Are you looking for the best industry practices on Steel Construction costing? Our experts at CERM-EX will give you the answers you need.
In a post COVID-19 world, uncertainty is rising, especially when it comes to project costs. In this series, we will walk you through how to navigate such times when it comes to putting a price on steel structures.
Why the first estimates are Crucial?
One of the key decisions in any project is the choice of the structural frame material. This usually occurs early in the design process since major components depend on it. Furthermore, any changes to the material could have a critical implication on the project such as cost, logistics, and construction program. Thus, a realistic cost estimate is one of the cornerstones in any successful project.
Overview
The initial cost estimates are regularly based on limited data such as an outline for the architectural design. Therefore, cost models, benchmarks, and historical data are used to give a more accurate estimate range. As the project progresses and more information becomes available, different costing scenarios can be developed and compared, and more details are added to the costing elements replacing the assumed or historical information. The costing progress can be seen as it starts with the rate per m2 gross internal floor area (GIFA) to the quantifying of the steel elements and pricing per ton. Nonetheless, it is crucial to include contingency and allowances for elements that are not quantifiable.
General Procedure
As we mentioned above, in the early stages, the costing is based on cost models, benchmarks, and historic data, and the cost is given as a rate per m2 GIFA. When using these three tools, it is important to have a good understanding of the project, rather than following the data blindly. Another important factor is observing current and future market trends. An example would be if a cost engineer or a consultant uses the highest/lowest rates of the standard range from the benchmarks/cost model/historical data in the midst of the COVID-19, where steel prices plummeted due to the lower demand without considering the potential rebound of prices that will occur after demand recovery, will definitely affect the project cost. This makes cost estimate a holistic approach when looking at the past, current and future data is critical for performing a successful project.
This is all for our first part of the series, make sure to stay tuned for the rest of the series.
If you are looking for a designer, manufacturer, or contractor for your next project, check out our website where we provide full solution packages for all your steel projects.