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OVERVIEW Cost estimators use standard estimating techniques to calculate the cost of a construction or manufacturing project.They help contractors, owners, and project planners determine how much a project or product will cost to decide if it is economically viable. There are approximately 198,000 cost estimators employed in the United States. HISTORY Cost estimators collect and analyze information on various factors influencing costs, such as the labor, materials, and machinery needed for a particular project.Cost estimating became a profession as production techniques became more complex. Weighing the many costs involved in a construction or manufacturing project soon required specialized knowledge beyond the skills and training of the average builder or contractor. Today, cost estimators work in many industries but are predominantly employed in construction and manufacturing. THE JOB In the construction industry, the nature of the work is largely determined by the type and size of the project being estimated. For a large building project, for example, the estimator reviews architectural drawings and other bidding documents before any construction begins. The estimator then visits the potential construction site to collect information that may affect the way the structure is built, such as the site’s access to transportation, water, electricity, and other needed resources. While out in the field, the estimator also analyzes the topography of the land, taking note of its general characteristics, such as drainage areas and the location of trees and other vegetation. After compiling thorough research, the estimator writes a quantity survey, or takeoff. This is an itemized report of the quantity of materials and labor a firm will need for the pro posed project. Large projects often require several estimators, all specialists in a given area. For example, one estimator may assess the electrical costs of a project, while another concentrates on the transportation or insurance costs. In this case, it is the responsibility of a chief estimator to combine the reports and submit one development proposal. In manufacturing, estimators work with engineers to review blue prints and other designs. They develop a list of the materials and labor needed for production. Aiming to control costs but maintain quality, estimators must weigh the option of producing parts in- house or purchasing them from other vendors. After this research, they write a report on the overall costs of manufacturing, taking into consideration influences such as improved employee learning curves, material waste, overhead, and the need to correct problems as manufacturing goes along. To write their reports, estimators must know current prices for labor and materials and other factors that influence costs. They obtain this data through commercial price books, catalogs, and the Internet or by calling vendors directly to obtain quotes. Estimators should also be able to compute and understand accounting and mathematical formulas in order to make their cost reports. Computer programs are frequently used to do the routine calculations, producing more accurate results and leaving the estimator with more time to analyze data. REQUIREMENTS High School To prepare for a job in cost estimating, you should take courses in accounting, business, economics, and mathematics. Because a large part of this job involves comparing calculations, it is essential that you are comfortable and confident with your math skills. English courses with a heavy concentration in writing are also recommended to develop your communication skills. Cost estimators must be able to write clear and accurate reports of their analyses. Finally, drafting and shop courses are also useful since estimators must be able to review and understand blueprints and other design plans. Postsecondary Training Though not required for the job, most employers of cost estimators in both construction and manufacturing prefer applicants with formal education. In construction, cost estimators generally have associate’s or bachelor’s degrees in construction management, construction science, engineering, or architecture. Those employed with manufacturers often have degrees in physical science, business, mathematics, operations research, statistics, engineering, economics, finance, or accounting. Many colleges and universities offer courses in cost estimating as part of the curriculum for an associate’s, bachelor’s, or master’s degree. These courses cover subjects such as cost estimating, cost control, project planning and management, and computer applications. The Association for the Advancement of Cost Engineering International offers a list of education programs related to cost engineering. Visit its Web site, http://www.aacei.org, for more information. Certification or Licensing Although it is not required, many cost estimators find it helpful to become certified to improve their standing within the professional community. Obtaining certification proves that the estimator has obtained adequate job training and education. Information on certification procedures is available from organizations such as the American Society of Professional Estimators, the Association for the Advancement of Cost Engineering International, and the Society of Cost Estimating and Analysis. Other Requirements To be a cost estimator, you should have sharp mathematical and analytical skills. Cost estimators must work well with others, and be confident and assertive when presenting findings to engineers, business owners, and design professionals. To work as a cost estimator in the construction industry, you will likely need some experience before you start, which can be gained through an internship or cooperative education program. EXPLORING Practical work experience is necessary to become a cost estimator. Consider taking a part-time position with a construction crew or manufacturing firm during your summer vacations. Because of more favor able working conditions, construction companies are busiest during the summer months and may be looking for additional assistance. Join any business or manufacturing clubs that your school may offer. Another way to discover more about career opportunities is simply by talking to a professional cost estimator. Ask your school counselor to help arrange an interview with an estimator to ask questions about his or her job demands, work environment, and personal opinion of the job. EMPLOYERS Approximately 198,000 cost estimators are employed in the United States: 58 percent by the construction industry and 17 percent by manufacturing companies. Other employers include engineering and architecture firms, business services, the government, and a wide range of other industries. Estimators are employed throughout the country, but the largest concentrations are found in cities or rapidly growing suburban areas. More job opportunities exist in or near large commercial or government centers. STARTING OUT Cost estimators often start out working in the industry as laborers, such as construction workers. After gaining experience and taking the necessary training courses, a worker may move into the more specialized role of estimator. Another possible route into cost estimating is through a formal training program, either through a professional organization that sponsors educational programs or through technical schools, community colleges, or universities. School career services counselors can be good sources of employment leads for recent graduates. Applying directly to manufacturers, construction firms, and government agencies is another way to find your first job. Whether employed in construction or manufacturing, most cost estimators are provided with intensive on-the-job training. Generally, new hires work with experienced estimators to become familiar with the work involved. They develop skills in blueprint reading and learn construction specifications before accompanying estimators to the construction site. In time, new hires learn how to determine quantities and specifications from project designs and report appropriate material and labor costs. ADVANCEMENT Promotions for cost estimators are dependent on skill and experience. Advancement usually comes in the form of more responsibility and higher wages. A skilled cost estimator at a large construction company may become a chief estimator. Some experienced cost estimators go into consulting work, offering their services to government, construction, and manufacturing firms. EARNINGS Salaries vary according to the size of the construction or manufacturing firm and the experience and education of the worker. According to the U.S. Department of Labor, the median annual salary for cost estimators was $52,940 in 2006. The lowest 10 percent earned less than $31,600 and the highest 10 percent earned more than $88,310. Starting salaries for graduates of engineering or construction management programs were higher than those with degrees in other fields. A salary survey by the National Association of Colleges and Employers reports that candidates with degrees in construction science/management were offered average starting salaries of $42,923 a year in 2005. WORK ENVIRONMENT Much of the cost estimator’s work takes place in a typical office setting with access to accounting records and other information. However, estimators must also visit construction sites or manufacturing facilities to inspect production procedures. These sites may be dirty, noisy, and potentially hazardous if the cost estimator is not equipped with proper protective gear such as a hard hat or earplugs. During a site visit, cost estimators consult with engineers, work supervisors, and other professionals involved in the production or manufacturing process. Estimators usually work a 40-hour week, although longer hours may be required if a project faces a deadline. For construction estimators, overtime hours almost always occur in the summer when most projects are in full force. OUTLOOK Employment for cost estimators is expected to increase faster than the average for all occupations through 2014, according to the U.S. Department of Labor. As in most industries, highly trained college graduates and those with the most experience will have the best job prospects. Many jobs will arise from the need to replace workers leaving the industry, either to retire or change jobs. In addition, growth within the residential and commercial construction industry creates much of the employment demand for estimators. The fastest growing areas in construction are in special trade and government projects, including the building and repairing of highways, streets, bridges, subway systems, airports, water and sewage systems, and electric power plants and transmission lines. Additionally, opportunities will be good in residential and school construction, as well as in the construction of nursing and extended care facilities. Cost estimators with degrees in construction management or in construction science, engineering, or architecture will have the best employment prospects. In manufacturing, employment is predicted to remain stable, though growth is not expected to be as strong as in construction. Estimators will be iii demand because employers will continue to need their services to control operating costs. Estimators with degrees in engineering, science, mathematics, business administration, or economics will have the best employment prospects in this industry. FOR MORE INFORMATION For information on certification and educational programs, contact American Society of Professional Estimators 2525 Perimeter Place Drive, Suite 103 Nashville, TN 37214-3674 Tel: 888-EST-MATE Email: info@aspenational.com For information on certification, educational programs, and scholarships, contact Association for the Advancement of Cost Engineering International 209 Prairie Avenue, Suite 100 Morgantown, WV 2650 1-5934 Tel: 800-858-2678 Email: info@aacei.org For information on certification, job listings, and a glossary of cost-estimating terms, visit the SCEA Web site: Society of Cost Estimating and Analysis (SCEA) 527 Maple Avenue East, Suite 301 Vienna, VA 22180-4753 Tel: 703-938-5090 Email: scea@sceaonline.net INTERVIEW Richard Coleman is a cost estimator and is the director of the Cost and Pricing Center of Excellence at Northrop Grumman, a global defense and technology company. He discussed his career below. Q. How long have you been a cost estimator? A. I have been a cost estimator since 1990, although I have a degree in operations research and so have worked in related fields since 1977. I work in Northern Virginia (specifically Chantilly, Virginia). Q. Why did you decide to become a cost estimator? A. As a navy captain, I was assigned a position as director for the Navy Center for Cost Analysis, based upon my degree, in 1990, and I stayed in the field after that. I stayed because I found the work challenging, fun, and intellectually rewarding, as well as being important to the country. Q. Please take us through a day in your life as a cost estimator. What are your typical tasks/responsibilities? A. I am quite senior, so my activities are not typical. I travel by air an average of 25 times per year to cities such as Los Angeles, California; New Orleans, Louisiana; Newport News, Virginia; Orlando, Florida; Melbourne, Florida; and others in the line of work. I spend about 50 percent of my time in overhead work, and 50 percent on direct projects. The direct work usually involves independent cost evaluations of big proposals for my company. I have been the lead of evaluations for two aircraft carriers, destroyers, amphibious ships, a large number of information technology programs, and a few classified programs in the intelligence community. These programs routinely cost between $100 million and $5 billion. I routinely lead small-to- medium teams in short-duration evaluations that last one to four weeks. I also work on a few government programs for the navy and the intelligence community. Cost estimators tend to work in [company] headquarters and are particularly numerous in industries involving defense and government contracts and at the government agencies that oversee these manufacturers. They are most numerous in northern Virginia, Washington, D.C., and Maryland. Cost estimators are involved in the determination, by statistical and analytical techniques, of the number of labor hours and the quantity of material needed. Pricers, by contrast, apply rates to labor hours and apply bid prices to bid bills of materials and so are more evenly distributed across the country in clusters where the headquarters and major manufacturing facilities are found. Q. What advice would you give to high school students who are interested in this career? A. Math and statistics are important, as well as science classes (science and engineering principles underlie the discipline). Don’t keep asking, “Why should I take this class? I’ll never use it.” You will; the course work in high school is well chosen for future applicability, and you will use these courses if you continue to succeed. Sports, at an appropriate level, will also serve you well, particularly team sports, as they are excellent preparation for workforce relationships and dynamics. Q. What is the future employment outlook in the field? A. The field of cost analysis (estimation) is a niche field for which good candidates are hard to find. If you become a cost estimator, you will always have work—it’s a lifetime opportunity! I have a much broader degree, with a bachelor of science from the U.S. Naval Academy and a master of science from the Naval Postgraduate School, but when I retired I quickly discovered that this field was rewarding and wide open. |