Cost estimators are essential to every construction project. Their accurate forecast of project costs is vital to the survival of any construction business. Our Nashville contractor lawyers are highly experienced in the construction industry on both a professional and personal level, as some of our attorneys have cost estimation experience.
We understand the importance of cost estimation, as discussed in part one of our series. In this second part, we will share some of the valuable characteristics and skills that estimators must possess to excel in cost estimation, as well as the different levels of cost estimates.
Characteristics of Good Cost Estimators
An expert cost estimator is central to the cost estimation process. Cost estimators should have an in-depth knowledge of construction materials and methods. They should understand the design and architectural details of engineering drawings. Competence in evaluating bids from subcontractors is important, too. They are skilled at navigating the countless costs associated with construction projects.
Good communication skills are necessary as estimators must communicate cost information to different stakeholders. Integrity is critical as well since estimators must deliver accurate estimates despite the pressure to cut corners or deliver estimations quickly. It is also beneficial for estimators to specialize in a variety of structures since projects may require estimations on different types of construction.
The Levels of Construction Cost Estimates
Cost estimate accuracy is dependent on a well-defined project plan and the needs of the owner, client, or the designer. It is standard practice to create multiple estimates during the pre-design and design phases of a project. This ensures that estimates become more accurate as the project’s level of definition increases. There are different levels of cost estimates that correspond to the phases of building design and development:
- Level 1 – Order of Magnitude: This estimate is used to facilitate budgetary and feasibility determinations.
- Level 2 – Schematic Design: This estimate provides a more comprehensive cost estimate to compare to the budgetary and feasibility determinations that were previously made.
- Level 3: Design Development: This estimate provides a greater amount of accuracy and verifies budget conformance as the scope, design, and materials are finalized.
- Level 4: Construction Document: This estimate confirms funding allocations, verifies the construction cost as the design phase is being completed, identifies when there is scope creep, and assesses potentially valuable engineering opportunities.
- Level 5: Bid Phase: This estimate is used to develop probable costs in the preparation and submission of bids.
More information on these levels can be found in the Whole Building Design Guide (WBDG). In part three, we will discuss common estimating techniques. In section four, we will focus on estimating mistakes and the use of estimating software.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.