Estimating building construction costs by production processes

Abstract

Building actors need accurate estimates in order to efficiently undertake the construction of buildings. The knowledge of real expected costs of construction works is a necessary condition for contractors to submit competitive tenders and for developers to be aware of the magnitude of their investment. In this paper, an innovative process-based model is presented, the POP model. This model aims at providing building actors with a systematized methodology to calculate building construction costs based on the planning, organization and scheduling of the expected works. Unlike the model of construction work units, the most widespread estimate model in Spain, the POP model comprises all construction costs in a direct way by identifying the production processes involved and the resources consumed, giving a new approach to the principles of the activity-based costing methodology in tune with the process-based cost models that are emerging in the international scene. Nowadays, the model is being applied in real construction works with satisfactory results of transparency, detail and adaptability. Not only reliable estimates are obtained, but also the performance of works is devised, allowing its optimization and control.