Chapter 4. Client’s Estimation of Project Cost – Construction Project Management: Theory and Practice

4

Client’s Estimation of Project Cost

Introduction, approximate methods of estimation, types of estimates, methods of structuring project costs, illustrative cases in preparation of estimate

4.1 INTRODUCTION

An accurate estimate of the cost involved is of great importance, especially to a contractor, as this forms a basis for his bid proposals, procurement plans and control of the cost being incurred in a job. Estimating in construction projects is a very complex process due to inherent interactions and interdependence involved and the absence of standard norms. Given the highly competitive environment at present, it is important that special attention is paid to cost estimation so that a contractor can win a job and still maintain a reasonable margin of profit.

It may be noted that the client (or owner) organizations and contracting agencies draw up their own estimates from the information and data available to them. Also, for different purposes, the required precision in the estimates is different – for example, for budgetary purposes an owner may be happy with even ±10 per cent variation, but such an error for a contractor bidding for the job could be simply disastrous and unacceptable. There is, thus, a clear difference in perception towards estimation in the client and contracting organizations. An effort has been made to bring the various issues in client’s estimation of project cost in this chapter. The issues inherent in project cost estimation from contractor’s perspective are presented in Chapter 8.

It is obvious that the accuracy of an estimate can be improved once the nature of the project is clearly defined, and all quantities, quality of material and workmanship, logistics, etc., are well understood. Since this is often not the case, rule of thumb and approximate methods have also evolved, and reference has been made to some of the more commonly used approaches at appropriate places. For building works, for example, whereas approximate estimates are at times drawn up on the basis of plinth area, floor area, enclosed volume, length of wall, etc., detailed estimates would require specification, programme of works, available drawings, material, manpower and equipment productivity, and the indirect costs.

4.2 APPROXIMATE METHODS OF ESTIMATION

The actual cost involved in any project can be accurately and simply worked out once the exact quantities of different items and the unit cost associated with each of them is known; however, while the latter is known with reasonable accuracy, the former is very difficult to determine till it is fairly late into the project. It may be borne in mind that the specifications used for the materials and construction methods are also of relevance as far as estimation of the cost is concerned. However, preliminary estimates (including estimates that may not be very accurate) of various aspects of a work are essential for planning, mobilization of resources, policy decisions and administrative approvals. Such preliminary estimates may be prepared differently for different structures, as summarized in Table 4.1.

 

Table 4.1 Estimation of preliminary costs of different civil engineering jobs

S. No. Structure Basis for preliminary estimates

1

Buildings

Depending upon the type of the building, the basis could be number of occupants (e.g., per student for schools and hostels, per bed for hospitals, or per seat for theatres). Some of the other commonly used bases are also discussed separately in subsequent paragraphs.

2

Roads and highways

The estimates are usually made on a per-kilometre basis, depending upon the nature and classification of the road, its width and the cross-section of the road. Obviously, the estimates are different for concrete and bitumen-topped roads.

3

Irrigation works

Estimates for these could be on the basis of length involved, the capacity of the channel, or also the area of land to be covered.

4

Bridges and culverts

This is done on the basis of the span of the structure, depending on the roadway, the nature and depth of foundation, the type of structure, etc. For small culverts, an approximate cost may also be available in handbooks on a ‘per culvert’ basis for culverts of different spans. At times, approximate costs of bridges are also worked out separately for the substructure and the superstructure.

5

Sewage and water supply

Estimates for these could be made on the basis of per head of population served or the area covered.

6

Overhead water tank

Estimates could be made on the basis of the capacity of the tank, depending on the type of structure, height of staging, etc.

Table 4.1 gives an idea of the diverse bases that need to be adopted for estimation of preliminary costs of civil engineering jobs, and, indeed, experienced clients/contractors have reasonably accurate thumb rules for the purpose. Some of the other methods used for building and industrial constructions are briefly discussed below.

4.2.1 Preliminary Estimate for Buildings

Plinth Area Method

For similar specifications, a bigger building costs more to build than a smaller building. This dictum forms the basis of this method and estimates are prepared on the basis of plinth area of the building. The rate is being deduced from the cost of similar buildings having similar specifications, heights and types of construction in the same locality. Plinth area estimates are made by determining the plinth area of a building and multiplying it by the plinth area rate. The former should be calculated for the covered area by taking external dimensions of the building at the floor level, excluding areas such as a courtyard or other open areas, which are not likely to count towards the construction cost.

