Estimating in Building Construction, 5th ed. by Frank R. Dagostino & Leslie Feigenbaum. Upper Saddle River, N.J.: Prentice Hall, 1999.
Means Building Construction Cost Data 1999. R.S. Means Company: Kingston MA, 1999.

This course, Construction Management 410, covers bid estimating from the standpoint of a general contractor (GC). It is the first of the construction management courses leading to the UW Certificate in Construction Management. In this course you will learn how to develop an estimate to be used for the competitive bidding of projects. The objective is to supply you with estimating skills you can use to begin or enhance your career within the construction industry. While there are many types of estimates, the competitive bid is fundamental; it is how a majority of construction contracts are awarded. The techniques learned in this course can be readily applied to most of the other types of estimates used by the construction industry.

Most of your interaction with your instructor and classmates will occur via the Internet. It is thus important to have computer skills and be comfortable with working on the Internet. You will be expected to complete reading and written assignments, work through self-study exercises, participate in online discussions, and complete a course project.

The course guide is designed as a supplement to the course text. There are various procedures for developing an estimate depending on the prevailing practice in a particular region of the country. This course is designed primarily for estimating as it is practiced in the Pacific Northwest. While methods vary, the principles are universal, and these procedures can easily be adapted from one region of the country to another.

Course Objectives

By the end of this course, you will be able to

review contract documents in preparation for competitive bidding (Lesson One);
develop a work breakdown structure (WBS) for a proposed project (Lesson One);
organize and schedule your estimating work (Lessons One and Two);
perform quantity take-offs for various work items (Lesson Two);
apply labor productivity factors to the required work (Lesson Three);
apply pricing factors and make extensions to determine costs Lessons Three to Six);
estimate the general conditions—job site overhead (Lesson Seven);
develop markups and fees and apply them to a bid proposal (Lesson Eight;
make a simple summary schedule to be submitted with your bid Lessons Four and Seven);
solicit, receive, and evaluate bids from subcontractors and major material suppliers (Lessons One and Eight);
make last-minute adjustments (literally!) to the bid (Lesson Eight); and
tender a competitive bid for your project on time, even under intense time pressure. (Lesson Eight)

Skills You Need to Complete This Course

Two prerequisites are listed for this course: knowledge of construction methods and materials and the ability to read blueprints and specification documents. If an estimator is lacking in either or both of these skills he cannot become an effective bid estimator. If you are lacking in these skills, you should find a way to acquire them before taking this course. Our time is limited and will not allow for the teaching or review of these prerequisites.

How This Course is Organized

This course is organized into eight lessons. Each one includes reading assignments, commentary on the readings, online discussion assignments, self-study exercises, and written assignments.

The bulk of the work for these lessons and the class in general will be focused on our class project, for which you and each of your classmates will prepare and submit a bid on an example construction project. The course project has been developed, as much as possible in an academic setting, to model the process of competitive bidding in the construction industry.

This Course in the Context of the Certificate Program

You will spend a lot of time in the Certificate Program with this construction project. After you complete this course, you will go on to plan it, schedule it, develop its safety programs, and manage it to its hypothetical completion in the rest of the courses of the Construction Management Certificate Program.

The Course Project

The project we will estimate is a basic structure that houses a medical clinic and has a second story for build out of rental spaces. It is a concrete and steel frame structure with some finished offices. It was recently built in the Seattle metropolitan area and thus should reflect construction according to recent editions of applicable building codes.

Residential and commercial projects represent a majority of the construction work done today. The project selected for use in this program is a commercial project representing many common types of construction. As we proceed through the course, we will point out the similarities of some of the work items that are used in both commercial and residential construction and how residential work and bids might be handled. Commercial construction can also be applied to light and medium industrial projects. Heavy industrial and heavy construction projects such as roads and dams are different altogether due to the very large quantities used, special equipment, and work items required. These are not a part of the UW Certificate in Construction Management curriculum.

