The Definitive Guide to Construction Estimating in 2020

Background: Estimate Construction Costs with Accurate Unit Prices   

RSMeans data engineers and data scientists continually monitor developments in the construction industry in order to ensure reliable, thorough, and up-to-date cost information is available for our customers to build an accurate cost estimate. While overall construction costs may vary relative to general economic conditions, price fluctuations within the industry are dependent upon many factors. Individual price variations may, in fact, be opposite to overall economic trends. Therefore, costs are constantly tracked and complete updates are performed yearly. Also, new items are frequently added in response to changes in materials and methods.
 

Costs in U.S. or Canadian Dollars

All costs in our estimate books represent U.S. national averages and are given in U.S. dollars. The City Cost Index (CCI) with RSMeans data can be used to adjust costs to a particular location. The CCI for Canada can be used to adjust U.S. national averages to local costs in Canadian dollars. No exchange rate conversion is necessary because it has already been factored in.
 
The processes or products identified by the green symbol in our publications have been determined to be environmentally responsible and/or resource-efficient solely by R5Means data engineering staff. The inclus'on of the green symbol does not represent compliance with any specific industry association or standard.
 

Material Costs

RSMeans data engineers contact manufacturers, dealers, distributors, and contractors all across the U.S. and Canada to provide localized and national averager material costs. If you have access to current material costs for your specific location, you may wish to make adjustments to reflect differences from the national average. 4 Included within material costs are fasteners for a normal installation.

RSMeans data engineers use manufacturers' recommendations, written 4 specifications, and/or standard construction practices for the sizing and spacing of fasteners. Adjustments to material costs may be required for your specific application or location. The manufacturer's warranty is assumed. Extended warranties are not included in the material costs. Material costs do not include sales tax.

If you would like to localize costs to your specific zip code, consider signing up for a free trial of RSMeans Data Online. The construction estimating software allows you to easily localize the cost of your entire estimate to zip codes across the United States and Canada.
 

Labor Costs

Labor costs are based upon a mathematical average of trade-specific wages in 30 major U.S. cities. The type of wage (union, open shop, or residential) is identified on the inside back cover of printed publications or selected by the estimator when using the electronic products. Markups for the wages can also be found on the inside back cover of printed publications and/or under the labor references found in the electronic products.
 
If wage rates in your area vary from those used, or if rate increases are expected within a given year, labor costs should be adjusted accordingly.

Labor costs reflect productivity based on actual working conditions. In addition to actual installation, these figures include time spent during a normal weekday on tasks, such as material receiving and handling, mobilization at the site, site movement, breaks, and cleanup. Productivity data is developed over an extended period so as not to be influenced by abnormal variations and reflects a typical average.
 

Equipment Costs 

Equipment costs include not only rental but also operating costs for equipment under normal use. The operating costs include parts and labor for routine servicing, such as the repair and replacement of pumps, filters, and worn lines. Normal operating expendables, such as fuel, lubricants, tires, and electricity (where applicable), are also included. Extraordinary operating expendables with highly variable wear patterns, such as diamond bits and blades, are excluded. These costs are included under materials. Equipment rental rates are obtained from industry sources throughout North America—contractors, suppliers, dealers, manufacturers, and distributors.
 
Rental rates can also be treated as reimbursement costs for contractor-owned equ'pment. Owned equipment costs include depreciation, loan payments, interest, taxes, insurance, storage, and major repairs.
 
Equipment costs do not include operators' wages.
 

Equipment Cost/Day

The cost of equipment required for each crew is included in the Crew List ngs in the Reference Section (small tools that are considered essential everyday tools are not listed out separately). The Crew Listings itemize specialized tools and heavy equipment along with labor trades. The daily cost of itemized equipment included in a crew is based • on dividing the weekly bare rental rate by 5 (number of working days per week), then adding the hourly operating cost times 8 (the number of hours per day). This Equipment Cost/Day is shown in the last column of the Equipment Rental Costs in the Reference Section.
 