In cases where the plan of the building is not ready or available, and the plinth area cannot be accurately determined, the estimate may be made by estimating the proposed floor area of the rooms from the functional requirements, and about 30 per cent to 40 per cent of this total added to account for walls, circulation area, etc., and an approximate cost may be obtained by multiplying the unit rate and the estimated plinth area rate.

Plinth Area Rate (PAR) method is one of the popular methods for preparing preliminary estimates. PAR is prepared by Central Public Works Department (CPWD) for preparation of preliminary estimates based on plinth area of a building. In PAR-2007, buildings are classified in residential and non residential categories such as houses of different types (e.g. Type I, Type II, Type III, Type IV, Type V, Type VI, and Servant quarters), hostels, offices, college, schools, and hospitals. In PAR-2007, typical specifications such as type of foundation (based on safe bearing capacity), type of structure (such as load-bearing or RCC-framed structure), flooring (such as mosaic, Kota stone, or marble), other finishing items and electrical fixtures are specified for a standard (nominal) building specification. The rates specified in PAR-2007are based on prevailing market rates as on 1.10.2007, and the base index for year 2007 is assumed to be 100. At regular intervals, the indices are revised based on the current market rates. Correction factors need to be applied if PAR-2007 is to be used in places other than Delhi.

The step-by-step method of preparing preliminary estimates based on PAR-2007 is given below:

 

Step 1:

Preparation of preliminary architectural drawings based on requirement of area, specification, function, etc.

Step 2:

Fixing of architectural features, type of foundation system, type of superstructure, general specification pertaining to civil works, electrical works, sanitary, water supply, external development, etc., and special structural requirements

Step 3:

Based on the specification, classification of proposed building into one of the categories available in PAR-2007. Additional amount, as the case may be, need to be applied for a richer specification than those specified in PAR-2007

Step 4:

Calculation of plinth area of the building in accordance with the specified methods

Step 5:

Multiplication of the plinth area and the specified rate with additional cost for richer specification, if any

Step 6:

Cost-index correction is applied based on the prevailing cost index

Step 7:

Addition of contingency and architect’s fee (if applicable) in the total sum calculated as above

Cube Rate Estimate

The cube rate estimate based on the overall volume of enclosed space comes handy, especially in cases such as multi-storey buildings, with the rate per cubic metre being deduced on the basis of location, specifications and type of construction. The volume of the building is calculated from the external dimensions of the building (with the length and breadth being taken at the floor level), excluding the foundation, the plinth and the parapet above roof. Needless to say, this method is more accurate than the plinth area estimate. In fact, some engineers also use an approximate estimate based on the total floor area to be provided on a per-square-metre basis. This method also includes the height of the building and is fairly accurate.

Approximate Quantity Method Estimate

This method is based on the total length of the walls in a building, which is found from the drawings, and then using a per-metre rate, the total cost is estimated. In effect, for this method the building may be considered as divided into two parts—the foundation including plinth and the superstructure, and the cost per running metre is calculated using appropriate values for the two portions separately. In determining the rate for the foundation part, items such as excavation, brick work up to plinth level and the damp-proof course should be included, and the rate for the superstructure should appropriately account for items such as brickwork, woodwork, flooring and roof, finishing works, etc. Needless to say, the plan or line plan of the structure should be available for this method.

4.2.2 Preliminary Estimate for Industrial Structures

Ratio Method

Rather than a single method, these are actually a class of methods that provide only a crude estimate since they ignore several important details and are good only for very preliminary cost estimates, such as those an investor may require for studying opportunities and screening options for further study. Some of the commonly used ratio methods are briefly explained below.

Investment per annual tonne capacity    Here, the cost of an upcoming plant or project is estimated on the basis of a similar plant of similar or even a different capacity elsewhere.

Turnover ratio and capital ratio    The ratio between annual sales and investment expressed in monetary units (rupees, dollars, etc.) is known as turnover ratio, and its inverse (ratio of plant investment and annual sales) is known as capital ratio. Now, if the capital ratio relating to a particular process and plant size is C, then for the proposed plant, knowing the sales volume and price, the installed cost R2 can be estimated as

 

R2 = C × V1 × P1           (4.1)

where V1 is proposed projected annual sales volume and P1 is the price per unit of sales volume.

