The aim of preparing an estimate is to convert a set of construction documents, such as drawings and specifications, into an accurate and useful budget to find out the approximate cost of the project.
Each type of estimate relies on a particular source of information and offers a different level of detail, and, consequently, accuracy.
When it comes to classifying estimates, terminology varies significantly. For instance, the American Society of Professional Estimators (ASPE) distinguishes the following five estimate levels, with the Level 1 being the roughest and Level 5 being the finest:
- Level 1. Order of Magnitude Estimate.
- Level 2. Schematic Design Estimate.
- Level 3. Design Development Estimate.
- Level 4. Construction Document Estimate.
- Level 5. Bid Estimate.
Let’s take a closer look at some commonly used types of estimates.
Also known as Conceptual Estimate, Preliminary Estimate is created at the initial stage of the project before the design is complete. Corresponding to the Level 1 in the above classification, it may have an error as high as 50% or more. This type of estimate gives us a rough idea of the future building cost and is used in feasibility studies and for screening.
Conceptual estimating relies on utilising previous experience. One of the methods of preparing a Preliminary Estimate is to use the gross building area to calculate the construction cost based on the average actual cost of similar projects completed in the past. For instance, if we know that a residential property with the total area of 200 square metres fit in the budget of $250,000.00, we can assume that cost for 300 square metres will be somewhere around $375,000.00. Sometimes this is called Square Footage Method.
A Composite Estimate quantifies composite elements of the building, like walls. While still coarse, it provides more detailed information about the project cost than a Preliminary Estimate because it breaks down the total cost into smaller components. This type of estimate allows a project owner or a customer to get a better understanding of the involved costs before making any serious commitments and investing time and effort into creating a Detailed Estimate.
Composite Estimating can be thought of as the Square Footage Method applied on the more granular level. If we know approximate rates for individual composites (‘assemblies’ in the US terminology), we can look at the work to be done as a combination of these assemblies, quantify them and then apply the known rates to each composite individually. For example, we can use a single rate for constructing a square metre of a brick veneer wall without thinking about the frame, brickwork, plasterboard and labour at this point.
Composite Estimates are widely used in some parts of the world, including Spain and South America.
This is the type of estimate that works with the most precise information about the construction costs. Here we will see all material quantities and prices, as well as labour hours.
The Detailed Estimate is very important During the construction phase because it helps the builder avoid, on one hand, wastage and, on the other hand, delays associated with ordering additional supplies and services.