Mobilization, Demobilization

The cost to move construction equipment from an equipment yard or rental company to the job site and back again is not included in equipment costs. Mobilization (to the site) and demobilization (from the site) costs can be found in the Unit Price Section. If a piece of equipment is already at the job site, it is not appropriate to utilize mobilization or demobilization costs again in an estimate.
 

Overhead and Profit

Total Cost including O&P for the installing contractor is shown in the last column of the Unit Price and/or Assemblies. This figure is the sum of the bare material cost plus 10% for profit, the bare labor cost plus total overhead and profit, and the bare equipment cost plus 10% for profit. Details for the calculation of overhead and profit on labor are shown on the inside back cover of the printed product and in the Reference Section of the electronic product.
 

General Conditions

Cost data in this data set are presented in two ways: Bare Costs and Total Cost including O&P (Overhead and Profit). General Conditions, or General Requirements, of the contract should also be added to the Total Cost including O&P when applicable. Costs for General Conditions are listed in Division 1 of the Unit Price Section and in the Reference Section.
 
General Conditions for the installing contractor may range from 0% to 10% of the Total Cost including O&P. For the general or prime contractor, costs for General Conditions may range from 5% to 15% of the Total Cost including O&P, with a figure of 10% as the most typical allowance. If applicable, the Assemblies and Models sections use costs that include the installing contractor's overhead and profit (O&P).
 

Factors Affecting Costs in Estimates

Costs can vary depending upon a number of variables. Here’s how we have handled the main factors affecting costs.
 

Quality

The prices for materials and the workmanship upon which productivity is based represent sound construction work. They are also in line with U.S. government specifications.
 

Overtime

We have made no allowance for overtime. If you anticipate premium time or work beyond normal working hours, be sure to make an appropriate adjustment to your labor costs.
 

Productivity

The productivity, daily output, and labor-hour figures for each line item are based on working an eight-hour day in daylight hours in moderate temperatures. For work that extends beyond normal
work hours or is performed under adverse conditions, productivity may decrease. (See “How RSMeans Data Works” for more on productivity.)
 

Size of Project

The size, scope of work, and type of construction project will have a significant impact on cost. Economies of scale can reduce costs for large projects. Unit costs can often run higher for small projects.
 

Location

Material prices in this book are for metropolitan areas. However, in dense urban areas, traffic and site storage limitations may increase costs. Beyond a 20-mile radius of large cities, extra trucking or transportation charges may also increase the material costs slightly. On the other hand, lower wage rates may be in effect. Be sure to consider both of these factors when preparing an estimate, particularly if the job site is located in a central city or remote rural location. In addition, highly specialized subcontract items may require travel and per-diem expenses for mechanics.
 

Other Factors:

  • season of year

  • contractor management

  • weather conditions

  • local union restrictions

  • building code requirements

  • availability of:

    • adequate energy

    • skilled labor

    • building materials

  • owner’s special requirements/restrictions

  • safety requirements

  • environmental considerations

 

Unpredictable Factors

General business conditions influence “in-place” costs of all items. Substitute materials and construction methods may have to be employed. These may affect the installed cost and/or life cycle costs. Such factors may be difficult to evaluate and cannot necessarily be predicted on the basis of the job’s location in a particular section of the country. Thus, where these factors apply, you may find significant but unavoidable cost variations for which you will have to apply a measure of judgment to your estimate.


Rounding of Costs

In general, all unit prices in excess of $5.00 have been rounded to make them easier to use and still maintain adequate precision of the results. The rounding rules we in the following table.
 