Six-tenth factor    This is a modification of the investment per annual t capacity method, where in order to find the cost of a component, a system, or a plant, the size of the new item is determined using a reference item, a ‘factor’ and the cost index or escalation. Mathematically, the method can be represented as follows:

Although any value between 0.20 and 1.37 can be taken for the factor, it is usually taken as 0.6 (and hence the name of the method). This method is a fast way to develop an estimate and sometimes good enough to be used even for preparing a definitive estimate.

4.3 TYPES OF ESTIMATES

Cost estimates of different accuracies are required by different agencies for different purposes in different stages of the project! T he primary objective of an estimate is to enable one to know beforehand the cost of the work, though the actual cost is only known after the completion of the work from the accounts of the completed work. If the estimate is prepared carefully, there will not be much difference in the estimated cost and the actual cost. For accurate estimate, the estimator should be experienced and fully acquainted with the method of construction.

The estimate may be prepared approximately in a manner explained earlier or may be made in detail, item-wise. In general, a choice of the method of estimation to be used depends upon the nature of the project, the life-cycle phase, the purpose for which the estimate is required, the degree of accuracy desired and the estimating effort employed. The essential steps in estimation are calculation of quantity and cost. While the working of quantities can be done based on the available drawings and design data, a number of other things are needed to estimate the cost. While rough estimates are prepared based on some thumb rule, the detailed estimates are prepared based on a number of factors such as specification, programme of works, available drawings, material, manpower and equipment productivity, and indirect costs.

Table 4.2 summarizes some of the types of estimates that are used in the construction industry and their basic functions. Some of these are explained in greater detail in subsequent paragraphs.

4.3.1 Rough Order of Magnitude Estimates

These estimates are also referred to as ROM estimates and are useful for ‘go/no-go’ kind of decision making, which essentially refers to whether the project should or should not be pursued. Some of the methods that can be useful for such estimates are investment per annual t, capacity, turnover and capital ratio, and six-tenth factor. The accuracy levels in such estimates are usually only of the order of ± 60 per cent.

 

Table 4.2 Types of estimates used in the construction industry

S. No. Estimate type Comments

1

Project proposal indicative cost estimate

Feasibility stage

2

Preliminary estimate

Budgeting costs toward the end of planning and design phase

3

Detailed estimate

Controlling costs during the execution of the project

4

Definitive estimate

To assess cost at completion

5

Final closure cost estimate

Final cost

4.3.2 Client’s Indicative Cost Estimate

A client on the basis of the indicative cost estimates prepared during the project feasibility stage may decide to proceed with the engineering phase of the project, which involves detailed design and plans for execution. At this stage, a more refined indicative estimate is also required, and there are several methods available for the purpose—cost per function estimate, square metre method, cubic metre method, cost index method, schedule-based estimates and S-curve forecast. The choice of a method at this stage depends on the nature of project, as the execution of the process (i.e., getting the estimate) needs little time and effort (may be just a few hours) provided the past performance data and prevailing trend/market rates are available. The range of accuracy at this stage is about 40 per cent and, therefore, further refinement is needed, which can be done once the architectural and structural drawings and other related information become available.

4.3.3 Client’s Preliminary Cost Estimate

During the project planning stage, a technical team, whether from the client’s side or the consultant’s, develops the design, specifications and drawings, from which a bill of quantities (BOQ) can be formulated. The BOQ contains estimated quantities of different items of work and also the approximate unit cost, and thus, a reasonably refined estimate can be arrived at. The unit rates contain input from the planning and the design team based on their cost analysis and previously tendered costs. The preliminary cost estimates are also prepared based on available plinth area rates. The cost estimates at this stage usually have an accuracy range of 215 per cent to 130 per cent, and the time involved in working the estimates out depends on the nature and scope of the project, the availability of the past performance data and the method of execution. Apart from the BOQ, similar estimates can also be arrived at using parameter cost estimate method and factor cost estimate method. It may be noted that this estimate becomes the basis for making the final go-ahead decision for execution of the project, which essentially means tendering action, and of course, the acceptance of a bid implies the client’s commitment for the payment of the quoted costs and the execution of the works.

