Experts and specialists estimate construction costs on a daily basis and are well-informed about the costs and measures with full accuracy. Whether contractors, construction supervisors, or property developers, they have a huge workload and brain to put at. Why add multiple work streams when the same could be outsourced and done at a much lower cost.
Quantify North America is emerging as a leading construction estimating company in North America and establishing its name by delivering the best estimating services to their clients.
Outsourcing comes with a complete package of supporting business services including hiring the right professionals for various jobs with specific skill sets, maintaining a smooth flow of integrated services, financial requirements, and technical support.
By outsourcing construction estimating, these construction companies control costs and slope up revenue graphs.
However, before finalizing an outsourcing company, construction organizations must be crystal clear about the goals and targets they want to achieve through it and of course the timelines are crucial to be decided at the beginning only.
A standard construction estimation covers all dimensions – from the objective, to all remuneration aspects and required human resources; everything is well-sketched out in it to eliminate any additional cost in the future as the project progresses.
Detailed 7 Reasons ‘Outsourcing Construction Estimating’ is Must
By now we have understood that outsourcing construction estimating is essential, let’s talk about the reasons in detail why one must outsource it. Rather than building an in-house estimation department or team.
1. To Get Specialised Services:-
The firms and organizations performing outsourcing construction estimating services have the best teams of experts and professionals with years and decades of experience in estimating costs and resources.
They are well-versed in building estimation of all kinds of construction sites whether residential, commercial, factories, or manufacturing units.
All these specialists are particularly qualified (Certified Professional Estimator (CPE) program or Associate Estimator Estimator Professional (AEP) program)in estimating construction costs, and hold the certificate to practice the same publicly, accurately, and with honesty.
For example:- Dealing with Legal Work: Construction projects and building structures with excellence could be your forte but when legal understanding is required that could add on to the cost of the project (which is included when you outsource construction estimating from specialists).
2. Technical Services:-
Nowadays, the construction industry is not merely limited to labour and material but requires IT services (Information Technologies), technology experts to develop and run applications needed at the time of on-going job.
These applications or software used by these technical experts enable accurate budget estimation and aligning the release of payments at each milestone as the project progresses. Now, AI introduction is enabling even more complex data estimating.
For example:- Construction contractors have to do a lot of paperwork, get permissions and approvals from respective authorities, NOCs (No Objection Certificate), etc. All these costs are forced on the construction contractors as a package of projects.
While outsourcing construction estimating, the estimator does take these technical and all sorts of costs that will occur in the future.
3. Cost and Time Efficiency:
So, the take-off quantities estimation even before the actual construction begins could take a toll on you if you are managing the construction estimation on your own. Or you have an in-house estimation department or team, you have to manage them, ask for updates and progress simultaneously, and pay a higher cost to maintain that. Which is cumbersome, tedious and ineffective.
Still think you are saving money and energy by not outsourcing your construction estimating? Then you are a bit mis-led.
4. Determine Estimated Material and Labour Requirements and Cost:-
Other than recruiting specialists and technical experts, Outsourcing Construction Estimating also assists in determining cost of material and labor. Material and labor are the most important, hence should be carefully estimated to avoid any future cost add-ons.
Here are the essentials steps followed by third-parties while estimating material and labor cost elements-
–Thoroughly examination of the project blueprints:– Drawings and blueprints of the project are examined before determining the estimated material quantity, labor units, and their respective per unit cost as per the standards.
–Take-off Quantities:- Here the unit costs are estimated by breaking down the entire project into small pieces and milestones like foundation, floors, rooms, walls, etc.
And this is performed by using measurement techniques such as liners feet, square feet, cubic yards etc. (selecting the best measuring technique and tools is important to maintain accuracy.
–Material Cost Estimates:- After determining the material requirement basis the drawings, cost estimation becomes straight. Multiply the unit required of the material with the per unit cost of material after taking into consideration factors like- delivery costs, inflation, market trends, future price fluctuations, and contingency cost related to materials.
All these should be estimates and calculations should be backed with data from government, independent agencies, and public interest research.
Formula,
Estimated Material Cost = Estimated Units of Material required x EstimatedUnit Cost of Material
–Labor Cost Estimates:- Labor cost estimation includes quite diverse areas beginning with identifying the type of labor required based on the kind of construction work it is. Then rates are determined (rates should include labor welfare elements as well such as – allowances, insurances, benefits, etc.)
