In order to understand construction cost estimation in general, you must have a basic grasp of the construction process. Overview of the Construction Estimation Process
A slight miscalculation with the time and cost can have a disastrous impact both in the budget allocations and in the project calendar, leading to unexpected loss of money and delayed schedules. When you build an estimate, you are also setting milestones and breaking your project into stages to ensure that you have a stable timetable. One thing the contractor often oversee when creating estimates is the critical link of project budgets and schedules. In the construction industry, time is as important as money. The Role of Construction Scheduling in Cost Estimating: – and the quality of the tools and procedures the estimator uses. – the skill and experience of the estimator – the level to which the estimator defines the project The accuracy of construction cost estimate will rely upon a number of factors: It also provides a price for project owners, so they know if they want to work with a particular contractor or not. They use estimates to decide whether to bid on a project, ideally with architects and engineers’ inputs, to ensure that the project will meet the financial feasibility and scope requirements. Owners generally choose the lowest bid that satisfies the standards and project requirements they specify.įor the contractors, however, accurate construction estimates win jobs. For owners planning extensive projects, they often look for multiple cost estimates, including those prepared by general contractors and those evaluated by independent estimators. Essentially, an accurate estimate will not only prevent a contractor from losing money but also help the project owner avoid overpaying.įor the owners, they use the estimates to determine the project’s scope and feasibility and to allocate budget costs. No one wants to lose money, so both parties do their own analysis on the financial impact of expenditure overrun, failure of completion, and the profitability of the potential project. What is Construction Cost, and why do we need to estimate it?Ĭonstruction cost estimation is a conventional practice both the project owner and contractor initially research on before making any project commitments.