4.3.4 Client’s Detailed Estimate

The detailed estimate is an accurate estimate and consists of working out the quantities of each item of work and the associated costs. For working out the quantities, the dimensions—length, breadth, height or thickness—of each item are taken correctly from drawings. A typical format used for the measurement and calculations of quantities are shown in Table 4.3.

As a second step, the cost for each item of work is calculated from the quantities already computed. The rates obtained from schedule of rates published by different agencies such as CPWD, state PWDs, state irrigation departments, etc., can be used for the cost estimate of standard or scheduled items. Market rates can be obtained for non-scheduled items. The rates so obtained are filled up in the format as shown in Table 4.4. The cost is summed up for all the items. Let it be X.

 

Table 4.3 Details of measurement form

A margin of 3 per cent to 5 per cent of X is added for contingencies, unforeseen expenditure, changes in design, changes in rates, etc., which may occur during the execution of work. A margin of 1½ per cent to 2 per cent is also added to meet the expenditure of work-charged establishment1. The grand total thus obtained is the estimated cost of work. For large projects, a margin of 1 per cent to 1½ per cent of the estimated cost is provided in the estimate for the purchase of tools and plants that will be required for the execution of work. Normally, the contractor has to arrange and use his own tools and plants.

The detailed estimate is usually supplemented with (1) report or history, (2) detailed specification, (3) drawings such as plan, elevation, sectional elevation and site plan, (4) calculation and designs, and (5) analysis of rates. Clients prepare detailed estimate for getting the sanction of the competent authority. The estimate is also required to be prepared for the bidding process. The detailed cost worked out is used to compare and evaluate the rates quoted by bidders.

4.3.5 Client’s Definitive Estimate

Most contracts have an escalation clause and invariably, some additional items of work and deviations from specifications are involved, and all have financial implications. Therefore, it is important that the estimation process continue into the execution stage, when the client’s cost accountant, based on information from the site, analyses actual payments made and deviations from original estimates, and predicts the final cost of a project incorporating prevailing cost trends. When the project is 70 per cent to 80 per cent complete, a reasonably definitive estimate can be prepared, including the detailed estimate of work quantities that also takes into account deviation orders and anticipated final bills of the contractors and suppliers. It should be noted that such estimates obviously exclude payments that may be made at a later date on account of disputes, claims, etc.

 

Table 4.4 Abstract of estimated cost or bill of quantity

4.3.6 Revised Estimate

It is always possible that in spite of all precautions in the planning stages, it becomes clear during execution that the actual cost of a project will exceed the original estimates. Now, generally a certain cushion (say, 10 per cent) of the cost is available; if the exceedance is higher, fresh estimates are prepared with appropriate justifications for financial approvals from competent authority. It is prepared on the basis of estimate on which sanction was obtained, showing the existing sanction and the progress made up to date. The revised estimate should be accompanied by a comparative statement showing the original and revised rates and quantities, along with variation and the reasons of variations for each item of work.

4.3.7 Supplementary Estimates

There is always a likelihood that while executing a certain project, it may be considered worthwhile to carry out additional work, which was not foreseen in the initial stages and, therefore, not accounted for in the preliminary estimates. Execution of such works requires drawing up and approval of supplementary estimates, and the exercise is essentially similar to that of drawing up the estimates for the main work. It is naturally expected that the costs of such additional works will be much smaller than the main works. The abstract of such estimate should show the amount of original estimate (X) and the total of the sanction required (X 1 Y) including the supplementary estimate (Y).

4.3.8 Project Closure Cost

Upon completion of a project, the final bill prepared by the contractor is closely scrutinized by the client and the consultant/cost engineer, and this scrutinized bill along with documents in support of actual cost data is used to prepare the final estimate of project costs, excluding unresolved disputes and claims.

4.4 METHODS OF STRUCTURING PROJECT COSTS

The cost estimate, prepared by a client during the planning stage, generally follows a structured approach. The structure of this estimate takes many forms. These forms vary with the nature of the project, the type of contract, the company policy, the type of contract and the client requirements. The three typical well-known forms in structuring estimation items in the United States, besides the one used predominantly in India, are given in Table 4.5.

In particular, the bill of quantities of a detailed estimate can be suitably divided under the heads given above. In the bid estimates, the contractor-quoted price includes direct and indirect costs and profit margin suitably distributed across the various items of the bill of quantities.

