Efficient and best management practice construction cost estimating, and ongoing construction project/program management involve early and ongoing planning, and the collaborative and competent involvement of all construction project participants and stakeholders.
Within this structure the Real Property Owner must demonstrate appropriate leadership skills and manage the selected internal and external service delivery teams. Continuous monitoring, process improvement, and resource development with the objective of common best value outcomes are primary responsibilities.
In general terms a construction cost estimate must be reliable and verifiable in order to be actionable. Use of the term “accuracy”, though widely used, is inappropriate.
A reliable estimate is one that reflects the approximate project cost developed using locally researched detailed construction line unit price tasks/activities. Many owners, architects, engineering, and builders inappropriately refer to the “accuracy” of construction cost estimates. This is simply unfortunate as estimates are, by their very nature, approximations. The ability to determine accuracy requires a known data point, a datum. Many assume that the final “as-built cost” is the datum. That assumption is faulty due to the numerous aspects that typically affect the final cost outcome (planning, procurement and project delivery method…).
A reliable, verifiable, and actionable construction cost estimate, however, is not only possible, but should be used exclusively prior to procurement and project delivery.
As noted, the most reliable form of construction cost estimate is one developed using granular local labor, material, and equipment costs that have be researched to reflect specific construction tasks. Each task should be totaled and presented in a cost per unit of measure (square foot, cubic foot, each, etc.), along with quantities. Using this approach, a reliable total cost and complete schedule of detailed construction line-item tasks/activities can be prepared after consideration of all physical and functional requirements and potential cost variations.
Overall, the process of generating a reliable construction cost estimate can be defined as a quantitative assessment process that generates a detailed line-item construction cost estimate based upon locally researched information.
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