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Construction Cost

BulgarBlogger

According to AIA Document B101, one of the first tasks an Architect needs to do is prepare a cost estimate. 

Without consulting contractors or a cost estimation company, and also without having lots of experience, how would you prepare this estimate? How would you know how much the building you are designing will cost?

Per Document B101, I also know that the initial cost of the work is subject to change, but your fee can also be tied to the construction budget- say 10%. Although the fee too can be re-negotiated at a later time, it's nice to have a realistic estimate from the get go. You don't want to undercut yourself.

Furthermore, is there a good resource for what percentage of the construction cost should be dedicated to each of the CSI divisions for different projects? How do you know if a product is too expensive? 

In sum: if a freshly licensed architect gets hired for a job and he isn't very experienced with construction cost, how does he/she satisfy 1) his/her contractual obligations for preparing an estimate, and 2) the fiduciary responsibility to stick to the budget? 

I feel that once younger architects get into the realm of cost, they often find themselves in a catch 22. On one hand you want to design something nice, and on the other hand you need to stick to a budget. When you don't have a lot of experience you risk going over budget, and when you are always thinking about cutting cost, you risk missing opportunities to splurge on something nice. How do you negotiate these two opposite ideas in the design process?

 
Jan 27, 15 9:06 pm

Ah, the black arts. Beware of AIA contracts!

It's important to understand the difference between an estimate and a budget.

You can deliver nice design on a budget. 

Jan 27, 15 9:41 pm  · 
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BulgarBlogger

Miles- 

thanks for your reply, but no thank you for your vagueness.. 

I'm not saying anything about not being able to deliver something nice on a budget, but I can't tell you how many times PM's don't even want to entertain an idea that is a little more "fancy" because they think it'll be more expensive.... It may not be as expensive as they think, but how does one know that without actually getting a price estimate? 

We filter our design process based on what we assume it will cost... 

Jan 27, 15 9:49 pm  · 
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,,,,

There is estimating software on the market. Some with free trials.

Jan 27, 15 9:53 pm  · 
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Experience, which is of course based on estimates and actual construction costs. 

Think of it like the Screen Arts Guild. You can't get a job acting without a SAG card and you can't get a SAG card unless you're employed as an actor.

I'm guessing your PM is above you in the firm?

Jan 27, 15 9:55 pm  · 
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BulgarBlogger

Not necessarily; our firm assigns the role of PM to whoever is capable of handling a certain type of project. I've been a PM on one type of project; a job-captain on another; a junior designer on another.

Either way, if the SAG metaphor you explain above applies to practicing architecture as a freshly licensed architect, you really can't practice comfortably unless you've got a true handle on construction cost, which comes with what I assume to be a lot more experience than the 5,600 hours NCARB asks you to fulfill... (and I have fulfilled)

Jan 27, 15 9:59 pm  · 
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I guess that depends on what you did in that 5600 hours.

Jan 27, 15 10:21 pm  · 
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BulgarBlogger

I would wager that most interns don't deal with construction cost at a level that prepares them enough to practice on their own....

Jan 27, 15 10:41 pm  · 
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Another demonstration of a thoroughly broken system, at least from the POV of aspiring architects. Great for established firms that need indentured servents. 

Jan 27, 15 10:52 pm  · 
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wurdan freo

An inaccurate budget will ruin a clients confidence in your abilities. Important to maintain strong relationships with quality contractors. If you don't have a handle on costs, sub it out to one of them.  Good information is worth the expense and until you do have a handle on costs, include their fee in yours for this service. 

Jan 27, 15 11:07 pm  · 
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Non Sequitur

I remember making detailed construction estimates in undergrad for no less than 3 projects. Do they not teach this anymore? I jumped right into drafting multi-storey Office building Class D to A estimates in my first few months out of grad school. I am sure that category was the first in my IDP to be filled.

If you can't draft an estimate, you have no business practising as a licensed architect.

Jan 28, 15 9:06 am  · 
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curtkram

no.  i don't think i've ever even seen an architect do a construction cost estimate.  not in practice or in school.

Jan 28, 15 9:53 am  · 
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Non Sequitur

Curt, construction estimating was a requirement in my professional practice courses and my office produces them in house on occasion.

Jan 28, 15 10:07 am  · 
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Wilma Buttfit

I did cost estimates as an intern but I learned from a contractor who taught me, most architects don't do cost estimates but I worked a firm that did and got pretty good at it.