Your Work on the Course Project

You and your peers will develop and submit a competitive bid as if each of you were a general contractor who self-performs certain work and subcontracts the remainder. Each of you will thus learn detailed estimating of direct (self-performed) work and order of magnitude estimating of subcontractor work. In addition, you will all go through the process of receiving the subcontract bids, finalizing your estimate and tendering your bid under pressure of time as it is done in the real world of competitive bidding.

Each student will estimate the course project individually. We will focus on the basic techniques required to complete an estimate including organization, performing quantity take-offs, recapitulating, summarizing the work, and developing markups leading to the completion and tendering of the bid.

The Program Kickoff Meeting

At the program kickoff meeting, you will pick up the bid package for the course project. The bid package consists of one set of plans and one copy of the specifications complete with the bidding information. (Note: if you are unable to attend the kickoff meeting, the bid package will be mailed to you.)

The kickoff meeting replicates construction industry practices in which a contractor picks up the bid package in preparation for tendering a proposal. We will visit the site where the building is located, and if approval can be obtained, we will tour the inside as well. This will serve as your site visit for the project. I welcome and encourage you to bring your camera. The course Web site will include photographs of the project site, however, both for those who are unable to attend the kickoff session and for later review by all students.

Bid Day

A significant part of the course involves learning how to solicit and field subcontract bids. You will not actually be soliciting subcontractor bids—you will receive them from me, your instructor, and I will tender most of these subcontractor bids on the last day of the class, commonly known as Bid Day. You will have to evaluate them in the ensuing time crunch and tender your proposal on time. Just as it happens in the real world, some of these subcontractor bids will come to you within minutes of your final deadline for submitting the project bid, and some may not come at all. If you are not fully organized, this will cause you to experience intense pressure and could possibly cause you to miss your bid deadline. A missed deadline means the contractor eliminates his chances of being considered for the work.

You will need to clear your calendar in preparation for Bid Day and arrange your communications—that is, your e-mail or fax—so that it will be available and reliable when it is time to tender your bid. See Lesson Eight for more on Bid Day.

The Lessons in The Course Guide

The first seven lessons concentrate on the techniques of developing an estimate. The final lesson provides preparation for Bid Day—the last day of class where you will receive and evaluate the subcontractor bids and tender your proposal for the class project. In each lesson you will complete reading assignments, on-line discussion assignments, self-study exercises, and homework assignments. Each lesson requires two weeks to complete. For the majority of the assignments, you will submit of portions of your estimate.

What You Need to Do to Complete This Course

To complete this course you must do the following:

participate in the kickoff meeting at the beginning of the program;
read the assigned sections of the text;
actively post at least one comment or respond to another person’s comment for the online discussion topics in each lesson;
complete and submit all written assignments; and
submit a bid estimate for the course project on Bid Day before the final bid closing time.

See the course timetable that you received with your course materials for the specific due dates of all assignments.

Course Procedures

I want you to do the work for this course by hand. The use of computers is allowed for spreadsheets and word processing. Estimating software and databases are not allowed. The purpose of this course is to teach you the details of estimating including calculations and summarizing so that you will fully understand the process. You will not fully understand these underlying details if you rely on a pre-packaged estimating environment. I expect you to manually enter information either by hand or via computer into your forms and spreadsheet and extend and/or check extensions with a calculator. In addition you will learn how to develop unit prices to be used as a general check of your work to make sure it is within an expected range. Computers are a convenience to improve efficiency, but if not properly checked, errors can occur that could cause large losses in a project. Smaller contractors could thus experience unbearable liabilities, which would tarnish or destroy their estimator’s reputation.

Estimating is the foundation of all projects and thus this course is the foundation of the construction management course series. Information generated in this course is used in the Project Planning and Control and Project Management courses. I encourage each of you to do your best in completing the estimating course so that you will have a good basis of information to be used in the remaining courses of this series.