Price Rounded to the Nearest
$.01 to $5.00
$5.01 to $20.00
$20.01 to $100.00
$100.01 to $300.00
$300.01 to $1,000.00
$1,000.01 to $10,000.00
$10,000.01 to $50,000.00
$50,000.01 and above
$.01
$.05
$.50
$1.00
$5.00
$25.00
$100.00
$500.00
 

How Subcontracted Items Affect Costs

A considerable portion of all large construction jobs are usually subcontracted. In fact, the percentage done by subcontractors is constantly increasing and may run over 90%. Since the workers employed by these companies do nothing else but install their particular product, they soon become expert in that line. The result is, installation by these firms is accomplished so efficiently that the total in-place cost, even adding the general contractor’s overhead and profit, is no more, and often less, than if the principal contractor had handled the installation himself/herself. Companies that deal with construction specialties are anxious to have their product perform well and, consequently, the installation will be the best possible.

Contingencies

The allowance for contingencies generally provides for unforeseen construction difficulties. On alterations or repair jobs, 20% is not too much. If drawings are final and only field contingencies are being considered, 2% or 3% is probably sufficient, and often nothing need be added. Contractually, changes in plans will be covered by extras. The contractor should consider inflationary price trends and possible material shortages during the course of the job. These escalation factors are dependent upon both economic conditions and the anticipated time between the estimate and actual construction. If drawings are not complete or approved, or a budget cost is wanted, it is wise to add 5% to 10%. Contingencies, then, are a matter of judgment. Additional allowances for contingencies are shown in Division 1.

Important Estimating Considerations 

The ‘‘productivity,’’ or daily output, of each craftsman includes mobilization and cleanup time, break time and plan layout time, as well as an allowance to carry stock from the storage trailer or location on the job site up to 200’ into the building and to the first or second floor. If material has to be transported over greater distances or to higher floors, an additional allowance should be considered by the estimator. An allowance has also been included in the piping and fittings installation time for leak checking and minor tightening. Equipment installation time includes the following applicable items: positioning, leveling and securing the unit in place, connecting all associated piping, ducts, vents, etc., which shall have been estimated separately, connecting to an adjacent power source, filling/bleeding, startup, adjusting the controls up and down to ensure proper response, setting the integral controls/ valves/ regulators/thermostats for proper operation (does not include external building type control systems, DDC systems, etc.), explaining/training owner’s operator, and warranty.

 

A reasonable breakdown of the labor costs is as follows:

  1. Movement into building, installation/ setting of equipment 35%

  2. Connection to piping/duct/power, etc. 25%

  3. Filling/flushing/cleaning/touchup, etc. 15%

  4. Startup/running adjustments 5%

  5. Training owner’s representative 5%

  6. Warranty/call back/service 15%

 
Note that cranes or other lifting equipment are not included on any lines in the Mechanical divisions. For example, if a crane is required to lift a heavy piece of pipe into place high above a gym floor, or to put a rooftop unit on the roof of a four-story building, etc., it must be added. Due to the potential for extreme variation— from nothing additional required to a major crane or helicopter—we feel that including a nominal amount for “lifting contingency” would be useless and detract from the accuracy of the estimate. When using equipment rental from RSMeans, remember to include the cost of the operator(s).

Estimating Labor-Hours 

The labor-hours expressed in this publication are based on Average Installation time, using an efficiency level of approximately 60%−65% (see table below), which has been found reasonable and acceptable by many contractors. Our books uses this national efficiency average to establish a consistent benchmark. For bid situations, adjustments to this efficiency level should be the responsibility of the contractor bidding the project. The unit labor-hour is divided in the following manner. A typical day for a journeyman might be:
 

Activity Duration Percentage
1. Study Plans
2. Material Procurement
3. Receiving and Storing
4. Mobilization
5. Site Movement
6. Layout and Marking
7. Actual Installation
8. Cleanup
9. Breaks, Nonproductive
14.4 min.
14.4 min.
14.4 min.
24.0 min.
24.0 min.
38.4 min.
307.2 min.
14.4 min.
28.8 min.
480.0 min.
3%
3%
3%
5%
5%
8%
64%
3%
6%

Related: Avoidable Consequences of Low Estimates

If any of the percentages expressed in this breakdown do not apply to the particular work or project situation, then that percentage or a portion of it may be deducted from or added to labor-hours.
 