Below is the representation how labor cost is calculated-
Formula,
Estimated Labor Cost = Estimated Units/Number of labor x Estimated
Per hour Cost
However, there are differences in rates depending upon the nature of work and the market conditions at the time of estimation.
5. Getting multiple jobs by focusing on bidding rather than focusing on estimating:-
Opportunity Cost of self-estimating construction estimating is huge as compared to outsourcing it third-party. The data reflects that $200,000 is the average opportunity cost per month that a contractor has to let go off by estimating construction cost on their own.
Imagine the time consumed while doing that estimation! Not only it cost money and time but it also lost many job opportunities that could have been acquired in a bid at the same time and expanded in the market.
By now we must have understood that construction estimating is not an easy task, it requires focus, full attention, and exclusivity from distraction. However, construction contractors are needed at multiple places. Hence, leads to interruptions and breaks in the estimating process, leading to delay and loss of opportunities.
Below stated are some of the areas to emphasis by outsourcing construction estimating:
– Lead Multiplication:– The ratio of bidding to actually landing a bid is 1:10 for construction contractors in the construction industry. Now rethink, if you are investing your time in estimating construction cost on your own means reducing the chances even more.
So, outsource construction estimating and redirect your efforts towards lead generation either organically or inorganically through Google ads or cold emailing to potential leads.
Increased chances of winning a bid increases when you have a good number of leads to select from to maximize profitability.
– Request assistance from estimating agencies and experts:- One there is a pool of bids to select from, choose the best ones and outsource to third-party to maximize your time investment in generating leads converting to successful wins.
At the same time, the estimating process is also simplified by outsourcing the same. Now have to review, verify, suggest changes if not aligned otherwise finally approve the estimating cost performed by a third party.
- Include estimating cost in project cost under Overhead cost:- Exactly, you get your construction estimating done for free if you determine the elements of your estimation with caution.
So, when you are quoting the price of the entire project at the time of bidding, along with labor, material, salaries, legal fees, wages, transportation, etc. include estimating cost as well under Overheards and get your construction estimation done for free.
6. Developing Communication between multiple stakeholders:–
The moment a contractor steps in the business of construction, starting with lead generation to finally delivering the project; have to deal with multiple stakeholders.
Whether architects, engineering, human resource managers, recruiters, project managers, supervisors, finance officer, government bodies, public authorities, etc.
Estimator (to whom the contractor outsources the construction estimating) acts as a link between these stakeholders and the contractor. Not only it helps in smooth communication amongst these entities but also saves time to invest in other important works.
In the entire process from drawing the designs to finally delivering the projects, contractors can primarily be focused on delivering top-notch quality of work.
7. Outsourcing construction estimating agencies focus equally on the four pillars of cost estimation:-
Yes, construction estimation requires a balance and blend of four crucial pillars, they are comprehensiveness, accuracy, credibility, and documentation in the process.
–Comprehensiveness:– This check particularly centres around ensuring that inclusion of all elements required to bring the project to existence.
–Accuracy:– There are market changes happening at a very fast pace, prices are sky-rockating in months, inflation impacts the costs of every element of construction costs.
So, while outsourcing construction estimating to third-party agencies, ensure to cross-verify the data used to back the estimation (it should be reliable and accurate to the market standards at present and align with future requirements too).
–Credibility:– Builders and construction contractors have a budget allocation for a particular project but not the precise estimated cost allocation details against them. Here comes the expertise of outsourcing construction estimating agencies to get personalised and expertized assistance from.
Prior to accepting the estimation, ensure that it is reasonable, believable, and have followed be developed as per the best practicing standards of the industry.
–Documentation and Proofs:– All the aspects of the estimation should be clearly stated, backed with data, and should quote the sources of acquiring material, recruiting technical professionals and specialists, labor, and other human resources. And clearly stated the estimations against each separately.
Conclusion
Outsourcing construction estimating should be the ultimate companion for every construction contractor if your objective is to establish a name in the business.
Outsourcing estimating brings budget and objective in a sync,and ensures accuracy, reliability, and credibility in the cost determination. Nowadays, these outsourcing agencies are making it possible for contractors to solely acquire more bids in the market without any distraction or deviation.
Redefining and simplifies the workload of a contractor altogether.
If you are still overburdening yourself with in-house estimating or performing self then you are losing the job opportunities u could have landed.
Whether you are into residential construction, commercial construction, civils projects, industries, or remodeling projects, Quantify North America should be your first choice to make your journey of construction estimating our priority.
