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200468 - Construction Cost Estimation

   

Added on  2020-03-01

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CONSTRUCTION COST ESTIMATION 1CONSTRUCTION COST ESTIMATIONBy (Student’s Name)CourseInstructorInstitutionCity and StateDate

CONSTRUCTION COST ESTIMATION 2IntroductionAccurate estimation of construction cost of a project is extremely paramount in the initial construction stages to ensure the project fits the budget of the client or the scheme drawn by the project designers. (Barmeyer and Franklin, n.d., P. 430). One of the major factors that affect construction cost estimation is the financial position of the client. This important factor would help to gauge the design and plan prior to construction work. The progress of construction sites heavily rely on this key factor. Conceptually, financial factors are categorically placed into three; the economic climate, competitors, and contract methods (Layer, 2003, P. 67). These methods are broadly discussed below.Financial factors affecting construction cost estimationEconomic climateThe state of economy is a key element to consider before establishing a cost estimate for a project. Most economies are striken by high inflation rates that affects the costs of construction materials. Additionally, inflation determines the lending rates and maximum borrowing limits of clients with a view to complete a project. As a designer, one should develop a cost estimate with knowledge of possible increase in prices (Wang et al., 22013, P. 98). To play safe, adding a reasonable percentage to the total cost would be ideal. Proper economic climate helps project managers allocate sufficient costs and budget in the project under execution.CompetitionAuthors Kurth, Winter and Pospichal (2015) argue that contractors are faced with stiff competition in their area of expetee. This affects the cost of the project. Morequalified contractors attract a competitive pricing mechanism lowering the cost of construction. Contractor’s bidding would significantly reflect the quality of work expected. The lesser the bid, the lower the quality. However, a very high bid does not always act as an assurence of the best quality (Ariaratnam & Rojas, 2009, p. 103). To

CONSTRUCTION COST ESTIMATION 3obtain a competitive bid it is important to allow discretion in bidders pricing of the project. It is also helpful to draw and specify the quality expected to the contractors. However, being flexible allows them opportunities to make choices of approaches, personnel, and materials. Specifications are key in determining the degree of competition by eliminating those who do not qualify the stated design. Openess alllows a graeter pricing for an effective cost estimate.Contract methodsContract methods have an impact on estimating construction costs. Factors such asthe degree of specialization required , time needed to complete the project, and thecost of materials affect cost. Different projects have different levels of complexity anddetails (Cai, 2012 P. 199).For example, there will be a variation in costs betweenconstruction of a school cafeteria and a five star hotel. Basically, projects are controlledwith three variables which are level of quality, size of the building, and total cost of theproject. High quality flexes prices. Therefore clients should decide on quality, size,and costs (AI-Mashta, 2011, p. 15). Variance analysis is important since it helps projectmanagers in understanding all sources of variances and hence coming up with propermethods of preventing inefficiencies from occuring. Industrial case scenarioStones River Apartment ComplexStones River Apartment Complex was constructed by J &S Construction Company for a period dating May 2011 to March 2012 under the supervision of Maffett Loftis as a mechanical and electrical engineer, and Huddlestone Steele as the civic engineer who oversaw landscape architects. The project costed $ 1.2 million (Parker, 2014, P. 422). Stones River is a 9 unit apartment building whose foundation was reinforced using concrete, and slab. It covers 7,548 square feet on a 1.5 acre piece of land. The walls were constructed using bricks and the roof is made of asphalt shincgle material. The building is energy efficient and environmental

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