In this article, we’ll take a look into the processes of construction cost estimating and project scheduling and highlight their importance and key considerations. These processes are typically conducted during the preconstruction phase and lay the foundation for successful project outcomes.
Embarking on a construction project without a clear understanding of the costs involved or a well-structured timeline is like sailing into uncharted waters without a compass or a map. Before any construction work can begin, it’s important to accurately estimate the associated fees and develop a detailed timeline to ensure smooth project progression.
Introduction to Construction Cost Estimating
Let’s say your dream is to build a trendy, new shopping mall from the ground up. To turn this vision into reality, accurate cost estimating becomes vital. But what exactly is it? It’s similar to creating a financial plan for anyone launching a new business. Essentially, it’s the process of forecasting the potential expenses associated with a construction project.
A professional project team would have a skilled cost estimator on board, diligently analyzing every aspect of your project. They would calculate the cost of each component involved in the construction of your shopping mall, from the cost of the cement for the parking lot, to the steel beams for the building structure. Let’s break down these components:
- Market Survey: You and the project team will typically conduct a comprehensive analysis of current market conditions. This involves researching labor availability, material costs, and industry trends using databases such as RSMeans to verify construction estimates and create project budgets. By understanding the market, you can assess potential challenges and opportunities that may impact your total project costs.
- Material Costs: Material costs are then broken down meticulously. For instance, you’ll want to estimate the number of bricks needed for the walls, the amount of glass required for the storefronts, and the volume of wiring needed for electrical systems. Construction takeoffs provide a list of all the materials necessary to complete a project and their associated costs. Evaluating these expenses means accounting for quality, quantity, and availability. This step ensures that your project’s foundation is built on reliable and cost-effective materials.
- Labor Costs: Consider the talented architects and designers who will help bring your project to life. Hard costs include the wages for construction workers. Soft costs include the fees for architects and engineers who will design the building, and the costs associated with obtaining the necessary permits for construction.
- Equipment Costs: Next, an estimator will help you calculate the cost of construction equipment. This involves the expenses related to equipment rentals, purchases, maintenance, and fuel. For example, the cranes for hoisting materials or concrete mixers for creating the building’s foundation.
- Overhead Costs: Overhead costs such as insurance, utilities, and project management fees are considered as well. While they may not be front and center, they help move your project forward and form an integral part of your total budget.
- Contingency Allowances: Finally, lenders will require you to allocate a percentage of the estimated costs as a contingency fund to ensure that you have a safety net for unforeseen events or scope changes, such as unexpected delays due to weather or increased costs due to supply chain issues.
By providing an accurate estimation of the project cost, you can make informed decisions, secure financing, and ensure the feasibility of your dream. This means assessing whether or not your shopping mall is realistic, profitable, and worth investing your time and money into.
Keep in mind, this is the general process for construction cost estimating once plans have already been drafted. If there are no plans in place, and you would like to get a cost estimate, that would be considered a predevelopment budget or a preliminary estimate. This would then require a whole new process, with a talented project team that has the necessary skillset, to give you an idea of what your projected costs will be.
A Brief Guide to Project Scheduling
However, cost estimating is just the beginning. Once you’ve decided that your dream is feasible, you will need a detailed schedule, or timeline, to ensure your shopping mall is completed on time and on budget. Without one, chaos would ensue in the form of missed deadlines, cost overruns, and unhappy stakeholders.
Generally, project scheduling is like organizing a grand opening event. It involves planning out the sequence of tasks needed to complete the shopping mall in a timely manner. This process begins with identifying the critical path, which determines the sequence of events according to the activities that are the most time-sensitive and have the most impact on the project’s timeline.
Ideally, you have a project manager creating this timeline for you. They align the project schedule with key milestones, such as the completion of the structure, interior finishing, or parking lot paving. They also take into account factors like cash flow, resource availability, and long lead times, which allows them to efficiently distribute resources, coordinate different construction teams, prioritize tasks, and prevent potential delays. The key aspects of project scheduling are:
- Project timeline creation: A detailed project timeline outlines the start and end dates for each construction phase. This allows for the smooth coordination of different trades and efficient resource allocation.
- Cash flow forecasting: Accurately predicting the inflow and outflow of cash throughout the project ensures proper financial management and prevents delays due to funding shortages.
- Cost control measures: Implementing strategies to monitor and control costs helps keep track of expenses, manage change orders, and adhere to the approved budget.
- Alignment with project milestones: Aligning the project schedule with critical milestones is crucial for timely completion and effective communication with stakeholders.
- Long lead times and material procurement: Early identification of long lead times for certain items, like special-order fixtures for the storefronts, is crucial. By staying ahead of these procurement challenges, project managers can keep construction activities on schedule.
Essentially, just like cost estimation, a thorough project schedule is fundamental to the construction of any project, be it your dream shopping mall or any other building. Together, these two elements form the backbone of successful construction management.
Overall, construction cost estimating and project scheduling are vital processes of commercial construction management. Accurate cost estimation lays the groundwork for informed decision-making, while effective project scheduling ensures timely completion and cost control.
At SCGWest, we understand the significance of both disciplines and seamlessly integrate them into our services to deliver successful project outcomes. If you’re in need of an expert in project and construction management to help you build your dream, contact us today!