The Textbooks and Course Guide Appendices

The Course Texts

Two books are required for the estimating course. These are

Estimating in Building Construction, 5th ed. by Frank R. Dagostino & Leslie Feigenbaum. Upper Saddle River, N.J.: Prentice Hall, 1999. ISBN 0-13-377938-6.
Means Building Construction Cost Data 1999. R.S. Means Company: Kingston MA, 1999. ISBN 0-87629-501-4

Throughout this course these texts will be referred to as Dagostino & Feigenbaum and Means. They may be obtained from the University of Washington Book Store, Amazon.Com, or other book stores. The Means reference can be ordered directly from R.S. Means Company (http://www.rsmeans.com or 1-800-334-3509). A student discount should be available if you purchase the book through the University Book Store.

The texts for this course are the basis for learning estimating techniques. The course guide has been written to supplement the text. Bear in mind that estimating techniques vary from place to place and from company to company. My intention in this course is to teach that which is basic to the estimating process. When you’ve completed this course, you should be able to quickly adapt to the particular methods at your particular place of employment.

The text uses forms from a computerized estimating program. Since this is a manual estimating course, we will be using forms that have been relatively standard for the construction industry and are readily adaptable to electronic spreadsheets. All forms to be used are included in appendix A of the course guide. In addition, they are available for downloading through the course discussion forum. All downloaded spreadsheets should be checked prior to their use to verify that the formulas are correct. No forms other than those in appendix A will be accepted in this course.

Means Building Construction Cost Data is also listed as a text for this course. This is a reference book rather than a text. You will learn how to use it for determining productivity factors and pricing. Means is probably the most used reference book in the construction industry. In Lesson One there is a listing of other references available to the estimator.

Throughout this course I will refer to several other R. S. Means references. You are not required to purchase them. If you desire to use them, you can generally find them in libraries or bookstores. When I refer to a R. S. Means reference, the word Means in italics will refer only to the Means Building Construction Cost Data (current issue) while references to any of their other books will be spelled out in full.

Sharing My Professional Experience

As you go through this course, you will notice there are places where the textbooks and I do not see "eye to eye." The writers of the textbooks write from their experience and I teach and write from mine, which is the result of my ongoing efforts to become more productive and accurate when making an estimate. For example, the Dagostino and Feigenbaum text goes into great detail pricing small items of work which, in my experience, can be estimated as a historically substantiated percentage of larger items—small details are more appropriate for a subcontractor’s estimate. The general contractor, however, usually has to estimate quite a bit of work in a short amount of time. The firm’s estimator thus cannot afford to get bogged down with the small time-consuming details of a particular item of work.

Course Guide Appendices and Glossary

The course guide contains five appendices. These contain useful forms and information for use in your training as an estimator and later on in your career. As we proceed through this course, I will refer specifically to pertinent material from the appendices; other items will not be mentioned. I recommend that you look through all appendices to see what is there and evaluate how it might help you in this course and beyond. The course guide also includes a glossary of all the key terms listed in the individual lessons.

Note on Building Codes

There are several building codes used throughout the country. There is also an ongoing effort to develop one code for the entire United States. I will occasionally make reference to the Uniform Building Code (UBC) because it is the one used most prominently in the Western United States. You are not required to purchase any building code for this class.

What Are the Assignments Like?

There are four types of assignments you will encounter in this course: reading assignments, online discussion assignments, self-study exercises, and specific written assignments as indicated at the end of each lesson. None of the assignments will be drawn from the textbook; however, you are encouraged to answer the chapter review questions to make sure you understand the material presented.

Reading Assignments

Lesson reading assignments appear at the beginning of each lesson. In addition to the reading assignments in the text, you will be asked to review certain subdivisions in the Means reference. It is not necessary to read every line item of each subdivision. Just look at them and know generally what is in each one. This will help you to determine the proper units to be used for quantifying, as well as to familiarize yourself with where you can find productivity and pricing figures.

