Cost Analysis for Construction Items Using Excel Sheets

Hesham A. Abd-elkhalek1, Remon Fayek Aziz

1, Heba Ramadan Mohamed

2

1Structural Engineering Department, Faculty of Engineering, Alexandria University, Egypt

Email address:

engheba_86@yahoo.com

Abstract

The objectives of this paper is to explore the local practice in construction cost estimating and develop

a cost estimating system to facilitate the local estimating practice mainly in building construction.

Construction cost estimating related literature has been generally reviewed; meanwhile some

estimating software packages have been reviewed also. The researcher explores Microsoft Excel

capabilities and tries to acquire the skills needed to utilize these capabilities in developing a cost

estimating system which he names "Construction Cost Estimate Software" (CCES).

Keywords

Computer-Aided Cost Estimation, Building Cost Estimation, Cost Models, Software Cost Estimation,

Cost Databas.

1. Introduction

Effective estimating and tendering process is a key to the success of a construction project. The

preparation of cost estimate for a project is one of the most difficult tasks in project management.

Nowadays, successful cost estimating has to be based on thorough and updated information, and

processed utilizing a well designed estimating software.

A research project has been carried out in sporting tunnel project which is located in Sporting station,

Alexandria to estimate most probable building cost in the early stage of the construction process taking

the advantage of recent developments in the information and communication technology. The main

objectives of the project were:

Collecting building construction cost data.

Processing data and transforming it into building cost information.

Storing and retrieving the cost data and information.

Saving time and minimizing mistakes.

2 . Definitions

The concept of cost is defined in various ways. In the most general sense, cost means the monetary

value of the all goods and services used in order to perform an operation.

In terms of building construction participants of the projects, the owner, the designer, the contractor,

the user and the society are concerned with the building cost in various ways, due to the diverse

expectations and the objectives of the participants.

The direct cost is often emphasized and it is underlined in the cost estimation and cost control studies

as the direct cost generally is very high compared with indirect cost within the building cost. Besides,

decisions on investment of building projects, owner’s evaluation of bids prepared by contractors,

calculation of the tender price of the contractors, cost control during the decisions on design are all

bound to the correct or almost correct cost estimation.

The first step in using a cost model is collecting the data required. Then, these data must be analyzed

and updated. In the meantime, the quality and the level of data and thus the convenience of the chosen

model must be evaluated. As soon as new data are acquired during the implementation of the model,

they must be appended to the previous data.

3.Background to computer-aided cost estimation systems The earliest applications were in-house developed software for mainframe computers by some large

contractors. Due to the high cost, they were not available to most estimators. In the 1980s PCs became

widely used and the cost of computing declined rapidly. A new generation of purpose built cost

estimating software emerged. Computer-based estimating programs are good at the data collection,

computational, and clerical aspects of estimating. They achieve and retrieve large volumes of

resources, cost, and productivity information, perform calculations quickly and accurately, and present

results in an organized, neat, and consistent manner. All these virtues are of tremendous help in the

high-pressure environment in which most construction estimators often find themselves [Sun &

Howard, 2004]. Recent developments in communication and information technologies increased the speed, productivity

and accuracy of building cost estimation process and made easy following tasks:

1. Processing electronic bill-of-quantities (B/Q) .

2. Setting up computer-aided cost databases.

3. Setting up computer-aided cost estimation systems.

CCES is a PC-based system which has been designed to run under Microsoft Windows. Microsoft Excel

is used in developing CCES, as most companies are familiar with it. Full description of CCES has been

given with detailed implementation procedures. CCES has been evaluated to test its suitability to local

estimating practice. Evaluation of CCES has addressed both conceptual and practical issues.

4.Factors affecting the choice of cost estimation models Traditional building construction process is known as design–bid–build in which phases follow one

another. In order to use the limited resources in a rational way, it is necessary that cost estimation

should be done efficiently in each phase of the process. As the level of details differentiates in each

phase of the project, the cost estimation models applicable for each phase shall be different as well.

Model can be chosen consistent with the detail level of the decisions in each phase. On the other hand,

participants of the building construction process, needs and uses, cost estimation for different purposes.

Owner wants to know how much the profit shall be, how much capital is required for the project. The

owner tries to estimate the roughest cost rapidly. On the other way, the designer needs the cost

estimation to determine which schematic design alternative is the most suitable solution. Finally, the

contractor needs more detailed and reliable cost estimation in order to determine the tender price and to

manage the cash flow.

5.A computer-aided building cost estimation model (CCES)

The development process of computerized estimating system was based on some ideas which were

concluded from the literature review related to cost estimating and the experience of researcher in

construction industry. Also review of estimating software packages and Ms Excel capabilities provided

other ideas in developing the system.

The researcher started to develop and implement a system that suited the contractors' construction

industry which is named CCES. Main menu which consists of input and output input such as company

and project information, insert items the project, insert project resources, insert rates of performance

standard, direct cost and indirect cost output consists of analysis of items prices and report of the cost

Analysis for all item such as Figure 1.

The steps of the model are explained in detail as follows:

5.1 Project data entry The first step is entering the project data for which the building cost to be estimated. These are the

characteristics of the project and the parameters that should be entered as shown in Figure 2.

The name of the project.

The name of the owner.

The date of beginning and ending the project.

The name of the company and company address Executing the project. currency type.

Figure 1. CCES Menu

Figure 2 : General information of the project

5.2 Enter the project items List

Figure 3 shown This list contains a long list of B/Q items with their item numbers,

item description, and unit of measure .

Figure 3 : project items sheet

5.3 Enter the project resources

5.3.1 Labors Data Sheet

Most of labors used in building works entered in the sheet as shown in Figure 4.

Figure 4: Labors Data Sheet

5.3.2 Materials Data sheet

Most of materials used in building works entered in the materials data sheet contains material name

and material unit as shown in Figure 5.

Figure 5: Materials Data Sheet

5.3.3 Equipments Data sheet

Most of equipments used in building works entered in the sheet as shown in Figure 6.

Figure 6: Equipments Data Sheet

5.3.4 Subcontractors Data sheet

Most of subcontractors used in building works entered in the sheet as shown in Figure 7.

Figure 7: Subcontractors Data Sheet

5.4Enter the performance of the project rates Rates performance sheet contains a description of the item, labors and equipment required for the item

and productivity of this team. After entering all the foregoing click a button of submit as shown in

Figure 8

Figure 8: Rates Performance Sheet

5.5 Enter Direct Cost

5.5.1 Labor Cost Sheet

Labors cost sheet contains labors name and unit price. From this menu you can click on the cell and

choose description labors from the dropdown menu. Labors unit price can be typed. After entering all

the foregoing click a button of submit as shown in Figure 9.

Figure 9: Labor Cost Sheet

5.5.2 Materials Cost Sheet

Materials cost sheet contains materials name, material unit, unit price and rate. From this menu you can

click on the cell and choose materials description and material unit from the dropdown menu. Material

unit price can be typed. After entering all the foregoing click a button of submit as shown in Figure 10.

Figure 10: Materials Cost Sheet

5.5.3 Equipments Cost Sheet

Equipments cost sheet contains Equipments name and unit price. From this menu you can click on the

cell and choose Equipments description from the dropdown menu. Equipment unit price can be typed.

After entering all the foregoing click a button of submit as shown in Figure 11.

Figure 11: Equipments Cost Sheet

5.5.4 Subcontractors Cost Sheet

Subcontractors cost sheet contains subcontractors' name and unit price. From this menu you can click

on the cell and choose subcontractors description from the dropdown menu. Subcontractors' unit price

can be typed. After entering all the foregoing click a button of submit as shown in Figure 12.

Figure 12: Subcontractors Cost Sheet

5.6 Enter Indirect Cost

5.6.1 open site overhead sheet and enter all cost of the site overhead as shown in Figure 13.

Figure 13: Site Overhead Sheet

5.6 .2 open site cost sheet and enter all cost of the site as shown in Figure 14.

Figure 14:Site Cost Sheet

5.7Analysis of project items prices

we have got the report of the cost Analysis for item (materials cost, labors cost, equipments cost,

subcontractor cost, productivity and the total percentage of overhead and profits) as shown in Figure

15.

Figure 15: Analysis of project items prices Sheet

5.8The total cost of the project

we have got the report of the total cost of project as shown in Figure 16.

Figure 16: The total cost of the project Sheet

RESULTS

1. Most of contracting companies are still estimating their bids manually. Shortage of suitable

estimating software is considered the main obstacle for estimating computerization. Another important

factor is lack of availability of qualified persons in using computerized estimating packages.

2. There is consensus amongst contractors on the importance of using computerized cost estimating.

The main advantages that can be obtained from using estimating software are:

Building database.

Building archive for previous projects.

Simplicity of updating the prices.

Fast estimating and saving time.

Minimizing errors and human omission.

3. In response to the main needs of contractors in estimating, CCES has been developed. It is a

computerized system in cost estimating which designed to improve the local practice in estimating the

works. Microsoft Excel is used in developing CCES. Most of contractors have relatively good

capabilities in using MS Excel. In this way, the user is expected to welcome using CCES as he is quite

familiar with its environment.

4. The study shows that most of contracting companies are considered the main obstacles in using

computer in construction cost estimate are shortage of user-friendly computer program .

5. CCES suits contracting companies and has the potential to contribute in improving the construction

cost estimate. It has a good performance and adequate accuracy.

CONCLUSION

The cost performance of construction projects is a key success criterion for project sponsors, which can

be measured by comparing project budgets against final cost. Therefore the estimation of cost is an

important issue in projects and worthy of research. A literature review of the concept of project cost

found no model to represent the elements that play a part in its estimation or the measurement of the

accuracy of these estimates.

The future goal for Building Information Modeling is for general contractors to be able to perform cost

estimating process in a few minutes . CCES is a step along the way to establish a systematic

construction cost estimation practice amongst contractors. Of course, it needs continuous modification

and enhancement.

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