Standards for Construction Cost Estimating in Illinois
As an integral element of the Application for Multifamily Financing, the Illinois Housing Development Authority (IHDA) demands applicants to obtain Construction Cost Estimates from professional services firms qualified in providing cost estimating services and competent of producing the expected services in a professional, timely and cost-effective manner. It is mandatory that all applicants submit a Construction Cost Certification form, as available on the website of the Authority. In cases where there are similar interests between a sponsor and project general contractor, between the project architect and project general contractor or between a sponsor and the project architect, IHDA wants the Construction Cost Certification form to be completed by an independent third-party construction cost estimation firm. The independent third-party construction cost estimation firm ensures that the project’s scope and costs are within proper budget. The cost estimating firm selected by the applicant should adhere by the defined standards for construction cost estimating along with the supplemental consultant standards.
To select construction cost estimating consultants to be used on IHDA-funded projects, the below mentioned information can be followed. The applicant should determine the competence or limitations of a consultant with responsibility. IHDA reserves the right to waive or modify any of the requirements mentioned below and decline any submitted cost estimates.
- Scope of Services
Cost estimating firms support applicants with estimating costs for all aspects of demolition, remodeling and new construction which includes related site work. Estimates should comprise of itemized direct costs, contractor overhead and profit, general conditions, federal and state prevailing wages. If paid for by the Project general contractor and dependent upon the financing offered, the cost estimate should think over any environmental related costs like radon mitigation, lead-based paint, asbestos-containing materials removal, etc., if noticeable.
The applicant should provide the selected cost estimating firm with the required documents to execute the tasks. The documents should include a full set of plans and specifications and related information. To assist the cost estimation firm identifying existing conditions, the project nature, associated ease of access and other site building restraints which effect cost, the applicant should also supply all documents like aerial photos, surveys, soils reports, etc.
Professional cost estimators must quantify the required materials, labor, and equipment needed by the scope of a project, and then price these items. This two-phase process comprises of quantity takeoff and cost estimating. To accomplish the quantity takeoff, the plans and specifications are inspected to establish total quantities of materials needed, along with labor and equipment.
During the cost estimating phase, the estimator scrutinizes the direct costs of estimated federal and state labor rates, materials and equipment, construction equipment and tools, and indirect expenses, such as general conditions, profit, overhead, inflation and market conditions.
Cost estimates should be developed with the help of a recognized construction cost source. Cost data should be organized as per the Construction Specifications Institute's 16-division Master Format 95 or the 44-division 2004 CSI Master Format numbering system.
Third-party construction cost estimates must be prepared by professional cost estimators. The American Society of Professional Estimators (ASPE) confirms the ethical awareness and estimating expertise of the Certified Professional Estimator (CPE). Certification as a cost engineer by the Association for the Advancement of Cost Engineering (AACE), as an authentic and certified professional estimator by the American Society of Professional Estimators (ASPE), or a State of Illinois Licensed Architect or Engineer, is essential.
The standards of practice in the Canons of Ethics published by the AACE and the ASPE apply to all estimating services. The Canons of Ethics are available on both their Web sites.
Construction estimates depends on the type of construction, whether it is a residential project or a commercial one, or if it is a extension, renovation, or remodelling work. New construction or major reconstruction work includes all major phases of construction like earthwork, site preparation, drainage, structures, paving, etc.
Construction costs can vary significantly due to scope differences and market conditions. For instance, construction cost estimates for 1-3 story apartment in Georgia is determined by various factors such as location, size etc. The below mentioned analysis of costs are derived from a building model that assumes basic components, using union labor for a 22500 square foot building:
Apartment, 1-3 Story Construction Cost Assumptions
|Story Height (L.F.)||10.00|
|Floor Area (S.F.)||22500|
|Data Release||Year 2013|
The cost assumption for a construction depends on the materials utilized, like the estimate for a 1-3 story apartment, square foot of face brick with concrete block back-up/ steel joists will vary from the one of face brick with concrete block back-up/ wood joists or the estimation for a building with stucco on concrete block/ steel joists will differ from stucco on concrete block/ wood joists or wood siding/ wood frame. For instance the following table presents the estimation for an apartment with brick veneer/wood frame:
|Cost Estimate (Union Labor)||% of Total||Cost Per SF||Cost|
|Contractor Fees (GC, Overhead, Profit)||25%||$33.19||$746,800|
|Total Building Cost||$179.22||$4,032,500|