Industrial Estimating Services for Accurate Costs, Takeoffs & Bids

Introduction

Building industrial projects comes with its own unique challenges related to cost and construction. Industrial projects consist of large structural components, custom mechanical systems, electrical infrastructure, process piping, specialized equipment, and tight construction deadlines. Because of these added complexities, competitive

Industrial estimating services

are a must for contractors to maintain profitability.

Competitive industrial estimating combines labor, equipment, materials, and subcontractor costs within a structured cost estimate including overview/administrative costs and unique risks associated with the project. Contractors can review all actual construction information shown in project drawings and specifications prior to preparing price proposals.

What are Industrial Estimating Services?

Industrial estimating is the process of projecting expected costs for construction, expansion, renovation or improvement of an industrial facility. Professional estimators perform a thorough analysis of project documents and specifications, including drawings, to determine materials, equipment, labor, and specialty services necessary to perform the work.

An industrial construction estimate may include structural concrete and steel, process piping, mechanical systems, HVAC, electrical infrastructure, instrumentation and controls, insulation, fire protection, and other construction systems.

Supervisory costs, mobilization, permitting, temporary facilities, safety, contingency, overhead and profit can be incorporated into the estimate as indirect costs associated with the project.

The goal isn't to provide a final project price. A preliminary project estimate value aids a construction contractor in assessing the cost elements aligned with the project, and in identifying the opportunities and risks associated with the market value of the project.

Industrial Estimating vs. Commercial Construction Estimating

Although embedded principles of estimating remain constant regardless of whether one is pursuing an industrial estimating project or a commercial estimating project, industrial estimation is more complex.

Construction of most commercial buildings, which may include offices, retail, hotel, and school buildings for example, generally involves a foundational structure, construction of walls along with placement of systems of mechanical and electrical and planning (MEP) components. Industrial buildings may contain production lines, process machines, pipe lines, heavy machinery, large system of electrical engineering and control, industrial ventilation, and sophisticated equipment.

There is significant variation in labor productivity due to industrial activities being performed in restricted or limited access areas, within fully operational facilities, through elevated installations, during shutdowns, in the presence of hazardous environments, and by specialized work groups.

Therefore, industrial estimates require intricate consideration of the specified technical elements, methods of installation, equipment required, and the project's project plan.

Why Industrial Projects Require Specialized Estimating

The nature of industrial projects is that they consist of many many systems. Therefore, a change to one system may cause a change to several other cost systems.

For instance, the placement of a major piece of process equipment may necessitate a reinforced foundation, structural steel, electrical work, piping, controls, insulation, crane work, and special installation. If any of these associated elements are overlooked, it may lead to a significantly understated construction cost estimate.

Specialized industrial estimating helps determine these relationships prior to the completion of the bid. It also aids in making assumptions regarding labor productivity, procurement of equipment, and planning of materials and subcontractors.

What Goes into an Industrial Construction Estimate?

Comprehensive industrial estimates must consider both direct and indirect costs associated with a project.

Material Quantities and Cost Breakdown

Material quantities are determined through a detailed quantity take-off from project drawings and specifications. This may include concrete, reinforcing and structural steel, pipe, duct, wire, conduit, cable, insulation, supports for equipment, valves, fittings and other building materials.

Measured quantities are priced based on supplier quotations, market conditions, transportation, waste and the flexibility of the supplier to meet the project’s material requirements.

Labor Hours and Productivity Rates

Productivity can be the key differentiator in labor estimating for industrial construction.

Trade specific wage rates, composition of the work crew, difficulty of the project, height of the work, access constraints, shift requirements and overtime are just a few of the factors an estimator must consider when estimating the labor requirement.

Contractors may price labor too low if they do not consider additional time required for complex industrial installations.

Equipment and Machinery Costs

Most industrial construction projects use cranes, lifts, forklifts, excavators and welders as well as more specialized equipment.

Equipment estimates must cover rental costs, ownership, fuel, maintenance and transport, as well as the operator, setup and take down.

Heavy equipment or complex installations can drive the equipment costs to a large portion of the budget for a project.

Subcontractor and Specialty Trade Pricing

Specialty subcontractors will be required for electrical systems, instrumentation, process piping, fire protection, insulation, equipment installation, testing and commissioning work and more.

Professional estimators include all major trade packages and all subcontractor quotes to define the final scope of work.

Overhead, Contingency, and Profit

Industrial estimates also include costs that do not relate to a specific material or activity.

These costs include conducting project management and supervision, costs for insurance, temporary utilities, safety programs, site offices, permits, and general project administration.

