Creating Accurate Unit Price Estimates

For any construction project, several estimates can be prepared during the planning phase to ensure stakeholders have a clear understanding of the projected scope, cost and timeline. In general, initial estimates are intended to be created quickly and economically. As planning proceeds and the project nears kickoff, there comes a need for more accurate and more time-intensive estimate types.

So far, we’ve discussed when to use conceptual estimates, square foot estimates and systems and assemblies estimates. Conceptual estimates are great for quickly assessing the feasibility of a project, square foot estimates can help project owners quickly understand how different design options may affect the final cost per square foot and systems and assemblies estimates are good for quickly getting a more precise idea of a project’s cost.

For projects that are nearing kickoff, the most appropriate type of cost estimate to create might be a unit price estimate. In this blog post we’ll learn more about what unit price estimates are, and how they can help you get a final, detailed estimate of what your projects might cost.

What is a Unit Price Estimate?

A unit price estimate is the final estimate type prepared before a project begins construction. Compared to previous estimate types we’ve discussed, a unit price estimate provides project leaders with the most detailed, accurate idea of what their project might cost. This is because it accounts for the costs of all of the materials and labor required to complete a project, in the project’s specific location.

Read more about how different estimate types are used at various stages of project planning.

Unit price estimates include the exact units of material and labor needed to complete the project. This differs from previous estimate types because it is built from the ground up using a line-item for each and every unit of material, equipment and labor required to complete the project. Because they are built from scratch, unit price estimates often take longer to prepare than the previous estimate types – around 40 hours per $1 million in project cost.

Most projects will warrant a unit price estimate before beginning construction. While conceptual estimates and square foot estimates help project owners make decisions early in the planning process, and systems and assemblies estimates help quickly get a more detailed idea of a project’s cost, a unit price estimate is the final and most exact estimate of what the final cost might be. A good unit price estimate can predict final costs within 5-10% accuracy.

Getting an Accurate Idea of Project Final Costs

While previous estimate types are good for deciding whether to move forward with a project based on approximate cost expectations, a unit price estimate can help iron out the exact materials and processes to be used, and how much they will affect total cost.

See how RSMeans data can help you quickly and reliably estimate project costs with accurate, location-specific data.

Some of these decisions take into account the different materials and building techniques required for a project’s specific location. For example, a pre-built foundation assembly might not accurately estimate the foundation’s cost if the building site has a unique ground composition that requires modification. Because a unit price estimate is prepared from the ground up, estimators can input the exact specifications for the required foundation, including the exact quantities of material needed to build that specific foundation line-item by line-item.

Better Data Makes Better Estimates

Estimators need to produce accurate unit price estimates because this estimate is meant to inform all parties of what the final cost of the project might be. At this point, having access to accurate cost data has never been more important. With Gordian’s RSMeans Data Online, estimators can instantly access dozens of pre-built assembly models from anywhere, at any time. And each of these are up-to-date with accurate, localized costs backed by over 30,000 hours of research to help estimators create better systems and assembly estimates, more efficiently.