The following are a few highlights of a cost estimator career:
Being able to accurately project the cost of upcoming projects is vital to the survival of any company. Cost estimators provide this vital information by developing the cost information needed in order to determine if a proposed product will be profitable, or to make bid for a contract. The also work to determine which endeavors are making an adequate profit.
Job descriptions are similar for all cost estimators no matter what industry they may choose to work in. They are responsible to analyze and compile data on each factor that may have an influence on costs. Such factors include labor, materials, special machinery requirements, and location. Depending on the type and size of the project other job duties may vary.
Among various industries the processes and purposes for estimating costs can differ significantly. For example, the estimating process on a construction project begins with the decision to submit a bid. Preliminary drawings and specifications are reviewed, and then the estimator makes a visit to the proposed project site. At the site, the estimator gathers further information on site access, water accessibility, and availability of electricity as well as the ease of access to other services. He also will make note of and examine the surface topography and drainage. The information gathered during the site visit is then recorded in a signed report and is included with the final project estimate.
Once the site visit is completed, a determination, as to the quantity of materials and labor the firm will need in order to complete the job, will be given by the estimator. This process, called the quantity survey or “takeoff,” entails completing standard estimating forms, filling in dimensions, number of units, and other information. For example, a cost estimator working for a general contractor will estimate the costs of all of the items the contractor must provide for the job. Even though subcontractors generally estimate their own costs as part of their bidding process, often times the general contractor’s cost estimator will analyze bids by subcontractors as well. Also, during the takeoff process, the estimator must make decisions regarding sequence of operations, physical constraints at the site, equipment needs, and crew size. Other factors that may increase overall costs will also need to be taken into consideration by the estimator including shipping delays, allowance for waste materials, and foul weather.
After the quantity survey has been completed, the estimator then goes on to prepare a cost summary for the entire project. This includes the costs of materials, equipment, labor, subcontracts, taxes, insurance, overhead, markup, and any other costs affecting the project. A bid proposal is them prepared by the chief estimator and presented to the owner.
As the project develops, the project’s architect or owner may also hire construction cost estimators to estimate costs or to tract actual costs relative to bid specifications. It is common for estimators to specialize in one particular area especially within large construction companies where their are more than one practicing estimator. Examples of area specialization include electrical work, concrete, excavation, and forms.
Most estimators working in manufacturing and other firms are usually assigned to the cost, pricing, or engineering departments. In manufacturing, the estimator’s goal is to accurately estimate the costs associated with making specified products. Management my request various estimates regarding the costs associated with an existing products redesign or the development of an entirely new product or production procedure. For example, when determining the cost of developing a new product, the estimator may work hand in hand with the engineers. In order to determine the tools, gauges, materials, and machining operations required for production of the product, the cost estimator and the engineers will first review blueprints or conceptual drawings of the product. The estimator then puts together a list of parts and decides whether it is more cost efficient to manufacture or to purchase the parts. In doing this the estimator makes various inquiries to potential suppliers about price information, as well as determining the cost associated with manufacturing each piece of the product. Some high-technology products require a immense amount of computer programming during the design phase. And since software development is one of the fastest growing industries, cost estimates in this area can be very difficult to make. In fact, some cost estimators now specialize in computer software development, only estimating its related development and costs.
After a decision has been made as to buy or manufacture the product parts the cost estimator prepares a time-phase chart and learning curves. The time-phase chart indicates the time required for tool design and fabrication. This includes finding and correcting all problems and kinks associated with the product as well as product assembly and testing. Graphically representing the rate at which performance improves with practice, learning curves are often referred to as “cost reduction” curves. Many of the problems associated with product production including part shortages, engineering changes, reworking the production process, and lack of operator skills diminish over time. As the number of parts produced increases, the unit costs linked to producing the product decrease.
Next, the estimator calculates the standard amount of labor time it will take to produce a fixed number of units. The labor hours are then converted to dollar values, and various other factors are added in such as waste, profit to yield, and overhead. The cost of purchasing parts is then compared with the company’s cost of manufacturing them. And the estimator makes a final decision as to which is most economical.
Because cost estimating often involves complex mathematical calculations requiring advanced mathematical techniques, computers have come to play an integral part in this area of business. For example, in order to undertake a parametric analysis (a process used to estimate project costs on a per unit basis, according to the specific requirements of a project), a computer database containing information on the costs and conditions of comparable products is used. Computers cannot be used for the entire estimating process, but they can alleviate much of the drudgery estimators accept from the monotonous, dull, and time-consuming calculations associated with it. With the benefit of word-processing programs and spreadsheet software, computers are also able to produce essential documentation. Estimators are then more available to study and analyze various products.
Cost estimators in search of employment will find that requirements for job entry vary by industry. For example, employers from the construction industry prefer to hire individuals with a degree focused in construction management, building construction, engineering, construction science, or architecture. Additionally most construction estimators have considerable experience with construction, gained through internships, work in the industry, or career education programs. A substantial competitive edge will be given to applicants possessing a comprehensive and detailed knowledge of construction costs, materials and procedures; especially if they are focused in heavy construction, masonry work, plumbing systems, or electrical work.
