The Main Phases of the Construction Cost Estimation Process

Construction Cost Estimation Process

Costing in the field of construction of any project is an important and integral part of the process. That is why estimating specialists undertake research, and analytical works, and perform financial forecasts. Finally, estimators provide a complete report with an in-depth analysis of the project’s estimated cost. 

There are several phases for estimating the cost of a project. Each one is critically important for the final result. In addition, it is worth noting that construction pricing software can be used in each of the four obligatory phases of the cost estimation process.

Also, an obligatory aspect in the evaluation process is the opinion of the client, the contribution of workers, the availability of building materials, etc. Each project is unique in its way, so the estimating process will never be the same, and neither will the work of the estimator.

What Are the Main Phases of the Cost Estimating Process?

As can be seen, there are four main phases of the cost estimating process. They should come one after another. This way the sequence of the procedures is met and the optimal result is achieved by the contractor and the team of builders. That is why all the construction estimators should take into account the peculiarities of all these four phases for great overall performance.

Phase 1: Contact the Clients & Staff

The first step in the cost estimating process is to collaborate with the client, architect, designers, and other professionals to help get an idea of ​​the scope of the project. At the introductory meeting, it is necessary to find out what the client wants to see as a result and to discuss the project scheme with the architect. 

An important part of the process in the first step is to create lines of open communication between all the representatives of the planning, designing, and construction processes. Among the key figures to interact, communicate, and negotiate with are:

  • Namely the client (on any stage of the project);
  • Architects and designers (especially in the initial stage of the project);
  • Estimators, managers, and accounting specialists (on any stage of the project).

Communication and nonstop interactions with estimators are critical as the project progresses and issues need to be discussed and resolved timely.

Phase 2: Supply Cost Analysis

The second phase includes estimating and analyzing the cost of all construction materials that may be needed during the construction process itself, to roughly determine when the construction of the project will be completed. 

To develop an initial estimate, the estimator needs to review the design drawings or diagrams to identify material types. Everything should be on the list: finishing materials, concrete, switches, sockets, etc. Also at this stage, more realistic deadlines for completion of construction are being specified. To carry out such a calculation, all factors that may provoke a delay in the established terms are taken into account.

Phase 3: Labor Cost Evaluation 

The third stage of evaluation is manifested in the fact that the construction estimator must identify the labor needs, and also calculate how much the project will cost. This stage involves cooperation with subcontractors and construction managers. 

This is necessary so that the evaluators can determine the number of employees required to complete the project on time. It also helps to estimate the workload of the project. Additionally, the team of estimators can forecast the proportion and balance between labor costs and the final profit margin of the project.

Phase 4: Final Presentation

The last stage includes the presentation of the finished project and the evaluation analysis to the client. It is necessary to pay attention to all the details and highlight the profitability of the construction project in comparison with the planned costs.

Architects and project managers can also participate in the presentation. The estimator needs to provide a high-level report with a detailed presentation and full analysis of the work performed. If the final report is satisfactory for all the parties, it is more likely that the project will be of high-profit margins and become hassle-free during all the building stages.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.