From quantities to an estimate: assemblies and unit prices

A quantity is not an estimate yet

«2,400 SF of partition type A on Level 3» is a fact about the drawings. It becomes a cost only when you attach a unit price to it — and a unit price is not a number you look up. It is a small model of how that work gets built: which materials, how many of them end up in the dumpster, which crew, how fast, with what equipment.

Every estimate, from a one-page bathroom remodel to a hospital, runs on the same multiplication:

The rest of this guide is about the right-hand side of that multiplication: how a unit price is built, how it rolls up into a total, what gets added on top, and how you check the result before it leaves the office. If you want the left-hand side — where quantities come from and how firm they are — start with the phases guide and the drawing set guide.

The structure of an estimate

An estimate is a tree. At the top, the project total. Below it, groups that organize the work — in the United States these are usually MasterFormat divisions (Division 03 Concrete, Division 09 Finishes, Division 26 Electrical…), or UniFormat elements when the estimate is organized by building system instead of by trade. Below the groups, the line items: one kind of work, one unit of measure, one unit price.

The labels change with the company's classification system — «Division» with MasterFormat, «Element» with UniFormat. The tree does not.

Two rules keep this tree honest. First, a line item has exactly one unit. «Partitions» measured partly in SF and partly in LF is two line items pretending to be one. Second, the unit is the unit you will buy, build and bill in. If the drywall sub quotes per SF of wall and you measured SF of board, you will compare two numbers that differ by a factor of two and not notice.

What a unit price is built from

In US estimating the recipe behind a unit price is called an assembly. In Latin America the same thing is called an APU — análisis de precios unitarios, unit price analysis. Different names, same idea: the list of resources needed to put one unit of work in place, each with its quantity and its cost. Every assembly has four families of resources.

1 · Materials, with waste

The quantity of each material per unit of work, increased by a waste factor, times its delivered price. Waste is not carelessness; it is geometry and logistics. Board gets cut around openings, studs come in fixed lengths, some material is damaged in handling. A waste factor that is too low shows up as a change order you cannot bill; one that is too high quietly loses bids. The honest source for it is your own jobs — what you bought against what you measured.

2 · Labor, from a crew and a production rate

Labor is where most estimates are won or lost, and it is the part most often priced by feel. The method has two pieces:

• The crew: who works together on this task and what one hour of that crew costs. A crew of two carpenters and a helper costs the sum of their three burdened hourly rates — wage plus payroll taxes, insurance and fringe benefits.
• The production rate: how many units that crew installs in one hour (or one day) under the conditions of this job.

Labor cost per unit is then simply crew cost per hour ÷ units per crew-hour. That one division is the most important calculation in the estimate, and the next section explains why.

3 · Equipment

Anything rented or owned that the crew needs specifically for this work: lifts, scaffolding, pumps, a concrete saw. It is priced the same way as labor — cost per day divided by the units produced in that day — which means equipment cost also depends on the production rate.

4 · Small tools and consumables

Hand tools, blades, bits, extension cords. Too small to itemize, too real to ignore. Most estimators carry them as a small percentage of labor, because tool wear follows hours worked. Whatever percentage you use, write down where it came from.

Worked example: a metal stud partition

An interior partition: 3-5/8" metal studs at 16" on center with top and bottom track, one layer of 5/8" gypsum board on each side, taped and finished. Wall height 10 ft. The unit is SF of wall — length times height, measured once, not once per face.

Where the quantities come from: two faces of board per SF of wall; a stud every 16" is 0.75 studs per LF of wall, and on a 10 ft wall that is 0.75 LF of stud per SF; two runs of track per LF of wall is 0.20 LF of track per SF. The crew's 50 SF per hour is 400 SF of finished-both-sides wall in an 8-hour day. All figures illustrative.

Three things to notice. The waste is applied to the quantity, not to the total: board gets 10% because it is cut around every opening; studs get 5% because they come in lengths close to the wall height. The finisher is a separate crew with its own rate — taping is a different trade from framing, it moves at a different pace, and mixing them into one crew hides both. And labor is about two thirds of the unit price, which is typical of assemblies where the material is cheap and the work is in the handling.

With the unit price in hand, the line item is one multiplication: 2,400 SF × $7.15 = $17,160 of direct cost. Nothing has been added yet for supervision, overhead, profit or risk. That comes later, and it comes once, at the level of the whole estimate.

Production rates: the number that decides the estimate

Estimators spend a lot of time on wages and material prices, and both matter. But they are the easy part: a wage is written in a payroll record, a material price is written in a quote. The production rate is written nowhere unless you write it down yourself, and it moves far more than either of the others. The same crew will frame an open floor of long straight walls much faster than a floor of small rooms, short returns and many door frames.

Take the example above and change one thing at a time:

Illustrative. The slower case also raises scaffold and small-tool cost per SF, because both are spread over fewer units per day.

How to record your own production rates

Published rates and manuals are a starting point, not an answer: they describe an average job that is not yours. The rates that make your estimates better are the ones you collect from your own work, and collecting them takes less than it seems:

• Measure installed quantity by location and date. «Level 3, east wing, partitions type A: 620 SF framed and boarded between Monday and Wednesday.»
• Record the hours worked against the same location. Daily reports already have who worked; they need to say where and on what.
• Divide, and write down the conditions. 620 SF over 42 worker-hours is about 15 SF per worker-hour, or about 44 SF per hour for a crew of three — with a note: «many openings, work from scaffold, material staged on the floor».
• Keep a range, not a single number. After a few jobs you will have a fast case, a normal case and a slow case, and a much better idea of which one the next project looks like.

A production rate without its conditions is almost as useless as a wage without its date. The note is what lets the next estimator decide whether it applies.

From direct cost to selling price

Adding up every line item gives you the direct cost: what it costs to put the work in place, trade by trade. The price you submit is that number plus several layers that do not belong to any single line. Each layer covers something different, and the most common mistake is to let them blur into one big percentage.

No percentages are given on purpose: they depend on the company, the market, the contract and the risk. A rate borrowed from somewhere else is a guess dressed as data.

Keeping the layers separate is not bookkeeping for its own sake. When an owner asks you to «sharpen the pencil», you can show exactly what each layer pays for. When the schedule slips, you know which layer grows. And when you compare your number against a competitor's, you are comparing like with like.

How firm is the number: estimates by design phase

The same building is estimated several times as its design matures, and each time the method changes. Early on there is not enough information to build assemblies at the component level; at the end, anything less is guessing. The assembly itself grows with the drawings.

Accuracy narrows as the design matures, and the estimate should say where it stands. The phases guide explains estimate classes in more detail. The practical point here: a number goes out with its phase, its date and what it excludes. An early estimate built with component-level precision is not more accurate. It is just more confident than the drawings allow.

Checking an estimate before it goes out

An estimate that has not been checked is a draft. The checks that catch real errors are simple, and they work best when done by someone who did not build the estimate.

Compare against your own history

Cost per SF of floor area, by division, compared with your own completed jobs of a similar type. Not a published average — your jobs, where you know what was included. Adjust for date and location before comparing. If Division 09 comes out at half of what it cost on the last three similar jobs, either this building is unusual or something is missing, and you want to know which before the bid, not after.

Compare unit prices line by line

Put this estimate's unit prices next to the same items on recent jobs. A partition assembly that is 40% cheaper than last time needs a reason — a different spec, a better quote, a faster production rate you can defend. «It came out that way» is not a reason.

Look for what nobody drew

The most expensive errors are not wrong prices; they are missing lines. The usual suspects sit between trades or outside the drawings:

• Blocking and backing in walls for things other trades hang.
• Firestopping at penetrations, and patching after other trades cut in.
• Temporary protection, cleanup, hoisting and material handling.
• Testing, inspections, permits and fees the GC is responsible for.
• Scope that each of two subs assumes the other one carries.

On bid day, scope leveling is the same check applied to subcontractor quotes: before comparing prices, confirm that every quote covers the same scope, and add what is missing to the ones that exclude it. The lowest number is often just the one with the most exclusions.

Quantities by location: one estimate, three uses

An estimate organized only by division tells you what the building costs. The same estimate, with every quantity also tagged by location — level, zone, area — tells you much more, without measuring anything twice:

• Scheduling. Quantity in a location divided by the crew's production rate is the duration of that activity in that location. The same production rate you used to price the labor now builds the schedule, so price and time cannot contradict each other.
• Pay applications. A schedule of values built from the same line items by location lets you bill what is actually installed: «partitions type A, Level 3: 100% complete» is easy to verify on a walk; «Division 09: 38% complete» is an argument.
• Change orders. When the design changes on Level 4, you reprice Level 4 with the same assemblies, instead of re-estimating the building or negotiating a lump sum from memory.

The most common mistakes

• Pricing labor with somebody else's production rate. A manual describes an average job. Your crews on your projects are the only source that describes yours.
• Applying waste twice, or not at all. Once in the quantity and once again as a percentage on the total — or forgotten because the takeoff looked exact.
• Mixing units. SF of wall against SF of board, LF against EA, a sub quote in one unit and your assembly in another.
• Marking up subs twice. Their quote already carries their OH&P; your markup on it is yours, and it should be decided as such.
• Using contingency to hide an unmeasured scope. If you know the work is there, measure it and price it. Contingency is for what cannot be known yet.
• Copying last job's unit prices without their date and location. A unit price without a date is not a price. It is a memory.
• Lump sums with no quantity behind them. They cannot be checked, cannot be scheduled and cannot be billed by progress.
• Sending the number without its phase, date and exclusions. Whoever receives it will treat it as final, because to them it is.

Frequently asked questions