Unit Costs, Assemblies and Square Foot Cost Models

difference between asemblies units and square foot costs


Understanding how to Accurately Estimate Unit Costs

All RSMeans data Unit Prices are organized in the same way and contain the elements described below.


Line Numbers

Line Numbers consist of 12 characters, which identify a unique location in the database for each task. The first 6 or 8 digits conform to the Construction Specifications Institute MasterFormat. The remainder of the digits are a further breakdown in order to arrange items in understandable groups of similar tasks. Line numbers are consistent across all of our publications, so a line number in any of our products will always refer to the same item of work.


Description

Descriptions are shown in a hierarchical structure to make them readable. In order to read a complete description, read up through the indents to the top of the section. Include everything that is above and to the left that is not contradicted by information below. For instance, the complete description for line 03 30 53.40 3550 is ‘‘Concrete in place, including forms (4 uses), Grade 60 rebar, concrete (Portland cement Type 1), placement and finishing unless otherwise indicated; Equipment pad (3000 psi), 4' × 4' × 6" thick.’’
 

Using RSMeans data

When using RSMeans data to estimate construction, it is important to read through an entire section to ensure that you use the data that most closely matches your work. Note that sometimes there is additional information shown in the section that may improve your price. There are frequently lines that further describe, add to, or adjust data for specific situations.

 

Reference Information

Gordian's RSMeans engineers have created reference information to assist you in your estimate. If there is information that applies to a section, it will be indicated at the start of the section. The Reference Section is located in the back of the data set.
 

Crews

Crews include labor and/or equipment necessary to accomplish each task. In this case, Crew C-14H is used. Gordian's RSMeans
staff selects a crew to represent the workers and equipment that are typically used for that task. In this case, Crew C-14H consists of one carpenter foreman (outside), two carpenters, one rodman, one laborer, one cement finisher, and one gas engine vibrator. Details of all crews can be found in the Reference Section.


Daily Output

The Daily Output is the amount of work that the crew can do in a normal 8-hour workday, including mobilization, layout, movement of materials, and cleanup. In this case, crew C-14H can install thirty 4' × 4' × 6" thick concrete pads in a day. Daily output is variable and based on many factors, including the size of the job, location, and environmental conditions. RSMeans data represents work done in daylight (or adequate lighting) and temperate conditions.


Labor-Hours

The figure in the Labor-Hours column is the amount of labor required to perform one unit of work—in this case the amount
of labor required to construct one 4' × 4' equipment pad. This figure is calculated by dividing the number of hours of labor in the crew by the daily output (48 labor–hours divided by 30 pads = 1.6 hours of labor per pad). Multiply 1.6 times 60 to see the value in minutes: 60 × 1.6 = 96 minutes. Note: the labor-hour figure is not dependent on the crew size. A change in crew size will result in a corresponding change in daily output, but the labor-hours per unit of work will not change.


Unit of Measure

All RSMeans data Unit Prices include the typical Unit of Measure used for estimating that item. For concrete-in-place the
typical unit is cubic yards (C.Y.) or each (Ea.). For installing broadloom carpet it is square yard and for gypsum board it is square foot. The estimator needs to take special care that the unit in the data matches the unit in the take-off. Unit conversions may be found in the Reference Section.


Bare Costs

Bare Costs are the costs of materials, labor, and equipment that the installing contractor pays. They represent the cost, in
U.S. dollars, for one unit of work. They do not include any markups for profit or labor burden.


Bare Total

The Total column represents the total bare cost for the installing contractor in U.S. dollars. In this case, the sum of
$72.50 for material + $80.50 for labor + $.88 for equipment is $153.88.

