First Principles Estimation is the process whereby an estimator identifies, considers and collates the estimated individual costs, quantities and production of every resource needed to complete individual items of work or tasks and ultimately a project successfully. In doing so, they not only determine an accurate expected total cost of all the resources needed but also gain a thorough understanding of the requirements, in terms of quantity and outputs, for a build that can be managed and controlled throughout the lifecycle of the project.
These resources which typically fall into the categories of material, labour, plant, subcontractors and overheads range from simple to varying levels of complexity.
For example, sand, stone and cement are simple resources or resources that can be purchased or hired. Combined in their respective proportions, they form what is known as a complex or combination resource, i.e. concrete materials mix. Adding the hiring cost for a dumper and the labour required to operate it and to mix and place concrete attains yet another level of complexity. Rest assured; the resources may become more complex but the pricing becomes simpler!
In summary, First Principles Estimation is the answer to the question, “What do I need to get the job done and how much will it cost?”
THE BENEFITS OF FIRST PRINCIPLES ESTIMATION
By embracing First Principles Estimating, construction companies can accurately forecast the cost, resource quantities and target productions of a project and in doing so anticipate, mitigate and proactively troubleshoot or model problems and changes if and when they occur or might occur.
FIRST PRINCIPLES & CANDY
Designed to incorporate First Principles Estimation at its core, Candy allows estimators to price and tender precisely using resource-based principles, free-format rate sheets and a range of cutting-edge features. Whether it’s pricing items manually or via import from Excel, applying predefined formulas, analysing resource usage and wastage in real time, or re-purposing project data from a previous project for use in a new one; Candy takes project tendering and estimation to a whole new level.
Start using Candy for free, for a limited time Click here