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Construction Contracting: A Practical Guide to Company Management, 8th Edition by Richard H. Clough, Glenn A. Sears, S. Keoki Sears, Robert O. Segner, Jerald L. Rounds

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Chapter 5Cost Estimating and Bidding

5.1 Introduction

Cost estimating is a function that is central and indispensable for every construction contracting business. Estimating can be defined as the estimator's making the best possible prediction of what the cost of performing a construction project will be, given the time and other resources available. Construction estimating involves the determination and analysis of the many factors that influence and contribute to the cost of a construction project. Estimating, which is done prior to the physical performance of the work, requires detailed study of the bidding documents, as well as a careful analysis of numerous factors that will have a bearing on construction costs. Estimators apply their knowledge and skills, carefully analyze the construction documents, and examine as many other factors and influences as they can foresee, and then, through the application of their skills, produce this prediction—the cost estimate.

5.2 General

Construction cost estimates are prepared for a variety of purposes, and much of the credit for the success or failure of a contracting enterprise can be ascribed to the skill and astuteness, or the lack thereof, of its estimating staff. If the contracting firm obtains its work by competitive bidding, the company must be the low bidder on a sufficient number of the projects it bids if it wishes to stay in business. However, the construction projects the firm obtains must not be priced and bid so low ...

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