Construction Business Owner, February 2007

The role of the construction estimator has changed dramatically over the years, particularly for those employed by general contractors (GCs) or construction managers (CMs). It used to be that the estimator's primary responsibility was to perform a complete quantity "take-off" and price the entire project before accepting subcontractor and vendor bids. Now, particularly for large GCs and CMs, estimators are expected to do much more. Expectations now include "filling in the blanks;" defining scopes of work; assessing alternative materials, systems or methods; and managing the intent of the design team and desires of the owner.

The rapidly escalating cost of construction, lack of resources and lack of bidder interest further complicate the role of the estimator. How can contractors best adapt to these enhanced expectations and provide true preconstruction value to their clients while differentiating themselves from their competition?

Project Delivery Method Affects Role

The delivery method selected by a construction owner has tremendous impact upon the definition of the contractor's preconstruction role and whether any preconstruction services beyond estimating will be required at all. Contractors and subcontractors will typically experience one of four project delivery methods on most of their projects:

1. Traditional Design-Bid-Build (lump sum bid) based on completed bid documents
2. Construction Management-Agency where the trade contracts are directly with the owner
3. Construction Management @ Risk with a Guaranteed Maximum Price (GMP) based on less than 100 percent documents
4. Design-Build with all design and construction responsibility combined. 

Table 1 indicates the relative level of preconstruction involvement required of contractors and subcontractors for each delivery method. Each construction project is unique and owners approach the selection of their delivery method and construction partner differently, but the recent trend toward more construction management and design build project delivery demands greater estimator capability than traditionally required with Design-Bid-Build. 

When owners have traditionally put their projects "out to bid," the focus of the estimating team would be limited to a very short and very intense bid period between receipt of the documents and the day of the bid. Depending on the project, this may be only a two-to-four week period of time. The objective of this bid period would be to win the project by being the lowest cost bidder. Keys to success in lump sum bidding include receiving as many bids as possible, knowing in great detail the quantities of materials required, including only what is clearly necessary and maintaining low overhead costs and fees. 

In contrast to this approach, Construction Management (CM) and Design-Build project delivery methods demand the involvement of the estimator or preconstruction manager for a much longer period of time, typically months and sometimes years prior to the actual start of construction. In addition, CM and Design-Build projects are often "fast tracked" or bid in packages allowing work to begin much sooner and to proceed while other portions of the project are still being designed. The result is the preconstruction and estimating activities overlapping construction activities for months or even years on large projects. Throughout this process, multiple estimates are created, updated and frequently refined based upon new design information or alternate materials or systems for portions of the work not yet bid. 

Many CM firms employ preconstruction managers, essentially preconstruction project managers, to lead the project through this period prior to the start of construction. Although many preconstruction managers possess an estimating background, more and more are field operations staff seeking a career change from onsite project management roles. Preconstruction managers in firms handling large projects may only be able to handle two or three projects at a time and may not even do any estimating themselves. Rather, they act as the manager of internal resources of the estimating department to produce progress estimates at design milestones, evaluate material and system costs, review document progress and coordination, build and maintain subcontractor and vendor relationships and serve to efficiently hand off the project to the project manager and superintendent at the start of construction.

Design Milestones

The nature of project delivery methods beyond traditional Design-Bid-Build require preconstruction manager involvement in the project as the design is developing through key stages. Although universally accepted definitions of these document development stages are not common, the implications for the preconstruction team at each phase can be generally outlined as follows:

Planning: (Also known as program) includes a comprehensive listing of all new needs and spaces for the building. 

Conceptual:  At the conceptual stage, some preliminary form has been contemplated for the building, including number of floors, total gross area, potential site, etc., and hand sketches may be available to clarify the design intent. 

Schematic:  At the schematic document (SD) stage, it is common to have single line scaled drawings of typical floor layouts, as well as a narrative description of the major structural, mechanical and envelope systems of the building. 

Design Development : At this Design Development (DD) point, the design of the project is close to being locked down and plans for all disciplines such as civil, architectural, structural, mechanical and electrical are included. Subcontractor and vendor estimating assistance should be sought for all areas of the project estimate.

Construction Documents: Although an owner can theoretically be offered a Guaranteed Maximum Price (GMP) at any point in the design process, the desire to minimize allowances, contingencies and changes will usually dictate that the GMP be established based upon Design Development or later documents. 

At each of these stages the preconstruction manager creates estimates that increase in detail. Along with the increased detail of each succeeding estimate, comes a corresponding decrease in contingency and qualifications that are necessary. A key owner and designer expectation of the preconstruction manager is the ability to clearly identify what changed and why it changed from previous estimates. A detailed variance report allows for clear identification of changes to the estimate.

It is essential that all progress estimates, starting from the very first one delivered, reflect the total anticipated construction costs regardless of what is shown. Unlike the Design-Bid-Build approach, owners employing construction managers or design-builders have little tolerance for hearing "it wasn't shown. It is the job of the CM preconstruction manager to "fill in the blanks" based on experience, knowledge and historical data so that the owner and design team are not surprised by escalating numbers as the design is finalized. Herein is the fundamental difference between the role of the preconstruction manager in CM or Design-Build and an estimator in a "hard bid" estimate. The preconstruction manager is expected to look out for the interests of the owner from the very first estimate by assuring the estimate is complete and reflects all that is required to build the project whether clearly indicated by current documents or not.

Beyond Design-Bid-Build, estimating becomes a process rather than a singular bid day event to be managed. This extended and enhanced role demands that preconstruction professionals wear many hats beyond that of just "estimator". Unlike Design-Bid-Build estimators, preconstruction managers at early stages of design rely on historical data and experience to quickly develop required alternate approaches and solutions from similar projects.