Make a spreadsheet. so you can fill in data and it automatically compiles the costs for you. Follow CSI format and use standard quantities, like s.f. or cu. ft. or linear foot, whatever stuff is measured in by the suppliers or contractors so you can match reality as much as possible. Structural steel can be estimated by weight for instance. Divide the spreadsheet by trades so you can subtotal that way too. Some stuff is easier to estimate than other things. Some stuff can be measured in allowances, like carpet. When you have jobs under construction that are similar, you can use the numbers from that if you know them or can find out. Other stuff you can get quotes from suppliers. Find published data for other stuff from RS Means. You might find RS Means at the library if your firm doesn't have it. Hard costs is the term you give to things that were physical and soft costs are other things like permits and design fees, contractor overhead and profit, put them in the spreadsheet. Add a contingency. Know the difference between an estimate, a budget, and a quote. Remember, many costs are local because of labor. I don't know about the B101, but different stages of the project warrant different levels of estimating. For instance you can find a per s.f. cost that is more general or you can do material take-offs and look up #'s in RS Means or call around (or fax or email) and get bids. It is a good mental thing to do material take-offs, sometimes the software can be used to make this even easier. Sometimes you can estimate by assembly, like a 2x4 wall with 5/8" gyp both sides can be one number and you don't have to parcel it all out. You can use the spreadsheet again for other jobs. If the job is not local or more unusual, don't try to estimate yourself, get a pro. I could do pretty good estimates because I got into a groove with the same type of jobs in the same area but once I moved to another city and started working on different job types that were more complicated in a different market I couldn't do them as well, needed a pro. I've had contractors do the pre-construction services for free (it positions them to get the job), which includes putting together a quality estimate that they update throughout the design process which is nice. 

Jan 28, 15 10:47 am  · 
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JLC-1

As cost can vary dramatically depending on location, I would suggest establishing a relationship with an experienced GC and ask about $/sq ft in different types of projects and qualities. And experience, after a while you get an eye for what something can cost. Also RS Means free trial 30 days.

Jan 28, 15 11:19 am  · 
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x intern

You need to look at the price similar jobs came in recently in your firm.  This will give you a fairly accurate starting point based on square foot cost.  You would need to add cost for items that you know about that are high dollar items that aren't typical. Looking at a few projects within a year will typically get you close you would need to add escalation if the market is on an upswing. Its also a good idea to contact contractors you've worked with to see how the market is going they can usually give you a pretty good idea.  Square footage cost is how most projects set their budget in the beginning.  As the project progresses you can hire an estimator or if you know a contractor that is going to go after the project they may help you out and run an estimate before you hit CDs.  Really you should know generally what the building you are designing typically costs per sqft at the level of budget your client can afford and what type of building and level of finish that budget can support.  If not how do you know what you are doing?

Jan 28, 15 11:26 am  · 
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tlee55

I work for a design build firm so I've gotten estimates for jobs by calling vendors and asking their price. Call serveral places for each trade. Then average the prices out and keep that number to plug into your estimate. For labor I usually look at the average salary of each trade person and multiply that x 2.5 or 3. For example a carpenter where Im from makes $25 per hour so the company will charge about $75 per hour for labor about $600 per day. You have to estimate how many days/months a job will take and how many guys it will take. Its hard to guess at some of these things if you're not a contractor, but if you have a good relationship with one you can just ask him for this info. Otherwise you can look at a cost estimating book.

Jan 29, 15 6:28 am  · 
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Carrera

Nice of Tint to lay it out... is correct... been estimating for 40 years... just finished one and I'm retired. Every architect should estimate their own projects unless there its a CM on board, relying on GC can be problematic, can't tell you how many jobs they stole from me when I was starting out. The OP is right to learn this. Here is my contribution:

On that spreadsheet the most important thing is the list of work items. Start there first. Build the job "brick-by-brick", you can do this... you do it everyday in your drawing. Build the job in your head from first day to end...#1 permit, #2 trailer, #3 temp power... and so on. I usually ignore a CSI format and cut-paste into format after, but that's a good method also... the most important thing in the estimate is the list of things to do, forgetting an item is worse than being off on a unit or SF cost.

The second most important thing is the unit cost and probably the hardest for you starting out. What do things cost? That isn't hard today it's all on the internet. You need this now so you know how to do the takeoff... you may find pricing by the SF or LF, you need to know this before you start counting things. While Miles is right that experience comes into play... I know how long it takes to frame a wall because I've watched it 100 times... so starting out stick to SF unit cost and don't try yet to estimate labor.

Then look at the list for things (materials) that don't fit SF profiles like Pella windows and email vendors for a quote... while you're waiting for responses get busy counting things. When done it will be close enough... you may be low somewhere but you'll be high somewhere else. Always put a statement below the total explaining the accuracy of the estimate because estimates are as accurate as the stage of drawings, here's mine:

"This is an estimate of cost and reflects the current level of accuracy of the present drawings. Accuracy levels are as follows: Schematic Design +/-15%, Design Development +/-10%, Construction Documents +/-5%. A contingency figure for this current phase has been included in this estimate"

This eliminates a lot of misunderstandings. Be like most aren't, be confident in providing this service... one of the biggest complaints of the public is that architects don't know cost and this is chiefly responsible for our decline.

Jan 29, 15 12:55 pm  · 
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BulgarBlogger

So when you say $/SF, can't you just divide the client's budget by the gross area and get that number?

Jan 30, 15 9:13 am  · 
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JLC-1

^could be, but you have to know what you are buying for that $/sf, is it hansgrohe or delta faucets? loewen or marvin windows?

