Estimating the cost of work

This incomplete discussion upon the systematic collection and use of unit costs for ordinary estimating purposes has been compiled partly from memoranda issued from time to time within the past four years by the author to the members of the hull Estimating and Planning Staff at certain Navy Yards, as a part of their instruction and training.

On account of the satisfactory results obtained by the use of these notes, incomplete as they are, I have been persuaded rather than to wait several years longer for more complete data from which to prepare a scientific discussion of the problems of the average estimator, to venture at this time to contribute my mite to the cause of standardization of labour.

I do this in the belief that my efforts will be supported and far surpassed by many others of kindred faith, and that at some distant day the art of Estimating the Cost of all classes of work will approach becoming a science.

The word "estimate" is used in several different senses, and in dealing with the cost of work it is necessary to confine our discussion principally to one specific definition or meaning. Those who require or seek estimates of cost need them for a variety of reasons or purposes, and these various purposes correspond with the kind of estimate required, for example:

To estimate may mean: To make a "rough" approximation of probable cost. This is the only kind of estimate possible when the specifications are not exact as to the extent and nature of the work which is contemplated. Such estimates as this are required by Congress upon which to base most of the appropriations. Such an estimate is required for large projects or for contemplated work not definitely decided upon, where the approximate outlay may determine whether the project can be financed properly and whether it is worthwhile to go to the expense of making more detailed investigation and of making accurate estimates. To estimate may mean:

To fix the value by comparison and experience; to calculate, and usually to make this calculation by utilizing all available comparative data. If an estimate is made for a prospective customer, it is usually in the form of a "bid," submitted on a regular form of the proposal; and if the estimate is accepted and approved, it becomes the contract price.

This form of estimate must be made and checked with great care, and it will be of advantage to be able to submit an estimate of this kind without undue delay. Hence both accuracy and promptness are desirable. Such estimates or "bids" are made by adding to the estimated cost of production a sum for marketing the product and for profit. The term "estimated cost of work" will be used to indicate the probable actual cost or outlay to the contractor

, which is required for a specified production. Profit and selling expenses will not be included. Total cost is composed of labour, material, and incidental expense. Attention will be especially devoted to estimating the labour. Estimating the cost of material presents no difficulty to the experienced estimator after a complete list of the material required is prepared.

Estimating the cost of work - PDF by William Burder Ferguson