CFB Cost Estimation 3 — Questions and Answers
Question 1: What is 'escalation' in the context of construction cost estimating?
- An adjustment for anticipated increases in material and labor costs over time (Correct answer)
- A penalty clause for late project completion
- The process of adding overhead to direct costs
- A change order that increases project scope
Correct answer: An adjustment for anticipated increases in material and labor costs over time
Escalation accounts for inflation and market-driven price increases expected between the estimate date and when costs are actually incurred.
Question 2: A field builder needs 240 linear feet of fencing installed at $18/LF. What is the estimated installed cost?
- $4,320 (Correct answer)
- $4,200
- $4,500
- $3,960
Correct answer: $4,320
240 LF × $18/LF = $4,320 total installed cost.
Question 3: Which of the following is classified as an 'indirect cost' on a construction project?
- Project superintendent salary (Correct answer)
- Concrete material cost
- Structural steel erection labor
- Roofing subcontractor cost
Correct answer: Project superintendent salary
A project superintendent's salary is an indirect (general conditions) cost because it supports the overall project rather than being tied to a specific work item.
Question 4: What is the purpose of a 'bid bond' in the competitive bidding process?
- To guarantee the bidder will enter into the contract at the submitted price if awarded (Correct answer)
- To ensure all subcontractors are paid promptly
- To cover warranty repairs after project completion
- To protect workers from on-site injuries
Correct answer: To guarantee the bidder will enter into the contract at the submitted price if awarded
A bid bond protects the owner by ensuring the low bidder will honor their price and execute the contract; if they refuse, the bond covers the cost difference.
Question 5: When using the square-foot method to estimate building costs, which variable is most critical to accuracy?
- Selecting a comparable building type and quality class (Correct answer)
- The number of floors in the building
- The geographic location of the project only
- The owner's desired completion date
Correct answer: Selecting a comparable building type and quality class
The square-foot rate is only valid when applied to a building of similar type, function, and quality; using the wrong category produces large errors.
Question 6: In estimating, what does 'waste factor' account for?
- Material lost to cutting, spoilage, or installation errors beyond the net quantity (Correct answer)
- The cost of disposing of demolition debris
- Contractor profit on unused materials
- Time lost due to weather delays
Correct answer: Material lost to cutting, spoilage, or installation errors beyond the net quantity
A waste factor (e.g., 5–15%) is added to net material quantities to cover off-cuts, breakage, and over-ordering needed to complete the work.
Question 7: A subcontractor submits a quote 20% higher than the budget. Which action should a field builder take first?
- Review the scope of work to verify the subcontractor priced the correct items (Correct answer)
- Immediately reject the quote and solicit a new bidder
- Reduce the project contingency to offset the difference
- Approve the quote and submit a change order to the owner
Correct answer: Review the scope of work to verify the subcontractor priced the correct items
Scope discrepancies are a common cause of price variances; verifying the sub priced the correct work is the logical first step before taking further action.
CFB Cost Estimation 3
What is 'escalation' in the context of construction cost estimating?