Construction Estimates: An Overview of 4 Common Types

Common Types of Construction Estimates

Throughout all phases of a construction project, it is important that project owners have a good sense of what the total cost will be. In most cases, cost is the most important factor in determining whether or not a project is even viable. That’s why having the most detailed and accurate cost estimate possible is vital at every stage. In order to do this, several estimates need to be prepared. Here are the four types of construction estimates you’ll need to execute successful construction projects.

Conceptual Construction Estimates

Before kicking off a project, decisionmakers need to have a rough idea of what the project is expected to cost. And when they are still assessing which plan to go with, or if the project is viable at all, they need a reliable estimate that is quick and efficient to create. That’s where a conceptual estimate, also called a rough order of magnitude or preliminary estimate, can come to the stage.

A conceptual estimate is intended to be quick and easy to create so project owners can have a rough idea of the project’s total cost with little time and money invested. Conceptual estimates can be prepared within minutes and are less expensive to produce because they require less research and time to produce. The intention with a conceptual estimate is to give decisionmakers enough information to assess which plan they want to go with. And because several may need to be created, it is important that they can easily be created and modified. Although they can be created efficiently, they are still considered reliable enough to confidently inform decisions. Conceptual estimates should predict a project’s cost with as much accuracy as possible within a constrained time period and are usually within around 25% accuracy.

Square Foot Estimates

In the next stage, project owners can benefit from investing in a more detailed, more accurate estimate to inform the beginning stages of construction. This is where a square foot estimate comes into play. An accurate square foot estimate can be used to benchmark initial costs, ensuring that the project starts out on track.

At this point, it is worth it for estimators to invest more time into creating a more detailed idea of what the various costs might be. Square foot estimates can usually be created in the span of several hours, so they are naturally more in-depth than what is required during the conceptual stages of a project. Square foot estimates provide more detailed information about the cost of labor, materials, professional services and more. Although they provide more detail than conceptual estimates, they are based on the typical cost to create a building with a set square footage, of the same type and use. Because a square foot estimate is still intended to be created with relative efficiency, it does not include finer details like specific materials used. A square foot estimate is intended to predict total cost of construction, give or take a 20% margin. Still efficient to create, without the detail needed in the later stages of a construction project.

Systems and Assemblies Estimates

To move the project along, project owners will need a more detailed estimate of costs to provide more detailed guidance and keep the project on track. At this point, it is worth it to invest more time and resources into creating a detailed breakdown of anticipated costs that are more specific to the project at hand. This is when project owners will want a systems and assemblies estimate.

The advantages of creating a systems and assemblies estimate at this stage is that this estimate provides a detailed breakdown of the costs of specific systems and assemblies that will exist in the final facility. This means that systems that will exist in the final building, including items as simple as lavatories, to more complex systems like mechanical systems, are accounted for. Because this type of estimate breaks down cost data into more minute details than a square foot estimate would, it gives a total cost estimate that is more accurate than preceding estimates. At this stage, systems and assemblies estimates can take days to create, and can predict the total cost of construction at an accuracy within 10-15% of the final cost.

Unit Price Estimates

The final estimate type is a unit price estimate. This estimate is created to have a final, accurate prediction of what the total project will be. A unit price estimate involves the highest level of research and takes the longest amount of time to produce. But for good reason — a unit price estimate is intended to be serve as a reference for project spend throughout the entire construction phase. The unit price estimate includes costs specific to the project, down to the specific materials that will be used.

This type of estimate can take weeks to produce but is this most informative of all the estimate types. It will be referenced throughout the majority of the project’s lifecycle, so accuracy and detail are very important at this stage. A good unit price estimate will predict the total final cost of the project within 10% of the final project cost.

Estimating Time vs. Accuracy Graph

Why Accurate Cost Data is Important

For all of these estimates, reliable cost data is the most important factor to producing accurate, effective estimates. The benefits of being able to access cost data that is up-to-date is also vital. Fortunately, Gordian’s RSMeans Data Online can provide the cost data needed at every stage of the project’s estimating process. It can even predict future costs up to three years in the future. RSMeans Data Online is the ubiquitous for accurate, reliable cost data in the industry, and instant access to updated cost data makes the estimating process more efficient and streamlined.

About Gordian

Gordian is the leader in facility and construction cost data, software and services for all phases of the building lifecycle. A pioneer of Job Order Contracting, Gordian’s solutions also include proprietary RSMeans data construction costs and Facility Intelligence Solutions. From planning to design, to procurement, construction and operations, Gordian’s solutions help clients maximize efficiency, optimize cost savings and increase building quality.