The construction cost estimates are viewed from different perspectives based on different institutional requirements. There are several types of cost estimates in the project, but the top classification of cost estimates is based on the functions; Design, bid and control.
The three major types of construction cost estimates are design estimates, bid estimates, and Control estimates. The major types are briefly explained in this article.
Also Read: 8 Type of Construction Cost Estimates
1. Design Estimates
There are different design estimates namely:
- Screening Estimates or the order of magnitude estimates
- Preliminary estimates
- Detailed Estimates
- Engineer’s estimates as per the plan and specifications
Various design estimates convey the progress of the design and planning stage of the project.
- A screening estimate is developed before the design of the facility. It relies on the cost data that is obtained from the facilities that are built in the past.
- The preliminary estimate is also called the conceptual estimate which is based on the conceptual design of the facility.
- The detailed estimate is called a definite estimate which is developed from the clearly defined scope of work. Here, the detailed design is studied so that the essential features of the facility are identified.
- An engineer's estimate is defined based on the plans and the specification that is obtained from bids taken from the construction contractors.
The facility can be decomposed into different levels based on the type of cost estimate that is to be prepared.
2. Bid Estimates
A bid estimate is an estimate that is submitted to the owner by the contractor. This can be either competitive bidding or bid that is concluded after negotiation. This bid includes:
- The construction cost
- General Overheads
- Profit
The bid estimates are derived from the combination of the following approaches:
- Quantity takeoffs
- Construction Procedures
- Sub-contractors quotations
Also Read: What is Construction Bidding?
3. Control Estimates
A control estimate is used for monitoring the project during the construction phase. The control estimate is derived from the following available information:
- The budgeted cost: This is acquired just after the contracting process and just before the construction phase starts.
- Budget Estimate for financing
- Estimated Cost to Completion: This is acquired during the progress of construction.
Some baseline has to be adopted by the contractor and the owner for cost control. A budget estimate has to be adopted by the owner as early during the planning that helps in long term financing of the facility.
In the case of a contractor, the bid estimate is considered as the budget estimate which can be used to control the purpose as a part of construction planning. The budgeted cost has to be updated periodically to highlight the estimated cost to completion and to ensure sufficient cash flow for the completion of the project.
Also Read: Construction Cost Estimates