Accurate construction estimating is an important part of any successful construction project. A mistake in estimating can lead to financial consequences, including cost overruns and project delays that affect timelines, budgets, and client satisfaction. Avoiding common construction estimating mistakes can help construction professionals stay within budget and meet project goals.
Let’s explore eight common pitfalls in construction estimation, how to avoid them, and how tools like estimating software, clear communication, and careful planning can help achieve more reliable cost estimates.
Accurate cost estimating is important in any construction business, whether building residential homes, commercial properties, or infrastructure projects. Construction estimators calculate the costs involved in a project by considering labor, materials, equipment, overhead, and other expenses. When they make mistakes, it can lead to serious issues, including unanticipated costs and financial losses. Here are the most common construction estimating mistakes and how they can be avoided by adopting best practices and leveraging technology.
One of the most significant mistakes estimators make is not thoroughly understanding the site conditions before estimating project costs. Site conditions can vary greatly depending on the location and factors such as soil quality, weather conditions, and existing infrastructure. Failing to include these variables can lead to inaccurate estimates and unexpected costs.
To avoid this, estimators should conduct a comprehensive site assessment early. With this information, estimators can make more informed decisions about the materials and labor required, reducing the risk of cost overruns later in the project. Construction companies should carefully review site conditions and factor them into cost estimates.
Estimating labor costs can be challenging because estimators must anticipate the number of workers needed, their skill levels, work hours, and productivity rates. Many estimators underestimate the amount of required labor for a project or fail to account for the complexities of the work.
For example, specialized tasks may require skilled labor, which could be more expensive than general labor. Failing to account for potential overtime or the effects of labor shortages can result in cost overruns.
That’s why it's important to understand the labor market, the type of work required, and how long the tasks will take. Estimating labor costs accurately requires thorough planning and a working knowledge of industry standards. Estimating software can help streamline this process and ensure more accurate labor cost predictions. Cam Delahoussaye, Chief Estimator at Eleven Western Builders, Inc., emphasizes this point when discussing DESTINI Estimator. “The software enhances accuracy in estimating and standardizes processes, driving value for our team. And the data-driven approach empowers us to make informed decisions.”
Every construction project carries risks such as unexpected delays, price increases, or design changes. Failing to account for these risks can lead to cost overruns and project delays that could have been avoided. In addition, some risks may be out of the contractor's control, like sudden weather changes or material shortages. Luckily, there are strategies estimators can use to prepare for the unforeseen.
Adding a risk assessment to the estimating process allows preconstruction teams to account for these potential challenges. By setting aside contingency funds and planning for possible risks, estimators can avoid being caught off guard by unexpected costs. Risk management tools can also help preconstruction teams identify which project elements are most susceptible to cost variations so they can make adjustments.
Construction estimators often rely on material costs as an important part of their budget. However, changes in market prices, supplier shortages, tariffs, or inflation can cause material costs to fluctuate. Some estimators also make the mistake of overestimating or underestimating the quantity of materials needed, resulting in waste or shortages.
By using updated databases and being informed about market trends, estimators can accurately estimate the cost of materials and avoid unnecessary purchases. Estimating software can help automate the process and provide real-time updates on material costs.
A well-organized and detailed table of contents within an estimate allows easy navigation and reference. However, some estimators don’t create a comprehensive table of contents or structure the estimate correctly. This lack of clarity likely confuses and leads to missed or overlooked costs.
That’s why it's important to break down the estimate into detailed sections, such as labor, materials, overhead, and contingencies. A well-structured estimate provides an understanding of where funds are allocated and can be used to track costs throughout the project. This is especially beneficial for large-scale projects that require careful management.
Construction estimating is not a solitary task—it involves input from various stakeholders, including project managers, architects, subcontractors, and clients. A communication breakdown can lead to misunderstandings and inaccurate estimates. For example, if the design team doesn’t communicate changes to the preconstruction team, those changes won’t be reflected in the estimate. This will lead to discrepancies between the initial budget and the actual project costs.
Maintaining open communication during estimating is essential for ensuring accurate predictions and smooth project execution. Regular meetings and updates result in a collaborative approach, ensuring all parties are on the same page.
Historical data from past projects is an important resource for creating accurate estimates. However, some estimators don’t incorporate this information or rely too heavily on outdated data. Without historical data, estimators are more likely to miss trends, overlook potential challenges, or underestimate costs.
Using historical data from previous projects, estimators can learn from past mistakes and successes. The data provides insights into typical costs, timelines, and potential roadblocks. Estimating software incorporates historical data into the estimating process, which helps construction companies save time and improve accuracy.
Revisiting and revising estimates before they are finalized can avoid mistakes. Estimators should always carefully review their calculations, cross-checking numbers and assumptions. It’s also good practice to ask a colleague or another estimator to double-check the estimate to identify any errors they may have overlooked.
Also, regular revisions may be necessary as the project evolves. Changes in scope, design, or materials should prompt estimators to reevaluate the estimate to ensure it reflects the current project requirements.
Estimating software is an essential tool for today’s preconstruction professionals. Software solutions such as DESTINI Estimator are designed to streamline the estimating process, helping estimators avoid costly mistakes. These tools integrate various aspects of the estimating process, including labor, materials, and overhead, and provide more accurate and up-to-date predictions. By using advanced features like real-time data updates and historical analysis, construction companies can reduce errors and improve their estimating accuracy.
Accurate construction estimating is the key to the success of any construction project. By understanding common construction estimating mistakes and adopting best practices, construction companies can avoid costly cost overruns, delays, and errors. And when estimators combine proper risk assessment, attention to site conditions, accurate material and labor cost estimation, and leveraging tools like DESTINI Estimator, it will reduce the likelihood of mistakes.