Morlando Corey Ross IIGrizzard3rd Period12 January 2018Construction EstimatingFor my senior project, I decided that cost estimating would make for an interesting fun project. What’s sparked my passion for this project was the fact that it was something new and challenging that involves Computer Science. This also Peaks my interest into what it’s like to run a business; something that I plan on doing later in my career path. I also know that being a cost estimator is a lot of hard work. And takes a lot of time and patience and being able to work under pressure and working within a small time frame. I want to find out how to accurately collect and analyze data, materials money, and laborers that are required to produce a product. For constructing a building. I would also want to learn how to properly read and interpret blueprints using computer software. Being able to calculate estimates and understand the construction industry. I would also like to be able to learn how to work with a sales team so that I can prepare estimates and bids for customers. These are just of the few many things I would like to learn when completing this project. I would also like to find out on how to find different companies to hire me so that I can estimate different blueprints for other jobs. This will also give me experience on how to work in the “real world”. This will also give me a chance to learn how to sew myself in an interview with a company or client. My reasoning for choosing to pursue this project it’s so that I can know how to estimate commercial projects at a professional level. I’m expecting to find the ends and out of being a construction estimator. Even if I find out that this project is to be tedious. I’m hoping to learn something valuable that I can use in the future from this experience.Literature reviewThe literature review is conducted to assist in developing a complete understanding of the project cost management and the techniques employed in various processes in construction cost projections that were highlighted by the past researchers. According to Smith (2014), effective management practices, processes and tools are key for a successful project cost estimation. The project manager is the main, tool for managing cost in any construction project. As such, a project manager should be knowledgeable and experienced in the project he carries on for effective cost estimations. Cost budgeting is very critical because serious cost problems such as cost overruns are common in projects which are executed using poorly projected costs.Sears (2015) argues that the project management team should develop a proposal, analyze and validate a project feasibility during the project initiation stage. If conscious cost estimations and other approaches to management are incorporated in the proposed initiation strategies, a continuous improvement will be witnessed in other project processes. Moreover, incorporation of conscious cost estimations leads to more cost-effective results at the end of the project.Azhar, Khalfan, and Maqsood (2016) talks about cost estimations in the planning stages of a construction project. According to Azhar, Khalfan, and Maqsood (2016), the planning process of a construction project results to the development of a workable scheme which can be well maintained to accomplish the desired business needs for the project. As such, the project management team should define the overall scope of the project, identify the project strategic plan, make a cost breakdown schedule, develop risk management plans, analyze project plan optimization, refine the estimates and establish an environment that is project driven.The scope of a construction project involves dividing the major project into small categories which are more manageable. This improves the accuracy of resource, time and cost estimations, facilitate clear assignments of responsibilities, create a baseline for control and measurement of performance and help in the carrying out of the critical evaluation of project success. Project strategic plan involves determining what physical resources like machinery, materials, workers and what quantities of each physical resources should be used to perform activities of the project. According to Brook (2016), cost estimation involves preparation of estimates for the prices of the resources that are required to complete all activities of a project. Martinelli and Milosevic (2016) argue that cost estimation is different from pricing and cost budgeting. According to Martinelli and Milosevic (2016), cost estimation is an evaluation of how much it costs the contractor or developer to provide service or product involved. Pricing is a decision taken by a business as to how much it will charge a developer or contractor for a service or product that uses the cost estimate. Cost budgeting, on the other hand, is used to establish a cost baseline for cost controlling and measuring project performance by allocating the overall cost estimates to individual work items.Ashworth and Perera (2015) investigated two main types of costs involved in a senior construction project. The first type of costs involved in a senior construction project is the direct costs. These costs are divided into two: flat costs and worksite costs. Flat costs include costs associated with equipment, subcontractors, supplies, and manpower production. The reason why these costs are termed “flat” is that no surcharge coefficient weighs their value. The work site costs include operating costs, assigned and non-assigned equipment and labor site costs. The second type of costs according to Ashworth and Perera (2015), are the special costs. These costs are also referred to as indirect costs or overheads. These costs follow in a chronological way the work site costs. These costs are related to a specific case. As such, they are not managed by the building site. These costs include management, organization and administration costs. Lee, Ka-Ram, and Jung-Ho (2014) evaluates various cost estimation methods which are mostly used for a construction project. One of these cost estimates is the analogous estimation. This cost estimation method is also referred as top-down estimation. The technique estimates costs of a new construction project by looking at data from historical projects. The reason why this technique is referred to as “analogous” is that its reliance on an archive of old projects which are similar to the new construction