In manufacturing industries, most employers prefer to hire candidates who have earned a bachelor’s degree in physical science, engineering, mathematics, operations research, or statistics. Those majoring in accounting, business, economics, finance, or other related subject are also sought after. Experience involving quantitative techniques is also important in most industries.
Cost estimators should have a propensity towards mathematics. They should be able to quickly analyze, interpret and compare detailed and often inadequately defined information. It is also important that they be able to make reliable and accurate conclusions based on this knowledge. Because estimators may work as part of a project team, strong interpersonal skills and good communication are vital to this job. Assertiveness and self-confidence in presenting and supporting their conclusions are also important, as they may be asked to share their knowledge with managers, engineers, owners, and design professionals. For individuals working as cost estimators a knowledge of computers, including word-processing and spreadsheet packages is also necessary. In some instances, familiarity with special estimation software or programming skills may also be required.
Every company has its own way of handling estimates, and consequently most new employees receive a great deal of on the job training. Working alongside an experience estimator, new estimators become more and more familiar with each step in the estimating process. Reading specifications or blueprints is the first aspect learned by those with little or no experience. As they become more confident and knowledgeable, newer estimators may work with an experienced estimator at the construction site or on the shop floor. There they will survey the work being done, take measurements, or carry out other standard tasks. As they become more and more experienced, estimators learn how select appropriate material prices and how to put quantities and dimensions from drawings into a table.
For most estimators, advancement means higher pay and greater prestige. Some may move into management taking various positions as project managers for a construction firm or manager of the industrial engineering department for a manufacturer. Others may take on their own business acting as consultants and providing estimating services to government, construction, or manufacturing firms.
At most colleges cost estimating is included as part of the bachelor’s and associate degree programs including industrial engineering, construction management, civil engineering, or construction engineering technology. Cost estimating also plays a significant role in many master’s degree programs such as construction management or construction science. In addition, organizations representing cost estimators may act as sponsors providing educational and professional development programs. Such organizations include the Association for the Advancement of Cost Engineering (AACE International) and the Society of Cost Estimating and Analysis (SCEA). These programs help students, estimators-in-training, and experienced estimators stay up to date with various changes affecting the profession. Specialized courses and programs in cost estimating techniques and procedures also are offered by many community colleges, universities, and technical schools.
Many cost estimators take the opportunity to become voluntarily certified. This type of certification can be extremely valuable because it provides professional recognition of the estimator’s competence and experience. Some individual employers may even require professional certification. Certifications programs are offered by various organizations including both AACE International and SCEA. In order to become certified, estimators generally are required to have between 2 and 8 years of professional estimating experience, and are expected to pass a specified examination. In some cases the publication of at least one article or professional paper in the field may also be required.
Through the year 2012 the overall employment of cost estimators is expected to grow along with the average for all occupations. In addition to job openings created through growth, some employment opportunities are expected to come about from the need to replace employees who transfer to other occupations or who retire from the work force. Because construction and manufacturing industries are the primary employers for cost estimators, job prospects are likely to be best for those with industry work experience as well as a bachelor’s degree in a related field.
53 percent of all cost estimators are employed by the construction industry. As such it is expected that the growth of this industry will be the driving force behind the demand for this workforce. It is predicted that the continual construction and repair of bridges, highways, and streets, as well as construction of further airports, water and sewage systems, electric power plants, subways, and transmission lines, will stimulate the demand for many more cost estimators. It is likely that the demand for cost estimators will also be spurred by the increasing population. Because of this increasing along with changing demographics, the call for residential construction and remodeling will be heightened. In addition as the population grows older, the demand for nursing and extended care facilities will increase. School construction and repair will also add need for added cost estimators. Job prospects in construction should be best for those holding a degree in construction management, engineering, architecture, or construction science, and who have practical experience in various phases of construction or in a specialty area.
It is expected for employment opportunities in manufacturing to grow as well, but not nearly as fast as those in construction firms. This is because firms continue to use their services to identify and control operating costs. Experienced estimators with degrees in science, business administration, engineering, economics, or mathematics should have the best chance of obtaining cost estimator positions in manufacturing.
For cost estimators, salaries vary significantly by education, experience, size of firm, and industry. In 2002 median annual earnings of cost estimators were $47,550. The middle 50 percent earned between $36, 440 and $62,040, while the lowest 10 percent earned less than $28,670. And the highest 10 percent made earnings of more than $79,240. In 2002 median annual earnings in the industries employing the largest number of cost estimators were:
It is likely that college graduates with degrees in fields that provide a strong background in cost estimating, such as construction management or engineering, could start at even higher levels. In fact, according to a 2003 salary survey by the National Association of Colleges and Employers, bachelor’s degree candidates with degrees in construction management/science received job offers averaging $42,229 a year.
$careerType = 'cost estimator'; ?>