A survey of current cost estimating practices in the UK

TLDR

Cost estimating in construction relies on conventional labour and material constants to price bill‑of‑quantity items item‑by‑item. The study surveyed contractors, grouping them by turnover into very small, small, medium, and large firms. Contractors mainly use cost estimating for planning, tenders, and cost control, rarely for evaluation, and have not adopted risk‑aware methods; inaccuracies stem from limited process knowledge, time constraints, poor tender documents, and subcontractor price variability. Keywords include cost estimate, tendering, performance appraisal, estimating techniques, and analysis of variance.

Abstract

Abstract The results are documented of an investigation into current cost estimating practices of contractors for construction projects. A questionnaire survey of contractors was undertaken, in which the respondents are classified into four groups based on their turnover namely: very small, small, medium and large firms. The survey indicates that contractors, irrespective of size, continue to undertake cost estimating predominantly for construction planning purposes, including the preparation of tenders and cost control of projects during the execution stage and, to a lesser extent, for construction project evaluation. Recent developments in cost estimating methods and tools that consider risks and variability in cost estimates, such as the use of range estimating and parametric estimating techniques, have not been adopted by contractors. The practice of cost estimating does not differ from conventional techniques based on the use of labour and material constants to obtain prices for bills of quantities items on an item by item basis. The study shows that the major causes of inaccuracy in cost estimating continue to be the lack of practical knowledge of the construction process by those responsible for the estimating function, insufficient time to prepare cost estimates, poor tender documentation and the wide variability of subcontractors' prices. Keywords: Cost EstimateTenderingPerformance AppraisalEstimating TechniquesAnalysis Of Variance