According to contractual agreements, the costs of contingency may be included in the provision for defined risks like price fluctuations, difficult site conditions, logistics challenges, and schedule risk. An appropriate profit margin is then added depending on the strategy and financial goals of the contractor.

How the Industrial Estimating Process Works

An industrial estimate that can be relied upon follows a formal process. This process helps reduce omissions and increase the accuracy of costs.

Step 1: Review of Industrial Drawings and Specifications

The structural, civil, mechanical, piping, electrical, instrumentation, architectural, and other special drawings are reviewed.

The specification text, instructions to bidders, addenda to the bid requirements, and the project schedule are also reviewed.

This also provides the estimator with the project completion criteria.

Step 2: Define the Project Scope and Work Packages

The estimated project is then divided into the logical trade packages or into construction work packages.

This scope definition helps avoid duplication of quantities and helps eliminate the risk of unfulfilled responsibilities between contractors and subcontractors.

Step 3: Conduct a Detailed Quantity Takeoff

Quantities are measured (taken off) using the digital takeoff tool from the drawings. Measurements can be of areas, lengths, volumes, weights, or counts of equipment and individual components.

These takeoffs help to establish both material and labor costs and the required equipment.

Step 4: Establish Material Costs

When quantities are known, estimators incorporate material pricing, think about hauling, delivery, waste, availability, and regional price variations.

A good industrial estimate builds an estimate of accurate measurements for the project with some project-specific pricing, giving the contractor a better basis for costs of labor, equipment, risk, and the final bid.

Industrial Quantity and Material Takeoffs

Quantity takeoffs are a major component of an industrial estimate and identify things on drawings that can be measured and defined.

Things included in industrial quantity takeoffs may be the volumes of concrete, tonnage of structural steel, lengths of piping, ductwork, areas of insulation, electrical conduit, cables, valves and fittings, equipment counts, and trade-specific items.

The overall reliability of an estimate is dependent on the quality of the takeoff. Missing quantities results in an underbid by the contractor, and including an item twice results in an overbid.

Quantity Takeoffs vs. Material Takeoffs

A quantity takeoff measures all project components while a material takeoff only measures construction materials.

For example, an industrial quantity takeoff may show piping systems and equipment as well as the installation of piping and structural components. A material takeoff may show the size of pipe, fittings, valves, supports, insulation, and fasteners.

Both aid in accurate pricing as well as planning materials procurement.

Overview of Major Costs in Industrial Estimating

Each component of an industrial construction project has its own system. To generate a reliable estimate, each of the main cost components has to be considered independently before they are combined to develop the total cost for the whole project.

Structural and Civil Costs

Activities such as excavation, grading, site preparation, placement of underground utilities, construction of drainage systems, roads, and site preparation are some of the activities that form the basis for the installation of other systems and equipment in an industrial project.

Cost of Mechanical and Process Piping

Mechanical and process piping costs can represent a significant amount of the total cost of an industrial project. Length of piping, fittings, valves, supports, and the testing and installation of pumps are some of the items that a Cost Estimator has to consider. Costs associated with the selection of the piping material, piping diameter, the pressure rating of the piping, and the installation environment also need to be considered.

Electrical, Instrumentation and Control Systems Costs

The scope of industrial electrical estimating can include distribution of power, installation of lighting, controls and instrumentation, and grounding systems, as well as the installation of switchgear, transformers, and cables and the installing of conduit systems.

Special high-capacity electrical systems and control systems may be a large part of the cost of an industrial project and these costs should be reviewed critically.

Equipment Installation and Rigging Costs

Delta cranes and erection crews, temporary supports, and alignment and assembly of industrial equipment can significantly affect the project cost.

These costs need to be considered when evaluating the project budget, as they can impact the project budget significantly and affect project completion.

Industrial Projects Which Involve Estimating

Professional industrial estimators assist with the building of many types of facilities, such as:

Manufacturing and Processing Plants

Warehouses and Distribution Centers

Generation Facilities

Facilities for Food and Beverage and Pharmaceuticals and Chemicals

Data Centers and Utility Services

Industrial and Facility Expansions and Renovations

Replacement of Equipment

Each has unique needs for labor and equipment, materials and processes, and thus project estimators must analyze actual project requirements versus making generic cost assumptions.

Common Issues with Industrial Project Estimating

There are several reasons why industrial project estimating can be difficult. There are factors associated with cost that can be found in most building construction projects and there are also factors that can be unique to industrial projects.

Complex Drawings and Specifications

Plans and specifications for construction of industrial projects can be very large and very complex.

