5 Construction Estimate Mistakes to Avoid
Be Wary of These Common Errors in Construction
However, taking the time to prepare a thorough and accurate estimate is critical. An estimate that is too high will make your bid less competitive, while estimating too low can take a toll on your profits and the growth of your business.
What are some of the most common mistakes in cost estimating, and how you can prevent them?
- Failure to visit the project site. This may seem obvious, but this step is often overlooked by contractors who are either inexperienced or overly confident and assume that a particular job is cut-and-dried. However, visiting the proposed job site is crucial because it lets you check things that might not be obvious on paper, such as:
- Topography, and whether grading or drainage is an issue
- Whether existing structures have to be demolished or removed from the premises
- Proximity to supply centers and sources of labor
- Access to the site, and whether the roads/access routes can handle heavy vehicle traffic
These are just some of the issues that may not come to light unless you visit the project site before preparing your estimate.
- Overlooking less-obvious costs. “Soft costs” like permits and inspection fees are frequently left out of estimates, and these can add up to thousands of dollars. There are also less-obvious costs like temporary power, dumpsters, and site prep. Even forgetting to add tax to your materials estimate can cost you plenty.
Your best bet to avoid commonly overlooked costs is a good checklist and detailed plans and specifications. These are available as paper forms, but mobile apps make construction estimating more accurate and efficient. Some mobile job estimators, for instance, will do the math for you, so you don’t have to tally countless rows of services and materials — and risk leaving off something important. And unlike complicated estimating tools that you have to purchase and install on your computer, apps are much less expensive and easier to get up and running, and ideal for reluctant and savvy technology users alike.
- Job site surprises. Even if you visit the project site beforehand, some surprises are bound to crop up. Sometimes water or insect damage or structural issues aren’t apparent until you’ve started the job.
While there’s no way to totally avoid these unwelcome surprises, your construction bid should include both the probable scope of work as well as a reasonable pricing structure for the unknown portions — for example: X dollars for each linear foot of floor joist that needs replacement, or X dollars to install a sump pump if conditions require one. The idea is to list specific prices for specific conditions rather than having an open-ended time-and-materials contract.
- Underestimating labor costs. Labor is one of the most difficult costs to estimate. For one thing, you need to consider not only how many hours and workers the job requires, but also the workers’ experience and whether subcontractors will be needed. And, since hourly rates for construction workers vary throughout the country, you’ll need to verify current wage rates and fringe benefits for the building trades involved through local union offices, other contractors, supply yards, and other reliable sources. Don’t forget to include possible overtime rates.
- Not checking your numbers. Even if you’re sure you’ve got the right rates, measurements, taxes, etc., you should check and double-check your numbers before submitting your estimate. Common mistakes in this area include:
- Math errors. Again, mobile apps can lower your risk of making a mistake. At the very least, use a calculator or have the calculations checked by another person.
- Measurement errors. Taking the wrong measurements and dimensions from plans, drawings, and specs results in corresponding mistakes in the cost of materials. Consider using an app to calculate measurements, and have another person check your work.
- Using incorrect units of measure (for example, square feet instead of square yards) can result in substantial cost increases or decreases.
Technologies like mobile apps can assist in the construction cost estimating process by tracking the description of work and doing the calculations for you, among other things. For more tools that can help you save time and improve safety on your job sites, download our latest eBook, Your Guide to OSHA’s Construction Safety Regulations.