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 Provides an assessment of capital cost for a specified piece of work. Forms the basic for planning and control by defining the scope of work and it’s associated estimated cost. 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. Provides the financial input required to prepare a cash flow curve. 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 : Understanding of the capital project process. Detailed understanding of the estimate requirements for each class of estimate. Engineering document reading. Code of accounts/works breakdown structure/project breakdown structure. Basic project controls (budget, schedule, cost control, change management, progress measurements, earned value, forecasting). Data analysis (labor productivity, database standards and development, historical data analysis, and benchmarking). Strategic estimating skills (capacity factoring, equipment factoring, cost modeling, general factor, and ratio development). 2.5 Detailed estimating skills (material takeoffs, pricing and costing ). General software. Estimating software. Presentation skills. Report writing. 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) : Number of hours used per day, month and year. Severity of job conditions. The way the equipment has been maintained. 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 : The skills and procedures used by the estimator. The quality of the project drawings and related documents prepared by the designer. 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 : Errors in simple mathematics (careless extensions of quantities times unit prices. Using old or unverified material unit prices. Using wrong labor rates. Transposing figures after extension are made. 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) : Performing quantity take-off using digitizer. Performing extension of units of labor, material, equipment and other expenses to develop the estimate. 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: Difficult to learn and to operate in a reasonable length or time. They have a tendency to shift the user’s attention from estimate preparation to program manipulation. 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 32-bit Windows application are pre-emotively multi-tasked, while 16bit windows application are cooperatively multi-tasked. 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. 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. Information-intensive; incorporate different database to store, process, and employ available data in order to improve the practically of preparing a cost estimate. Efficient; user friendly and fast processing Flexible; previously estimated projects can be added to built the historical data, costs and items can be edited and modified easily. Modular; allows future expansions and enhancements. 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 Item Direct Material Installation Labor rate Total Cost Calculation Each Division Per Unit Area 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 The system is designed and structured in a manner that allows future expansion and enhancements. User friendly, easy to use, efficient, and fast calculations. Ability to easy edit, add and modify the available data of all database. Professional output reports that can be used for bidding purposes, and the ability to graphically visualize. 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 : A unique cost estimate computer system has been developed that is particular for the construction industry. 115 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 : 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. 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