing
Cost Estimating
4.9
79
Percentage of Problem usually faced when Using Standard
Software in Preparing Cost Estimating
81
5.1
System Development Process
84
5.2
System Component
86
5.3
System Architecture
88
5.4
Database Entity Relationship Diagram (ER Diagram)
90
5.5
Methodology Data Flow Diagram
92
6.1
Sample Table 1 of Each Division Data
96
6.2
Sample Table 2 of Each Division data
96
6.3
Sample Table 3 of Item Taking Off List
97
6.4
Snapshot of the Form from Table Database
98
6.5
Snapshot of the Database and their Relationships
98
6.6
Snapshot of the System Main Menu
100
7.1
Snapshot of the Starting Menu
103
7.2
Snapshot of the Project Brief
104
7.3
Snapshot of Project Cost Information
105
7.4
Snapshot of Activities under Building Works
106
7.5
Snapshot of Activities under Superstructure
106
7.6
Snapshot of the Form Cost Estimating
107
7.7
Snapshot of Functional Button
108
7.8
Snapshot of High-tensile and Mild-steel Conversion
108
7.9
Snapshot Functional Buttons of Estimating Form
109
xviii
7.10
Snapshot of Summary Cost Concrete Staircase
109
7.11
Snapshot of Summary Total Cost Staircase
110
7.12
Snapshot of Data Record
111
7.13
Snapshot of Report Construction Cost
112
7.11
Snapshot of Report Brief Specification
113
xix
LIST OF APPENDICES
APPENDIX
A
TITLE
Questionnaire
PAGE
-
91
CHAPTER 1
INTRODUCTION
1.1
Introduction
Generally, the process of awarding any construction contract is based on a
competitive bidding. Contractors will be invited to submit their bids to the owner who
normally awards the lowest bid to construct the project. Beforehand, both the owner
and contractor have to access the construction cost of the proposed project. This is
achieved through a construction cost estimate.
Although, the actual total cost of
construction is not known until the completion of the project, conceptual estimates can
be a good start for the owner and contractor. The owner will be able to estimate in
advance a range of the final cost, to secure the lowest cost to construct the project, and
budget the necessary fund
in advance.
Considering an adequate contingency
percentage to the total estimated cost covers such risk. In order to win the contract, the
contractor bid price has to be low enough to compete with other competitors, yet high
enough to cover his risks and make some profit. Consequently the importance of cost
estimates is enormous for all project phase, moreover at the conceptual and feasibility
phase.
The preparation of any type of cost estimate depends on the experience of the
estimator, the tools used, the time spent, and the information available. Usually the
preparation of an estimate starts by breaking down the project into components, then
taking off the quantities of the elements of each package and next pricing them all.
2
Finally, by summing up the price the direct construction cost is computed. This
process is long and complex but the most complicated part of it is the quantity take off.
Consequently, computers are considered to be effective tools in cost estimating. due to
their capability of doing complex calculation and storing huge amount of data for
future use. Any decision concerning the construction of a project that has been or to be
executed is based on one type of estimates, which are preliminary estimates, which their
moderate level of accuracy owner, quantity survey and contractor consider them as the
first choice estimates because they are inexpensive and fast to generate. Owner uses
them to decide whether constructing a project is feasible and to evaluate contractors
bids, while architect to design within owner’s budget and considering alternatives, and
the contractor to know if bidding on a project is profitable or not. Consequently, in the
proposed methodology the concentration is on preliminary construction cost estimates
with the emphasis on a computer as an avail tool for estimators.
1.2
Background
Computers are expending increasingly into all aspects of daily life. The cheaper
computer hardware today has boasted the rush of using the computers. Although the
move had been slow compared to the others, the construction industry is steadily
coping itself with the advancement in the information technology system. As a result,
the professional Architects, Engineers and surveyors had computerised their works, and
the contractor had started to use computers for their daily business purposes. From a
survey by Mohd Hisham Ariffin (2002), it is concluded that the Construction Industry
Development Board (CIDB) G7-graded contractors were highly dependent on computer
for the administration work while having mediocre dependency on computer for
technical work which include scheduling, technical calculation, budgeting, estimating,
and others.
3
The early uses of computers by construction companies were limited to
accounting functions. With the advances in micro-computing, increased knowledge of
computer capabilities, and the development of user-friendly software, computers have
been used everyday construction to make quick and accurate decisions.
The method of pre-tender price estimating have been developed as manual
processes. The computer can be used in conjunction with any methods of estimating for
the rapid retrieval of cost data, of for calculating an approximate estimating. The
advantage of using a computer is that an estimate, however detailed, can be updated
quickly and efficiently for changes, which may be necessary in a revised design.
The computers potential in construction estimating has progressed from its use
as an adding machine to an integrated process of computer-aided design (CAD),
estimating software, job costing software and project scheduling systems. However the
actual use of the computer for estimating is varied within the industry.
Some
companies use the computer for all projects and with high degree of sophistication.
There is a variety of estimating software program available. Some simply
perform the mathematics of the estimating process, others integrate the estimating
operation with other functions of the construction process. No matter how sophisticated
the program might be, it is imperative that the estimator understands the calculation
methods and assumptions used in the program. The estimator should be properly
trained and should known all assumptions before proceeding with an estimate.
Computer estimating still involves the measurement of dimensions and
compiling materials. This information can then be fed to the computer to obtain the
labour, equipment and material costs that may be used to compile the estimate.
To
perform this type of function, the computer must be programmed to proceed through the
required steps, and appropriate unit costs must be stored in it.
4
An estimator must assemble a large amount of information in an organized
manner and perform numerous calculations to prepare a cost estimate. The computer
can be used by the estimator to organize, store and retrieve information and to perform
the many calculations necessary to prepare an estimate. It can be an effective tool for
decreasing the preparation time and increasing the accuracy of cost estimating.
Numerous computer database can be developed to automate and standardize the
estimating function. Historical cost database can be developed from the cost records of
projects that have been completed by the company. Information from the historical cost
database can be retrieved for the preparation of estimates for future projects. As new
information is obtained from current projects, the historical cost database can be
updated.
The advent of the relatively powerful and economical computer technology has
realistically made the computer-aided estimating become feasible.
The number of
estimating products increased rapidly since the entry of an interactive computing system
into the market. Accompanied with the emergence of estimating software, advance in
the database management system has significantly influenced the development of a
computer-aided estimating software. Therefore, it can be concluded that the entry of
computer technology in the estimating practice is a major event in the improvement of
the traditional estimating method by shortening estimate preparation time, reducing the
amount of paperwork required for the conventional data storage, improving the quality
of documentation. These advantages allow the estimator to pay more attention on
decision making during the process of estimation and leave all burdens of data handling
tasks to the automated system (Charoenngam, 1996).
1.3
Problem Statement
In general, it can be stated that the current estimating programs are unable to
fully satisfy their own users. The available software are under–utilized due to its
5
inefficiency in terms of difficulty, cost and because the program does not match with
the company’s style of estimate (Charoenngam, 1996). There is very long learning
curve for practicing estimators to operate the system especially for small companies
( Lowe,1994).
Most estimating products focus on program manipulation and offer to much
irrelevant optional features rather to concentrate on the core estimate preparation. The
estimating method and techniques are different from regions, countries to countries,
location to locations and companies to companies (Lowe 1994).
Therefore the research
is needed because in Malaysia the use of Cost
Estimating system was very limited. The most common and widespread method for
taking-off was still the traditional method and spreadsheet method. In the mean time,
although most of the contractors have their highly capable Cost Estimating system,
there are still many of them who still use the spreadsheets program. The reason is that
spreadsheet programs actually save more time than the Cost Estimating production
system.
For all this spreadsheet users, template or standard sheets were being
developed to help out Cost Estimating process. The users will only have a key in the
dimension and then, they will have quantities for multiple items in one single sheet.
1.4
Aim and Objectives Of The Study
The aim of this project is to develop a prototype computer – aided project cost
estimating system which can help the users to prepare preliminary estimate cost of
building works. In order to achieve the above aim, the following objectives of study
have to be carried out.
1. To study the various conventional methods of estimating from contractors
perspective.
6
2. To identify the software used by contractor for cost estimating in practice
and the problems they faced in using the software.
3. To develop a computer – aided project cost estimating system by using
Microsoft Access 2003.
1.5
Scope of Research
This study only covers the following scopes :1. This study concentrates on developing an application from taking off to
automatic approximate cost estimating.
2. This study concentrates on building work only.
3. This study focused only on an assortment of contractors who has registered
with Pusat Khidmat Kontraktor (PKK) and Construction Industrial
Development Board ( CIDB) in Johor Bahru.
1.6
Importance Of The Study
Although it is a simple application, which covers only the approximate cost
estimating preparation process, it is a landmark application that cost estimate can be
prepared automatically using Microsoft Access. This application will have the same
capabilities with the expensive Cost Estimating production software in terms of
preparing Cost Estimate.
As this application only requires Microsoft Access 2003 to run, the cost of
obtaining and installing this application is thought to be much cheaper then the
available Cost Estimate Production software. As a low cost solution, this will give the
contractor much more opportunity to use the computer in preparing their cost estimate.
As a result of this widespread usage, files can be shared among all the parties involved.
7
1.7
Research Approach
The idea of this research initiate from the researcher experience in using
KAPPA-PCT Application Development System version 2.2 in doing preliminary
estimate before architectural drawings can be produced. The prototype is developed in
the form it is easy to understand and use. The user has to answer the questions appear
on the screen such as type of school, location, year when the school is to be build, site
condition and piling requirement, that is before the preliminary estimate can be
calculated. They cannot accommodate detailed element for preparation cost estimate.
Therefore, the first phase in doing this research is to make study on the Microsoft
Access of whether it can be developed into a Cost Estimate Production application.
The second phase involves doing literature review on the Cost Estimate
Production software or associated software available in the market.
All the software
was extensively being reviewed and it form a model for the proposed application.
The third phase is on learning to do programming in Microsoft Access. This is
important because this application will be programmed by the researchers who have
little experience in programming before hand.
89
1.8
Research Strategy Chart
PHASE 1
Issued statement and data collecting
Scope of
Research
Data Analysis, Develop Computer Cost Estimating System,
Conclusion and Recommendation
RESPONDENT
Registered contractors
Class A,B,BX,C
With PKK or CIDB in
Johor Bahru
Research
Statement
Problem
Statement
PHASE 2
DATA
ANALYSIS
OBJECTIVE 1
Identify Cost
Estimating
Method
OBJECTIVE 2
Identify Software
used by contractors
and problem
INSTRUMENT
Questionnaire,
Literature review
Review
the Computerised Cost
Estimating System
Figure 1.1: Research Strategy Chart
OBJECTIVE 3
Developed Cost
Estimating
System
Summary,
Conclusion and
Recommendation
9
CHAPTER 2
LITERATURE REVIEW
2.1
Introduction
Cost estimating is an essential aspect for the business operation of
construction firms. Construction is a unique industry that by nature is risky since
most projects must be priced before they are constructed, whereas in other industries
the selling price is based on known manufacturing costs. The success or failure of a
project relies on the accuracy of several estimates done throughout the course of the
project.
Estimating has been recognized as an important element of construction
project.
The primary function of preliminary or approximate
estimating is to
produce a forecast of the probable cost of a future project, before the building has
been designed in detail and contract particulars prepared. In this way, the building
client is made aware of his likely financial commitments before extensive design
work is undertaken (Seeley,1996).
The purpose of pre-tender price estimating is to provide an indication of the
probable costs of construction at a very early stage in the life of a construction project.
It is one of the most important factors influencing the client’s decision to build. An
approximate estimate, which is too high, may discourage a potential client, whereas
estimates, which are shown to be far below a tender sum, may result in an abortive
design.
10
2.2
Definition of Estimating
Researcher and experts give cost estimating different definition, thus the
succeeding paragraph states some of them. The Project Management ( PMI ) defines
the cost estimating to involve developing an approximation (estimate) of costs of the
resources needed to complete project activities (Duncan 1996).
Hendrickson
specifies that are design, bid and control. Furthermore, he defines that at the very
early stage of design, the screening estimate or order of magnitude estimate is made
before the facility is designed, therefore it relies on the cost data of similar facilities
built in the past.
While preliminary or conceptual estimate is based on the
conceptual design of the facility at the state when the basic technologies for the
design are known. Moreover, the detailed or definitive estimate is made when the
scope of work is clearly defined and the completed plans and specification when
they are ready for the owner to solicit bids from construction contractors
(Hendrickson 1989)
Association for the Advancement of Cost Engineering (AACE) International
define the cost estimation to provide the basis for project management, business
planning, budget preparation and cost and schedule control. Included in these costs
are assessments and an evaluation of risks and uncertainties (Uppal 1997). On the
other hand, Carr defines it as being an accurate reflection of reality that shows the
levels of detail that is relevant to decisions (Carr 1989).
Estimating is the process of looking into the future and trying to forecast
project costs and resource requirements (Halpin 1985). An estimate is a judgement,
opinion, forecast or prediction. It is a judgement or opinion of the cost of a process,
product, project or service. It is a prediction or forecast of what a work output or
work activity will cost (Stewart 1982). Estimating is a collection and analysis of the
bill items which influences and contribute to the cost of the project (Clough, 1984 )
11
According Society by Laws, march 1978 Estimating is the art of
approximating the probable worth or cost of an activity based on information
available at the time (Stewart 1982).
The primary function of preliminary
estimating is to produce a forecast of the probable cost of a future project, before the
building has been designed in detail and contract particulars prepared. (Seeley,
1996). Consequently, all those definition are similar in one way or the other in
describing cost estimating as being the process of guessing and foreseeing the future
costs of a project or product before it actually exist. Despite the likeness between
cost estimating and pricing, one has to carefully distinguish the difference. Cost
estimating involves an assessment of the likely quantitative result, how much will it
cost to perform product or service involved. Pricing is a business decision, how
much will be the charge for that product or service (Duncan 1996).