Jan 30, 15 10:27 am  · 
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Carrera

BB - Yes but better to do it in reverse, you tell the owner what the SF cost might be for the typical building type he wants and let him use it to offer a budget that can be discussed.

What Tint & I outlined was for an itemized cost estimate, what I believe your latest question refers to is finding a single square foot number for a building type without an itemized estimate. This would only be done prior to any drawings as a means of helping an owner establish a budget in pre-schematic stage. Those numbers are available at DCS (Design Cost Data) or RS Means, both on the web.

Jan 30, 15 10:49 am  · 
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BulgarBlogger

Once you know what the $/sf is for the entire building, is there a resource for breaking down that cost in terms of percentsges for each component- i.e. Something like out of a $250/sf project, 5% goes to plumbing, 25% goes to structure, etc.... Thus way when you go to actually choose (hansgrohe vs dornbracht for example) you know what your client can afford...

Feb 1, 15 11:39 am  · 
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Carrera

BB, there might be but a 16 point breakdown isn't going to help much picking out faucets. OK to set a project budget with a SF number but after that it's time to break out the spreadsheet and break it down into parts, then you can look up what you budgeted for the faucet and make good decisions.

Feb 1, 15 1:56 pm  · 
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Saint in the City

no.  i don't think i've ever even seen an architect do a construction cost estimate.  not in practice or in school.

That's interesting, curtkram -- what type of firm / projects are you involved in?  Do you hire out all estimating?

Feb 2, 15 10:10 am  · 
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curtkram

saint, commercial/industrial

we've hired out estimating for government work

sometimes we work with contractors in a design/build type relationship

in design/bid type projects, i guess we just hope our design ends up close.  i suppose most of our clients have built enough that they already have a ballpark figure they're working with.  i've seen clients say 'money is no object,' but that is pretty much always reconsidered once they see what things will cost, then we just redo as much as we can to cut the cost.

on a lot of projects, there is a general idea of what kind of quality the client is looking for, like a class 'a' or 'b' type space.  also, there is an idea of where they want to put their money, like a nice public lobby but cut back at the break room or open office or whatever.  so we do know from the outset if we're picking the ceiling tile with '$' icon, or the one with the '$$$' icon.

it seems to me contractor prices can vary considerably.  i've worked with contractors on fairly specific costs when it relates to LEED or the ADA 20% rule, and it seems there is a lot of gray area.  if i say as an architect that carpet should be $x/sy installed, because that's what my carpet rep said, then i'm kind of committing a contractor to that cost, and if it ends up far off, then that's a pain in the ass for everyone involved.

Feb 2, 15 11:17 am  · 
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mightyaa

I assume this is still out there, but I liked the RS Means format to get you started.  Just google it and get the books.  I've found it is fairly accurate and allows you to either do it in a wag $/sf rough or break it out (more accurate).  Then I've made my own spreadsheets to plug the numbers in.

Experience is where you can make adjustments like curtkram does, so you have a sort of feel of where you should mark it up or where Means is off and you use your own numbers. 

Most my projects though, I push hard to get a GC selection in the pre-design and involve them in the design process (lots of reasons for that, but one is estimating).  Basically, I sort of also try to avoid those 'low bidder' clients... and if I've got one, I tend to add 15% to whatever my probable construction cost comes out to so that I'm the 'high bidder' and they feel they got a 'deal' with the GC bid.

Feb 2, 15 12:08 pm  · 
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mightyaa

Oh, should also tell you that the more you break out the estimate, the better you will be on the estimate... Because basically if you totally blow the millwork, or earthwork, it doesn't make as much of a dent as it would if you just used a rough overall cost per square foot and blew it.

Another good habit is tracking the cost on the past projects; You've usually got a nice really broken out pay application, so you can scavenge those cost back to a quantity cost format to just sort of track where cost are in your region as well as start understanding how size or complexity drives some of those cost; Which helps you make those adjustments later.

Feb 2, 15 12:13 pm  · 
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BulgarBlogger

ou've usually got a nice really broken out pay application, so you can scavenge those cost back to a quantity cost format to just sort of track where cost are in your region as well as start understanding how size or complexity drives some of those cost

Right- but if you do that, then don't you get into the problem of producing the same stuff over and over again?

Feb 2, 15 1:42 pm  · 
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Saint in the City

^ No.  Reverse engineering the Schedule of Values gives you a baseline project with associated costs at a specific point in time.  You can adjust up or down based on scope and complexity.  None of the above suggestions are trying to give you THE formula, since estimating is an art and a science.

You mentioned the B101 -- if you are using that, you'll essentially be updating your estimate at each phase.  On the front end when you don't know as much about the project, you can use SF or volume.  By the end of the process, you can provide a much more detailed estimate possible.  Some great suggestions above.

Also note that per the B101, you make no guarantees regarding cost -- however, if the lowest bid runs over your estimate, one of several things needs to happen per 6.6......one of which being that you can be directed by the Owner to revise the plans to reduce the cost.  Not what you want. 

Feb 2, 15 4:59 pm  · 
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