The most common mistakes in the budget of construction works

The most common mistakes in the budget of construction works
6 min read
02 September 2022

Continuous improvement is always good! Always good is the dedication to study and knowledge of new techniques! It is always useful to pay attention to what seems common and trivial but can be improved. It is because it has a very important impact on the final result.

Bringing these topics to day-to-day professional life means the perception is amplified, even in the face of such common and seemingly common themes and the domain of a budgeting professional who contributes to estimating services like Xactimate estimating services.

Every project has specificities, no matter how standard it may seem, and therefore requires a data check at each defined stage to only then proceed with the budgeting processes. The organization of data through an ordinary routing of steps can be designed, containing sub-steps that guide the budget department and every professional involved with the budget, regardless of the time in which they are involved.

So as not to compromise the quality of the budget. Given this premise and the mistakes listed down as guiding topics, there follow considerations that may collaborate as important notes (tips) for the budgeters and construction estimating services companies.

So, with the time delimited and the work schedule defined, knowing the steps and sub-steps implicit and inherent to the work, consider:

Dropping the field visit

Besides aspects such as neighbourhood, access and conditions, springs, and supplies, among others, this aspect, although it can be categorized as a basic error, can have in an appropriate action the compromise of the budget, as much as the lack of the visit.

The visit is made by a professional and the budget is developed by another without the support of a careful survey form along with a photographic survey (when possible). Perceptions vary from professional to professional, and data from memory can compromise the estimate, potentially generating costs of an eventual revisit and losses about deadlines.

Ignorance of measurement criteria

This error is related to methods of the company contracting the budget or Xactimate estimating services defined after the budget or after the budget has been allocated to the service. There may be competition among third-party suppliers for the services, and the contract can be modelled according to the best cost-benefit in line with the equalization of proposals.

In this way, the measurement and payment criteria must allow for flexibility, i.e., have a margin that can be eliminated without prejudice to the overall amount, depending on the conditions and decisions that arise in the future. 

Use of standard compositions

In the admission that every project is unique and has its specificities and peculiarities, the use of standardized compositions, and the use of a plastered, standard EAP, which forces the project to adapt, are practices that inevitably induce and seriously lead to problems. It is essential that each project in the budget can be evaluated with perspicacity and structured in its differentials, whether about the pricing of inputs, labor productivity, contracted services or services planned for using their labor.

Ignore collective bargaining agreements (labor laws in general, by region)

The current legislation that regulates and parameterizes the construction labor force is an important variable to be considered in the budget for obvious reasons. Given this, it is relevant that a budget roster or construction estimating includes all the updated values according to the region to be checked and applied.

This way, one can avoid unpleasant surprises in realizing a budgeted project. And it should be noted that it is reckless to consider the data as known and thus allow the advancement of a process without proper checking. It is because the legislation is very dynamic and can have nuances that can change indexes, rates, and important percentages levied on labor and taxes in general in civil work.

Forget freight and unloading.

Once the local and specific logistical characteristics of certain materials are disregarded, the transportation and unloading of materials, in general, can greatly compromise the budget because it implies, in addition to the cost, productivity and consequent compliance with the work schedule.

The expression "time is money" is nothing more than the translation of a crucial reality, especially in civil construction: time commitment directly implies work costs. And costs must be predicted as reasonably and rationally as possible in the budget and its processes.

Do not equalize bids.

The pricing of materials and labor implies the preparation of complete technical documents that guide suppliers to enable the equalization of proposals to apply to the budget the correct values. The non-equalization of proposals and scope definitions can seriously compromise the budget for the simple reason of inducing errors in interpreting what was considered and will be practised.

Not generating the ABC curve

It is well known in the construction universe that the ABC curve constitutes an indispensable report to the criticism of a budget. It provides parameters that allow planning delineation or investment in revisions of concepts and processes applied, aiming to adapt the product to the various realities of construction, contemporary to the project's realization phases, under socioeconomic and even cultural conditions. The checking and verification of the data made available by the ABC Curve can promote preponderant evaluations, and to ignore them, therefore, is incompatible with the always desired success of a project.

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