Wood
mentioned that in management terminology the cost refers to expenditure, not
revenue, the price and cost are not the same. Thus, the price may be less than the
cost in the case of a loss, or the price may be greater than the cost in the case of a
profit (Wood 1974).
2.3
Purposed of Cost Estimates
Peculiar to the definitions an estimate, at its most excellent, is a close
approximation of the actual costs. Hence the purpose of an estimate is to postulate
the costs required to completing a project in accordance with the contract plans and
specification.
Furthermore, it is important that management has as much
information as possible when deciding on funding projects.
Sutherland (1999)
explains the purposed as to provide the client and design team with as precise an
estimate of final cost as possible so that the project can be accomplished within the
client’s budget. Likewise, Weatney (1997) outlines the purposed of a cost estimate
through the following :
12
ƒ
Provides an assessment of capital cost for a specified piece of work.
ƒ
Forms the basic for planning and control by defining the scope of work and
it’s associated estimated cost.
ƒ
Provide much of the basic information (hours, resources, tasks, and
durations) which is needed for preparing a schedule. It also states general
resource requirements such as labor, material, and construction equipment.
ƒ
Provides the financial input required to prepare a cash flow curve.
ƒ
Is a catalyst for discussion, idea generation, team participation, clarity and
buy-in, it ties together much of the relevant project information within a
simple document.
2.4
Estimating and Project Management Roles
Both project management and estimator differently share responsibilities in
performing an estimate at the decision level.
2.4.1 Project Management Estimating Responsibility
Decision making requires a sequence of actions needed to be taken to
perform the process from an initial status to a goal status (Hegazy 1993). Therefore,
management must know what cost information is needed and how to use it in
making decisions.
Estimate development must be directed and approved by
management prior to issue.
The project manager is actively involved in the
development of the estimate and is reasonable for the final product. The project
team is responsible for providing the necessary project deliverables and scope
information to the estimator (Dysert 1997).
13
2.4.2 Estimator Responsibility
Estimating is a fundamental part of the construction industry. Cost estimating
accuracy is the basis of a project success or failure. Accurate estimates optimize
good contracting ( Andrian 1993). Much of the credit for the fruition or dud of a
construction enterprise is attributed to the accuracy and capability of its estimating
department and personnel. An accurate, liable and realistic bid preparation demand
good judgement and estimating skills. It is the estimator responsibility to ensure
that a project team understands the information needs for the estimate, then ensure
that a project team understands the information needs for the estimate, then ensure
that the information provided is suitable to produce the quality of estimate desire
(Dysert 1997). Estimators should compile and analyze data on all factors that might
influence the cost like materials, labor, location and equipment (Cost Engineering
Journal 1998). Estimating is not an easy process, it involves complex calculations,
and when little information is available demand the estimator to imagine the
elements of the projects.
It is important that the estimator views the complete
estimate in orderly steps that include quantity takeoff, costing of the work,
determination of overhead costs, and the determination of an appropriate profit
(Adrian 1993).
Including all the items in the project neither more nor less
challenges estimator. Prior to the design completion, estimator has to have the
vision to see beyond the obvious components and their primary costs of construction
(Carr 1989).
2.4.3 Estimator Skill
The challenge that faces a cost estimation is to have it close the actual cost,
this inquires good skill and experience. Dyset and Elliot (1999) avows that an
effective estimating organization requires highly knowledgeable personnel,
14
possessing technical skills. Furthermore they define a set of skills as estimating
core competencies as follows :
ƒ
Understanding of the capital project process.
ƒ
Detailed understanding of the estimate requirements for each class of
estimate.
ƒ
Engineering document reading.
ƒ
Code of accounts/works breakdown structure/project breakdown structure.
ƒ
Basic project controls (budget, schedule, cost control, change management,
progress measurements, earned value, forecasting).
ƒ
Data analysis (labor productivity, database standards and development,
historical data analysis, and benchmarking).
ƒ
Strategic estimating skills (capacity factoring, equipment factoring, cost
modeling, general factor, and ratio development).
2.5
ƒ
Detailed estimating skills (material takeoffs, pricing and costing ).
ƒ
General software.
ƒ
Estimating software.
ƒ
Presentation skills.
ƒ
Report writing.
ƒ
Listening.
Types of Estimates
The availability of design data to the estimator does influence the types of
estimate to be chosen. Cost estimates may be divided into two different types,
depending on the purpose for which they are prepared for and the amount of
information known when estimates
are prepared.
Approximate and detailed
estimates are the major types of construction cost estimate. (Steward 1982) classifies
the cost estimating methods as the “top-down” or parametric approach that uses
15
historical data from previous projects to develop the cost of new project based on
increased or decreased factors : or the “ground-up” or industrial engineering
approach that requires estimating and pricing the man-hours and materials of each
element. Approximate estimate are commonly known as Conceptual, Preliminary,
Order of Magnitude and Budget or feasibility estimates.
Meanwhile bid and
definitive estimates are other names for detailed estimates.
The most common
estimates type used in building construction are 1) Conceptual estimate. 2)
Preliminary estimate. 3) Engineer’s estimate. 4) Bid estimate. The four
levels
reflect the fact that as the project proceeds from concept through preliminary, to
final and bidding phase, the level of detail increases, allowing the development of a
more accurate estimate (Halpin 1985).
AACE International has identified a
progression of five types of estimates of construction costs during engineering
design, order of magnitude, conceptual, preliminary, definitive and control ( Duncan
1996). Furthermore, Westney (1997) classified the estimating types based on 1)
How the estimate will be used. 2) The type, quality and amount of information
available for preparing the estimate. 3 ) The range of accuracy desired in the
estimate. 4) The calculation technique used to prepare the estimate. 5) The time
chosen to produce the estimate. 6) The method or input and output (manual or
computer) used in preparing the estimate. 7) The phase of project (feasibility,
appropriation and construction) related to the estimate. 8) For whom the estimate is
prepared (owner, contractor or insurance company). Generally, the estimating chore
continues during the different phases of the project construction to ascertain whether
the actual costs match with the bid’s estimate. Although, numerous methods and
level of accuracy are available to estimate the cost of constructing a project, all these
estimates are approximated and are based on experience and judgement (Barrie and
Paulson 1992). Certainly the total actual costs will be known just when the project
construction is consummated. Table 2.1 lists the four commonly used estimates,
when each one of them can be used according to the design progresses. In addition
to the purpose of using each one of them.
16
Table 2.1 : Types of Cost Estimates
ESTIMATE TYPE
Conceptual
WHEN
Prior to design
Estimate
WHY
Useful for decision in conceptual
and budgetary stage.
Preliminary
After preliminary design
Offers the owner a pause to
Estimate
(40% of total design)
review design before the detail.
Engineers estimate
After detail design
Ensure design is within financial
( 100% of total design)
resources and assists in
evaluating bids.
Bid Estimate
During bidding by
Establish bid price
contractors
2.6
Method of Estimates
Estimating are required at all stages of a project with varying of available
information thus several methods are evolved. Estimator has to always consider the
relationship between available information, project stage, method and estimate
accuracy. Forecasting is the procedure for simulating the future by creation of a
picture based on historical information (Wood 1974). Yet forecasting contrived from
publishing press is slightly accurate so forecast should be carried out on information
related to the industry in which it is serve. Different estimating methods are
described in the midst of the succeeding paragraphs.
17
2.6.1
Preliminary Estimates.
Early in the planning stages, both building owners and designers must agree on
an anticipated cost of the project at bid award. Preliminary Estimates are employed in
the early planning phases of a proposed project to match an owner's needs, expressed as
written programmatic requirements, with budget constraints in order to establish its
overall scope (size) and quality expectations. The Work Breakdown Structure
recommended at this stage is a systems-based format, where elements of the building
(e.g. exterior closure) are the method of categorization. Estimate comparisons at this
stage are especially valuable in evaluating the feasibility of strategic alternatives being
considered to satisfy current and projected space requirements (e.g. new construction
versus renovation, or lease space). As the design is not fully developed at this stage, a
design contingency is typically included, typically between 10-15%. Issues which need
to be identified at this juncture include method of procurement being considered,
location market factors, specific site constraints or challenges, proposed phasing plans,
and start and finish dates. It is recommended that a formal risk analysis be carried out at
every stage in the design, but particularly in the planning stage when proactive steps can
be taken to mitigate identified risks.
2.6.2
Intermediate Estimates.
After proceeding with a preferred course of action, Intermediate Estimates are
employed at various stages of project design development to maintain accountability for
initial budget projections and as a means of evaluating competing alternative
construction assemblies, systems, and materials. On large projects it is common practice
for an owner to employ a construction manager or professional estimator to continually
update project estimates and provide feedback on budget impacts of decisions on major
design elements. The estimates will typically still be in a Work Breakdown Structure.
18
The risk assessment should be updated and a contingency factor calculated depending
on the outcome of the risk analysis. As the design progresses and risks are mitigated,
the design contingency can typically be reduced.
2.6.3
Final Estimates.
As the design is completed a detailed pre-bid estimate can be prepared. At this
stage the design contingency would typically be reduced to zero: however, in some
instances, there will still be risk surrounding the project, which would make it prudent
to still include a small bidding contingency. The estimate should be organized in the
same Work Breakdown Structure as required of the bidders. This then allows for a
comparison of the final estimate with the bids received and can aid in negotiating with
the lowest bidder. In addition, having the final estimate and bids in the same format
facilitates developing cost databases for use in planning future projects.
2.6.4 Unit Method
Wood (1976) elaborate unit estimates as selecting a standard unit like seat
per cinema, bed per hospital, table per school to obtain the estimate cost of project.
Based on the total unit of functional proposed building, the estimate cost of a
building can be obtained from past project of the same functions.
The unit of preliminary estimating consists of choosing a standard unit of
accommodation and multiplying this an appropriate cost per unit. The standard
units may represent, for example schools (cost per pupil), hospital (cost per bed) and
car parks (cost per apace). The technique is based upon the fact that there is usually
a close relationship between the cost of construction project and the number of
functional units it accommodates. Functional units are those factors, which express
the intended use of the building better than any other. This method is extremely
19
useful on those occasions where the building client requires a preliminary estimate
based upon little more information than the units of accommodation.
The method of counting the number of units is extremely simple, but
considerable experience is necessary in order to select an appropriate rate. Rate can
be obtained by the careful analysis of a number of recently completed projects of a
similar type, size and construction. Adjustments based upon professional judgment
will however need to be made to account for varying site conditions, specification
changes and market conditions.
It is the simplest and quickest method to
implement, but it must be used with care. Therefore, it is advisable to express the
cost within a range of prices that can be useful for budgetary estimate.
2.6.5 Superficial Method
This perhaps the most common method in use for estimating purposes. The
estimate is easy to calculate and costs are expressed in a way fairly readily
understood by an average building. The area of each of the floors are measured and
then multiplied by a cost per square meter.
The rules of measurement for the superficial area of a building were defined
by the Royal Institution Of Chartered Surveyor, United Kingdom.
In order to
provide comparability between various schemes, the floor areas are calculated from
the internal dimensions of the building. It is preferable to separate the floor areas
and apply different unit rates. It is appropriate for projects such school and housing
where storey heights are constant.
20
width
length
Figure 2.1 Superficial Method
Factors such as storey height and plan shape are particularly important when
deciding upon the rate to be used. Another factor in its favour is that rates are
readily available from many sources, or alternatively, they can e very easily
calculated from existing schemes.
2.6.6 Cube Method
The Royal Institute of British Architects defined the rules of measurement
for the cubic content of a building as follows :The external plan area was multiplied by the height from the top of the
concrete foundation to halfway up the roof if pitched or to 610mm above the roof if
flat. If the roof space was to be occupied then the height on pitched roof building
was three-quarters way up the roof. The allowances for flat and pitched roofs and
the measurement to foundation depth are all very arbitrary. Additional allowances
need to be made for projections such as porches, chimney stacks, etc.
Other
21
weaknesses of this method are that it does not give any indication to a building
client of the amount of usable floor area, it takes no account of storey or plan shape
and it produces a large cubic quantity that will increase the possibility of further inaccuracy in the estimate.
610mm
width
height
length
equal
equal
height
Figure 2.2 Cube Method
2.6.7
Storey Enclosure Method
James (1954) as cited by Ashworth (1988) evolves a new method in an
attempt to overcome the many disadvantages of the other methods of estimating
using the following rules of calculation.
22
1. Twice t the area of the lowest floor.
2. The area of the roof measured on plan.
3. Twice the area of the upper floors, plus an addition of 15 per cent for the
first floor, 30 per cent for the second floor.
4. The area of the external walls.
The method attempts to take into account :
1. Plan shape ( by measuring the external wall area )
2. Total floor area ( by measuring each floor)
3. Vertical position of the floors (by using different multipliers for each
floor)
4. Storey height (ratio of floor and roof areas for external wall area)
5. Overall building height (ratio of roof area to external wall area)
6. Extra costs of providing usable floor area below ground (by using
multipliers)
James as cited by Ashworth (1988) claimed that it would perform better, in
terms of accuracy than the other methods. The weightings used are subjective and
are unlikely to apply equally to every building. In addition, the quantification does
not easily relate to the client’s accommodation requirements and as such fails from
the same deficiencies as the cube method.
2.6.8 Approximate Quantities
Approximate quantities provide a more detailed preliminary estimate than
any of the other methods described. They represent composite items which are
measured by combining or grouping typical bill measures items. In practice only the
major items that are of cost importance are measured. This method does provide a
23
detailed and reliable method of approximate estimating, but it does involve more
time and effort than any of the methods previously described. No particular rules of
measurement exist and the composite items result from the experience of each
individual in practice. Considerably more information is required from the designed
if the method is to be applied adequately in practice.
2.6.9
Cost Planning
The first stage of cost planning can be used to determine the approximate
cost of a construction project. This method analyses the cost of the project on an
element basis often attempting to make use of the cost analyses from other similar
projects. Cost planning also seeks to do much more. It provides cost advice during
the design process, offering the client better value for money. It also keep the
designer fully informed of all the cost implications of the design in relationship to
an approved approximate estimate and likely accepted tender sum. Full cost
planning services would also incorporate the attributes of life cycle costing. Two
alternative forms of cost planning have been develop, although in practice a
combination of both is sometimes used. The first form is known as Elemental Cost
Planning where the project must be designed within an overall framework of a cost
limit. It is often referred to as ‘designing to a cost’.
In practice it is more
appropriate to public sector projects which often incorporate some form cost limit.
The alternative form is Comparative Cost Planning where alternative designed can
be examined within an economic context. This method is referred to as “costing a
design”
24
2.6.10
Analytical Estimating
This is the method that is traditionally adopted by contractors’ estimators to
determine their individual rates for measured items in bills of quantities. Each
individually measured item is analysed into its constituent parts of labour, material and
plants. Each part is then costed on the basis of outputs, gang sizes, material quantities
and plants hours. Particular emphasis is placed upon such project factors as type, size,
location, shape and heights as being important factors affecting the contractor’s costs.
In theory the contractor will make extensive use feedback.
Alternative analytical
methods may calculate cost on the basis of operations rather than individual bill items.
Analytical estimating is not strictly a pre-tender method of price prediction,
because of the amount of time required and the type of data necessary. It will, however,
find application in those circumstances where, for example, a new material or
construction process is envisaged. In these circumstances where existing data is not
available, the design team may have no choice but to refer to analytical estimating.
2.6.11
Cost Model
Cost models are the latest technique to be used for forecasting the estimate cost
of a proposal construction project. Although they were first “discovered” during the
early 1970s there is only scant evidence of their use in practice. However, considerable
interest has been shown and research has been undertaken to convert the theory into
practice.
A mathematical model or formula is constructed that best describes the data
collected in terms of cost or price. The technique most widely used has been that of
multiple linear regression analysis, although evidence suggests that a more appropriate
technique might be that of simulation. The development of cost model is a lengthy
25
process requiring the collection and analysis of large quantities of data, and then at an
appropriate stage testing the model against conventional methods before it can be put
into practice. A further disincentive towards the adoption of this method of estimating
is the radical approach to the treatment of the data. The use of a computer together with
appropriate software is essential when developing and using cost models due to the
large amounts of statistical analysis that is required.
2.7
Construction Cost
After the drawing and specification which represent the owner requirements
have been completed by the architect and engineers or the owner himself, the costs of
work have to be determined by the bidders ( contractors ) who will make offers to do
the work for the owner.
The cost of work is made up of different types of costs which constitute the total
cost. The analyze them, they may be classified as follows (Collier 1987):
1.
Material costs.
2.
Labors costs.
3.
Equipment costs.
4.
Overhead costs.
5.
Profit.
26
2.7.1
Material Costs
Different elements of costs are involved when estimating material cost. Storage,
freight, transportation and inspection are different parts of the cost of material (Collier
1987).
An estimator may keep current price lists of material for reference, and he
obtains as they are issued.
But for basic materials or products that represent a
significant part of the total costs of a project, the estimator usually receives specific
quotation are desirable so that such important considerations as price, status freight
charges, delivery schedule and guarantees are explicitly covered.
It
is common
practice to enter material price as a lump-sum amount on the tendering sheet.
2.7.2
Labor Costs
A detailed contractor labor cost estimate includes two types of component :
direct labor cost and indirect labor cost.
2.7.2.1
Direct Labor Costs
This is the cost of labor directly related to the project such as engineers,
carpenters, foreman, etc. It can be calculated as follows :
A = B * C * D (Collier 1987).
Where:
A =
Estimated labor cost for a quantity work.
B =
Labor hours or crew hours required to accomplish a unit of a given work
type (production rate).
27
C =
Appropriate wage scales per hour.
D =
Total number of units of work of this category. For an accurate
production rate, which is the largest area of uncertainly facing the
estimator, reliable labor productivity records from completed projects
should be available.
2.7.2.2
Indirect Labor Costs
This is the cost of labor indirectly related to the project, such as payroll, taxes,
insurance and employee fringe benefits of wide variety such as health paid vacations
and pension plans. Indirect labor cost normally constitutes a 35 to 50 percent addition
to the direct payroll costs (Collier 1987).
2.7.3
Equipment Costs
To evaluates and select one particular piece of equipment, it is essential to
determine its hourly cost very accurately. The equipment cost is divided into owning
cost and operating cost. The manufacturer’s data and past cost records constitute means
of determining the equipment costs. Some factors have to be considered at this stage
and they are (Collier 1987) :
ƒ
Number of hours used per day, month and year.
ƒ
Severity of job conditions.
ƒ
The way the equipment has been maintained.
ƒ
Demand for used equipment when it is sold.
28
The above factors should be considered and studied carefully in the light of
estimator’s experience.
2.7.3.1
Owning Costs
Owning costs include the cost of depreciation, insurance and loss of interest.
This cost, divided by the average number of hours utilized in a year will give the hourly
owning rate. The straight line, sum of the year, or the declining balance method can be
used in calculation of depreciation per year.
2.7.3.2
Operating Costs.
Operating costs include the cost for fuel, lubricants, filters, grease, tires, repairs,
maintenance and any other variable costs. The manufacturer data is good reference but
most of the time, for marketing reasons, they are lower than the actual figures which put
more emphasis on previous cost records. One should also consider the job conditions.
An accurate estimate of total hourly rate for the operating costs is essential.
2.7.4
Overhead Costs
These are construction costs of any kind that cannot be attributed to any specific
item of work. Overhead cost can be classified into two types, namely, job overhead
costs and office overhead costs. If cost can be attributed to a specific job site because
the costs arise only out of that particular job, these costs are job overhead costs. If cost
29
cannot be attributed to any particular job, they are office (operating) overhead cost
(Ferry 1972).
Overheads are a significant item of expense and will generally run from 5 to 15
percent of the total project cost, depending somewhat on where certain project costs are
included in the cost estimate (Carr 1989).
2.7.4.1
Office Overhead
The item of adequate overhead expense is sometimes neglected by many
contractors, but it is of such importance that every contractor should give it careful
consideration.
Every contractor has certain fixed expense that must be paid regardless of the
amount of work done or contracts received and these items should be charged to office
overheads.
These include such as office rent, fuel, lights, telephone and stationery, office
supplies, advertising, trade journals and magazines, legal and accounting expenses not
chargeable directly to any one job, fire and liability, insurance for office, club and
association dues, office employees such as bookkeepers, clerks, estimator, and services,
along with travel and entertainment expenses and depreciation of office furnishings and
equipment.
30
2.7.4.2
Job Overhead
Each job will entail certain expenses that are chargeable to the job as a whole.
These are set forth in general conditions.
These will include such items as
superintendent, temporary buildings, offices, utilities, protection, clean-up, permits,
survey, photographs, tools and equipment, insurance and benefits, sales taxes, surety
bonds and warranties. Sometimes, these are covered only in a general way and it is up
to the contractor to visit the site to determine what is needed.
As discussed above, job overheads and office overheads are most excellent kept
separately although, occasionally the cost of employees, insurance, tools and equipment
and other items may be divided between office expenses and job expenses.
Many contractors figure a certain percentage of the cost of the job to take care of
all overhead expenses and plant charge, but this is not the correct method to use and
does not give the contractor or estimator a reliable basis for computing the cost of this
work.
Each item entering into the cost job overhead expenses should be estimate in the
same way as any other branch of work.
2.7.5
Profit
The amount of profit to be added to the estimates cost of the work is a question
which a contractor must answer individually for each bid. There is no set amount that
can be added. It all depends on local conditions, competition, and how badly the job is
wanted.
31
On small job alterations, remodeling and similar work a contractor is justified in
adding twenty five percent to the actual cost for profit. On new work where it is
possible to estimate the cost with a fair degree of accuracy, a contractor is entitled to ten
percent on the actual cost of the work but, when submitting competitive figures, it is
safe to say there are many jobs let on a five percent instead of an ten percent basis.
The amount of profit is generally computed as a percentage of the contract, or in
some cases, as a percentage of each item in the contract (Carr 1989).
2.8
Factors Influencing Estimating
Estimate costs are based on combination of historical data of previous projects
and price quotation received from suppliers or vendors. Cost estimates are influenced
by factors that arise from the operating environment. For instance, the cost varies if the
proposed project is constructed near a city or in a rural location. Effective construction
cost estimating is heavily dependent on experience (Carr 1989). Since estimating
process is a forecast of the future cost of constructing a project, it is a process
surrounded by uncertainty and risk. To produce a reliable estimate numerous factors
should be considered. Errors during the estimating process have cost construction firms
millions of dollars all over the years. Usually estimator uses cost data from past
projects or published in estimating guides. Using such data arbitrary without knowing
their similarity at hand will produce an inaccurate estimate because it is not based on
the reality of the current project (Carr 1989).
There are many items that influence and contributes to the cost of a project,
each item must be complied and analyzed. Since the estimate is prepared before the
actual construction of the project, a great deal of study must be put into the construction
documents, and this makes estimating one of the most important phases of any
construction business (Dagistino, 1973).
32
The accuracy of any estimate is particularly important. Factors that influence
accuracy include the amount, type and quality of data available and the proficiency of
the estimator and the way that the data is interpreted. The estimating expertise depends
upon many factors such skill, experience, judgement, knowledge, intuition and luck
(Ashworth, 1983). Regardless of the type, preparing an accurate estimate requires
several skills. Andrian (1993) classifies three essential elements to an accurate estimate
stated as follows :
1.
Determination of the quantity of work.
2.
Identification of the productivity needed to perform the most difficult to
estimate, project drawings and the cost of rework.
3.
2.8.1
Calculation of the unit cost of the resources to be used for the work.
Quantity Surveying
The development of the quantities of work to be placed in appropriate units is
referred to the quantity takeoff or surveying (Halpin 1985). Regardless of the type of
the estimate, items to be estimated must be listed. This is the most important look of
the contractor’s estimating and bid functions. Taking off the quantities from drawings
and specification is a time consuming step. Adrian (1983) assorts the required time and
accuracy level of quantity takeoff to be depending on :
ƒ
The skills and procedures used by the estimator.
ƒ
The quality of the project drawings and related documents prepared by
the designer.
ƒ
The definition of the work items to be taken off the drawings.
Quantity takeoff may be done manually or by using electronic digitizers in
conjunction with estimating software. Since it is one of the most time consuming
33
activities in the estimating process, contractors and owners more frequently use
computer system (Westney 1997). Traditionally, quantity takeoff is done manually
according errors are most likely produced. According to Halpin (1985) list some of the
most common errors as being :
1.
Arithmetic, errors in addition, subtraction, and multiplication.
2.
Transposition mistakes in copying or transferring figures, dimension, or
quantities.
3.
Errors of omission, overlooking items called for or required to
accomplish the work.
4.
Poor references, scaling drawings rather than using the dimensions
indicated.
5.
Unrealistic waste or loss factor.
In addition to the foregoing list, Halpin (1985) has added two more common errors that
are 1)using wrong formula, and 2) using the wrong conversion factors.
2.8.2
Costing the Quantity Takeoff
Once the quantity takeoff is located to the work components, and the quantities
of each elements are tabulated, their cost must be indicated. First, estimator deals with
the direct costs that consist of the cost of materials, labor, and equipment for each work
components or elements. Doing so, typical mistakes occur. Halpin (1985) includes the
following :
ƒ
Errors in simple mathematics (careless extensions of quantities times
unit prices.
ƒ
Using old or unverified material unit prices.
ƒ
Using wrong labor rates.
ƒ
Transposing figures after extension are made.
ƒ
Inadvertently leaving elements of the work off the pricing sheet.
34
Basically cost estimates are prepared from three sources of cost related data.
These are 1) published cost information, 2) costs from similar projects and costs of
project equipment, and 3) historical company cost data files and in-house projects. The
sources of outside cost data are many, listed are some of the most common ones.
2.9
Different Types of Costs.
Although the determination of cost is the final in the preparing of an estimate,
estimator has to determine all types of costs to be engaged. The estimator has to have
ability to understand the concept of a cost and its components. This highlighted by the
fact that the cost estimate serves to initiate the project and to engage the contractor who
will build that project (Adrian 1993). Halpin (1985) classifies costs into four major
genera
1) Direct costs related to placing construction, 2) Subcontractor cost and
repayment, 3) Job indirect costs (for mobilizing), 4) Markup.
A direct cost of an activity is physically traceable to the activity in an economic
manner it is not counted if the activity is not performed. On the other hand, indirect
costs, known as overheads, are business costs other than direct costs of construction
activities, they are not physically traceable and are counted even the activity is not
performed (Carr 1989). Construction direct costs are those resources costs required to
place the elements of construction in a project. Meanwhile Carr (1989) classifies direct
costs as costs of material, labor, and equipment. Halpin (1985) includes the cost of
small hand tools. Traditionally, most contractors cover the project overhead costs by
adding a percentages to the direct cost. This method to be inaccurate and recommended
that project overhead costs can be estimated with some accuracy by carefully examining
contract conditions since they consider overhead cost is not part of actual construction
cost but an indirect cost. Estimating project overhead costs is the most difficult ones to
estimate with reasonable accuracy, especially for large and complex project (Collier
1984).
35
2.10
Tools and Methodologies for Cost estimating
Regardless of the cost estimating type, the preparation requires specific tools
and methodology in order to achieve the most excellent out of it. According to Steward
(1982) list five basic tools for a cost estimate as follows 1) An estimator or team of
estimators, 2) A methodological approach, 3) Knowledge or data concerning the
project, process, product, or service, 4) A computation capability, 5) A publication
capability. Besides Westney (1997) pronounces that cost estimating tools include the
forms, hardware, and software used to execute the estimating methodology. Estimating
tools fall into the two broad classes of manual forms and computer software.
Additionally the Project Management Institute considers that computerised tools are
widely used to assist with cost estimating. Parametric tools bring speed, accuracy and
flexibility to estimating process that are often bogged down in unnecessary detail.
2.11
Summary
Thus chapter has reviewed previous theories and practical works related to the
process of construction cost estimating. The literature review reveals that the most
important types of construction cost estimates is the preliminary estimates. Major
decisions are based on this estimates therefore the level of accuracy is an important
issue. Many factors influence the process of producing accurate estimates. Beside the
estimator experience, method and the amount of data available, are effective tools that
will be most likely aid the estimating processes. Indeed computers are practically the
first tools to consider in this task.
36
CHAPTER 3
COMPUTER AND COST ESTIMATING
3.1
Introduction
This chapter the role of computers, as an effective tool to increase the level
of accuracy and reduce the time required in preparing a construction cost estimate.
Computer have tremendous number and type of applications in construction
business, which very from accounting to scheduling, estimating and so forth. Fast
and accurate estimate is one of the key factors that can make the difference between
gaining a reasonable
profit and running out of business.
Therefore the use
computers is essential to fulfill this obligation.
In Malaysia, computers were used to prepare cost estimating since 1980’s
(Chong WP,2001). At that time, Quantity Surveying System (Q.S.S) was selected by
the QS Department of Jabatan Perumahan Negara to handle the taking off, cost
planning, tender procedure, interim payment, variation orders, cost estimating,
tender report, specification, preliminaries, prime cost and provisional sum.
In the mid 1990’s, when the computer are becoming more affordable and
user friendly and more contractor and consultant firm are using the computer to
facilities their work not only in the technical field but in administrative works. At
the same time, students and trainees in this field were exposed in the importance of
information technology and as a matter of fact, more construction graduates are
well-literate in computers.
37
On the development of computer software and application, more and more
complete, reliable and easy to use software was produced. More and more specific
and specialized software for construction industry were being produced and being
introduced to the industry. From a blue screen of dimension sheet ( the old DOS
version of specific software ), it has develop in a 32-bit application with enhance 3D
and digital imaging for instant processing. The latest version of the software would
be able to automatically calculate quantity from CAD drawing and produced a
complete BQ and cost estimating in just a few mouse click.
3.2
Use of Computers in Construction
Most construction cost estimates in the past and newfangled are performed
manually accordingly errors are most likely to occur. Thus the use of computers in the
construction industry is growing rapidly. The early use of computers in construction
and general accounting functions. Nowadays, computers increasingly are playing a big
role
in the contractor’s project management functions, including estimating.
Computers have introduced modern technology to the construction industry.
The
estimator in search of any advantage that can assist in preparing an estimate (Jurkiewicz
1999). Computers play an essential role in cost estimating because estimating may
involve complex and advanced mathematical calculations and techniques. Automating
the process of construction cost estimation is desirable not only for improving the
efficiency, but also for reducing human errors as much as possible (Wu and Adeli
1998).
Computers cannot do the entire estimating process, but they can ease the
estimating procedure. The use of computers in documenting cost estimating, give
estimators more times to study and analyze projects. Consequently, estimators will be
able to generate more accurate estimates (Cost Engineering Journal 1998).
38
3.3
Computer the Estimating Tool
The accuracy of any estimate depends greatly on the tools used in the tools used
in its preparation. Cost estimators need tool that not only forecast and tracks cost, but is
able to reduce considerably the burden of data entry as well as provide instantly
reliable financial reports. One of the estimator’s most important tools is the computer
and associated software.
Today, personal computer is most often the estimator’s
choice. ( Dyset and Elliott 1999). Once you learn to build an electronic estimate on the
screen, you will be able to turnout more estimates, faster, with less chance of making an
error, analyse and manipulate numbers before you finalised you bid.( Feldman 1996).
The use of computers with cost estimating can simply and facilitate rapid consideration
of many costing alternative (Ducan 1996). Listed
are some of the activities that
computers can be used for (Duncan 1996) :
ƒ
Performing quantity take-off using digitizer.
ƒ
Performing extension of units of labor, material, equipment and other
expenses to develop the estimate.
ƒ
Developing spreadsheet for bid preparation.
With digitizer, contractors can electronically make measurement from blueprints
and prepare detailed estimates with a day ( Cost Engineering Journal 1999). Hence
computer estimating programs can greatly reduce the time it takes to perform quantities
take-off and prepare bids, increase calculating accuracy and create a professional
looking estimate. As well as offering an easy way to evaluate job profitably.
3.4
Computer Software for production of Cost Estimates
There is a large number of estimating software available to the construction
industry.
Yet computer programs encompass a significant portion of computer
39
software that are prepared by the process known as programming. Andrian (1993)
defined programming as being a prepared set of computer instructions that provides
the mode of solving a specific problem. These programs are available to perform
complex pricing, estimating, and analysis functions. It is difficult to generate overall
ground rules of thumb for computer software cost estimating because of the increasing
number and types of computers and computer languages (Steward 1982). Steward
(1982) has grouped cost estimating software programs into two kinds:1.
Industry-dependent systems based on predefined historical data and
equations with specialized
reporting facilities.
The equations are
usually concealed in the source code or in the data files, out of reach of
the user. Normally they are written in a high –level language like C,
C++, or Visual Basic.
2.
Systems primary focusing on production of cost reports generators.
Historical data and algorithms are usually kept separate from the
estimating system. These systems are written in a spreadsheet language
or database.
The utilization of estimating software allows the contractors to breakdown
costs to the last minute. They provide wide range of capabilities-from conceptual to
final estimate, also they simplify the task of providing different cost views of an
estimate.
Most estimating computer programs are either written in-house or
purchased from vendors. In both cases the result has not been entirely satisfactory in
achieving the desired results because this satisfaction requires both the engineer and
programmer to be highly trained and experienced in the field of estimating. Steward (
1982) has ranked the elements that affects the development of estimating software as
following:1.
System size and complexity (in terms of the number of code lines or of
function. Modules or program features).
2.
Personnel capabilities and experiences
40
3.
Hardware constraints.
4.
The use of modern software tools and practices.
5.
User understanding of the software.
Several software developers sell their estimating software with own quarterly
database updates or third parties database. In addition of considering most estimating
programs to be based on the use of some vendor’s database. Hicks (1992) listed the
similarity of these programs as:ƒ
Difficult to learn and to operate in a reasonable length or time.
ƒ
They have a tendency to shift the user’s attention from estimate
preparation to program manipulation.
ƒ
They have many auxiliary features more or less to estimating but
unnecessary for estimate preparation.
They lack the ability to do what is necessary for estimate closure and bid.
Although, Steward (1982) has listed the advantage of these programs as the consistent
organization and format for estimating, the capabilities of estimating item by item.
He also listed the disadvantages as giving a rigid format and very few short cuts are
permitted. In the same manner, Miller (1998) provides some of the problems that
might be encountered by the use of vendors’ database 1) a database that has been
developed in another country or state and does not match how things are done in the
geographic area where the company is located 2) The database generate too much
information ( i.e. the number of nails needed for forming). 3) The database contains
formulas that use multiplication factors with no explanation of why they are there ( in
case of calculation quantities). Furthermore, as a solution for these problems Miller
suggested to create own database from scratch, starting by the determination of the
basic coding structure with respect to the industry standards. The database available
from vendors can be good guide on how to build a database with the requirement of
modifying them in order to fit individual estimating methods.
41
3.5
Industry Programs
In general, the available estimating programs in the market typically require
few days of training to get familiar with and to operate.
Additionally, if other
functions are to be tied into the estimating process then a modular package is required
and in this case the training time span will extended.. Software developers have
designed computer programs to meet the needs of a specific industry. Since industry
programs are developed for a specific business or industry, they are referred to as the
vertical market, because they are sold to one business type rather than many.
MASTERBILL, BUILDS SOFT, RIPAC , GENERALCOST ESTIMATOR AND
GOLDENSEAL ESTIMATES are a few of many industry programs. Some other
computer application aid in improving the efficiency and accuracy of the construction
estimating process, such as Computer Aided Design (CAD) application, math
Conversion applications, Database applications, and simulation applications ( Andrian
1993).
3.5.1 Masterbill 3 (MB3)
MB3 is being developed by Masterbill Micro System Ltd. It is one of the
leading software for QS in Malaysia. MB3 is a fully featured BQ production package
comprising pricing, tender analysis, estimation and valuations features, plus multiple
libraries and ability to transfer data between projects. However, MB3 only have a
simple format for estimate calculation.
42
Figure 3.1 : Sample of Interface Masterbill 3 (MB3)
3.5.2 Ripac For Microsoft Windows
Ripac dominates the world market for QS software. Ripac is produced and
supported by CSSP, an international software house specializing in construction
solutions . Ripac is used by Quantity Surveyor for quantities measurement, tender
analysis, contract administration and management (CSSP,2002).
Every measurement with Ripac will simultaneously create a database from
which every calculation, every analysis, every report can be produced for pre and post
– contract administration without recreating data.
Ripac gives QS the power to
integrate all their activities at pre and post contract stages, maximizing the
productivity of their resources and increasing the range of their services. Ripac can
do the following process comprehensively :-
43
a. Bill preparation
b. Estimating
c. Tender appraisal
d. Payments
e. Cost reporting
f. Final accounts.
Figure 3.2 : Sample of the Ripac Measurement Screen
3.5.3 Builds Soft
Global Estimating is an estimating program that has been tailored for
commercial use in the building and construction industry. It produces Bills of Quantities
or detailed Estimates and Cost Plans. Designed primarily for use by commercial
44
building contractors and professional Quantity Surveyors it includes features which
allow it to be used in other industries where estimating is required.
Information that is entered into the program can be re-sorted or analysed by the
use of powerful grouping columns. For example, the estimate can be summarised to
produce totals by area, block, stage, cost centre, accounting group, or any user defined
set of codes.
Figure 3.3 : Four Level Estimating System in Build Soft
Figure 3.4 : Interface of Trade Breakup ( Level 2 )
45
Figure 3.5 : Interface of Rate Breakup ( Level 3)
3.5.4 General Cost Estimator for Excel 4.0
General Construction Cost Estimating System for Excel. Designed specifically
for contractors, builders, cost estimators, architects and construction professionals.
GeneralCOST Estimator contains industry standard cost data in the CSI format (16
division) for all cost categories covering general construction. Unit prices include
material and labor including labor hours. City indexes are automatically applied to
adjust costs for your local area. Easily modify and add cost data to suit your local
conditions and business. GeneralCOST Estimator instantly creates user-modifiable, onscreen or printed estimate reports including price quotation. Built-in Step-By-Step
tutorial makes learning fast and easy. Use GeneralCOST Estimator as an estimating and
bidding tool to save time, improve accuracy and achieve greater success.
GeneralCOST Estimator is designed and developed in the USA by CPR International,
Inc., a leading provider of cost estimating software tools and cost data for the
construction industry since 1986.
46
Figure 3.6 : Sample Interface of GeneralCOST Estimator
3.5.5 Goldenseal Estimating Software
The Goldenseal estimating program includes many cost estimation features that
help users to increase the accuracy of the project estimates, and reduce the time it takes
to prepare a bid:
•
dimensions calculate quantities from a few simple measurements
•
unit costs and assemblies calculate an accurate cost for the work -- and
update automatically when prices change
•
competitive bid tracking handles price quotes from suppliers and
subcontractors
•
project templates make it easy to estimate "standard" types of projects
Goldenseal estimate, can automatically get other useful information from it-including a project schedule, contracts and material takeoff lists. Goldenseal has many
47
features that are simply not available in other estimating programs for construction and
other fields. The Goldenseal project estimator program includes "smart dimensions"
which take simple project measurements, and convert them into actual quantities for the
items in estimates.
Figure 3.6 : Interface Goldenseal Startup Guide
Figure 3.7 : Interface Goldenseal Estimates
48
3.6
Review Of Software
Review of software were done by running the software or intensively studying
on the demo disc provided by supplier. The results of the review were classified into
the following categories for easier comparisons and documentation :
a.
System Feature
b.
Screen Layout Features
c.
Cost Estimating Features
d.
Dynamic Link
3.6.1 System Features
Computer technologies has been growing at a very fast pace. All systems must
be able to be up-to date so that user can benefit more from the new enhancement in
the information technologies. At present, the operating system that were widely use
were Microsoft Windows with XP version being the entry level to new computers.
Although there are users who use other operating system such Linux, Mac OS, DOS
etc, most of the software developers are concerning on the Microsoft Windows
platform for is huge share in the market.
Watkins (2002) recommended that the software system worth considering
must be a true 32-bit Windows system. It should no be an 8/16 bit hybrid or DOS
with a Windows-like front end system.
Starting from the Windows 95 version,
Microsoft and the computer world are moving into 32-bit environment. Obviously,
32-bit system provides a better computing platform than the old 16-bit system.
To understand the difference we must first go back a little while. The very
first IBM PC caused quite a stir when it was released as it used 16-code and as a result
49
ran 16-bit applications.
Prior to this, the most powerful computers had 8-bit
processors and could only stores only up to 255.
However, these new 16-bit
processors could handle 16-bit numbers (i.e 0 to 65,535) quite efficiently, but still to
deal with larger numbers it was forced to do some extra work carrying out double the
instruction in order to get round its number handling limitations.
Modern 32-bit applications can handle 32-bit quantities as easily as a 16-bit
application handles 16-bit quantities. Basically 32-bit is superior when handling 32bit values (i.e. o to 4,294,967,295) and as a result will probably run faster because
fewer instructions and fewer memory accesses are required.
Beside that, 32-bit application also has a greater capacity for dealing with
larger quantities of data. A 16-bit programmed can deal with only 64K of data at a
time, but a 32-bit application can work with up to 4GB.
This means a 16 bit
application must do more work to read and write large quantities of data.
The
difference is insignificant when an application is dealing with arrays, data structures
and others smaller than 64K in length, but when the data size exceeds 64K the larger
segment size available to 32-bit applications pays great dividends because an
application does not have to load and reload segment registers to access all the data.
