Costing individual construction projects accurately is what separates profitable contractors from busy-but-struggling ones. Here Nuala McGowan, CPA, ACA, AIA and founder of McGowan Accountancy Service offers advice on how to cost individual contracts.

1. Define Scope & Specifications Clearly

Start by fully understanding what you’re building.

• Review drawings, plans, and specifications

• Clarify materials, finishes, and quality standards

• Identify exclusions (what’s NOT included)

? If the scope is vague, your estimate will be wrong—guaranteed.

2. Break the Project into Work Packages (Takeoff)

Divide the project into measurable components:

• Site work (excavation, drainage)

• Structure (concrete, steel, timber)

• Finishes (plastering, flooring, painting)

• Services (electrical, plumbing)

Then perform a quantity takeoff:

• Measure volumes, areas, lengths (e.g., m³ of concrete, m² of plaster)

3. Assign Unit Costs

Attach costs to each item:

• Materials (current supplier prices)

• Labour (hours × hourly rates)

• Plant & equipment (hire or ownership cost)

? Use updated local rates—construction prices fluctuate a lot.

4. Add Indirect Costs & Risks

Don’t just price the physical work—include:

• Site overheads (site office, utilities, supervision)

• Preliminaries (permits, insurance, safety compliance)

• Contingency (typically 5–15% depending on uncertainty)

• Inflation or price escalation (for longer projects)

5. Review, Adjust & Validate

Before finalizing:

• Cross-check quantities and calculations

• Compare with similar past projects (benchmarking)

• Get quotes from subcontractors/suppliers

• Stress-test assumptions (e.g., “what if materials rise 10%?”)

For more information or to make an appointment contact Nuala McGowan on (090) 66 25818 or email nuala@mcgowanaccountancy.com

 

Image by partystock on Freepik