Construction Estimating Guide: Definitions, Tips & Free Template

Construction Estimating Guide: Definitions, Tips & Free Template

Construction estimating is the process of assessing all the costs of a construction project, such as direct costs, indirect costs, overhead costs and a profit margin for the general contractor. It is used to forecast how much it will cost to build the structure in your project plan, and is one of the most important steps taken at the early stages of any construction project management process. It is done by the project estimator, but can also be created by the project manager, another manager or someone else on the project. When making a construction estimate, it is important to have a construction estimate template, such as ProjectManager's free construction estimate template. The construction estimate is used to determine the overall cost of a build.

It includes direct costs such as materials, labor and equipment, indirect costs such as quality control, security, utilities, admin, legal fees, permits, etc., and subcontractor costs such as labor, materials and equipment. The American Society of Professional Estimators has identified a five-tier system for classifying construction estimates. Level 1 is the rough estimation formed at the very beginning of the project, Level 2 is the Intermediate or Schematic, Level 3 is the Preliminary or Design Development, Level 4 is the Substantive or Construction Document, and Level 5 is the Definitive or Bid.