The extent to which 32-bit code speeds up an application depends on the extent
to which the application performs these kinds of tasks; moving data around in
memory; adding, subtracting, multiplying, dividing, comparing, and in other ways
manipulating 32-bit values; and handling large arrays. 32-bit applications won’t be
superior in every circumstance but given the size of a typical application carrying out
the same tasks.
Furthermore in Windows a 32-bit application is a accorded special treatment
by the operating system :
50
ƒ
32-bit Windows application are pre-emotively multi-tasked, while 16bit windows application are cooperatively multi-tasked.
ƒ
32-bit Windows application can spawn additional threads of execution
to do work in the background such as printing that can dramatically
increase an application’s speed and responsiveness.
ƒ
32-bit Windows application have access to the richer Win32
application programming interface (API); 16-bit application are still
stuck with the old Windows 3.1 API.
In general Windows 95/98 is a better operating system if use 32-bit
applications and the situation is likely to be even more dramatic in the fully 32-bit
environment of Windows 2000. With the trend now showing sign of moving into a
64-bit system, where AMD has managed to produce the 64-bit processor, it will be
soon that the 32-bit system becomes obsolete.
3.6.1.1
Builds Soft
Build Soft is Microsoft Windows compatible where they can be installed in all
version of Windows. They are a 32-bit application and can support up to a 64-bit
environment (for future upgrade only). It ha s a similar Microsoft product ‘look and
feel’ in order for new user to quickly adapt to their environment. Besides, Build Soft
employed Windows such as right mouse button functionality and can link to other
Windows product.
On the database part, Build Soft uses the SQL database format. SQL stand for
Structured Query Language and SQL database have been used in the IT industry for a
number of years. In its previous version, i.e Builds Soft, it adopt a third party SQL
called Sybase SQL. Anywhere in their products which involve the software being
51
installed on both the server and the terminal machine in order to make the data
available across the network.
The main advantages of using a SQL are speed and stability.
An SQL
database provides a ‘true client/server’ networking, which is ideal for use over either a
Local Area Network (LAN) or Wide Area Network (WAN). True client/server
networking means that the server will only supply specific data in response to client
request.
An a result, the software will not be vulnerable when hardware or
networking problem occurred. A SQL database also ensures that ‘open database
architectures’ is adopted. This mean that other application can have access to the
database with little application.
3.6.1.2
Ripac
For the Ripac system, it is not known whether it is a 16-bit or 32-bit system.
However, it is developed for all version of Microsoft Windows including the earliest
version being the Windows 3.1. Ripac need a very low system resource in order to
run. Based on the technical specification, it only needs a 486 – 50 MHz PC with 8Mb
of RAM and 20Mb of hard disk space.
3.6.1.3
The proposed application (COES)
The proposed system will not have anything to concern in the regards.
Whether it is a 16-bit or 32-bit system or even the future upgrade 64-bit system, it will
have no effect on the COES application. This is because COES is will just another
application which resides inside Microsoft Office. As long as the Microsoft Office is
upgraded, the application will be upgraded too.
52
The system required for the COES will be determined by the system
requirement of the Microsoft Office version. This should not give any threat to this
software as the entry level of the computer today is at Pentium IV 2.60 GHz processor
with 256Mb of RAM while the latest Microsoft Office 2003 version only needs a
Pentium III processor with 128Mb of RAM (Halbrok, 2004).
On the COES database, it does not employ an external database system. Since
COES is true Microsoft Office application, it has no problem sharing its database with
any other external program.
Moreover, COES will only required a simple 2D
database for keeping its description library and as such,
it does not need the
sophisticated external database system. Initially, this application proposed to use
Microsoft Excel as its database system but in the end, it was determined that
Microsoft Access itself will be more than enough for such a simple database.
3.6.2 Screen Layout / Graphical User Interfaces (GUI)
For normal and average user, this is the feature that determined whether the
software is good or not. Therefore, it is important that this feature was given high
emphasis on the development stage. Screen Layout Features / GUI does not have to
be “beautiful” in terms of it back screen, icon, dialog boxes, etc. More important
aspects are the interfaces and the navigational tools that have to be kept as simple as
possible. For example, a user shall only be require to click one or two buttons for him
to go to a required page rather than navigate here and there which is time consuming.
A GUI with mouse intensive is much preferable than the keyboard shortcuts.
However, it is still important not to discount the much faster keyboard shortcuts for
advance users and sometimes inaccessible function by mouse.
Besides that,
single/double clicked menu, drop-down list, check boxes and tools button are much
more preferable than the traditional coding and keyboard system.
53
As explained, Masterbill and Build Soft is developed in a Microsoft Windows
Environment and utilized the Microsoft Features. Therefore, all its Graphical user
Interface are to Microsoft standard and all of the them are accessible by mouse click.
Moreover, it has a similar text editing features and use Windows fonts. In additional
to that, Masterbill and Build Soft allow user to view on their dim sheet, selection of
item (libraries) and calculation cost estimate. Furthermore, it has a user defined
headers and footers as well as numbering and referencing.
Ripac has menus, entry routines and reporting which are totally compatible
with Microsoft Windows. Ripac leads the user through project setup and data entry in
a simple and intuitive style.
3.6.2.1
The proposed application (COES)
Starting with the Access 95 version, the interface has allowed user to create
custom forms, dialog boxes, check-boxes, user-define tools and etc as a method of
simplifying the data-entry processes. Nevertheless, there are not many of the users
who were able to utilize this tools as it needs some basic programming knowledge to
create a transfer the entered data into the relevant form.
The COES application will fully utilize this tools to match the user interface of
the specific software while making sure that the data entered will reach its true
destination.
Moreover, COES is an application build with Microsoft Access.
Therefore, all Microsoft Access interfaces, shortcut keys, function, formula, tools, etc
will still be available to the user.
54
3.6.3 Cost Effectiveness For Specific Software
The main purposes of using computer software are to save time an reduced
error for double-handling work while maintaining the accuracy of cost estimate. The
time saving will subsequently generated in cost saving as the companies can save on
resources (particularly salary and office overhead) spend on each project. Besides
that, it also increase the efficiency and motivation of estimator as he no longer needs
to got through long, tedious and repetitive tasks.
A research by Chong S Y (2001) found that the most important factors that
affect the cost effectiveness of the specific software are :a.
Reliability of software
b.
User-friendliness
c.
Sufficient feature of the software
d.
Maintenance
e.
Number of computers
These factors plays a big part in determining whether a software success or
not.
Therefore, these factors were seriously studied and incorporated into the
application.
3.6.3.1
Reliability Of Software
Good and reliable software must be consistently functional so that cost
effectiveness for the usage of that software can be achieved. Unreliable software will
cause havoc where the result will not be accurate. Besides, more time and resource
will be spent in order to check and rectify all those mistakes. (Chong SY, 2001)
55
Unreliable software can be defined as software which always caused the
system to crash and hang.
Besides, there were computer bugs all around and
sometimes cannot perform some important function that it have. Moreover, some
system will not be able to handle a large amount of data or will cause to use a huge
amount of computer resources such as a hard disk spaces and the memory.
However, nowadays, established software such as Microsoft Windows and
Microsoft Office which were running on a 32-bit Windows system shall have
eliminated much of these problems. Nevertheless, this might not always happened
with all the specific software. From some user experience, the software did hang up
and crash especially when the amount of data exceed the capabilities of the computer.
3.6.3.2
User-friendliness
Software that is user-friendly will be easy to learn and use. New user or
employee will not encounter big problem to use user-friendly software even without
through and proper training. The staff will not have to waste time in looking for the
supplier help once there are any problems if the software is user-friendly (Chong SY,
2001). A user friendly and efficient system with proper training and motivation will
bring more effective as well as economic service (Kelly 1990).
There is some specific software which is actually not user friendly. For all
novice and average users, the modern trend is to use the mouse and the click, and the
drag and drop command.
Undoubtedly most software has this interface in their
system. However, what is really lacking is the shortcut command in which most
advance user are familiar with. It is a sure bet that most specific software have their
own shortcut key assignment which is totally different to Microsoft Windows standard
interface. This is extremely troublesome and can cause a lot of accidental errors.
Therefore, the system developed must be as similar to the Microsoft Window system.
56
3.6.3.3
Sufficient Features Of The Software.
Software ought to have sufficient features in order to have an efficient
performance or else saving in terms of time value failed. (Scott, 1987). In actual fact,
Cost Estimating production software shall have a full feature of automatically
producing cost estimate from the measurement sheet.
However, most specific
software come with other feature such as analysis of cost estimating, comparison of
bids and tender appraisal, monthly or interims valuation, variation control and
scheduling.
Of course, these additional features are very good in nature but does anyone
really need it. As a matter of fact, the more feature that the specific software has, the
more expensive it will be. Therefore, does this feature add to the cost effectiveness
of the software or reduce it?
3.6.3.4
Maintenance
Maintenance of software can be defined as service provided by the
supplier/technical staff of the software developer periodically to ensure smooth
functioning of the software. Maintenance ensures that the software is always fully
functional and the work will not be stop as an effect of corrupted software. If problem
always occur because of no proper maintenance schedule, it will cause delays in
estimator works. Therefore, cost effectiveness will not be able obtained .(Chong SY,
2001).
As a matter of fact, the maintenance service does not come cheap.
For
example, the supplier for specific system charged a minimum fee of RM3,000.00 per
annum for annual support maintenance charge.
57
Of course maintenance is important but what if a software that does not need
maintenance or need only simple maintenance. This can be achieved if the software is
kept in the simplest format where any staff with some computer technically could
reinstall the software if any problem occurs. Besides that, if the software is properly
developed and tested, there shall have little problem with the software.
3.6.3.5
No of computer
According to the specific software suppliers, number of computers will give
effect to the cost effectiveness of specific software. In order to get optimum cost
effectiveness, the optimum ratio of computer to user is 1:1 (Chong SY,2001)
3.7
Justification for Using Microsoft Access
The research is focusing cost estimating system with Microsoft Access 2003.
From the study majority of the respondents using Microsoft Excel in preparing cost
estimating and the user has to develop the formula before develop cost estimating. As
we all concerned, Microsoft Access has been one of the most common and easy to use
application to develop simple programmed for Windows. Initially, this research is to
use the Microsoft Access as the programming language. Another key point of
programming in Microsoft Access is that output application can be used as an Add-ins.
This Microsoft Access programming language offers a lot of advantages Among them
were :-
a.
Prevent access to the programmed code.
End user cannot view the programmed codes in the workbook.
58
b.
Avoid confusing users.
If an end user loads the application as an add-ins, the file is not visible and is
therefore less likely to confuse novice users or get in the way
c.
Easier access for users.
The steps were in a multiple path ( where clicking here and there ) and this
have made the system to be error-prone..
d.
Always a read only
User cannot make accidental (or intentional) modifications to the workbook
or code.
In fact, the concept that made this application distinguished from other
specific software development is that it only Microsoft Access to create an application
that can match the ability of the specific software.
59
CHAPTER 4
ANALYSIS AND RESULTS
4.1
Introduction
A through planning and scheduling had been organised on the methodology and
research sequence to ensure a smooth running of the research program from literature
review, data collection, data analysis until discussion of result and conclusion.
Literature review involved a through searching and investigating project
manager related issues through different primary and secondary
sources such as
textbooks, articles, and journals. In additional, there also effort on searching and
browsing through internet web pages, internet websites, electronic database and online
articles and journals to seek for supplementary information. The purpose of literature
review is to gather important information related to the topic and deepen the
understanding of cost estimating.
4.2
Data Collection
Despite literature review, interviews were conducted with relevant parties who
have involved in preparing cost estimating, to find out hands-on issues and experiences
related preparing cost estimating.
This was preceded by a pilot study in which the
interviewers were asked to consider the layout, order, complexity, intelligibility and the
60
length of the questionnaires. In other hand, series of question were set for conducting a
survey to obtain feedback and response from the local construction industry. Then, the
questionnaires were distributed through mail to several contractor Class A, Class B,
Class C and Class D who have been registered with Pusat Khidmat Kontraktor (PKK)
and Construction Industrial Development Board (CIDB) in Johor Bahru. Both the
interviews and questionnaires were conducted to support the literature review.
4.3
Data Analysis
Upon the collection of questionnaires, every type of data received under
different questions will be separated and segregated to answer different research
objectives. The data will be categorized under different variables to represent the result
of the research objectives. Different statistical methods such as frequency analysis and
average index analysis were being used in the data analysis.
4.4
Frequency Analysis
Frequency analysis will be using tabular form to represent result of data analysis
of frequency of response that respondent give to the different variables in the
questionnaires.
The result was tabulated in the form of frequency number and
percentages according to total respondents. For graphic result presentation, bar chart
and pie chart will be used as summary.
61
4.5
Average Index Analysis
In average index analysis, the result will further summarized to obtain the level
of efficiency of methods and computer software uses by contractor to prepared cost
estimating. The respondent were requested evaluate methods and computer software
on five point scale starting with 1 for extremely inefficient, 2 for inefficiently, 3 for
moderate efficient, 4 for very efficient and 5 for extreme efficient.
The classification of the rating scales proposed by Abd. Majid, M.Z., McCaffer,
R., (1998), have been referred in this study. The classifications of the rating scales are
as follows:
Average Index
Level of Importance or Evaluation
4.50 ≤ Average Index ≤ 5.00
Extreme efficient/used
3.50 ≤ Average Index < 4.50
Very efficient/used
2.50 ≤ Average Index < 3.50
Moderate efficient/ used
1.50 ≤ Average Index < 2.50
Inefficiently/less used
1.00 ≤ Average Index < 1.50
Extreme inefficiently/not used
All the collected data from the questionnaires were analysed in frequency
analysis as preliminary analysis. This method shows the frequency and the percentages.
The frequencies are then represented in the form of tables and pie charts.
4.6
Data Analysis
A detail analysis of data and result will be shown and elaborated by using
Frequency Analysis and Average Analysis. In order to complete the master dissertation
62
project, 60 respondents were specifically identified as the targeted respondents of the
“Computerised Building Cost Estimating System”.