4.5 ILLUSTRATIVE CASES IN PREPARATION OF ESTIMATE

4.5.1 Case1: Multi-level Car Parking Facility

A municipal body of the country is planning to construct a multilevel car-parking facility in a locality. The study constructed in the locality suggests the requirement of parking facility for about 1,000 car units. Further, there is a requirement of parking space for about 400 two-wheelers.

Usually, such estimates are accompanied with the description of need for the project. The need for this illustrative project is stated thus:

Increase in number of vehicles and stringent parking regulations coming into force are making parking in public areas and in new upcoming projects a very important design consideration. Solutions are required to create sufficient parking areas to enable maximum cars to be parked safely, in minimum time and in minimum land area.

The municipal authority has proposed the preliminary estimate on plinth area basis, which is shown in Table 4.6. This estimate has also been used to obtain administrative and financial approval from the competent authority. The schematic sketch of proposed parking is given in Figure 4.1 and Figure 4.2.

 

Table 4.5 The prevalent structured approach

The schematic diagram (Figure 4.1) provides only the entry and exit schemes of the proposed car park, besides providing the overall area involved in the project. The designer at this stage is familiar with broad specifications of the project and he would also know the preliminary scheme of car parking. For example, at this stage he is expected to know the number of levels in which cars will be stacked (Figure 4.2) and, thus, the construction height involved in the project. Based on the broad specifications and the preliminary sketch, the quantities are worked out and schedules are referred to in order to arrive at the project cost. The preliminary plan and sectional drawing shown in Figure 4.1 and Figure 4.2 form the basis of plinth area calculation, which is the basis of estimate preparation at this stage. The plinth area calculation for this example is given in Table 4.6.

Now, based on the plinth area calculated above, the broad specification for the project can be laid out, and on basis of CPWD plinth area rate as on 01.10.2007, the estimate can be prepared. The estimate is made in two parts—for schedule items and for non-schedule items. While the rates for schedule items are readily available in the schedule of rates, the non-schedule items are estimated based on the market rates prevailing at the time of preparation of estimate.

The estimate for schedule items is given in Table 4.7. The estimate contains the following major parts:

RCC Frame Structure

The total area for RCC frame structure is 16,000 m2, and the corresponding rate given in schedule of rates is Rs. 18,035/m2. On this base rate, the provision for mastic asphalt in the basement, earthquake resistant design and stronger structural members to carry heavy loads are to be added. Further, the schedule specifies additional cost provisions for modules over 35 m2 (which in our case is applicable), and for additional heights above 3.35 m (this is again applicable in our case), and accordingly, these provisions have been kept as given in Table 4.7.

 

Table 4.6 Plinth area calculation

Figure 4.1 Layout of car parking

Figure 4.2 Cross section showing different levels of car parking

Table 4.7 Preparation of estimate for schedule items based on C.P.W.D. PAR–2007

Fire Fighting, Automatic Fire Alarm System and Pressurized Mechanical Ventilation System

The estimate for fire fighting is based on plinth area of 16,000 m2 and the applicable schedule of rate is Rs. 450/m2. Similarly, automatic fire alarm system and pressurized mechanical ventilation system in the basements with supply of exhaust blowers are based on PAR-2007 and the applicable rates are Rs. 300/m2 and Rs. 50/m2, respectively.

 

Table 4.8 Preparation of estimate for non-scheduled items

Services Such as Internal Water Supply and Sanitary Installation, External Service Connection, Internal Electric Installation and Quality Assurance

The schedule of rates specifies a certain percentage of total cost obtained from the above two heads. In case there is a basement involved in the project, the percentages are reduced to 50 per cent of the given percentage. Thus, for internal water supply and sanitary installation, 50 per cent of the specified 4 per cent of the subtotal cost given at Sl. No. (C) of Table 4.7 is taken, which is equal to Rs. 15,579,977.00. Similarly, other estimates have also been derived. A provision of 1 per cent of cost mentioned at Sl. No. (C) of Table 4.7 is taken for quality assurance.

Lifts

Four passenger lifts of 20 persons capacity are envisaged for the project, and the unit rates as mentioned in the schedule of rates are taken for estimate preparation.