Online Discussion Assignments

You will participate in four required online discussions for this course, for which the class will have a topic to discuss or question to answer. (The topics and questions are included in the course guide, though the discussions will take place on the course discussion forum.) Each student is required to post a comment or to answer these questions—or post a comment to another student’s response. Most discussions require a minimum of one posting. Some require a minimum of two. I encourage you to make more than the minimum and develop a dialogue with your classmates. The discussions’ purpose is to promote an exchange of ideas similar to what you would get in a classroom setting. Several of you are probably already involved in the construction industry and have specific knowledge about certain items. Your postings can help others to learn, and others’ responses may bring you fresh insights into how to get things done.

I will review the online postings to see if students are responding as required and for the quality of their response. The online discussion is meant to be a place where students help each other, and I will base the quality of response grades on how helpful postings are. Ideally at the end of the posting period, students should have developed a definite answer (or series of answers) about the specific topic. Students who do not respond may learn from others, but the lack of effort will be detrimental to their grade

Self-Study Exercises

Self-study exercises, like the review questions in the textbook, are included in the course guide for each student to work through to make sure he or she understands particular concepts. The answers to most are included in Appendix C in the course guide—if you have trouble with them, contact your instructor. With the exception of Self-Study Exercise 1, these are not graded and need not be turned in. This does not mean you don’t have to do the other self-study exercises. Considering the time, money and effort you will apply to this course, you owe it to yourself to work through them. Your understanding of and proficiency in estimating is based on continuous practice—which these exercises help provide—and you will value every bit of proficiency you can muster when it comes to the final hectic countdown on Bid Day.

Written Assignments

There are two written assignments per lesson. The timetable that you received with your course materials will tell you when each assignment is due. For most of your written assignments, you will submit specific portions of your estimate. These will be supplemented with some additional assignments to help you learn specific points of estimating. Since estimating is a procedure that is subject to an estimator’s interpretation of the work, there are no absolute right or wrong answers. The assignments will be checked for procedures, neatness, and to see if someone else (that is, me—representing the industry’s perspective) can understand what you are doing. If your procedures are correct, you should be able to submit a comprehensive, accurate proposal on Bid Day that would, if won, would allow your company to make the estimated profit.

The written assignments and online discussion assignments are designed to both help you learn and demonstrate your understanding of the principles that are being taught in this course. They will not cover all of the work required to complete your bid estimates and in fact will cover less than half of it. There is no timetable beyond what you yourself schedule for completing those parts of the work that are not specifically assigned to be turned in. Estimators by the nature of the work have to be motivated, determined self-starters and know that there is no excuse for not tendering a bid. Bids submitted late or incomplete are treated as non-responsive and you as a contractor would have no chance of being awarded the contract.

Grading

I suppose if we were following industry bid practices strictly, there would be one A among the students in this course (the winning bidder) and the rest would be F’s. I won’t be nearly as strict as that. I will calculate the average of all the bids received. Your bid and your classmate’s bids will have to be within a given range of this average to be acceptable. In general, the lowest bid within this range will be the winning bidder and receive the best grade. Other bidders will be graduated downward the farther away they are from the low bid. All bids received within the acceptable range will receive passing grades on the project component of your course grade. See Lesson Eight for the specific project grading criteria.

We will nonetheless be following industry practice strictly in one regard. In your role as a contractor bidding the course project, you must submit your bid in accordance with the bid documents, and you must submit it on or before the required bid time in order to have it graded.

Your other work is also a factor in determining the final grade for the course. Just because someone is the high bidder (within the acceptable range) doesn’t mean he or she will receive a subpar grade. Participation in online discussions, assignments and how well your bid is organized will be significant considerations.

Five situations will be cause for bid disqualification. These are

collusion (where two or more bids are identical or nearly identical);
a very high bid that is well beyond the acceptable range from the mean;
low-ball bids that are artificially low in an attempt to be the winner;
bids that are not prepared in accordance with the bid documents; and
late bids.

