The law of statistics assumes that if you bid more, you will win more. Without the right tools and processes in place, you run the risk of burning out your team. Cost estimating software makes it possible to bid more and win more without the burnout. Accurate cost estimation provides construction firms with competitive bids that ensure profitability.
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What is cost estimation?
Cost estimation analyzes many different factors of a project to forecast the cost to build a project. Owners and architects use cost estimation to establish an approximate budget for the project. On the other hand, contractors use cost estimation to develop bids for selection. When a contractor’s estimate on a project is too low, contractors run the risk of jeopardizing their profits. However, when a contractor’s estimate on a project is too high, contractors run the risk of non-selection.
What is the value of construction cost estimating software?
Because cost estimates include direct costs, indirect costs, and a certain amount of “padding” for what-if scenarios, many refer to cost estimation as an “art of predicting.” When a contractor receives a bid solicitation, seasoned estimators rely on their expertise to develop an approximate cost. Intuition and experience go a long way in the industry. However, bid contracts include estimates and require validation.
In this competitive market, contractors receive bids left and right on open projects. This brings about a need and pressure to create bids quickly. Accuracy is critical in bids. As we stated before when contractors submit a wrong bid, they risk their reputation and their profits. Many contractors have gone out of business because they misestimated a job.
Many contractors still rely on excel spreadsheets to produce their estimates. While spreadsheets are very valuable tools for contractors, there is a high risk of error due to data entry or formula errors. Not only does using spreadsheets for estimating create errors, but it also makes it impossible to scale. The manual nature hinders the efforts to creating bids quickly. Additionally, spreadsheets do not provide the intelligence to mine collective data from previous bids to help in creating future bids.
What features are important in cost estimating software?
Depending on your company’s size, revenue, and specialty trade, construction cost estimating software varies widely. Despite all the differences, many estimating software solutions have the following similarities:
Takeoff systems utilize digital copies of blueprints to estimate the amount of material needed for a specific project. With takeoff software, you can calculate automatically dimensions or counts of items needed and directly import them into your estimate.
When the estimator imports the takeoff information into the estimating software, he relies on the cost database to estimate the costs of the items. The cost database provides localized and industry-specific pricing information to determine how much the materials and labor will cost.
Reviewing the history of jobs including previous estimates along with the actuals serves as an important reference point in cost estimates. Of course, the integrated cost database would update any outdated prices. But other than that, estimators can easily reference where they under or overestimated previously to make any necessary adjustments on current or future bids.
Work breakdown structure
The ability to break down the segment of a project into smaller phases and activities provides specific granularity into estimates. This will also help to ensure that the estimator scopes out the project thoroughly and does not miss major items and deliverables. Most importantly, the work break down structure method of estimating and project management is critical for your historical database. You will be able to see specifically which phases or labor activities need refinement in cost estimation.
Once the estimator has gathered and verified the requisite costs, estimating software automatically inputs the information into a proposal. No double entry. Estimating software provides several pre-built templates or the ability to upload a customized template.
With all open, closed, accepted and not accepted bid estimates centrally located in one solution, estimating software provides the benefit to provide rich data for reporting purposes. Individuals can slice, dice, and analyze the information in several different ways to discover efficiencies in estimation and project delivery.
Software provides the ability for your team to capture and share information easily. So it’s important for estimating software to be able to easily share information with construction accounting and project management solutions. Being able to import or export values between different software improves workflows of each department and ensures the accuracy of information throughout the entire project lifecycle.
eSUB’s Estimating Software Partners
As founding members of the Construction Open Software Alliance, eSUB is committed to improving integration between all construction software. eSUB users can upload estimate information directly into their eSUB project management solution. This process eliminates duplicate data entry and ensures accuracy in reconciling estimates and actuals. Below are a few of eSUB’s preferred estimating software partners:
Stack Construction Technologies – STACK is web-based construction takeoff and estimating software that works from any computer Mac or PC and comes with free training and support. We provide all of the tools you need to produce highly detailed estimates, right down to the very last screw. Work smarter by using STACKS powerful takeoff tools to measure lengths, count items, calculate areas, slopes, and volumes and then expand your takeoff into a detailed estimate by adding items and assemblies from one of our pre-built catalogs.
ProEst – ProEst Estimating software accurately calculates the estimated cost of nearly any project of any size quickly and easily. ProEst estimating software is designed to meet the needs of multiple trades with customizable databases, whether you are a general, electrical, mechanical, landscape, concrete and masonry, residential and remodeling or specialty contractor. ProEst software is used by more than 8000 construction firms across the globe, and headquartered in San Diego, CA.
ConEst – ConEst’s IntelliBid Estimating Software provides the tools you need to generate accurate, consistent, and winning bids. Electrical, data cabling and low voltage contractors have four estimating solutions from which to choose – IntelliBid™ Design Build, Pro, Plus and Lite. Each software program comes with an industry-smart database of more than 125,000 electrical, data cabling and low voltage material items with over 50,000 prebuilt assemblies and more than 500,000 prebuilt assembly options. The company’s founders are deeply entrenched in the Electrical Industry, driving the design with their experience and knowledge to provide powerful, affordable software. ConEst Software Systems provides the electrical and data cabling Industry with innovative and forward thinking technology.