The process of building isn’t what it used to be. Construction projects have gotten more complex over the years, and material and labor costs are increasing. Nonetheless, project starts are on the rise. In fact, new data from the U.S. Census Bureau indicates that construction spending reached $376.6 billion during the first three months of 2022, up 12% from the same period last year.
New opportunities and challenges highlight the importance of producing accurate estimates. In an industry with razor-thin margins, incorrect estimates can lead to a major hit in profitability and wreak havoc on your company’s finances. A study by QuickBooks and TSheets found that one in four firms would go out of business after just two or three inaccurate estimates.
This is why it’s essential to ensure that your costs and quantity estimates are as accurate as possible. One of the best ways to do this is to use construction estimating software.
The right solution will not only help you come up with accurate estimates, but it will also speed up the process, reduce stress, and enable you to produce more compelling bids.
This article will shed light on the fundamentals of construction estimating software. You'll learn about its role in construction projects, the benefits of having the right tools, and how to select the best solution for your firm.
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Construction estimating software refers to a digital tool (or a suite of tools) that empowers estimating teams to accurately and efficiently estimate their project bid price.
Estimating software solutions typically includes features that streamline tasks like conducting quantity takeoffs and determining project scope.
To understand the value in construction estimating software, let’s look at the estimating process and see where digital tools would come into play.
Here is a high-level overview of the steps involved in construction estimating—and how software can help.
The first step in construction estimating is to have a plan—literally. You will need to review the project plans and documentation to effectively determine the scope of the project.
Traditionally, estimators would get their hands on 2D project plans and start to identify quantities and measurements from there. Now, thanks to leading construction estimating software, teams can view project plans in 3D, so they can get an enhanced view of the project and gain a better understanding of design intent.
This knowledge can benefit the next steps of the process, which include performing takeoffs and producing estimates.
The next step is performing quantity takeoff. This entails determining the quantities and amount of materials needed for a project. When conducting takeoffs, estimators need to create a list of materials with their corresponding quantities.
Estimators must measure rooms and spaces in the building, as well as count all the components and fixtures in the plan. For example, to figure out the amount of concrete needed to construct a parking garage, estimators would need to measure the area and determine how many slabs of concrete are required.
The old-fashioned way of doing things meant estimators measured paper plans by hand using a scale ruler, then calculated material quantities.
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Construction estimating software makes this step easier by digitizing measurements on the plans uploaded onto the platform. The math is also streamlined; users can just enter the formula into the software and let the program crunch the numbers.
All construction projects have changes in design that can occur both during the preconstruction and construction phases of the project. If left unaccounted for, they can have a significant impact on cost, labor and schedule of a project. An effective change management process during the takeoff phase can help estimators account for changes in quantities before they become a problem. When choosing a takeoff solution, it is important to choose a solution that allows you to easily identify changes when comparing versions of sheets and models as well as allow you to move the takeoff over to the latest drawing set, so you do not have to start from scratch.
While the two are closely related, takeoffs and estimates are distinct components of a construction project. Takeoff is simply the process of quantifying the resources—i.e., materials and labor—needed for the job. The estimating stage is when costs are factored in.
In other words, estimates move takeoffs a step further by including the costs of materials, equipment, labor, and other expenses.
As for how to create the construction estimates, teams would need to tap into industry and market information to figure out expenses for the items listed in the quantity takeoff.
Quotes from subcontractors, along with historical data on costs for similar projects may be helpful too, as long as you’re mindful of market fluctuations and issues like supply chain disruptions.
In any case, having the right information is essential. If you’re using digital estimating tools, then the info you need may be easily accessible. Some solutions also have predictive analytics capabilities that surface trends and insights to help you come up with accurate estimates.
In addition to estimating your material and equipment costs, you also need to account for labor. Ensure you have the most recent labor rates and don't forget to factor in the costs of overtime and extra hours.
Finally, make sure you factor in indirect costs. Administrative expenses, utilities, and land acquisition are just some of the things that need to be considered.
Once you have your estimate, incorporate it into your proposal. Use the quantities and costs from the steps above and then factor in your profit margins to come up with a competitive bid.
For best results, ensure that your proposal is easy to read by using clear wording and crafting a document that follows a logical structure. Use headings, tables, and graphs whenever it makes sense to make the information easily digestible.
Double-check your proposal to ensure it contains the most recent information and it covers all the required bid specification documents.
Construction estimating software is an important tool for any firm. Implemented correctly, it can vastly promote team productivity, help you impress your clients and improve your bottom line.
Consider the following benefits of construction estimating software.
Software enables you to complete estimating-related tasks in less time. Automated quantities and calculations mean you can spend fewer hours measuring and counting and devote more energy toward optimal activities.
Automation also reduces human error and miscalculations that lead to inaccurate estimates.
Modern estimating tools further improve accuracy by providing historical data that you can reference when figuring out material and labor costs. You can easily benchmark and compare costs and use that data to make informed decisions during the estimation process.
The estimating process is rarely done by a single person. In many cases, it requires a team of professionals to effectively implement construction takeoffs and estimates.
Good construction estimating software brings people together into one digital working environment. Team members can review plans simultaneously on the same platform, improving collaboration as well as eliminating mistakes and duplicate work.
Digital estimating tools make it simple to capture, track, and manage data. Documents such as project plans can be stored in the software alongside relevant information such as measurements, quantities, and costs. This makes finding and retrieving information and insights much more streamlined.
All of the above benefits—including faster takeoff, precise estimates, and greater access to data—lead to more competitive bids. With the right tools and information, you will submit accurate proposals, while ensuring optimal profitability.
Now that we’ve discussed the benefits of construction estimating software, let’s look at the factors you should consider when selecting the right one for your firm.
When deciding on construction estimating software, set your sights on cloud-based platforms. These solutions let you access the information and tools you need from anywhere and from multiple devices so you’re not tied to a set location when working.
Cloud solutions also pave the way for better collaboration and productivity as they allow teams to always have access to updated information in real-time.
Your estimating software should work well with your current processes. Prefer the metric system over imperial? Do you use custom classifications for your projects? Whatever the case, see to it that the solution you choose can support those needs and preferences.
Also, if you need to use other tools alongside the construction estimating software, choose a solution that can work with your existing applications. For instance, if you’re using Excel, select a platform with built-in export capabilities.
Partner with a software vendor that has your existing and future needs in mind. Remember that the construction industry is constantly evolving. It’s best to align your firm with a provider that regularly releases software updates and optimizations that fit your needs.
Let’s look at some of the top software solutions that can improve your estimating.
ProEst is a powerful, cloud-based cost estimating solution that lets you create more competitive bids in about half the time.
The tool offers advanced tools and automated workflows to streamline estimating and preconstruction tasks, all with the kind of accuracy and detail that results in more profitable jobs.
As a smaller company, Whelan Construction adopted ProEst to stay sharp and compete against larger firms. While the small team expected to be stretched even thinner than usual by implementing new software, they were pleasantly surprised by the system’s intuitive UI and simple logic. Now, Whelan can create a professional and accurate estimate in as little as 40 minutes.
Wagner General Contractors also saw results with ProEst. Their rapidly-growing firm needed a solution to time-consuming estimates if they wanted to continue growing at the rate they were experiencing. They decided to implement ProEst when they realized that it could work across different geographical locations and could be easily accessed by everyone on their team. Now that the team uses ProEst, their CEO, who is heavily involved in the estimation process, can get accurate estimates out quicker than ever.
Autodesk Takeoff is a cloud-based tool to help teams optimize their takeoff workflows. The software can be used across 2D and 3D takeoffs, so teams can generate the quantities they need easily. Generate figures faster from 3D models to save time and capture project scope with linear, count, and area takeoff.
Companies that have adopted Autodesk Takeoff have seen some notable results so far.
Take, for example, Windover Construction, a Massachusetts-based general contractor. Windover used to spend a lot of time and effort on takeoffs, using cumbersome processes to complete tasks. What’s more, it estimating and VDC teams worked in silos.
Autodesk Takeoff streamlined Windover’s workflows by enabling estimating and VDC team members to collaborate on one platform. The solution also allowed the VDC team to share 3D models with estimators, thus streamlining the quantity takeoff process. By leveraging Autodesk Takeoff, Windover was able to reduce their quantity takeoff time by more than 50% on a recent project.
“Autodesk Takeoff facilitates information flow by eliminating data silos to produce efficient workflows for our projects to develop detailed estimates from enriched 3D models while saving time,” says Kevin Hansen, Vice President of Preconstruction and head of the Estimating team at Windover Construction.
Meanwhile, Carroll Estimating was able to reduce the amount of time it spent creating tenders. The process, which previously required days to complete, now takes the team minutes thanks to the platform automation features.
Patrick Carroll, Director at Carroll Estimating, recalls a project that involved a takeoff for 400 doors, with more than 20 doors that required different specifications. Prior to Autodesk Takeoff, the task would've taken days, but the software enabled the team to do it in less than a minute.
Autodesk Takeoff’s 2D and 3D model capabilities also helped the firm broaden its market and win more work.
“For us as a team, working with more 3D models has opened up our marketplace. Previously, we were primarily doing jobs that had 2D drawings, but now we’re able to work on more complex and bigger jobs as the solution improves our productivity,” says Patrick.
“We’re also still able to takeoff more regardless of whether they are 2D or 3D models as we’re working from the same environment.”
BIMSearch is a cloud-based web app that acts as a viewer for any model saved in Autodesk Construction Cloud. The platform supports the takeoff process and enables you to quickly search the elements, view them highlighted on the model, and tabulated in a report that you can export to Excel.
Quickbase provides a no-code operational agility platform that enables organizations to improve operations through real-time insights and automation across complex processes and disparate systems. With Quickbase, teams can manage and track all information related to estimates, as well as provide summary reports and insights to key stakeholders.
As the construction industry becomes more complex and competitive, you must ensure that your firm produces precise estimates. To learn more about our tools that can help you improve the estimating and takeoff processes, reach out today.