Every contractor must know about all types of construction estimates. Accuracy in cost evaluation is necessary! A minor mistake in the calculation derails the whole project. Every type of construction project starts with one critical step. That is the evaluation of the project expense. If you predict them correctly, it will help you complete projects on time and achieve good profit margins. If you are wrong, then you will have to face over-budgeting and lose clients.
However, as a contractor, it is a must to understand them and deliver projects on time and on budget. Successful contractors rely on expert Construction Estimation Services and save their projects from failure.
Contractors must be aware of all types of estimates to work on the right one when required in the project!
Main Types of Construction Estimates
1. Preliminary Estimate
It is also called an abstract cost estimate, ROM estimate, conceptual estimate, and budget estimate. This type of estimate is used in the early stage of the project. In this stage, the clients do not have complete project plans.
Accuracy Range is -25% to +75%
Preliminary estimates are processed based on:
- Historical data of similar completed projects
- Cost per square foot or unit measurements
- The estimator’s knowledge of comparable projects
It is better to:
- Use multiple comparable projects for reference
- Account for major differences in scope, location, and market conditions
- Clearly communicate the limited accuracy range to stakeholders
- Plan to refine the estimate as more information becomes available
2. Detailed Estimate
It is also called an Accurate estimate. This is one of the construction estimation types used when construction plans are complete.
Accuracy Range is ±5% to 10%
These types of estimates include:
- Complete quantity takeoffs
- Labor analysis
- Equipment costs
- Current material pricing
- Subcontractor quotes
- Indirect costs
You need to know that a detailed estimate converts the projects into:
- Foundation work
- Structural framing
- Exterior finishes
- Interior finishes
- Mechanical systems
- Electrical systems
- Plumbing systems
- Site work and landscaping
However, it is better to:
- Use construction takeoff software to improve accuracy
- Verify all quantities with a second review
- Update material pricing regularly to reflect market conditions
- Document all assumptions and exclusions
- Include allowances for items not yet specified
3. Quantity Estimate
This type of estimate is required in the resource planning phase.
Accuracy Range is ±10-15%
This is one of the construction estimating methods that breaks the project into components and calculates:
- Cubic meters of concrete needed
- Square footage of flooring
- Number of doors and windows
- Linear feet of piping
- Tons of steel required
- Gallons of paint
If you want to manage everything accurately, then make sure to:
- Organize quantities by trade or system
- Use standard measurement units consistent with suppliers
- Account for waste factors appropriate to each material type
- Cross-reference quantities with design documents
- Update as design details are finalized
4. Bid Estimate
It is the type of proposal prepared to win projects from the clients.
Accuracy Range is -5% to +15%
During the preparation of this estimate, contractors need to include all expenses expected in the evaluations. Bid estimates are prepared by the contractors. It is based on the project documents and other factors. To deliver a successful bid, you must:
- Review all bid documents thoroughly before estimating
- Obtain firm quotes from subcontractors and suppliers
- Analyze market competition and typical bid spreads
- Include appropriate contingencies based on project risk
- Conduct internal estimate reviews before submission
- Document all assumptions and qualifications clearly
- Consider value engineering opportunities
5. Control Estimate
This type of estimate is prepared by professional construction cost estimators after contractors win the project.
Accuracy Range is up to ±2% variance
Control estimates are based on:
- Contracted values
- Approved subcontractor agreements
- Purchase orders for materials
- Actual labor rates
- Committed equipment costs
The best way to generate these estimates is to:
- Implement robust change order tracking systems
- Monitor leading indicators of cost overruns
- Reconcile actual costs with committed costs frequently
- Use project management software for real-time cost tracking
- Conduct regular forecast-to-complete analyses
- Document lessons learned for future estimating improvements
Factors Affecting Estimate Accuracy
If your project design is complete. There are very less chances of errors. Professional Takeoff Estimators make sure that everything is on point by analyzing the project blueprints. Incomplete designs always result in budget overruns.
There is one thing you need to understand, that even large projects can be easier for you to execute. In the same way, residential projects can be the most difficult. But why? The answer is only one thing: it is all about understanding the project drawings and client needs. Experts also consider the quality of the Soil and other various factors. The main focus is on considering every factor so that it does not increase the cost.
Conclusion
Learning and using the various types of construction estimates is important for every contractor and estimator. In this competitive construction industry, the accuracy of estimates matters the most. Using the right type of estimate helps you prevent mistakes. This way, the overall accuracy is also enhanced. Contractors complete their jobs under timelines. Plus, you also need to learn when to apply every type. However, getting yourself updated with the latest method is the right approach to make the right decisions for your projects.
