Estimating Construction Costs Of Heavy Projects

Estimating Construction Costs Of Heavy Projects

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Every day, millions of people use or benefit from large infrastructure, with little or no thought as to how these conveniences came to be. People work in skyscrapers, travel to grandma’s house through the mountains and utilize a tunnel, and others will take a major highway to work. Most have gotten so used to these modern conveniences being in their near daily lives that they forget the planning and work it took to make these large pieces of infrastructure come to life. However, every highway, bridge, tunnel, and skyscraper, has a history behind them that usually beings with it a budget and many experts collaborating and planning. The beginnings of such things bring many different professionals together to estimate the cost of the engineering to be done.

The Important Role of Project Managers

When a large project must be started, project managers are set in place. These managers will start long before the first piece of dirt is dug and will stay with the project through its completion.

Project managers are responsible for making sure the project is meeting its objectives and staying on budget. They must be highly skilled and trained in many disciplines, including engineering, cost management, planning, scheduling, estimating, contract law, and negotiating. Project managers will work and coordinate with other departments within the project to expedite materials, secure permits and licenses, conducting meetings, writing management reports, and negotiating claims.

Another important part of the work a project manager will do is optimizing the manpower and delivery of materials for the project, as well as site layout. A proper and well-planning site layout will help maximize the budget and the manpower of a large building project. As the project gets underway, project managers will continue to coordinate all activities in and for the job site and help keep the budget on track. As the project is ending, managers will be required to close out the activities on the job site and negotiate claims for orders that require additional work and a portion of the budget.

Perhaps one of the most important roles of the project manager is to keep costs of the project within budget and even estimate that cost prior to building. The project manager must efficiently utilize labor, equipment, and materials.

Labor Costs

Productivity on the job site is often referred to as output per hour. Labor costs constitute a large portion of a project’s budget and is more easily influenced by management than other budget items, such as materials. Project managers can track, manage, and change labor productivity. Labor productivity is a measure of the total effectiveness of how the operating system is utilizing labor, capital, and equipment to convert the efforts to useful output. It is important to note that labor productivity is not a measure of the sole capabilities of labor. Purchasing a new piece of equipment, though it may be quite costly initially, can help decrease the number of labor hours, causing an increase in labor productivity.

Job site productivity can be affected by many factors, including the age and skill of the workforce, the leadership and motivation of the workforce, the size of the job and its complexity, accessibility of the job site, labor availability, climate, cultural characteristics, equipment utilization, and contractual agreements. Project managers must take all of these factors into account when estimating the labor costs of a new project to be completed.

Output of construction can be measured in constant dollars or in terms of functional units, such as units of product per labor hour, for example cubic yards of concrete placed per hour or the miles of a roadway paved per hour. The value of a large construction project is not determined by the benefit of the final constructed piece, but by the actual construction costs themselves.

Materials Management

Effective and successful project planning and control must include materials management. Materials are a large portion of the expenses of creating a new project. Project managers know that minimizing the procurement or purchase expenses can create an effective opportunity to reduce costs. If materials are not managed effectively, vast and unavoidable costs will created during a large construction project. If materials are purchased too soon, capital can be wasted on interest. Materials can even be stolen or begin to deteriorate in storage if purchased too soon. However, waiting too long can cause delays in getting necessary materials and delay the project and increase costs altogether. Getting the materials needed for a project within the perfect time frame is very important when it comes to the budget for a project.

Materials management decisions should be made during the initial planning and scheduling stages of a particular project. Large items, such as steel beams or elevators should be added to the procurement schedule early in the planning stages. If the project requires the use of large scale resources that are of critical importance or are in high demand, the project manager may want to begin procurement before even hiring a constructor, in order to reduce the delay of construction.

In fact, many project managers will use computer based systems to make the materials purchasing process consistent and complete. These systems allow the project manager to focus on other aspects of the job and leave the detailed record keeping to the software. Estimating the costs of a large scale construction project, such as a skyscraper or major highway can be quite the daunting task. However, with the right training, software, planning time, and resources it can be done correctly.


Reference Sources

http://pmbook.ce.cmu.edu/04_Labor,_Material,_And_Equipment_Utilization.html

http://www.metwashairports.com/file/Construction_Project_Cost_Estimator.pdf

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