LOW OR HIGH ?

Evening Post, Volume CXVII, Issue 71, 24 March 1934, Page 14

LOW OR HIGH ?

DRAWING UP ESTIMATES

ENGINEER'S PROBLEM

In his address to the Wellington section of the' New Zealand Society of Civil Engineers at the annual meeting last evening the retiring chairman, Mr. G. P. Anderson, discussed the question of the preparation of estimates, a steadily-recurring problem with engineers.

A great deal of criticism and a good deal of humour has been levelled against the engineer in connection with the estimates he prepares, said Mr, Anderson. It must be admitted that estimates and expenditure do not always agree, but is this all the fault of the estimator? May not some of the blame be put on those who do the spending? It is not everyone who is equally suited to handle men or-to handle a big job. When tenders arc called be who is most fitted for the job and can see most clearly how the job can be managed will, as a rule, put in the lowest tender, but where there is no such competitive test there is no guarantee that he. who is delegated to handle the job is the person niost fitted for it. There may be an.enormous difference in the costs of a job according to the personnel in charge. THREE ALTERNATIVES. i Should an estimate aim.to state the probable actual cost, the lowest cost for which it is possible to do the work, or an amount that will not be exceeded? continued Mr. Anderson. Prom the point of view of getting authority and arranging finance it would seem proper to give the lowest figure that will not be exceeded, but if the work is not done by contract, there is a tendency to fix prices by reference to the estimate, so that there is a tendency to work up to it. In the final wash-up it is likely to be found that the estimate has been exceeded. If, on the other hand, the lowest amount for which it is considered possible to do the job is given, an effort will be made to work down to it, but almost certainly the prospect of having to' raise additional capital will have to be faced. These two methods of estimating will give very different results.

It might be replied that the usual practice supplies both figures. The estimate is made out at the lowest possible figure, and then a contingency item is added which gives the outside value. Well and good, but why was the contingency item .always ,io per cent.? It should sometimes be 5 and sometimes 50 per cent. The contingency item had to cover extra workj which could not oe foreseen, and damage due to acts of God, floods or earthquakes, and it could hardly be made to serve both purposes. In any case, there was no justification for a flat rate on all jobs where the hazards might vary enormously.