Estimating, Bidding, and Cost Control Flashcards

Which type of construction estimate is most accurate and is typically used for final bidding?

Answer: Detailed quantity takeoff estimate

A detailed quantity takeoff estimate — developed from final construction documents — is the most accurate estimate type and is used for final competitive bids.

What is 'overhead' in a contractor's estimate?

Answer: Indirect costs of running the business not directly attributable to a single project

Overhead includes indirect costs such as office rent, equipment depreciation, administrative salaries, and insurance — costs necessary to operate the business but not tied to a single project.

A 'lump sum' (stipulated sum) contract means:

Answer: The contractor agrees to complete the scope for one fixed total price

A lump sum contract requires the contractor to complete all specified work for a single fixed price, placing the risk of cost overruns on the contractor.

In competitive bidding, a 'bid bond' serves to:

Answer: Ensure the bidder will enter into the contract at the bid price if awarded

A bid bond guarantees that if the bidder is awarded the project, they will execute the contract at the bid price — otherwise the surety pays the owner the difference.

The term 'markup' in construction estimating refers to the percentage added to:

Answer: The total direct cost to cover overhead and profit

Markup is the percentage added to total direct project costs (labor, materials, equipment, subs) to cover overhead and generate profit.

What is a 'unit price' contract?

Answer: A contract where prices are set per unit of work, with final payment based on actual quantities

A unit price contract establishes prices for defined units of work (e.g., per cubic yard of concrete), and final payment is determined by multiplying those rates by actual measured quantities.