With the number of students bidding, I expect some bids to be relatively close to each other and have seen this happen in the industry. If all students are doing their own work and submitting the bids honestly, then I don’t anticipate collusion to be a factor. Low-ball bids are of questionable ethics because the bidder is knowingly leaving something out and will fight for the costs to be added later on through a change order. Very high bids usually represent an error, and error prevention is something that will be emphasized throughout this course.

Bids shall be accepted only when submitted per the "Instruction to Bidders" in the project bid documents. It is imperative that you explicitly follow these instructions. If you have questions or confusions about them, make sure to get them addressed as early as possible. Failure to follow the instructions can be cause for disqualification of your bid, thus affecting your grade. This is a corollary to our theme for this course about being on time—a contractor whose bid is disqualified has reduced his chances of winning to zero.

Grading Breakdown

Assignments (including submission of the bid)

64

points

Online Discussion Postings

10

points

Bid Results

26

points

Total

100

points

Extra Credit: Sharing of Expertise

5

points max

Grading Scale

I will use the following standards developed by the Department of Construction Management at the University of Washington for assigning grades in this course.

Grade		Percentage
A	4.0 – 3.9	100 – 97.5
A–	3.8 – 3.5	97.4 – 92.5
B+	3.4 – 3.2	92.4 – 88.7
B	3.1 – 2.9	88.6 – 85.0
B–	2.8 – 2.5	84.9 – 80.0
C+	2.4 – 2.2	79.9 – 76.2
C	2.1 – 1.9	76.1 – 72.5
C–	1.8 – 1.5	72.4 – 67.5
D+	1.4 – 1.2	67.4 – 63.7
D	1.1 – 0.9	63.6 – 60.0
D–	0.8 – 0.7	59.9 – 57.5
F	0	57.4 and below

Students should indicate how they want their assignment grades returned to them. Privacy rules require that the final grades be sent to you by mail from the UW Extension.

Grading vs. Learning

While your achievement in this course is measured with a grade at the end, do not lose sight of the fact that the underlying objective for taking it is for you to learn industry practices that you can apply in furthering your career. You could use only your short-term memory and focus your goal on getting a high grade for your transcript; however, each of you will get more out of the course if you fully learn the skills that are presented. You will be better prepared to work in the construction industry if you fully understand the subjects taught in the construction management series.

Communications

The distance learning Construction Management Program takes advantage of current electronic technology for communication. This technology is based around the Internet and e-mail. Supplemental technology such as faxes and telephones are additional means of available communication.

The preferred method of communication for this course will be the Internet—that is, e-mail and the course discussion forum. Methods and procedures for communicating with your instructors and with each other using these tools are outlined in your student handbook and the Instructor Information Sheet that you were given with your course materials.

I encourage all students to use e-mail and the course discussion forum as much as possible. Since this is a distance learning course, you will not have the benefit of listening to a lecture and asking questions on the spot. A lot of learning can be accomplished through an exchange of thoughts with each other and with me on the occasions that I will be available.

Sharing of Student Expertise: Extra Credit

I recognize that you and your classmates may have expertise in various fields of construction. I encourage you, via extra credit, to share this expertise by posting to the course discussion forum a one- to two-page document on your particular specialty. (Check the instructor information sheet that you received with your course materials for instructions on where to make your posting.) For example, someone who is a carpenter may want to post a document on details of framing a structure, someone else might want to discuss lumber grading. Other topics could include, but are not be limited to, evaluation of bids, certain design aspects of a structure, preparation for inspections, or legal aspects applied to construction. All topics must be related to the construction industry and should be presented to stimulate the interest of your fellow students.

Up to two postings will be accepted for extra credit, however, more may be made if someone feels that a particular subject may be of interest. Each posting can contribute up to 2.5 points to your grade for a maximum of 5 points depending on the subject and quality.

