It should come as no surprise that different projects have different requirements and will therefore have different expenses associated with them. Cost estimation services are a great tool to help you get a sense of project prices throughout various stages of construction, but since they’re just approximations, accuracy can vary, with 5% to 25% fluctuation from actual final prices depending on what level of detail your cost estimation goes into. This OptiBuild blog breaks down the four main cost estimation methods to help you decide which one is right for your project.
Project Comparison Estimating (15%-25% accuracy variance)
This method is the least accurate but takes the least amount of time to perform. It is often used for projects in preliminary planning stages where little is known about them other than basic parameters. Project comparison estimates are based on what projects of a similar scope in the same geographic region have cost in the recent past. If there is insufficient record of similar buildings within the same scope and location and/or their prices, this method is unlikely to provide you with a workable estimate.
Area & Volume Estimating (5%-15% accuracy variance)
This method works at preliminary or intermediate stages and is most effective if your project’s design provides floor area and volume calculations. There are several historical databases that provide annually updated prices of square metre costs to support this method, though more accurate estimates made with this method also adjust for factors such as regional costs, local labour wages, and special aspects like aesthetic features.
Assembly & System Estimating (≤10% accuracy variance)
This method is usually performed when design drawings are 10%-75% complete. Assemblies or systems combine the work of multiple work items – e.g. a foundation requiring excavation, reinforcing, and concrete pouring – into a single unit and receives one estimate pricing these elements together. This is done by applying values available in historical databases of assembly-specific cost data guides.
Unit Price & Schedule Estimating (5% accuracy variance, depending)
This method involves work being divided into the smallest possible increments with a ‘unit price’ being established for each piece. Unit prices are multiplied by necessary quantities, and all costs are combined to obtain the total estimate. For example, a brick wall’s cost can be accurately determined by finding out how many bricks are required and estimating relevant costs (delivery, storage, cutting, installing, cleaning, etc.). This is the most meticulous and accurate method, though accuracy can be affected by market supply and demand.
If you need construction cost estimation services in Melbourne or Brisbane, OptiBuild is your one-stop shop. Contact us online or call 1300 678 428 and let us provide you with an estimate to help you manage your project costs.