What is Bottom-Up Estimating?
There are quite a few ways to estimate a project. We will be discussing all the types of estimating here at ConstructionScale. Just remember, it is best to stick to the same way of estimating for each project so you are able to measure what is working and what is not working for you or your team.
Bottom-Up Estimating - This type of estimating requires an incredible amount of attention to detail. For those of you who are not familiar with this type of estimate, as it applies to our fields, it requires thorough reading of the specifications or scope in order to pull every detail out and takeoff properly. Imagine you receive a Request for Proposal (RFP) from a large company. The RFP is basically your bidding instructions, a roadmap to how the company wants you to design your pricing. This RFP is usually sent to a group of bidders to ensure all estimates are similar. So, now you have your RFP and have read through the scope of work. Please apply this to your field but for this purpose, I will use demolition. The RFP may read something like this:
“Contractor shall transport and dispose of all non-hazardous concrete debris from building A” We are assuming this is only above grade for this explanation.
First, we need to know the dimensions for building A. We find it is 50 feet long by 50 feet wide, this gives us a footprint of 2,500 square feet. Each wall is 15 feet high non-painted block construction with no windows. We know that every wall is 50 feet long, by 15 foot high, by 8 inches in depth (8” depth for the block construction) and we know that a building has 4 walls (Assuming no interior walls). So, we know this (50’ x 15’ x .66 = 495 Cubic Feet). Now to get that into yards we need to divide by 27 (495 / 27 = 18.3 Cubic Yards). Now we know one wall equals 18.3 cubic yards of concrete block. We multiply that by 4 which gives us 73.3 total cubic yards of block on building A. Concrete is quite heavy, so lets use a conversion rate of 1.8. This will allow us to convert our yardage into tonnage. We take the total yardage of 73.3 and multiply by 1.8 and we get 132 tons of concrete block. Now that we have our takeoff, we can go to the next step.
We have our takeoff for block which is 73.3 yards or 132 tons of concrete block on building A. We need someone to transport this and we need someone to dispose of it. Sometimes you can get both in one. As an estimator, it is your job to find out the route that makes the most financial sense. Some companies charge for transporting by the hour, some by the trip. Some disposal charges by the tonnage, some by the box yard (The full yardage a box can hold) and some by the load. There is a landfill that is 11 miles away.
Transporter 1 charges $100 dollars an hour and can hold 12 tons. With the landfill 11 miles away, it would be safe to assume you can safely get 2 full loads to the landfill and empty trucks back in that hour.
Transporter 2 charges per load at $80 and can hold 8 tons a load. They can make the same amount of drops within that time as well.
Now, we would look at the difference between transporter 1 and transporter 2. Transporter 1 would take 11 total trips to complete the 132 tons transporting (132 tons / 12 tons a truck = 11 trips). Transporter 2 would take 17 trips to complete the 132 tons transporting (132 tons / 8 tons a truck = 17 trips).
Now we know this:
Transporter 1 - 11 trips at $100 = $1,100
Transporter 2 - 17 trips at $80 = $1,320
We learn one great tip here, READ THE FINE PRINT. Just because you get a quote that is a little lower, ALWAYS make sure you are reading the fine print and make sure you do the math. even if its time consuming, it will save you money in the long run.
Now. we need to do the same for disposal! (Bottom-Up Estimating is time consuming and tedious but it ensures a very accurate estimate as we use real pricing and real takeoffs)
Usually, you will be stuck with one or two landfills or recyclers for this portion. This means for disposal you are usually able to get the same type of pricing. It is often per ton pricing or per yard. If it is per ton, you take the total tonnage and multiply it by the price, easy as cake. If it is by the yard, you should ask how they are measuring the yard. is it by the box yard? which would mean if you have a 25 yard box, they charge for 25 yards, even if you don’t fill it. Make sure you take your estimate the same way or you will be under water quickly! If they do it by material yard, make sure you know about how much you can fit in a box and estimate accordingly.
For this, we have one disposal location and they provided us pricing at $34 per ton. We have 132 tons so it should cost us $4,488 to dispose.
We are looking at a total of transport and disposal cost of ($1,100 + $4,488 = $5,588)
Now you would apply your pricing on top of this and apply to your bid.
This is just one portion of your RFP, there may be hundreds of sections to include in your overall bid. This may differ from other contractor specific estimating, however, the amount of detail in a bottom-up estimate is required in order to be a bottom up estimate. Think of bottom-up estimating as a building. You start with nothing, at the bottom! You build a takeoff, you build an estimate quantity, you gather pricing, you analyze pricing and you apply pricing. you worked your way up from nothing and now you have an accurate estimate.
Thank you for taking the time to read this and if you have any questions or want to share your own estimating procedures, head to our notebook and submit your own blog to us and we will post it and make sure we include you if you want to be seen!
Stay tuned for other examples of estimating!
