Accuracy of Cost Estimation at the Pre-tendering Stage in Klang Valley

Lee, Hoi Yan (2018) Accuracy of Cost Estimation at the Pre-tendering Stage in Klang Valley. Final Year Project (Bachelor), Tunku Abdul Rahman University College.

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Abstract

Cost estimating is the technical function undertaken to predict the total cost of executing of works within a timeframe using all available information and resources. Yet, there are still overestimated or underestimated projects due to inaccuracy of cost estimation. Hence, this research aimed to assist the contractors in Malaysia in improving the accuracy of the cost estimation by exploring the factors influencing the estimate accuracy. This research consists of three major objectives which are to study the important of accuracy of cost estimation at the pre-tendering stage, to determine the factors influencing the accuracy of construction cost estimate on the perspective of contractors and to propose the ways for improving accuracy of cost estimation on the perspective of contractors This research has been conducted through literature reviews of the topic related to the cost estimation, followed by a field study. The questionnaire included fifty six factors, categorized into six groups and twelve ways to improve the accuracy of pre-tender cost estimate. Two hundred and twenty questionnaires were distributed to contractors in Klang Valley as respondents. Previous findings outlined the important of cost estimate as provide an assessment od capital cost for a specified work, develop a project budget to estimate the project funding requirement and obtain the financing for the project. The results of analysing the fifty six factors considered in the questionnaire conclude that the main factors influencing accuracy of pre-tender cost estimate are estimator’s experience, estimating method used, clear and detailed drawings and specification, time allowed for preparing v cost estimates, expertise of consultants, clear scope definition for client, materials, project complexity, completeness of cost information and inflation rate. On the other hands, the results of analysing the twelve methods concluded that the most effective methods for improving accuracy of pre-tender cost estimate are ensure sufficient information for estimating, ensure proper design documentation and increase cost planning and control activities during the design stage. The study recommended estimators to give more attention to the main factors identified in this study to develop effective strategies in order to achieve more reliable and realistic estimates, which would lead to successful projects.