The Best Ways To Avoid Construction Estimation Pitfalls
Don’t cut yourself out of a profit by over or under bidding on project.
For any construction contractor, the prospect of a lucrative job is always enticing. But in order to ensure that your construction bid is priced correctly, you’ll need to make sure you’re approaching the client with cool heads and the best information. Balancing the desire for profit with the commercial necessity of submitting the lowest bid is a tricky business. To manage the bidding process you’ll need all staff members to have a realistic idea of the costs to be incurred during the course of the project.
Having more than one estimator
It’s true that on larger projects you may need to find more than one estimator; however, be aware that the more you employ the greater chances your estimations could go wrong. Without clear and consistent guidelines, estimates for the same services or product can end up varying wildly. Subcontractors may offer slightly different services or products to one another, or the material costs may change depending on the start date of the project. It is essential to make sure that the information you are working from has been gathered fairly and consistently.
Even if costs are estimated consistently and accurately at an early stage, your budget could still be off. Though ensuring that you include a profit margin on top of your estimation might sound obvious, but it is surprising how often this is overlooked. Mistakenly assuming the overall cost includes the profit margin can be disastrous. Whether deliberate or by accident, making a construction bid that is too low is a mistake you don’t want to make.
Not being transparent
It’s very well providing accurate estimates for every part of a project, but a comprehensive assessment of costs is only half the battle in the bidding process. Your construction estimation needs to provide an overview, as well as a detailed breakdown, that is easy to understand by everyone involved in the project.
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