Water Tanks

For estimating the cost of water tanks, the volume of the tanks is computed in an approximate manner by means of approximate knowledge of the length, breadth and height of the tank. The schedule of rates provides the rate on per-litre basis (Rs. 9/l as per CPWD PAR-2007).

The estimate for non-schedule items is given in Table 4.8. There are only two items—automatic parking system and Qualideck PU flooring. In order to arrive at the market rates for these items, the broad specification must be frozen. For example, the level of automation, the time of retrieval, the level of automation, the security system, etc., would be required for estimating the cost of an automatic car-parking system. Market rate at this point need not be based on formal quotation. One can give reference to the various discussions with manufacturers and installing agencies, as well as the actual costs of similar systems in other nearby projects. Too much emphasis should not be given on the discussion held with a single agency; one should use his own judgement to arrive at an appropriate estimate.

The abstract of cost estimate for Multi Level Car Parking Facility is presented in Table 4.9. The sum total of estimate of schedule items is taken from Table 4.7. The cost index prevailing as on the date of preparation of estimate is added in the sum total of schedule items. For this case, cost index value of 20% has been assumed. The sum total of estimate of non-schedule items is taken from Table 4.8. The total cost of schedule items, increase on account of cost index, and the total of non-schedule items have been summed up in Sl. No. 4 of Table 4.9. On this a contingency amount of 3% of total cost is added to arrive at the estimated project cost of Multi Level Car Parking Facility (See entry at Sl. No. 6 of Table 4.9).

 

Table 4.9 Abstract of cost estimate for Multi Level Car Parking Facility Project

S. No. Item of work Amount (Rs.)

1

Schedule items estimated on the basis of PAR-2007 (Sl. No. (E) of Table 4.7)

885,381,214.90

2

Add prevailing cost index (say 20% over PAR-2007 estimate) as on the date of estimate preparation

177,076,242.98

3

Total of non-schedule items based on the market rate (Sl. No. (F) of Table 4.8)

317,600,000.00

4

Total (Sl. No. ± 1 Sl. No. 2 ± Sl. No. 3)

1,380,057,457.88

5

Add 3% contingency on Total at Sl. No. 4

41,401,723.74

6

Total estimated project cost for Multi Level Car Parking Facility (Sl. No. 4 ± Sl. No. 5)

1,421,459,181.62

4.5.2 Case 2: Preliminary Estimate for Construction of Sewage Treatment Plant

Let us take another example project of construction of a sewage treatment plant. The plant is to treat the sewage generated from a township, and the estimated capacity of the plant is 2 MLD. For illustration, let us prepare the preliminary estimate only for civil works associated with the sewage treatment plant. The preliminary design envisages the structures/utilities as given in Table 4.10. The plan for the sewage treatment plant is given in Figure 4.3. The estimate is prepared in three major heads (see Table 4.11):

 

Table 4.10 Summary of civil works

Figure 4.3 Layout of sewage treatment plant for a township

Table 4.11 Abstract of cost estimate for civil works for a sewage treatment plant

Load-bearing Construction

These items are estimated based on the total plinth area of load-bearing construction. The project envisages construction of single-storey quarters of Type I, Type II and Type III, and servant quarters of floor height 2.90 m. The plinth area rate specified for such construction, based on PAR-2007, is Rs. 6,390/m2.

Water Tank

A large number of water tanks are required in a sewage treatment plant. The sizes are fixed based on the preliminary design available at this stage. Based on the preliminary sizing, the volumes of each of the tanks are calculated. The schedule of rates provides per-litre rate (Rs. 9ℓ based on PAR-2007) for such construction.

Development at Site

Under this head, internal roads, horticultural works and area lighting in plant area have been considered. While per-square-metre rates are available in the schedule of rates for internal roads and horticultural works, for area lighting a lump-sum cost has been assumed.

A cost index of 20 per cent is assumed as on the date of preparation of estimate and, accordingly, the total cost of the above three heads has been increased by 20 per cent. A contingency value equal to three per cent of the total cost is also added to get the estimated cost of the project as shown in Table 4.11.

REFERENCES

 

1. Chitkara, K.K., 2006, Construction Project Management: Planning, Scheduling and Controlling, 10 reprint, New Delhi: Tata McGraw-Hill.