The respondents included the
contractors Class A, Class B, Class C and Class D. Among 60 sets of questionnaire
forms distributed, there were 37 sets of replied with complete questionnaire from that
cover 62% of the total 60 sets of questionnaires in the study.
Table 4.1 : Response Percentage
Categories Contractors
Class A
Class B
Class C
Class D
Total
returned from respondent
19
3
8
7
37
Percentage
51.35
8.11
21.62
18.92
100.00
No of questionnaire
Class C
19%
Class A
51%
Class BX
22%
Class B
8%
Class A
Class B
Class BX
Class C
Figure 4.1 : Response Percentage
63
4.7
Section A :
Estimating Model
4.7.1 What kind of cost estimating method applied by your company?
The respondents were asked to identify, from the list given, the method that the
respondent represents in order for preparing cost estimating. The results for question
A.1 shown in table 4.2 below:
Table 4.2: Method use for Preparing Cost Estimating
Class Contractors
No
1
2
3
4
5
Method of Estimate
Unit Method
Cube Method
Superficial or floor area method
Storey enclosure method
Element cost analysis
Class A
Class B
Class C
Class D
Total
Percentages
12
2
7
2
13
1
2
1
0
2
3
3
4
0
7
4
0
3
0
4
20
7
15
2
26
54
19
41
5
70
6
Comparative estimates
9
1
4
0
14
38
7
8
Interpolation method
Approximate quantities
1
15
0
3
0
5
0
6
1
29
3
78
Total Respondent
19
3
8
7
37
70%
80
78%
70
60
50
54%
Percentage 40
41%
38%
30
20
19%
5%
10
3%
0
Unit Method
1
Mathod
Cube Method
Superficial or floor area method
Storey enclosure method
Element cost analysis
Comparative estimates
Interpolation method
Approximate quantities
Figure 4.2: Percentage of Method use for Preparing Cost Estimating
64
Table and figure 4.2 shows the percentage of method use for preparing cost
estimating where majority (78%) of the respondents were used approximate quantities
method for preparing their cost estimate.. From the total number of respondents, 70%
were used elemental cost analysis method while only 3% of the respondents were use
interpolation method.
4.7.2
What are the factors of choosing the cost estimating method as mentioned ?
The respondents were asked to identify, from the list given, factors of choosing
the cost estimating method as mentioned. Table and figure 4.3 shows the percentage of
factors choosing the cost estimating method.
Table 4.3 : Factors of Choosing Cost Estimating Method
Class of Contractors
No
1
2
3
4
5
6
7
8
Factors
Class A
Class B
Class C
Class D
Total
Percentage
Easy to apply
Time factor
Types of project
Types of contract
Size of project
Information given by client
Client requirement
Cost Estimate obtained is more accurate
6
10
11
8
7
13
6
3
1
2
2
4
0
1
1
2
3
4
4
3
4
5
2
5
2
5
1
4
2
4
3
2
12
21
18
19
13
23
12
12
32
57
49
51
35
62
32
32
Total Respondent
19
3
8
7
37
65
70
60
62%
57%
50
Percentage
49%
51%
40
30
35%
32%
32%
32%
20
10
0
Factors
1
Easy to apply
Time factor
Types of project
Types of contract
Size of project
Information given by client
Client requirement
Cost Estimate obtained is more accurate
Figure 4.3 : Percentage of Factors Choosing Cost Estimating Method
From the analysis it was found that 62 percent or 23 out of the total 37
respondents were choose information given by client as a important factors for choosing
the cost estimating method in order preparing cost estimate. Time factor were contribute
57 percent or 21 out of the total 37 respondent, types of contract contribute 49 percent
or 18 out of the total 37 respondent and size of project contribute 35 percent or 13 out of
the total 37 respondent.
The others factors such as easy to apply, client requirement and cost estimate
obtained is more accurate only contribute 32 percent or 12 out of the total respondent.
The number of contractors involved in this questionnaire survey will provided a good
result in terms of their knowledge and experience which can contribute to this
investigation.
66
4.7.3
What types of cost estimating method, which your company applied to the
project ?
The respondents were asked to identify, from the list given, types of cost
estimating method used for several types of contract. Table 4.4 shows the percentage of
factors choosing the cost estimating method.
Table 4.4 : Cost Estimating Method used for Several Types of Contract
Cost Estimating Method
A
No
1
2
3
4
5
6
7
Type of Contract
B
C
D
E
F
G
H
No
%
No
%
No
%
No
%
No
%
No
%
No
%
No
%
Work Order
Lum Sum Contract
Bill Of Quantities
Cost Plus Contract
B.O.T Contract
Turnkey Contract
Schedule of Rate Contract
12
9
15
8
3
7
9
32
24
41
22
8
19
24
2
1
1
0
2
1
0
5
3
3
0
5
3
0
3
13
2
5
3
2
3
8
35
5
14
8
5
8
0
0
0
0
0
3
2
0
0
0
0
0
8
5
10
19
17
9
8
7
10
27
51
46
24
22
19
27
5
11
13
8
8
6
5
14
30
35
22
22
16
14
5
3
5
2
2
1
0
14
8
14
5
5
3
0
3
0
0
0
2
2
0
8
0
0
0
5
5
0
Total Respondent
19
3
8
7
37
Legend:
A : Unit method
B : Cube method
C : Superficial or floor area method
D : Storey-enclosed method
E : Approximate quantities
F : Elemental cost analysis
G : Comparative estimate
H : Interpolation method
Table 4.4 shows the analysis of cost estimating method used in preparing cost
estimate for several types of contract. According Hashim Sikan (1999), work order
contract in general used in public sector for small project and the interim payment base
on schedule of rate. It was found that unit method is the high frequently method used in
preparing cost estimating for work order contract, where represents 32% out of total 37
respondents. Percentage for approximate quantities method using in work order contract
67
only 27% out of total respondents. From the analysis shows, overall cost estimating
method has been listed above represents below 50% from the total of respondents.
For lump sum contract, approximate quantities method were the highest
frequently used in preparing cost estimate. From the total number of respondents,
approximate quantities method represent 51% in lump sum contract, 46% in bill of
quantities contract, 27% in schedule of rate contract and 24% in cost plus contract.
As a conclusion, majority of the respondents declared approximate quantities
method were the most popular technique in preparing cost estimate for any type of
contract. Elemental cost analysis is a secondary method or child in approximate
quantities in order for preparing cost estimate for several types of contract.
6.7.4
How frequently the sources of unit rate that your company referred to?
The respondents were asked to rate the degree of uses on the list of how
frequently the sources of unit rate that the contractor referred in preparing cost
estimate.. In analyzing the data, the following assumed values have been considered for
responses on the degree of frequently used by the contractors: “Not Used” (1), “Less
Used” (2), “Moderately Used” (3), “Very Used” (4), and “Extremely Used” (5). The
list provided was produced by the researcher from the case study carried out and was
arranged and classified according to the research objective. The results presented in
Table 4.5 shows a full list of frequently used the sources of unit rate listed in the
questionnaire.
68
Table 4.5 : Degree of Frequently used the Sources of Unit Rate in
order of Preparing Cost Estimate
No
List of Sources
1
%
2
%
3
%
4
%
5
%
Average
Index
1
Base on catalogues or supplier
quotation
0
0
0
0
0
0
11
30
26
70
4.702
2
Based on built up rate
0
0
0
0
0
0
15
41
22
59
4.594
3
Base on past project
0
0
0
0
2
5
12
32
23
63
4.567
4
Base on experience
0
0
0
0
0
0
9
24
28
76
4.757
5
Base on elemental cost analysis
0
0
0
0
5
14
24
65
8
21
4.081
6
Base JKR’s schedule of rate
6
16
14
38
17
46
0
0
0
0
2.297
The explanation and a review of the survey results received for each sources listed in
the table are presented in the section that follows.
4.7.4.1
Base on Catalogues or Supplier Quotation
This result reveals that 70 percent which 26 out of 37 respondents agreed that it
is extremely used that the catalogues or supplier quotation to be use as a resources
before prepared cost estimate. Another 30 percent (11 respondents) approved that the
resources should be referred in order to produced accuracy cost estimate.. From the
average index score which is 4.702, it can be said that the catalogues and supplier
quotation is “extremely used”.
69
4.7.4.2
Based on Built Up Rate
From the table, it can be seen that more than half (59 percent) of the respondents
accepted that it is extremely used the built up rate in order to ensure that the cost
estimate accurate and profitable. 15 numbers of respondents (41 %) believed that it is
very used resources base on built up rate in order for preparing cost estimate. From the
average index score which is 4.594, it can be concluded that the feasibility study is
“extremely used” and should be taken into account in the referred resources for
preparing cost estimating.
4.7.4.3
Base on Past Project
A majority of the respondents classified this type past project resources
extremely used (63%) and 32 percent as very used resources in order for preparing cost
estimate. Only 5 percent of the respondents ranked the resources under moderately
used. It can be noted that this resources is “extremely used” based on the average index
result from the table which is 4.567. This may be due to the accuracy of preparing
building cost estimating.
4.7.4.4
Base on Past Experience
Twenty respondents (76%) indicate that it is extremely used for the contractor to
referred resources base on their experience before they produced their cost estimating.
Furthermore, 24 percent of the respondents realized that resources base on previous
experience is very used in order to prepared cost estimate. From the average index
score of 4.757, it can be seen that the past experiences resources is “extremely used”
and should be one of the contractors data information in preparing their cost estimating.
70
4.7.4.5
Base on Elemental Cost Analysis
Different levels of importance and frequent referred were established for
elemental cost analysis as shown in table 4.5, where the result for extremely used, is 21
percent, for very used 65 percent and 14 percent for moderate used. The average index
score for referred resources base on elemental cost analysis is 4.081 which is
categorized under “very used”.
4.7.4.6
Base JKR’s Schedule of Rates
A majority of the respondents classified this type JKR’s schedule of rates is
moderate used (46%) and 38 percent as less used resources in order for preparing cost
estimate. Only 16 percent of the respondents ranked the resources under not used . It
can be noted that this resources is “less used” based on the average index result from the
table which is 2.297.
Base JKR's schedule of rates
2.297
Sources
Base on elemental cost analysis
4.081
Base on experiences
4.757
Based on past projects
4.568
Base on build up rate
4.595
Base on catalogues or supplier
quotation
4.703
1
1.5
Not Used
2
Less Used
2.5
3
Moderate Used
3.5
4
Very Used
Figure 4.4: Frequently used the Sources of Unit Rate
in order of Preparing Cost Estimate
4.5
5
Extremely Used
71
4.8
Do your company do any adjustment before applying the sources of unit
rates as mentioned above?
The respondents were asked to identify, from the list given, any adjustment
before applying the resources of unit rates in order preparing cost estimate. Table 4.6
shows the option applying the resources of unit rates in order preparing cost estimate.
Table 4.6 : Option of any Adjustment or no need any Adjustment
in Applying Resources of Unit Rates
Class of Contractors
No
1
2
Option
Class A
Class B
Class C
Class D
Total
Percentage
Need any adjustment
No Need any adjustment
19
3
8
5
2
35
2
95
5
Total Respondent
19
3
8
7
37
It was found that 95 percent of the respondents accepted, there are need any
adjustment before applying resources of unit rates in order preparing cost estimate,
Contractors Class A (19), Class B (3), Class C (8) and Class D (5) which contribute to
the total numbers of 37 respondents The number of contractors involved in this
questionnaire survey will provided a good result in terms of their knowledge and
experience which can contribute to this investigation. From the analysis shows only 5
percent or 2 out of total number of 37 respondents declared there are no need any
adjustment in applying resources of unit rate in order preparing cost estimate.
72
Any adjustment before applying the sources of unit rates
5% ( 2 samples )
95% ( 35 samples )
Need any adjustment
No Need any adjustment
Figure 4.5 :Percentage of any Adjustment before
Applying Resources of Unit Rates
4.9
Section B :
Application of Computer in preparing Cost estimating.
4.9.1
Do your company use computer to prepare cost estimating?
The respondents were asked to identify, from the list given, did the contractors
company
used computer in order preparing cost estimating.
Table
4.7
discretionary from the respondents. The ratings are as follows:
Table 4.7 : Computer used to Preparing cost estimating
Class of Contractors
Class A
Class B
ClassC
Class D
Total
Percentage
Yes
19
3
8
7
37
100
No
0
0
0
0
0
0
Total
19
3
8
7
37
shows
73
The study found, as shown in the table 4.7, that overall of the respondents had
dealt with the computer facilities in order preparing cost estimating. From the table, it
can be noted that computer is very important to prepare cost estimating and other works
in construction industries.
4.9.2 What kind of standard software which your company used to prepare
estimating?
The respondents were asked to identify, from the list given, types of standard
software they used to prepare cost estimating. Table and figure 4.8 shows the types of
respondent against their discretionary standard software in preparing cost estimate.
Table 4.8 :Standard Software used to Prepare Cost Estimating
Class of Contractors
No
1
2
3
Types of Sofware
Microsoft Excel
Lotus 123
Microsoft Word
Class A
%
Class B
%
ClassC
%
Class D
%
19
0
5
100
0
26
3
0
1
100
0
33
8
0
3
100
0
38
7
0
2
100
0
29
From table 4.8 above, most of the respondents used Microsoft Excel in order
preparing cost estimating which the respondents were Contractors Class A (19),
Contractors Class B (3), Contractors Class C (8) and Contractors Class D (7). A total of
26 percent of respondents Class A (5), 33 percent of respondents Class B (1), 38 percent
of respondent Class C (3) and 29 percent of respondent Class D (2) used Microsoft
74
Word in order preparing cost estimating. This shows that most of the respondents used
Microsoft Excel as a standard software in preparing building cost estimate.
120
100 100 100 100
100
Percentage
80
60
40
26
33
38
29
20
0
0
0
0
0
Microsoft Excel
Lotus 123
Microsof t Word
Class A
100
0
26
Class B
100
0
33
Class C
100
0
38
Class D
100
0
29
Standard Softw are
Figure 4.6 : Percentage of Standard Software used by Contractors
in Preparing Cost Estimating.
