Construction estimating software counts the materials and labour that a design needs, prices each item, and adds them up into the bid that a contractor submits to win a job. A bid is the price at which the contractor offers to build the project. Estimating is done before the contract is won, so a contractor may price ten jobs to win one or two of them.
The work has three steps. First comes the quantity takeoff: listing every item in the design and how much of it is needed, such as cubic metres of concrete, tonnes of steel and square metres of plaster. The quantities may come from a BIM model. Or AI may count them from the drawings, in quantity takeoff software. Second, each item gets a rate. The rate for a cubic metre of concrete includes the cement, sand, stone aggregate and water, the labour, and the hire of the mixer and the pump. Third, the estimator adds the site's running costs, a margin for risk and the contractor's profit.
Consider a contractor in Lucknow bidding on a state government tender for a 400-bed hostel. The takeoff finds 3,200 cubic metres of concrete, 310 tonnes of steel bars and 21,000 square metres of plaster, among 600 items in all. The software prices each item from the contractor's own rate library, which holds what the contractor has actually paid on past jobs. At about ₹62,000 a tonne, the steel bars alone come to about ₹1.9 crore. The software then adds GST, the site costs and the margins, and gives a total of ₹38.6 crore. On a government job, the department fixes the bill of quantities, the official list of items and their quantities. The contractor only quotes the rates. So the bid is won or lost on the rates.
Rates change, so the software keeps them up to date. Steel and cement prices can change every month. Many government departments also publish a schedule of rates, an official price list for each item of work, such as the Delhi Schedule of Rates of the Central Public Works Department (CPWD). The software compares the contractor's rates with that schedule. Government bids follow fixed rules, which the page on government tenders explains. The tender documents themselves are often prepared in RFP software.
What happens after the bid is won? The estimate becomes the project's budget in construction management software, and every later cost is checked against it. The material list goes to the buying team, or to a construction materials procurement platform that quotes for and delivers the cement and steel.