Carry out the construction using the methods and equipment specified in the cost estimate!
I was recently shocked to discover that that “strange custom” has made a comeback at public construction sites…
Here is the client's position.
"The equipment listed in the cost estimate isn't being used on the job site! Bring the exact same equipment listed in the cost estimate and use it for the work!"
"The construction method is different from the cost estimate! Follow the construction method specified in the cost estimate!"
…In situations like this, how do you, as contractors, handle it?
I imagine you often make changes exactly as the client requests, don't you?
Or, just to keep a photographic record, they go out of their way to procure equipment tailored to the cost estimate and pretend to be using the same construction methods as in the estimate...
Although it’s a completely meaningless and baffling action, the reality on the ground is that we have no choice but to do as the client says.
"Standard Unit Rates" in Quantity Surveying and On-Site Construction
To begin with, cost estimates are calculated using “standard labor rates” for constructing the required structures.
Since this is merely a “standard,” there is absolutely no problem with using your company’s technical expertise to improve efficiency in order to build at a lower cost than the standard unit price. Conversely, in areas where your company is not as strong, even if the cost ends up being slightly higher than the standard unit price, that is simply a matter of the contractor’s circumstances, so it is not a problem.
For example, when building a road, even though earthwork is not our strong suit and is costly, we have exceptional expertise in paving work, so overall, we still turn a profit—and since this is perfectly acceptable, there’s no need for the client to make a fuss about it.
As for the construction methods used, we simply consider the methods employed by typical companies to be the “standard” and base our cost estimates on them. Therefore, it’s perfectly fine to use construction methods developed in-house.
It’s only natural that there will be discrepancies between cost estimates and on-site construction. Otherwise, technological progress would be impossible.
Purchasers and Standard Labor Rates for Cost Estimation That Cannot Be Accounted For in an Audit
So why do clients say, “The equipment listed in the cost estimate isn’t being used on the job site! Bring the exact same equipment listed in the cost estimate and use it for the work!”?
The reason is simple and clear: it is to “comply with the Board of Audit.” In other words,If construction on-site differs from the cost estimate, the client won’t be able to provide an explanation during the inspection, so...that's how it is.
To begin with, there are so many “clients lacking technical expertise” who don’t even understand the basics of cost estimation!
- I don't know what "standard step rate" means!
- I don't know how the step-by-step guide was put together!
- I don't have the skills to calculate construction costs by hand!
Nowadays, if you enter the appropriate figures into cost-estimation software, it will generate a figure, but how many clients are actually able to determine whether that estimate is correct?
This is just my personal impression, but I'd say it's about 5 out of 100 people...
Cost estimation and on-site construction are different.
In the past, there was a time when clients themselves built their own cost estimation systems. Rather than relying on outside parties (such as contractors), clients would design and develop the systems themselves, thoroughly check for input errors and calculation mistakes, and calculate construction costs.
In other words, the client side had a team of professionals who were thoroughly familiar with the details of the unit rates; these individuals understood the contents of the standard unit rates and recognized that “it is only natural for cost estimates to differ from actual on-site construction.”
However, now that cost-estimation professionals are retiring in droves, and as outsourcing firms and other contractors have begun developing cost-estimation systems in response to changing times, there are fewer and fewer clients who truly understand the fundamentals of cost estimation.
We’ve reached a point where some clients don’t even know the difference between “optional temporary structures” and “designated temporary structures,” let alone understand the concept of “standard unit rates.”
With so many clients who don’t understand the fundamentals of cost estimation, it seems likely that this era of “nightmares for contractors” will continue.
Contractors will likely be required to have the skills to challenge clients more and more in the future.
Construction Cost Estimation and the Pride of Construction Engineers
We’ve now reached an era where we don’t even need to use a calculator anymore. You can simply enter the quantities to get the totals, and drawings can be created using CAD.
However, it is also important for construction engineers to acquire skills that do not rely on such convenient systems.
The system does not always produce the correct answer. Since errors are bound to occur, you should develop the skill to detect them.
- Can construction costs be estimated by hand?
- Can I create drawings by hand?
- Can you turn the planimeter?
…Isn’t mastering these basic skills a matter of pride for construction engineers?