4.9.3
Do your company use any special software that designed for estimating ?
The respondents were asked to identify, from the list given, any special software
used in their company in preparing cost estimating. Table and figure 4.9 shows the
types of respondent against their discretionary in using special software.
75
Table 4.9 : Special Software used in Preparing Cost Estimating
Categories Contractors
No
Item
Class A
Class B
Class C
Class D
Total
Percentage
1
Use special Software
2
0
0
0
2
5
2
Not used
17
3
8
7
35
95
Table 4.9 shows that 5 percent of the respondents had used the special software
in preparing cost estimating. Only 2 out of 37 respondent ( Contractor Class A).used
special software in order preparing cost estimating. It was found that majority of the
respondents ( 95 percent ) no used any special software in preparation their cost
estimate.
5% ( 2 sample )
95% ( 35 samples )
Used special softw are
Not Used
Figure 4.7 : Percentage of used Special Software in Preparing Cost Estimating
76
4.9.4
What kind of software which your company used ?
The respondents were asked to identify, from the list given, what kind of special
software they used in preparing cost estimating. Table 4.10 shows the types of
respondent against their discretionary in using special software.
Table 4.10 : Type of Special Software used in Preparing Cost Estimating
Categories Contractors
No
Types of Software
Class A
Class B
Class C
Class D
Total
Percentage
1
MASTERBILL
2
0
0
0
2
100
2
RIPAC
0
0
0
0
0
0
3
CATO-2000
0
0
0
0
0
0
4
BUILDSOFT
0
0
0
0
0
0
5
ICEPAC
0
0
0
0
0
0
Total Respondent
2
0
0
0
2
The study found, as shown in the table 4.10,. it represented 100 percent of the
total respondent (2) from Contractors Class A were use special software in preparing
their cost estimating. .From the table, it can be noted that 100 percent from the total
respondent were used special software acknowledged. Masterbill is the special software
they used in prepared cost estimating.
77
4.9.5
What are the advantages or efficiencies of computer software used in your
company for preparing the estimating ?
The respondents were asked to rate the degree of advantages on the list of how
efficiencies the special software in preparing cost estimate.. In analyzing the data, the
following assumed values have been considered for responses on the degree of
efficiencies
by the contractors: “not efficient” (1), “less efficient” (2), “moderate
efficient” (3), “highly efficient” (4), and “extremely efficient” (5). The list provided was
produced by the researcher from the case study carried out and was arranged and
classified according to the research objective. The results presented in Table 4.11 shows
a full list of efficiencies used special software in the questionnaire.
Table 4.11 : Efficiencies used Special Software in Preparing Cost Estimate
No
List of Sources
1
%
2
%
3
%
4
%
5
%
Average
Index
Complete work in short time
0
0
0
0
0
0
17
46
20
54
4.541
2
User friendly
0
0
0
0
0
0
16
43
21
57
4.568
3
Quality of work done
0
0
0
0
14
38
16
43
7
19
3.810
4
Efficiency
0
0
0
0
0
0
11
30
26
70
4.702
1
4.9.5.1
Complete work in shorter time
The study shows that 54 percent of the respondents ranked the complete work in
short time is extremely efficient. Another 46 percent were classified under very e
efficient. From the average index score which is 4.541, it can be concluded that the
78
complete work in short time is “extremely efficient” and should be part of listed
advantages that should be in preparing cost estimating used computer software.
4.9.5.2
User friendly
A majority of the respondents classified this type of user friendly as extremely
efficient (57%) and 43 percent as very efficient in user friendly. It can be noted that this
advantages is “extremely efficient” based on the average index result from the table
which is 4.568. This may be due to the function and linkage of design computer
software that might affect the process in preparing cost estimating
4.9.5.3
Quality of work done
Seven respondents (19%) indicate that it is extremely efficient in quality of work
done in order using computer software for preparing cost estimating. Furthermore, 43
percent of the respondents realized that quality of work done is very efficient while the
contractors used computer software. 38 percent of the respondents felt that quality of
work done is moderate efficient. From the average index score of 3.810, it can be seen
that quality of work done is very efficient and should be one of the advantages using
computer software in preparing cost estimating.
79
4.9.5.4
Efficiency
This result reveals that 70 percent which 26 out of 37 respondents agreed that it
is extremely efficient
that the efficiency using computer software is one of the
advantage in preparing cost estimating. Another 30 percent (11 respondents) approved
that using computer software is very efficient. From the average index score which is
4.702, it can be said that the efficiencies of using computer software is “extremely
efficient” and should be listed as one of the advantage using computer in preparing cost
estimating.
Advantage
Efficiency
4.702
Quality of work done
3.810
User friendly
4.568
Complete work in short time
4.541
1
1.5
Not
Efficient
2
2.5
3
Less Rating value scale
Moderate
Efficient
Efficient
3.5
4
Very
Efficient
Rating Scale
Figure 4.8 : Rating Scale Efficiencies used Special Software
in Preparing Cost Estimating
4.5
5
Extremely
Efficient
80
4.10
Problem usually faced when using the computer software to prepare the
estimating.
The respondents were asked to identify, from the list given, what are the
problem usually faced when using the computer software in preparing cost estimating.
Table 4.12 shows the types of respondent against their problem usually faced when
using the computer software.
Table 4.12 : Problem usually faced when using Standard Software
Categories Contractors
No
1
2
3
4
5
Task
Class A Class B Class C Class D Total Percentage
Formula has be develop before key in the data
There is no standard format for costing
Lack of knowledge to use the computer software
Have to refer past document
More time to spent in checking
11
15
10
6
1
3
2
1
2
0
6
5
6
3
0
4
5
5
4
1
24
27
22
15
2
Total Respondent
19
3
8
7
37
65
73
59
41
5
Table 4.12 shows 73% from contractors where used computer for preparing
cost estimating certainty, there is no standard format for preparing cost estimating.
The contractors should be develop their own format before preparing estimate. From
the analysis 65% or 24 out of total 37 respondents decide formula has be develop before
preparing cost estimating. 59 percent decide, lack of knowledge to use the computer is a
weakness factor to be consider as a problem usually facing when used the standard
software for preparing cost estimating, 41 percent decide have to refer past document
and only 5% out of total 37 respondents decide more time to spent in checking as a
problem usually facing when using standard software in preparing cost estimating.
81
80
73%
70
60
65%
59%
50
Percentage 40
41%
30
20
5%
10
0
1 before key in the data
Formula has be dev elop
Problem
There is no standard format for coasting
Lack of knowledge to use the computer software
Hav e to refer past document
More time to spent in checking
Figure 4.9 : Percentage of problem usually facing when using Standard
Software in Preparing Cost Estimating.
4.11
Summary of Analysis and Results
Objective 1 : To study the various conventional methods of estimating from
contractors perspective.
From the study, it can be concluded that the approximate quantities is the
impressive method used by the contractors in preparing cost estimating. Besides that
unit method and element cost analysis as a partake of the method decide by the
contractors Class A, Class B, Class C and Class D who has registered with Pusat
Khidmat Kontraktor (PKK) and Construction Industrial Development Board (CIDB) in
Johor Bahru. Base on the analysis, researcher can be considering from that method for
develop building cost estimating database system .The data obtained from the
questionnaires with contractors involved in preparing cost estimating were analysed in
terms of frequency and average index.
82
Data in section A showed that majority of the respondents used computer in
preparing cost estimating, 78 percent from total 37 respondents decide approximate
quantity as a method in preparing cost estimating. Data obtained in section B, showed
from the total 37 respondents using computer in preparing cost estimate only 2
contractors from Class A used Masterbill as a special software in order preparing cost
estimating. Microsoft Excel as a standard software used by the total 37 respondents in
preparing cost estimating and finally, no standard format costing is the highest problem
facing when using standard software in preparing cost estimating.
Objective 2 : To identify software use by contractor for cost estimating and the
problems.
The result shows 100% of the total 37 respondents used computer in preparing
cost estimating and Microsoft Excel as a standard software intentionally used by the
respondents. From the study only 2 respondents (Contractors Class A) used Masterbill
as a special software in order preparing cost estimating. Finally 73% or 27 out of total
37 respondents decide there is no standard format and 65 percent make a decision
formula has be develop before key in data as highest problem usually facing when using
standard software in preparing cost estimate..
Objective 3 : To develop an application which is capable of producing cost
estimating using Microsoft Office Access.
Cost Estimating Database has been develop used Microsoft Access 2003 and the
system is base on building work concept with approximate quantities and element cost
analysis as a basis for cost estimating.
The system has been
develop with the
minimum cost and accomplished to produce cost estimating easily and efficiently.
83
CHAPTER 5
MODEL DEVELOPMENT METHODOLOGY
5.1
Introduction
This chapter evinces the methodology of developing a conceptual cost
estimating computer model. The system requirements are distinguished, base on the
literatures review of the chapter 2 and 3, along with the aspects to be considered in a
practical system. The process of introducing a valiable approach is considered in order
to enhance the benefits of the system under its classified requirements and development
constrain. Good information system depends on the integration between databases,
programming languages, and software engineering: its lifecycle incorporates the
interrelated technologies of conceptual modeling and database design (Loucopoulos,
1992). Figure 5.1 illustrates the system development process. The process consists of
two major phases: 1) the conceptual modeling phase , and 2) the Implementation phase.
The conceptual modeling phase will be discussed in the current chapter and
included problem investigation and user requirements, system architecture and
components.
Thereafter, the database requirements, can be identified and the
conceptual design can be carried out then the conceptual scheme (Entity Relationship
diagram) can be derived. All the proposed database modules will be explained and
finally the proposed methodology will be established and shown through the current
practice (data flow).
84
Conceptual
Modeling
Users
Requirements
Problem
Investigation
Database
Requirements
Conceptual Design
Conceptual Schema
BDMS Independent
BDMS Specific
Implementation
Data Model
Logical design
Data Model Mapping
PHYSICAL DESIGN
PHYSICAL SCHEMA
Figure 5.1 : System Development Process
5.2
System Requirements
The problem investigation and user requirements are rooted on the literature
review of chapter 2 and 3. The basis of an integrated methodology that fosters the
preparation of timely, dependable, and efficient conceptual cost estimate incorporates
85
the importance of having data available when needed and a computer tool use for
generating the estimate. To this end, a list of a specifications and basic requirements
that was followed in the developing the proposed estimate preparation system is shown
in Table 4.1. Besides such requirements, the system would be designed to have the
following characteristics:
SPECIFICATIONS
1.
Designing and implementing database for preliminary estimate.
2.
Utilizing cost of previously projects as handy historical data for
preliminary estimate.
3.
Employing the Masterformat division for preliminary estimate as WBS
in metric units.
4.
Flexibility of updating the built in costs when deeded.
5.
Generating various reports that can be used for bid preparation and
summary cost.
6.
Direct linkages between the generated items take off list and summary
cost.
ƒ
Information-intensive; incorporate different database to store, process,
and employ available data in order to improve the practically of
preparing a cost estimate.
ƒ
Efficient; user friendly and fast processing
ƒ
Flexible; previously estimated projects can be added to built the
historical data, costs and items can be edited and modified easily.
ƒ
Modular; allows future expansions and enhancements.
ƒ
Practical; includes fast calculations process by applying available tools
( expressions and structured query language (SQL).
86
5.3
System Components and Architecture
The developed system consists of components designed in preliminary estimate
module. Figure 5.2 illustrates the system components used in the model methodology
development. The function performed within each of the systems components.
DATABASE
Figure 5.2 : System Components
87
The preliminary estimates module that integrates the preliminary database base
on Masterformat provides the user with the option of using metric cost data to calculate
the direct and indirect cost of chosen items. The user cal also use own cost data in
calculating the direct and indirect costs. The selection methodology evaluate four
selection criteria:
1.
Work Break Down Structure (WBS)
2.
Data sources ; own cost data
3.
Cost adjustment
4.
Unit in metric
The System Architecture is illustrated in Figure 5.3. The process stats with
entering the project information. Selecting the work breakdown, entering take off form
for generated the quantity for estimate is chosen.
86
9
88
INPUT
REQUIREMENTS
Data Analysis
CRETERIA
System Database
Preliminary
Module
Project
Information.
Cost Data . Own
Unit : Metric
Preliminary
Own Cost
ƒ Item Direct
ƒ Material
ƒ Installation
ƒ Labor rate
Total Cost Calculation
ƒ Each Division
ƒ Per Unit Area
ƒ Whole Project
WBS
Masterformat
Data Source
Own Data
Unit
Metric
OUTPUT
Project Cost
Estimates
Cost Summary Report
Tabulated Detail
Figure 5.3 : System Architecture
Items Take
Off List
89
9
5.4
Database Conceptual Design
The conceptual cost estimate database has been created by slaving computers to
minimize the required time in preparing an estimate, the ability to call up and modify
costs data when needed for preliminary estimates, and to provide a professional output
reports for bidding purposes. Utilizing computers has myriad benefits, perhaps the
foremost of them is employing their immense capacity to store huge amount of data and
the capability to retrieve it fast. The foregoing paragraphs have classified the system or
database requirements thereafter the conceptual design can be established by identifying
the components of the conceptual schema. The conceptual schema concentrates on
describing the database entities. Their attributes and relationships.
The graphical
representation of the conceptual schema is accomplished by using an approach known
as Entity-Relationship diagram (ER-diagram). The ER approach uses rectangles to
specify entities, diamond-shaped to represent the available relationship between two or
more entities and oval-shaped to represent the attributes. Figure 5.4 shows the ERdiagram used to conceptually design the model.
Entities are the primary data objects about information is to be collected, and
represent the cost estimate concepts that are stored in the database. The entity name is
written inside the rectangles and the proposed database comprises 5 entities (Project,
Division, Element, Cost estimate, Cost Source).