One missing line on a drawing can mean the difference between an incomplete estimate and a complete estimate.

Loss of Labor Productivity

There can be a host of factors that affect the productivity of labor on a construction site such as, access, operating limitations, contingency shut downs, special construction techniques, and safety.

Estimating must take these factors into account to properly determine labor needs.

Volatile Material Costs

Prices on many of the materials used in industrial construction change quite often, such as, piping and steel, instrumentation and electrical material, equipment and specialty items.

Construction contracts need to be very clear with estimate assumptions and cost parameters to control risk.

Site and Equipment Constraints

Industrial construction can have very difficult site logistics and equipment needs, requiring multiple temporary construction and support facilities with a tightly controlled material delivery and special lifting plans.

These factors can have a major impact on the costs of a project.

Benefits of Professional Industrial Estimating Services

A professional industrial estimate provides a framework for a contractor to picture the financial aspect of the project before a bid is placed or the ground is broken.

A professional industrial estimate provides a contractor with the ability to:

Improve bid accuracy

Less likely miss scope

Identify major cost drivers

Determine scope, sequence, and plan for resources

Improve procurement

Evaluate subcontractor quotes

Less internal estimating requirement

Analyze project profitability

Maintain profit margin

Enhance the chance of receiving the project

For contractors who have multiple simultaneous bid requirements, outsourced estimating provides additional capacity without an increase to the internal estimating resource.

What Should an Industrial Estimate Deliver?

For a professional industrial estimate, the contractor should be able to understand why costs are incurred and where costs can be incurred. The estimate should then allow the contractor to make appropriate adjustments.

Some examples of what should be included in a professional industrial estimate include:

Detailed quantity take off

Material costs

Labor hours and cost

Equipment cost

Labor cost

Trade organized cost

Marked up drawings

Bid summary

Assumptions and exclusions

Bid spreadsheet

HTML estimate report

This documentation allows contractors to review the estimate, evaluate supplier quotes, discussion of scope with subcontractors, and prepare the final bid.

Why Select All State Estimation Canada?

All State Estimation Canada

provides professional industrial estimating services for contractors, subcontractors, builders, developers, and construction services across Canada.

We review project plans and specification and perform detailed quantities, prepare material, labor, equipment and subcontractor costs for the project scope.

We can support all phases of the process including structural work, concrete, steel, mechanical systems, process piping, electrical systems, HVAC, and insulating systems.

Each estimate is broken out in a consistent way to show both cost and quantity information. We also perform a scope review of the project, measurements, and major cost components.

Our estimating support helps you evaluate project costs and bid with more confidence for manufacturing facilities, warehouses, processing plants, utility projects, data centers, or industrial renovations.

Frequently Asked Questions For Industrial Estimating

What are the Industrial Estimating Services?

Analyzing construction project drawings, given specifications, and estimating the cost of material, labor, equipment, and subcontractors in the context of the project is Industrial Estimating.

What Do Industrial Construction Estimates Include?

A draw rack, material, labor hours, equipment, subcontractor cost, overhead, contingency, and profit, depending on the specified limit are included in an Industrial Construction Cost estimate.

How do Industrial Estimates Differ from Commercial Estimates?

Industrial construction estimates include Project Estimates for more complex work systems, such as Process Piping and instrumentation.

What Kinds of Industrial Construction Estimates are Available?

Estimates can be prepared for construction of Manufacturing factories, warehouses, Processing, Power Generation, Food, Data Centers, Utilities, Renovations, etc.

What Kind of Drawings do Industrial Estimates Require?

Estimating requires Architectural, Structural, Civil, Mechanical, Electrical, Piping, Instrumentation, Equipment, and other project-specific drawings along with specifications and addenda.

Can an industrial estimate include labor and equipment costs?

It certainly can. Industrial estimates account for trade-specific labor hours, labor rates, productivity rate assumptions, equipment rental, fuel, operators, mobilization and other pertinent costs.

Conclusion

The kind of depth and thoroughness that industrial estimating services add to the analysis of a construction project that warrants a bid is unparalleled. Quantity takeoffs, pricing for materials, labor productivity, equipment, subcontractor costs, and an assessment of the project’s unique risks form the basis of estimating services. It provides the contractor a firm basis for making their decision.

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Industrial estimating provides the contractor a competitive edge; it guides a contractor in constructing a bid that accounts for the real costs and minimizes the risk of inadequate scope. Well-structured, comprehensive industrial cost estimates provide contractors the confidence in fully engaging in the given opportunity and placing a bid.