Types of Estimates
2.1 Approximate Estimates
Definition: Approximate estimates, also known as preliminary or rough estimates, provide an early cost projection for a project. These estimates are prepared during the initial stages of planning when only the broad outline or basic concept of the project is known. They are based on general assumptions rather than detailed drawings or specifications. The accuracy is limited, but it’s helpful for quickly assessing feasibility and aiding in budgeting decisions.
- Purpose: To give clients, stakeholders, or decision-makers a general sense of what the project will cost, enabling them to decide if they want to proceed with detailed planning.
- Example: When considering a new hospital, the rough estimate might calculate cost per bed space (e.g., $200,000 per bed), helping stakeholders decide on project viability before committing resources to detailed planning.
2.2 Detailed Estimates
Definition: A detailed estimate is a highly accurate calculation that covers every aspect of the project’s cost in detail. It is prepared after finalizing detailed project drawings and specifications, and it includes quantities of materials, labor costs, equipment, and overhead expenses. Detailed estimates also consider contingencies and other indirect costs. This type of estimate is comprehensive, providing a complete cost breakdown.
- Purpose: Essential for budgeting, contract agreements, and tendering processes, a detailed estimate enables accurate financial planning and control, ensuring no aspect of the project is left unaccounted for.
- Example: For a residential building, a detailed estimate would calculate costs for each element—like foundations, walls, plumbing, and finishes—using precise quantities (e.g., 50 cubic meters of concrete at $100 per cubic meter).
2.3 Revised Estimates
Definition: Revised estimates are updated versions of the original estimates, created when significant changes in project scope or unexpected cost increases occur. These estimates reflect changes like design modifications, labor rate increases, or material price hikes. When costs exceed a predefined threshold (often 5% of the initial estimate), a revised estimate is prepared to adjust the budget accordingly.
- Purpose: Ensures that any additional costs are documented, justified, and approved by project stakeholders. Revised estimates are essential for maintaining financial accuracy and for getting stakeholder approval for extra funding.
- Example: If a highway construction project faces unforeseen geological challenges, requiring additional excavation, a revised estimate would include these extra excavation and labor costs.
2.4 Supplementary Estimates
Definition: Supplementary estimates are prepared when additional work not covered in the original scope becomes necessary. These estimates document the costs of the additional items, ensuring the project can adapt to unforeseen requirements without affecting the initial budget. Supplementary estimates help in adding new works that are essential but not initially anticipated.
- Purpose: To cover the costs of essential additions to a project, providing funds for elements that may have been overlooked or added due to new requirements.
- Example: In constructing a school, if an additional playground is required but was not included in the initial design, a supplementary estimate would account for this cost.
2.5 Annual Repair and Maintenance Estimates
Definition: These estimates project the annual costs required to maintain a building or infrastructure. They are focused on routine, predictable expenses necessary to keep the structure in good condition. They typically include costs for regular repairs, repainting, and minor upgrades to ensure the facility remains safe and functional.
- Purpose: To allocate funds for the routine maintenance and minor repairs needed to preserve the condition and functionality of the building or infrastructure, reducing the likelihood of major repairs.
- Example: For a commercial building, this estimate would include costs for repainting, HVAC servicing, and minor plumbing repairs, calculated annually to ensure regular upkeep.
2.6 Extension and Improvement Estimates
Definition: Extension and improvement estimates are used when additional structures or upgrades to existing facilities are needed to improve functionality. This estimate type is necessary when the project’s original design requires expansion or improvements, often driven by new requirements or an increase in demand for the facility’s use.
- Purpose: To plan and justify the cost of expanding or enhancing a building or infrastructure, helping project managers assess the feasibility and budget for the improvements.
- Example: Adding a new floor to a university building to accommodate more students would require an extension estimate covering structural adjustments, additional materials, and construction labor.
2.7 Complete Estimates
Definition: A complete estimate includes all possible costs associated with a project from start to finish, covering everything from initial construction to post-construction expenses. This is the most comprehensive estimate type, providing a total financial picture of the project and ensuring that all phases are budgeted for.
- Purpose: To provide a full financial overview of the project, useful for large-scale projects or government contracts where transparency and thorough budgeting are critical.
- Example: For a government office building, a complete estimate would cover site preparation, construction, interior finishing, landscaping, and even furniture and fixtures.
2.8 Split-up of Cost of Building Works
Definition: A split-up estimate divides the total cost into detailed components for each part of the construction, such as foundations, walls, roofing, and interior finishes. This type helps in tracking and managing costs at a granular level, allowing project managers to control budgets effectively and see where funds are being allocated.
- Purpose: Provides a precise cost breakdown, making it easier to monitor and adjust budgets for individual project sections as needed.
- Example: In a building construction project, the split-up estimate might allocate separate budgets for excavation, foundations, superstructure, and finishes, so that if material costs increase, only the affected section's budget needs adjusting.
Click here for chapter 1 >> : Introduction of Estimating
Click here for syallabus of 5th sem : 5th semester syallabus
Click here for First sem :
click here for Second sem :
click here for Third sem :
Click here for 4th sem :
Click here for 5th Sem: