Watch That Bottom Line! General Guidelines for Cost Estimating

Imagine your company has decided a portion (or all) of its current security measures need to be enhanced, upgraded or replaced and has tasked you with completing the project. Your first step should be to plan the scope of the project and determine what you envision the end result to be. You can then begin the initial preparation and design of the project using your company’s internal resources (if they are sufficient) or by obtaining a reputable security engineering design consultant. The next step you should take however, is to develop a cost estimate based on your requirements and scope of work.

In today’s business environment, the cost of a project is a key decision making tool. Security projects, like all others must compete for limited and valuable corporate capital dollars. Return on investment calculations are becoming commonplace in our practice.

Cost estimates provide a means to compare contractor quotes. Your cost estimate can be as simple as a handwritten list of major system components with lump sum cost or as complicated as an electronic spreadsheet with numerous formulas and calculations. While complexity is not important, completeness is. What is important is to think through the task completely so you will have a good indication of everything required to complete the project. Details to keep in mind are items such as miscellaneous hardware and fasteners, actual wiring/cabling needs (including a reasonable amount of waste), paint and other restoration items that may be needed.

After you have captured all the items needed, it will be time to determine their associated costs. Estimates for security specific hardware are best obtained from a trusted vendor. Costs associated with general construction activities (i.e. fencing, painting, digging holes in the ground) can be obtained from a construction data reference manual such as RS Means. RS Means updates the reference information in their manuals on an annual basis to capture any increases in construction costs. By utilizing the information found in the RS Means manual, you can be reasonably assured your cost estimate will reflect current and local economic conditions.

Finally, other costs to include in an estimate are items such as contractor overhead, profit, bond, contingencies, and supervision and administration costs. These items must be accounted for as they can escalate the project costs by as much as 50 percent. A cost estimate is no less a critical part of the security project process than are design drawings and specifications. It is simply a good business practice.

Brian McCullock