Types of construction estimates

An estimate can only be as detailed as the documents behind it. Early in design, cost is priced by area, system or assembly because the details do not exist yet. Once construction documents are issued, the same project can be measured and priced line by line.

AACE International describes this with a five-class system. Its Recommended Practice 56R-08 covers building and general construction and ranks estimates from Class 5 to Class 1. The maturity of the project definition documents is the primary characteristic that sets the class. A separate practice, 18R-97, covers the process industries and excludes commercial building construction.

Expected accuracy ranges narrow as estimates move toward Class 1. In 56R-08, a typical Class 5 range runs from -20% to -30% on the low side and +30% to +50% on the high side, while Class 1 runs from -3% to -5% and +3% to +10%. These ranges assume an 80% confidence interval and appropriate contingency. AACE says the range for a specific project should come from risk analysis, so treat them as reference points, not a promise about any single estimate.

• Class 5: concept screening, priced by square foot factoring, parametric models, judgment or analogy
• Class 4: schematic design or concept study, priced with parametric and assembly-driven models
• Class 3: design development and budget authorization, priced with semi-detailed unit costs at the assembly level
• Class 2: control or bid, priced with detailed unit costs and a forced detailed takeoff
• Class 1: check estimates, bids and change orders, priced with detailed unit costs and a detailed takeoff

Conceptual and budget estimates support decisions made before the design is finished: whether to proceed, which option to carry and what budget to set. They price the building by area, by system or by assembly, using cost data the estimating team approves.

A useful budget names the basis for every line, lists what the design does not show yet and states the design stage it reflects. It is not a bid. The number will move as the design fills in and market prices change.

• Typical inputs: concept, schematic or design development plans, a program or outline specification and site information
• Typical output: cost by system or division, assumptions, allowances and the estimate class
• Use it for feasibility checks, budget setting and comparing design options

A bid estimate is prepared from construction documents. Each priced line comes from a measured quantity and a labor, material or equipment rate, and every addendum is tracked. In 56R-08, bid and tender estimates fall in Class 2 and Class 1.

The bidder owns the final number. Markups, contingency, bid strategy and the decision to submit belong to the company that signs the bid.

• Typical inputs: plans, the project manual, the bid form, all addenda and approved rates
• Typical output: a priced takeoff, alternates and unit prices, inclusions, exclusions and qualifications

A quantity takeoff measures the work without pricing it. The estimator breaks the project into measurable items and records areas, lengths, counts and volumes from the plans, specifications or model.

Takeoff-only work suits contractors who price with their own rates. It should state the plan revision, the measurement rules and anything that was unclear, so the person pricing it can check the basis.

• Square feet (SF) for walls, floors, ceilings and slabs
• Linear feet (LF) for partitions, trim, base, pipe, conduit and curb
• Each (EA) for doors, fixtures, devices and structures
• Cubic yards (CY) for concrete and earthwork
• Squares (SQ) for roofing, where one square equals 100 square feet

A change order adds work to or deletes work from the original scope of a contract. Pricing one means measuring what changed between document versions and applying agreed rates and markups.

Change order pricing is a detailed estimate of a small scope. 56R-08 lists change orders among the uses of Class 1, its most detailed class. The contract terms control how markups, credits and supporting detail are presented.

A trade estimate covers one scope, such as drywall or electrical, for the subcontractor pricing that work or for a general contractor checking it. A whole-project estimate rolls every trade into one number, organized by MasterFormat division or the contractor’s own cost codes, and adds general conditions, allowances and alternates.

Choose by the decision in front of you. Use a budget estimate to test feasibility or options, a takeoff when your team prices its own work, a bid estimate when construction documents are out for bid and change order pricing when a revision arrives during construction.