The Civil Engineering Contractor April 2019 | Page 36

THOUGHT LEADERS
How to estimate construction
costs — ensuring you stay on
budget throughout your project
By Andrew Skudder, CEO
of Construction Computer
Software
The modern construction
industry typically deals with
large numbers in terms of
rand amounts in converse
proportion to the relatively
small numbers concerned
with available margins.
Andrew Skudder, CEO of CCS.
34 | CEC April 2019
T
hese tighter margins demand
a far greater focus on
operating within budget to
avoid completed projects delivering
little profit or, in the worst cases,
considerable losses. So where should
a company focus its efforts to stay on
budget?
Estimations must consider both
fixed and variable costs as well as
contingency flexibility to account
for variations. Labour costs must
also be estimated correctly. This can
only be done if the contractor has
a good understanding of how long
each task will take and how many
labour hours will be required to
finish it. Having an accurate estimate
will avoid any surprise costs incurred
down the road that hurt a project’s
profitability. Modern estimating
software can make a huge impact in
these areas and greatly reduce errors
and discrepancies, not only in their
preparation but also later on in the
project to ensure these estimations
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