Contacting the Architect, Subcontractor, and Suppliers

Part of this course discusses how you solicit information from the owner or architect. In the real world these people are in the business of making money and the intensity of competition does not allow them to address issues that do not have a profit potential. They therefore prefer not to use up their time addressing concerns of students taking an estimating course. Please do not contact the owner or architect for the projects used in this course.

Similarly you will learn how to contact subcontractors and major material suppliers to solicit bids for their work. Subcontractors typically have questions regarding the bid that will need to be answered in order to supply a price. You will learn how to get this information and forward it to the subcontractor. Again subcontractors and suppliers are very busy bidding and performing work on an on going basis and do not have the time to work with students. I will give you subcontractor and major supplier bids on or before Bid Day.

As part of the estimating procedures you also will need to research pricing on various materials that can be purchased in local hardware and building supply stores. You will do this by either checking newspaper ads or going to one of these stores and finding out these prices. If this is not an option for you, you will use pricing indicated in estimating references.

I REPEAT: DO NOT CONTACT THE OWNER OR ARCHITECT FOR THE PROJECT USED IN THIS COURSE. ALSO DO NOT SOLICIT PRICING FROM ANY SUBCONTRACTORS OR MAJOR SUPPLIERS FOR YOUR BIDS.

The Estimator’s Personal Notebook

One of the keys to maximizing your experience as an estimator is to have historical data as well as other needed information at hand for a ready reference. Dagostino & Feigenbaum in item 4 on page 7 refers to an estimator’s ability to maintain a database of information as well as a knowledge of availability of all required items.

Years ago, I established several notebooks in which I maintained information that was not easily obtainable from other sources. The notebooks also served as a handy place to keep the more common information. I started out keeping simple conversions, such as board feet per lineal feet tables. As I got involved in heavy industrial projects, I found such things as a good formulation to calculate welding man-hours. On one project, I had to estimate the field installation of 8 foot diameter steel pipe. I called a friend of mine in the business, and he supplied me with the needed information, which I recorded and stored in my notebook.

I kept a series of notebooks in which I maintained the summary sheets of estimates that I made complete with the bid results and my assessment of why I won or lost the bid. I was usually able to find out whether the winning bidder made or lost money, and in some cases, how much was lost. I would note this on my assessment page. I also kept the final cost report on all of my successfully bid projects.

I’d like to encourage each of you to start your first estimator’s personal notebook during this course. You may find things such as waste factor calculations, conversion information, and other useful information to keep in your notebook. What you keep in your notebook will differ from what someone else keeps. The point is to develop a handy reference for information that may be less accessible elsewhere. From time to time in this course, we will be doing exercises or run across pertinent information that I will recommend you put into your notebook. While this is not a course requirement, I feel that your personal estimator’s notebook is an item that will enhance your career.

If you desire to keep information on a computer or on floppy disks or other electronic storage media, I encourage you to also keep a hard copy in your notebook. Computers can crash and data can be lost. Floppy disks, on the other hand, record the data on one version of a program, and if it is not updated each time you update your programs, you may not be able to recover the data at all. The hard copy in your notebook is usually the fastest to reference also.

Course Notebook

I also encourage you to make a course notebook that will include all pertinent information from this series of construction management courses. Its purpose is threefold. First, the work done in this estimating course is used for Project Planning and Control and for Project Management. First of all, putting pertinent information in your course notebook will provide a handy reference for those courses. Second, it serves as a reference to use in your career of estimating and project management. Third, it can be used as a portfolio if you plan to apply for a job as an estimator or project manager. Your first items under the tab of estimating would be the estimate done in this course. By setting up tabs for each course, you will then add pertinent information and the work done for each of them. When you get through, you will have a complete notebook that you can refer to or exhibit to prospective employers.

Assignments (including submission of the bid)	64	points
Online Discussion Postings	10	points
Bid Results	26	points
Total	100	points
Extra Credit: Sharing of Expertise	5	points max

CM 410

Construction Management 410 Construction Estimating II

Introduction

Overview

Required Textbooks