2. Choudhary, S., 1988, Project Management, New Delhi: Tata McGraw-Hill.

3. Datta, B.N., 2008, Estimating and Costing in Civil Engineering – Theory and Practice (Including Specifications and Valuations), Ubs Publishers’ Distributors (p) Ltd.

4. DSR 2007, Central Public Works Department – Delhi Schedule of Rates 2007, Jain Book Agency, New Delhi.

5. PAR-2007, Central Public Works Department, Plinth Area Rate, Jain Book Agency, New Delhi.

SOLVED EXAMPLES

Example 4.1

Derive the rate per cubic metre for providing and laying in position cement concrete 1:2:4 (1 cement: 2 coarse aggregate: 4 graded stone aggregate 20 mm nominal size) for all work up to plinth level excluding the cost of centering and shuttering.

Solution

The approach adopted here for the analysis of rate is mostly adopted by government departments for small jobs or projects. The labour and material coefficients per m3 or per 10 m3 are specified along with the rates of material and labour as on the base year of the schedule of rates. The coefficient for material carriage is also specified in them. The working for this example (see Table S3.4.1) is based on per m3 basis according to the Delhi Schedule of Rates for the base year 2007.

 

Table 4.1.1 Working of rates for 1 m3 of cement concrete

REVIEW QUESTIONS
  1. State whether True or False:
    1. Estimating costs in construction projects is a very complex process due to the inherent interactions and interdependence involved and the absence of standard norms.
    2. Number of occupants is the basis for preparing preliminary estimate of a building project.
    3. The preliminary estimate of roads and highway projects is prepared based on per-kilometre basis and nature of classification of the road.
    4. For irrigation projects, the preliminary estimates are prepared based on the length involved.
    5. The preliminary estimate of bridges and culverts is prepared on the basis of the span of structure.
    6. The preliminary estimate for sewage and water supply projects is on the basis of per head of population.
    7. The preliminary estimate of overhead water-tank project is prepared on the basis of capacity of tank.
    8. Methods for preparing preliminary estimate of industrial structures are—plinth area method, cube area estimate and approximate quantity method estimate.
    9. Methods for preparing preliminary estimate of buildings are—ratio method, investment per annual t capacity, turnover ratio and capital ratio, and six-tenth factor.
  2. Match the following with proper options.
  3. Prepare a preliminary estimate of a school building proposed to have 10 classrooms and a total of 500 students.
  4. Why client’s estimate of cost differs from that of contractor’s? Identify which estimate is more critical, and why?
  5. Give a detailed account of different methods involved in preliminary estimate of cost involved in a building project and an industrial project.
  6. Define capital ratio and turnover ratio. How is it helpful in preliminary estimate of cost of an industrial project.
  7. Identify different stages involved in a construction project and give a detailed account of types of cost estimate associated with each stage.
  8. Visit a construction site and get the project’s drawing and specification for that project, and on the basis of this, prepare a detailed client’s cost estimate? Compare your estimate with the client’s prepared cost estimate.
  9. Why is the revised estimate necessary?
  10. What are the different factors that determine the form of structure of an estimate?
  11. What are the different types of costs involved in a project, and how is the overall project cost calculated? Taking an example of a project you are working with or are familiar with, give the rough way of working out how the overall project cost was derived.
  12. What is preliminary estimate? Explain its process.
  13. Write short notes on detailed estimates.
  14. Derive the rate per cubic metre for 1:5:10 cement concrete in foundations with brick ballast 40 mm size.
  15. Derive the rate per cubic metre of 2nd class brick work in foundation with 20 cm x 10 cm x 10 cm nominal size with cement sand mortar 1:6.
  16. Derive the rate of one MT of reinforcement cost including cutting, bending and tying all complete. Assume any suitable data required for deriving the rate.
  17. Derive the rate of one square metre of shuttering/centring to be done for wall, column, beam and slab. Assume any suitable data required for deriving the rate.
  18. Derive the quantity of materials required for producing one m3 of cement concrete 1:4:8 in foundation. Assume total dry mortar for 1 m3 of cement concrete 5 1.54 m3.
  19. Derive the quantity of dry materials required for producing one m3 of brick masonry in cement sand mortar. Ratio 1:5. Assume total dry mortar required for 1 m3 of brick masonry 5 0.30 m3.