Cost Estimate Accuracy
Cost Estimate Accuracy
(OP)
Does anyone have a reference to an accepted classification system for various types of cost estimates? For instance, a Class ?? cost estimate would be used for conceptual planning and has an accuracy of +-30%. A Class ?? cost estimate is for a final design and has an accuracy of +-5%. Etc....
Thanks.
Thanks.





RE: Cost Estimate Accuracy
An engineering opinion of cost carries a lower liability than a "cost estimate". A cost estimate is considered to be just that and is expected to be relatively accurate, but fortunately I don't know that there has been a quantification on that range in the courts. It is generally accepted that a cost estimate will be within about 10% of the cost.
An opinion of cost is usually qualified heavily and may vary 25%.
If you are a design or consulting engineer, I would suggest that you provide an engineering opinion of cost and leave the cost estimate to the contractors willing to actually contract for that amount.
RE: Cost Estimate Accuracy
Order of Magnitude Estimate +/- 20%
Square Foot or Cubic Foot Estimate +/-15%
System Estimate +/- 10%
Unit price estimate +/5%
I know there must be other conventions out there, but I haven't had any experience with them.
RE: Cost Estimate Accuracy
RE: Cost Estimate Accuracy
RE: Cost Estimate Accuracy
The contractors that submitted those bids live and die by their ability to estimate the cost of a project, yet look at the difference between their bids! They all want the job at the highest possible number, but they can't get it unless they are the low bidder and most of them are good, responsible contractors (or they wouldn't be bidding your jobs right?).
I have two points:
First, it is foolish to think that an architect's or engineer's budget is going to be "accurate" when the guys who bid for a living can't get close to each other. How many tie bids do you see? The A/E budget may be a necessary part of the process, but don't count on it being accurate. I actually had an architect refuse to disclose his budgets because he felt contractors would use it to base their bids on - honest!
Secondly, a good measure of how well drawn and documented your project is, is how close the bids are low to high bidder. IMHO, if you want to score yourself, keep track of the % standard deviation of the bids on your projects, the smaller it is, the better you are doing.
RE: Cost Estimate Accuracy
RE: Cost Estimate Accuracy
RE: Cost Estimate Accuracy
Class A - Pre-tender estimate - 5%
Class B - Mid Design - 10% to 15%
Class C - Preliminary/Predesign - 20%
Class D - Conceptual - 25% or designers level of comfort.
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RE: Cost Estimate Accuracy