Total Incl O&P column

The Total Incl O&P column is the total cost, including overhead and profit, that the installing contractor will charge the
customer. This represents the cost of materials plus 10% profit, the cost of labor plus labor burden and 10% profit, and the cost of equipment plus 10% profit. It does not include the general contractor's overhead and profit. Note: See the inside back cover of the printed product or the Reference Section of the electronic product for details on how the labor burden is calculated.


Assemblies in Construction Estimating

The grouping of several different trades into building components or broad building elements is the "Systems" or "Assemblies" method of estimating. This method allows the estimator or designer to make quick comparisons of systems in various combinations within predetermined guidelines. Systems which are best suited to accommodate budget, code, load, insulation, fireproofing, acoustics, energy considerations, and the owner’s special requirements can quickly be determined. This method can also be used to help match existing construction.

In order to understand how a System estimate is assembled, it is a good idea to compare a Unit Price estimate with a Systems estimate. In a Unit Price Estimate, each item is normally included along the guidelines of the 50-division MasterFormat of the Construction Specifications Institute. In a Systems estimate, these same items are allocated to one of seven major group elements in the UNIFORMAT II organization. Certain items that were formerly grouped into a single trade breakdown must now be allocated among two or more systems.

An example of this difference would be concrete. In a Unit Price estimate, all the concrete items on the job would be priced in the "Concrete" section of the estimate, CSI Division 03. In a Systems estimate, concrete is found in a number of locations. For instance, concrete is used in all of these systems: Division A10, Foundations; Division A20, Basement Construction; Division B10, Superstructure; and Division B20, Exterior Closure.

Conversely, other items that are listed in separate trade breakdowns in a Unit Price estimate are combined into one division in the System estimate. For example, interior partitions might include two CSI divisions: Division 06, Wood Stud Wall; and Division 09, Lath, Plaster and Paint. In the UNIFORMAT II Systems Estimate, these items are all combined in Division C, Interior Construction.

This re-allocation of the familiar items from the CSI format may, at first, seem confusing, but once the concept is understood, the resultant increase in estimating speed is well worth the initial familiarization required.

Systems or Assemblies estimating is not a substitute for Unit Price estimating. It is normally done during the earlier conceptual stage before plans have been completed or when preparing a budget. This enables the designer to bring in the project within the owner’s budget. During the actual initial design process, the designer will be forced to make important decisions and "trade-offs" for each of the various systems.

Some of the trade-offs can include:

  1. Price of each system

  2. Appearance, quality, and compatibility

  3. Story height

  4. Clear span

  5. Complications and restrictions

  6. Thermal characteristics g. Life-cycle costs

  7. Acoustical characteristics

  8. Fireproofing characteristics

  9. Special owner’s requirements in excess of code requirements

  10. Code l. Load

 

Before starting a Systems Estimate, gather all the information possible pertaining to the project.

Information can be gathered from:

  1. Code Requirements (see Reference Section of your book)

  2. Owner’s Requirements

  3. Preliminary Assumptions

  4. Site Inspection and Investigation

 

Since the Foundation and Substructure design and price are functions of the Superstructure and the site, it is advisable to start the estimate with the Superstructure. Follow this with the Foundation and Superstructure, and then the other Systems in the sequence as applicable to your project.


Final Checklist

 

Estimating can be a straightforward process provided you remember the basics. Here’s a checklist of some of the steps you should remember to complete before finalizing your estimate. 

 

Did you remember to:

  • factor in the City Cost Index for your locale?

  • take into consideration which items have been marked up and by how much?

  • mark up the entire estimate sufficiently for your purposes?

  • read the background information on techniques and technical matters that could impact your project time span and cost?

  • include all components of your project in the final estimate?

  • double check your figures for accuracy?

  • call RSMeans if you have any questions about your estimate or the data you’ve found in our publications?

 
Remember, RSMeans data from Gordian stands behind its publications. If you have any questions about your estimate, about the costs you’ve used from our data sets, or even about the technical aspects of the job that may affect your estimate, feel free to send us a note or call us at 1-800-448-8182.

Additional resources for success in Construction Estimating: