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Estimate Construction Costs for BIM Projects Quickly – And Accurately!

How to estimate construction costs for BIM projects quickly - and accurately

The problem of how to estimate construction costs is one of the most crucial issues facing companies in the industry.

An accurate cost estimate, incorporating both the direct costs and project risks, is the fundamental guideline to determining a project's feasibility.

BIM should in theory enhance the accuracy of cost estimates. It should allow construction companies to bid for work based on real intelligence, so they will only take on work they know is profitable.

The reality is somewhat different. Companies are not using BIM properly and continue to struggle with accurately estimating project costs. They create bids based on guesswork, dangerously thin profit margins and financial struggles for leading construction contractors.

Problems facing the construction industry

We’ve already written extensively on problems with BIM model element classification resulting in inaccurate quantity takeoffs.

This creates problems around material costs, with over or under-orders of up to 30% not uncommon.

But it gets worse. Our research suggests that currently only around a third of construction professionals actually use BIM software for cost estimation. While most BIM-based estimating tools are capable of exporting quantities to a spreadsheet for the quantity surveyor to begin pricing work, this means that the two processes are working independently of each other. Any changes or tweaks made to the model using BIM software will not be reflected in the updated cost estimate. This makes it practically impossible to refine and optimise projects according to cost or time.

Throw in the fact that costs also need to be applied to work schedules - and that up to half of construction project schedules are created and edited in Microsoft Excel, right now - and you get a feeling for how disconnected and clunky the whole process currently is.

In simple terms, cost estimation using today’s flawed BIM processes is a manual, laborious process which involves little more than assigning numbers to deeply questionable assumptions. It’s a mess of pen and paper, with spreadsheets and cost books held together by human experts who are too time-poor to consider any kind of alternative.

Just consider the numbers. We surveyed 235 construction professionals, and asked them specifically how long it takes them to prepare cost estimates. 75% of them told us it takes longer than a week, with just under 30% saying it takes longer than 3.

Again, this dramatically increases the time and cost of bid preparation, a key driver of low profit margins in construction companies.

Check out the video below to find out more about Kreo’s cost estimation features…

Kreo - the solution!

When you import your BIM model into Kreo, it reviews and identifies any potential errors. Kreo facilitates the close collaboration of at least 5 team members. Project managers can assign roles, invite team members, make important decisions and coordinate the overall workings of the project.

  • Architects or BIM managers use KREO to correct BIM model errors or collisions, as well as verifying and confirming the classification of BIM elements.
  • Quantity surveyors or cost estimators verify and confirm that quantities are correct, as well as activity assignment.
  • Planners or programme managers use the platform to verify activity assignment, sequence logic, resource loading and levelling.
  • And bid managers verify the size and division of work packages.

Kreo produces a ‘default scenario’ in just a few minutes - with a detailed cost estimate, schedule (Gantt and 4D visualisation) and work packages to tender off. Kreo fully integrates with leading cost data providers - BCIS in the UK and RS Means in the US and Canada. Kreo automatically identifies the most suitable cost items for all the BIM elements (materials, unit of measurement, activity) and loads costs directly to the cost estimate. You can also use your own internal cost database if necessary. Depending on your preference, Kreo produces the work breakdown structure of the project in accordance with NRM or MasterFormat.

At this stage, each expert can start to apply his or her expertise and skills to the experiment. They can create new scenarios by tweaking key cost and schedule drivers, and immediately see how those changes affect the overall project KPI. They can save the scenario on the ‘scenario dashboard’ for the team and project manager to consider.

With Kreo, construction project stakeholders, such as quantity surveyors, cost estimators and bid managers, can deliver projects at a lower cost, more quickly, or more efficiently - depending on what the client needs.

Download Kreo's eBook to learn how we are unleashing the potential of 4D & 5D BIM