Construction cost estimation is a critical aspect of any construction project. Accuracy is crucial for project planning, budgeting, and resource allocation, while speed is critical for staying competitive in the industry and delivering in a timely manner.
For example, not submitting cost estimates and proposals on time could disqualify you from the bid. Alternatively, submitting your proposal after your competition could bury your proposal in hundreds of other bids. When it comes to accuracy, inaccurate numbers could easily lead to delays and cost overruns.
This means that contractors need to find ways to achieve both speed and accuracy in their cost estimations to stay ahead. One way is by using AI takeoff software to achieve up to 98% accurate material takeoffs in just under a minute.
Keep reading to explore the importance of speed and accuracy in construction cost estimation as well as the strategies for achieving both.
Why is Speed so Important in Construction Cost Estimation?
Here are some of the reasons why speed is so important in cost estimation:
Time and Cost Savings
The longer it takes to complete a cost estimate, the more money it costs in terms of labor and overhead expenses. Completing an estimate quickly helps reduce these costs and opens opportunities to participate in more bids. For example, Coastal Construction estimators were able to send 10 bids on average and get $1 Million in savings just by using Togal.AI to speed up construction takeoffs and the cost-estimating process.
In a highly competitive industry like construction, being able to provide cost estimates quickly can help you stay ahead of the competition and win more bids. Requests for proposals (RFPs) often have tight deadlines, and being able to quickly complete a cost estimate can help you submit a competitive proposal on time and ahead of your competitors.
Client Satisfaction and Increased Business
Clients want to work with contractors who are responsive and efficient. Providing cost estimates quickly helps build trust and credibility with clients. Also, when you can complete cost estimates fast, you can take on more work and grow your business.
Why is Accuracy so Important in Construction Cost Estimation?
Here are the reasons why accuracy is so important in construction cost estimation
Proper Resource Allocation
Accurate cost estimates help ensure that the project is properly funded and that resources are used efficiently. Inaccurate cost estimates can result in costly mistakes, such as overestimating or underestimating the amount of materials needed for the project, leading to waste or delays.
It can lead to poor decision-making, ineffective resource allocation, and other issues that can impact project success.
Building Trust and Credibility
Accurate cost estimation demonstrates a contractor's commitment to transparency and builds trust with clients and stakeholders. When contractors provide accurate cost estimates, clients can trust that they are provided with a fair and honest assessment of the project's cost.
Accurate cost estimates help reduce the risk of cost overruns, delays, and other issues that can arise during the project. On the other hand, inaccurate cost estimates can lead to disputes, litigation, and other legal issues, which can be costly and time-consuming.
4 Ways to Achieve Speed and Accuracy in Construction Cost Estimation
Some of the most basic approaches for ensuring accuracy include attending site visits and pre-bid meetings. You can take a look at site conditions, take measurements, and inspect the topography, as well as ask questions and clarifications regarding the project scope.
As an estimator, it will help you consider factors that could impact the cost estimates that aren’t found in the RFP such as road access, site traffic, and soil conditions. Doing site visits can also help you assess potential risks and create contingencies to ensure they don’t cause delays and unforeseen costs.
Beyond implementing this basic, yet essential step, here are the other ways you can achieve speed and accuracy when it comes to your takeoff and construction cost estimation.
Performing takeoffs and cost estimations involve many repetitive or tedious tasks, such as data entry, measurement, and calculation. These tasks can be time-consuming and prone to human error, which can negatively impact the accuracy and speed of your cost-estimating process.
Here are two ways to address this:
Use Specialized Calculators
Specialized calculators can eliminate manual errors that often occur when calculating by hand. By streamlining the calculation process, estimators can complete estimates faster with reduced errors and inconsistencies, especially for complex calculations.
Below are some of the calculators that you can take advantage of:
Use AI Takeoff Software, Togal.AI
Despite not directly profiting from completing cost estimations, estimators still spend weeks, even months on this process due to manual takeoffs or the use of outdated digital takeoff processes.
In fact, before using Togal.AI, the estimators at the Coastal Construction Miami office used to spend about 50% of their time on manual clicking, dragging, and tracing lines on a set of drawings to perform takeoff with on-premise software. Similarly, around 15 million estimators globally continue to spend around 20 hours a week doing the same.
But with the help of AI-powered takeoff software, general contractors and their team of estimators can now automate up to 80% of the takeoff. Here’s how:
2. Standardize Estimating Processes
Use a Checklist
Establish standardized estimating processes to ensure consistency and accuracy across all estimates. One way of doing this is using a checklist.
Here’s a sample checklist you can follow:
☑️ Get familiar with the project scope and expectations
☑️ Explore the site layout, soil quality, weather conditions, and existing geographical challenges.
☑️ Attend the preconstruction meeting for any clarifications
☑️ Use manual, digital, or AI-powered takeoff tools to analyze the project drawings.
☑️ Build a comprehensive list of materials needed for the project.
☑️ To account for the labor, determine the types of trade and the time needed to dedicate toward the project.
☑️ Determine any technologies or equipment needed.
☑️ Once you’ve determined the cost estimate, ensure all the requirements have been fulfilled.
☑️ Craft your proposal to include branding and any format the project owners require.
Another way of doing this is by using templates to reduce the time required for data entry and ensure all the necessary information is included.
To ensure the speed and accuracy of construction cost estimates, provide ongoing training and education to estimators and staff to increase their knowledge and skills. Encourage participation in industry associations to stay up-to-date on best practices and new technology.
Some of the sites and forums you can follow include:
4. Improve Communication and Collaboration
Accurate and speedy cost estimation depends on effective communication and collaboration among all project stakeholders. To achieve this, you need to follow some best practices that will ensure that everyone has access to the necessary information, can provide feedback, and can work together smoothly.
These best practices include establishing clear lines of communication, setting expectations, fostering a culture of openness and transparency, scheduling regular check-ins, and using collaboration tools.
Some of the collaboration tools you can use include:
Get up to 98% Accurate Takeoffs in under a minute with Togal.AI
In the highly competitive construction industry, achieving both speed and accuracy in cost estimation is crucial. Being able to provide cost estimates quickly can help contractors win more bids, increase their bottom line, and build trust and credibility with clients. On the other hand, inaccurate cost estimates can result in costly mistakes, disputes, and legal issues.
Fortunately, there are strategies and ways to achieve both speed and accuracy in cost estimation. Utilizing technology such as AI takeoff software like Togal.AI can increase the speed and accuracy of takeoffs and cost estimation, allowing contractors to achieve up to 98% accurate takeoffs in just under a minute. Standardizing estimating processes, providing ongoing training and education, improving communication and collaboration, and conducting post-project reviews can also contribute to achieving both speed and accuracy in cost estimation.
By incorporating these strategies and utilizing tools like Togal.AI, contractors, and estimators can reduce costs, win more bids, build trust and credibility with clients, reduce risks, and deliver successful projects.