909
Cost/unit area
Address
Address
Total Cost
Area
Description
Estimator
Date
Name
Division
Number
N
M
Uses
Name
Uses
Cost
Number
% of total
Cost
Number
Project
M
% of Total
Cost
Cost
Unit
M
Element
N
Uses
Item
N
Name
1
Has
Uses
Uses
Description
1
Cost Source
Unit Cost
N
M
Name
Cost Estimate
Unit
M
M
Figure 5.4 : Database Entity Relationship Diagram (ER-Diagram)
Quantity
Total
Cost
991
-
Relationships represent the associations among two or more entities. The
different types of connectivity between entities are One –to-One (1:1), Oneto-Many (1:M), and many-to-Many (M:N). In the proposed database one
type of connectivity has been used which is Many-to-Many (Figure 4.4)
-
Attributes are the entity characteristics that provide descriptive detail about
that entity. Attributes opposite entities by having values, they are in two
types either identifiers or descriptors.
An identifier (or key) uniquely
determines an instance of an entity and underline in the ER-diagram (Figure
5.4, e.g Number).
5.5
The Conceptual Estimate Methodology
Base on the previous discussion, the proposed step-by-step methodology that
effectively incorporate the cost estimate, the function fulfilled and the necessary
input/output data links is outlined by the data flow diagram as shown in Figure 5.5.
This diagram simplifies the implementation and the development of the model. From
the main module, the user will select the module and accordingly a connection with its
module will be created and its integrated database will be opened. Thus, the user will
start the process of estimating costs of the constructing a project.
92
Start Menu
Project
Brief
Project Cost
Information
Main
Element
Building
Work
Sub Element
Building
Work
Standard
Form for
Estimating
Form Built
Up rate
Summary
Cost of Sub
Element
Total Cost of
Main
Element
Report Data
in Form
Estimating
Preview Report
Brief
Specification
Report Cost of
Project
No
Figure 5.5 :Methodology Data Flow (Current Practice)
Yes
Stop
93
5.6
Conclusion
This chapter proposed a methodology for cost estimating model, using available
tools (algorithms and database management system) that can avail cost engineering and
estimator s to prepare preliminary cost estimates. A procedure for developing the
methodology is applied based on a group of identified system requirements. The
preliminary estimate based on historical data of previous executed projects and the
module utilizes built in cost data or user own cost data to produce a quickly preliminary
estimate. The proposed system, “SAVER” eases the preparation of a conceptual cost
estimate in a favorable technique, efficient and accurate.
This chapter stressed the
conceptual modeling phase of the system development, founding a structured
methodology for conceptually estimating the costs of constructing building works. The
model implementation phase is presented in chapter 6
94
CHAPTER 6
MODEL IMPLEMENTATION PROCESS
6.1
Introduction
Former chapter listed the phases of developing the system’s methodology, dealt
specifically with the conceptual phase and derived the conceptual schema. This chapter
described phases two of the development process that is the model implementation. It
exhibits the process practiced in developing the computer model that comprises the
system database for preliminary estimate module.
6.2
Database Implementation
The development stats by mapping the data model’s components, which are
entities, attributes and relationships within a Database management System (DBMS).
This is achieved by using Microsoft Access 2003 through design Preliminary Database.
The database development is conceptually pictured in the ER-diagram as show in
Figure 5.4 of chapter 5. The design of each database is considered separately in the
succeeding paragraphs.
95
6.3
Preliminary Database
The components of this database are incorporated from the ER-diagram as
follows : Project, Cost Source, Division and Cost Estimate. Each entity is used with
partially of fully of its associated attributes. To design this database three major steps
are performed sequentially. The data source bused is based on Metric for coasting that
uses the Masterformat to breakdown the project structure with some modifications
made for design purposes as follows :
Step One
Having settled the data pertinent to this database, each division and its
associated sub-divisions and items have to be identified through a unique ID number.
The importance of identifying each line items data by a unique number so that the
database software (Microsoft Access 2003) accepts it is necessary because it speeds the
process of retrieving desired items and eliminates duplications.
Step Two
Having the numbering system identified each division and associated items are
given a unique number and then the operation of building the tables can be commences.
Normally a relation database is composed of a collection of tables that accommodate
grouped data. Every division and its interrelated items are entered into two different
tables. Entering data is the most time consuming process of the system development, as
shown in Figure 6.1 and Figure 6.2 below :
96
Figure 6.1 : Sample Table 1 of Each Division Data
Figure 6.2 :Sample Table 2 of Each Division Data
97
Afterward, the Item ID links these table one-to-one relationship because each
division line item is unique and cannot be duplicate. The related tables are named after
the name of each division with an abbreviation showing the unit used.
Figure 6.3 :Sample Table 3 of Item Taking Off List
Additionally, there are few minor tables for the user to make use of. For
instance, entering required data (e.g size of those element, no of element, length, width
and key in own rate data. Figure 6.4 shows the design of a form.
98
Figure6.4 : Screen Snapshot of the form from Table Database
Figure 6.5 : Snapshot of the Database tables and their Relationships
99
Because tables are rigid objects and do not permit any data manipulation,
queries are utilized due to their flexibility and ability to do that job. Expressions are
used in all the queries in order to carry out all the required calculations. All the
employed queries are base on at least one or two related tables, and each one of them is
specified to one division accordance to the data source.
Step Three
Once all the appropriate data of this database are precisely listed into sets of tables and
queries, the database interface is carried out. The goal of designing this database is to
deliver a tool that comprises clearness, simplicity and user friendly. Thus, this aim is
achieved through using set of series of forms. Each series represents the Masterformat
divisions in a specific unit. This form is linked to a query called “Qttl_SumAPRON,”
which provides the form with the required data, as well it stores all the calculation for
this database. Similarly, all the other division for the selected are similar forms. This
process has been repeated for all the other division.
6.4
Main Module
Following the design of the database, it is necessary to design a simple procedure to
be the gate for the user to access the database under choice. In other words, from that
form the user assign the type of division he or she wants to use. Consequently, a main
form, name “Cost Estimating System” is design in a way that links the database and by
simple clicks the desired one opens. The first form that opens in this procedure is the
introduction screen as shown in Figure 6.6. At the bottom of this form there are two
100
command buttons, one to exit the model and the second to enter and mentioned forms
respectively.
Figure 6.6 :Snapshot of the System Main Menu
6.5
Conclusion
The developed computer system Cost Estimating System (COES) that
conceptually estimates the costs of construction for building works. Base on the model
operation, the system has several useful features as follows :
101
ƒ
The system is designed and structured in a manner that allows future expansion
and enhancements.
ƒ
User friendly, easy to use, efficient, and fast calculations.
ƒ
Ability to easy edit, add and modify the available data of all database.
ƒ
Professional output reports that can be used for bidding purposes, and the ability
to graphically visualize.
ƒ
Exporting the generated estimates to a spreadsheet and a word processing
document .and as a result, Cost estimating System (COES) was created.
Generally, COES can facilitate the user to do cost estimating, built up rate,
report of total construction cost and preview report of brief specification and
finally formatting the cost estimate to a proper format.
102
CHAPTER 7
SYSTEM VALIDATION
7.1
Introduction
Validation is the part of evaluation that deals with the performance of the system
(for example, how it compares to the other software). Simply stated, validation refers to
building the “right” system, which is, substantiating that the system performs with an
acceptable level of accuracy.
7.2
Prototype
Based on the model that has been developed, a prototype has been designed and
produced to help the user to obtain cost estimate before the contractors submit their
tender bid. In this study, Microsoft Access 2003 has been selected as a tool to develop
the prototype. This system has various functions and characteristics which is suitable to
develop the prototype based on the scope of the study which has been specified.
The objective of developing the prototype is to help to speed the process of
preparing cost estimating which normally carried out manually and take a longer time.
This process of preparing cost estimate will be repeated until the contractors is satisfied
with the estimate figure.
103
This study will try to develop a system to prepare cost estimating through
prototype, which has been developed. The function of the system produced is in line
with the objective and purpose of this study.
7.3
Use Of The Prototype
The prototype consists few session which need to be selected and correct button
to be chosen till end of the window. The final window will show the report of the cost
estimating. If the user does not want to continue till end of the window, the BACK
button can be used to go back and leave the window.
To use this prototype, the step is to open COES Software. The following screen
will appear that allows the user to use COES. If user do not wish to continue, click the
EXIT button. Click the CONTINUE button to start the estimating work.
Figure 7.1 : Snapshot of the Starting Menu
104
The following interface will appear. In this interface, The user has to key in the
information present in the form such as project name, location, client, floor area, name
of estimator, check by and date of estimate. Click button ENTER to open form Project
Cost Information.
Figure 7.2. : Snapshot of the Project Brief
In this interface, the user can choose the main element of building work in
general for preparing cost estimating
The user only has to click ENTER button to
move the next selected screen or can choose the BACK button to go back to the
previous screen.
105
Click ENTER button
to open interface list of
elements under
building work
Click ENTER button
to view report of
summary Project Cost
Click BACK button to
go back previous
interface
Figure 7.3 : Snapshot of Project Cost Information
Figure 7.4 and 7.5 illustrate respectively the events when the user chooses to
preview superstructure work, the next interface opens a form listed activities under
superstructure work.
106
Click ENTER
button to view
activities under
Superstructure
Figure 7.4 : Snapshot of Activities under Building Work
Click ENTER
button to view form
estimating for
staircase
Figure 7.5 : Snapshot of Activities under Superstructure
Figure 7.6 display the main activity in preparing cost estimating according to the
approximate quantities method. The user has to key in all the dimension, description
107
and other information according to the drawing in the form. For the example, in the
concrete staircase work, the user must key in all the information such as estimating for
formwork, reinforcement and reinforce concrete. For the other application, the user
only has to click the button provide in the form. The same process has be carried out
for all the other elements.
Figure 7.6 : Snapshot of Form for Cost Estimating
108
Auto number
Information about
the specification
Works item for
concrete staircase
Number base on total
data was key in
Location for
building
Button for delete
data in row
Button for save
data in row
Figure 7.7: Snapshot of Functional Buttons
Information for high
tensile and mild steel
conversion from meter
length to kilogram
Figure 7.8: Snapshot of High-tensile and Mild-steel Conversion
109
Save all record
for all data
Add new
record
Open form
element landing
slab
Open form
element
landing beam
Open form
element steps
View summary cost of
concrete staircase
View total cost
staircase
Delete all
record
Open form
Built Up rate
Close / exit the
form
Open form
Hand railing
Figure 7.9 : Snapshot Functional Buttons of Estimating Form
Figure 7.10 : Snapshot of Summary Cost for Concreting Staircase
110
From the estimating form (Figure 7.6), when the user hitting view summary button,
we are transferred to the “summary cost for concreting staircase” as shown in Figure
7.7 and illustrates the total cost for
form work, reinforcement and reinforced
concrete. If the VIEW TOTAL COST FOR STAIRCASE button is entered, the total
cost for staircase will be prompted. Click the BACK button to return to the cost
estimating form.
Figure 7.11 : Snapshot of Summary Total Cost for Staircase
Figure 7.8 displays the summary total cost for activities staircase and cost per floor area.
If the VIEW button is entered, the screen summary cost of each element was entered
will be prompted similar to Figure 7.7. Click button BACK to go back to the cost
estimating screen.
111
Figure 7.12 : Snapshot of Data Record
In this screen, a report consisting the data of the estimating for form work
landing will be shown.
112
Figure 7.13 : Sample Snapshot of Report Construction Cost
In this screen, a last, a report consisting the detail of the building cost estimating
will be shown.
113
Figure 7.14 : Sample Snapshot of Report Brief Specification
114
CHAPTER 8
CONCLUSION AND RECOMMENDATION
8.1
Conclusion
After extensive research on the specific software for producing cost estimating
and analysed data from respondents, finally Cost Estimating System (COES) was
being develop. It is Microsoft Access 2003 application designed specifically for doing
building cost estimating. Cost Estimating System have the ability to automatically
produce cost estimating from the calculation form has be develop according to
approximate quantities and element cost analysis method. Moreover, user-friendly
interfaces features such as selecting built up rate development and producing summary
of cost estimating making this system easy to use application. Nevertheless, there are
still some features which are lacking such as formatting errors. Actually, the problem
can be solve by either reprogramming or using a patch file. As a final conclusion, this
research has achieved its objective of developing an application which is capable of
producing building cost estimating using Microsoft Office Suite.
8.2
Research Contribution
The contribution of this research reside in the following :
ƒ
A unique cost estimate computer system has been developed that is
particular for the construction industry.
115
ƒ
An operational database system has been designed and implemented using
windows environment and utilizing Microsoft Access 2003applications.
This advances the field of MIS (Management Information System)
applications in the construction industry, which is known to lack behind
other industries in this area. This will aid practitioners in the construction
industry to perform conceptual estimates within the short time available to
study a project.
The developed system is intended to assist owners, contractors, and estimators
in preparing fast, efficient, and reliable cost estimates. It provides the user with the
option of selecting the of division to use. It reduces the time required to build costs list
for the project activities so that this reduction can be beneficial for the quantity take off
time process. It provides professional output reports that can be used for bidding
purposes. The system includes a structured database, which can be extended, enhanced
and modified depending on the user needs.
8.3
Recommendation For Future Research
The
research has generated a milestone result for automatically producing
building cost estimating from Microsoft Access 2003
introduces a functional system as a tool
Despite that this research
for contractors and estimators to use in
preparing cost estimates for the construction industry, it is a platform that can be
potentially enhanced by future works. These may include :
ƒ
Detailed cost database models so that the user will be able to prepare all
types of estimates in accordance with the different phases of the project.
ƒ
Automatic integration between the detailed estimate and scheduling tools
allowing the user to schedule the activities according to the crew
productivity after generating the estimate.
116
ƒ
Integration between AutoCAD and the detailed cost estimate database
model to enable the user to automate the quantity off process directly
from the drawings while preparing the estimate.
ƒ
Using neural networks or regressions to forecast the cost items of the
preliminary cost estimate database model.
117
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