projects. Bottom-up cost estimation technique is the second cost estimation method according to Lee, Ka-Ram, and Jung-Ho (2014). This cost estimation method is also called analytical estimation. The technique establishes the total cost estimates for a construction project by estimating the total cost of completing each task and adding them up. This technique is known as one of the most time-consuming, but also as one of the most accurate cost estimation techniques. The third cost estimation method for construction projects is the parametric estimation. When using this cost estimation technique, management teams divide a project into work units before determining the cost of each unit. From there, they multiply the cost per unit by the number of units to get the total cost estimate for the project. According to Lee, Ka-Ram, and Jung-Ho (2014), this cost estimation technique is very successful if one can calculate the correct cost per unit. The Parametric cost estimation techniques have shown more positive results in projects that involve repetitive tasks. Empirical cost estimation is the fourth estimation method. This cost estimation method works effectively in estimating costs of projects which are similar. This method draws information from previous construct projects in order to estimate cost for a new project. Automation has made this cost estimation technique accurate and timely. The firth cost estimation method according to Lee, Ka-Ram, and Jung-Ho (2014) is the expert judgment, only specialists and experts with a vast background experience of similar construction projects in the past and knowledge can conduct this cost estimation technique. For the specialists to create and adjust the cost estimates, they must compare the current project with other projects in the past. This method is often used when a project manager wants to find if a project is feasible or not because it does not give an exact number. The last cost estimation method for the construction project is the three-point estimation. This technique originated from the Program Evaluation and Review Techniques (PERT). Through this method, determines estimations, pessimistic and optimistic by analyzing the duration, costs, and activities undertaken during the progress of a project. Various formulas are used in this statistical method to calculate the expected cost. This method can be effective only when the initial estimates are accurate.According to Sears et al (2015), there are different varieties of project construction resources, methods, technologies, and equipment. Each of this items has a different price in the market, As such, the project management team should conduct a survey of the market before making the final cost estimation. Apart from the market survey, the project team should conduct a preliminary site investigation and a study of probable financial risks on the pre-design stage. The design stage is more detailed and it requires preparation of intermediate cost estimates. The project management team should involve itself in the bid and award stage. In this stage, the team should invite quotations and tenders from various vendors keeping the BOQ from detailed phase as a baseline. When a high-cost variance is identified in the quotations and tenders, the specifications and design of items should be moderated before documenting the final cost estimates and authorizing the most qualified vendor to supply resources for the project.Martinelli and Milosevic (2016) look at the main advantages and disadvantages of cost estimations in project cost management. According to Martinelli and Milosevic (2016), cost estimations can be tinkered and implemented according to the different stages of the project. Second, cost estimation increases the efficiency of a project in terms of accuracy and ability to perform tasks accurately. This saves the project time, prevent customers from overpayment and the builder from losing money. Moreover, cost estimation assists project management team in choosing suppliers, making choices for funding the project and other activities.On the downside, Martinelli and Milosevic (2016) argue that cost estimations require frequent updates which are time-consuming and expensive. The market is experiencing a constant flux, technology is always moving onward and the prices are changing. These changes affect prices of products and services, which means a frequent update should be carried out and values changed to match. As a result, the time which could be used in carrying out other valuable activities of the project is drained. Moreover, cost estimation needs to be conducted by highly skilled personnel. The auditors and accountants may charge more for their services if the project management team to have an experienced person who can tackle the part of cost estimation. Extra training and cooperation with data input must sufficiently be provided to employees; non-cooperation can render ineffective a progress of a construction project. According to Martinelli and Milosevic (2016), the total cost estimation of a construction project is possible when the contractors, site engineers, quality surveyors, design engineers, architects and other players in the field perform their functions effectively and are conscious of cost management. A delay of project or cost variance results if there is a lapse on the part of any single component. Martinelli and Milosevic (2016) add that effective cost estimation is possible if the team of project management follows management techniques such as budgetary control standard costing, value analysis, and PERT to reduce cost and improve the physical performance.Work citedAshworth, Allan, and Srinath Perera. Cost studies of buildings. Routledge, 2015.Azhar, Salman, Malik Khalfan, and Tayyab Maqsood. “Building information modeling (BIM): now and beyond.” Construction Economics and Building 12.4 (2015): 15-28.Brook, Martin. Estimating and tendering for construction work. Taylor & Francis, 2016.Lee, Seul-Ki, Ka-Ram Kim, and Jung-Ho Yu. “BIM and ontology-based approach for building cost estimation.” Automation in Construction 41 (2014): 96-105.Martinelli, Russ J., and Dragan Z. Milosevic. Project management toolbox: tools and techniques for the practicing project manager. John Wiley & Sons, 2016.Sears, S. Keoki, et al. Construction project management. John Wiley & Sons, 2015.Smith, Peter. “BIM & the 5D project cost management.” Procedia-Social and Behavioral Sciences 119 (2014): 475-484.