Cost Estimation Flashcards

What is 'value engineering' in the construction cost context?

Answer: A systematic review to achieve required functions at lower cost without sacrificing quality

Value engineering analyzes materials, systems, and methods to find alternatives that meet performance requirements at reduced cost.

Which cost estimating technique provides the highest level of accuracy?

Answer: Detailed bottom-up estimate based on complete drawings

A detailed bottom-up estimate, built from full design documents and quantity takeoffs, typically yields accuracy within ±5–10%, far better than the other methods.

A field builder's crew can pour 50 CY of concrete per day. A footing requires 175 CY. How many crew-days are needed?

Answer: 3.5 days

175 CY ÷ 50 CY/day = 3.5 crew-days; this fractional result means planning for 4 calendar days but billing 3.5 days of crew time.

What is a 'preliminary estimate' also commonly called in construction?

Answer: Conceptual estimate

A preliminary or conceptual estimate is prepared early in design when limited information is available, providing an order-of-magnitude cost range.

When material prices spike unexpectedly during construction, which contract type most protects the contractor?

Answer: Cost-plus contract

Under a cost-plus contract, the owner reimburses actual material costs, so the contractor is protected from unforeseen price escalation.

Which element of the project cost estimate captures costs for site safety programs, temporary facilities, and project management?

Answer: General conditions

General conditions cover indirect project costs — such as temporary power, site offices, safety compliance, and supervision — that support construction but aren't a specific work item.

A project's total direct cost is $500,000. The general conditions rate is 12% and markup (overhead + profit) is 10%. What is the total contract price?

Answer: $616,000

$500,000 × 1.12 = $560,000 (with GC); $560,000 × 1.10 = $616,000 total contract price.