Estimating and Bidding
What the exam expects
Estimating questions test quantity takeoff, unit pricing, overhead and profit, contingency, and bid strategy. You should be able to compute quantities from dimensions, apply waste factors, and separate direct costs from indirect costs.
Core concepts
Understand direct costs (labor, material, equipment, subcontractors) versus indirect costs (overhead, supervision, permits, insurance, bonds). Know markup versus margin: markup is added to cost; margin is a percentage of the selling price. Know what a bid bond, addendum, and bid opening are, and how alternates and unit prices are handled.
Traps to watch
- Confusing markup and margin. A 20% markup on $100 cost yields $120 (16.7% margin), not 20% margin.
- Forgetting waste and compaction factors in material quantities.
- Applying overhead to the wrong base (labor-only vs. total cost).
- Ignoring addenda issued before bid opening; they become part of the contract documents.
- Treating contingency as profit; it is a risk reserve.
Rule of thumb
Always convert to consistent units before multiplying. For concrete, volume = length × width × depth, then divide by 27 for cubic yards. Add a waste factor (commonly 5–10%) to material takeoffs, and remember that compacted fill requires more loose volume than finished volume.
Worked example
A slab 20 ft × 30 ft × 6 in thick: 20 × 30 = 600 sq ft; 6 in = 0.5 ft; volume = 300 cu ft; ÷ 27 = 11.1 cu yd. With a 10% waste factor: 11.1 × 1.10 ≈ 12.2 cu yd. If concrete is $150/cu yd, material cost ≈ $1,833.