The construction cost constitutes a substantial part of the total project cost. This part of the cost is controlled by the construction project manager. The level of precision of construction cost estimates fluctuate at different stages of the project development, ranging from ball park figures in the primary stage to quite authentic figures for budget control before the construction. The cost estimates made at the primary stage can lack accuracy as the design decisions made at the beginning stage of a project life cycle are based on uncertain data than those made at a later stage of the construction. The precision of a cost estimate reflects the data available at the time of estimation.
Due to different institutional requirements, construction cost estimates can be analyzed from different perspectives. Though there are various types of cost estimates used at different phases of a project, cost estimates are basically classified into three major categories on the basis of their functions. To generate the estimation of any project either a design estimate or a bid estimate is employed as the construction cost estimate serves one of the three basic functions, design, bid and control.
For the owner and the design professional of the construction project, the types of cost estimates that come up during the process run parallel with the planning and design as follows:
For each of the different estimates mentioned above, the amount of design information available increases in general.
The bid estimate that is submitted to the owner for competitive bidding or negotiation should consist of direct construction cost including field supervision along with a markup to cover general overhead and profits. The direct cost of construction for bid estimates is obtainable by combining the following approaches:
To monitor the project during construction, a control estimate is obtained from the available information to confirm: