Types of Cost Estimates

Whether constructing the bungalow, multistorey building, or superstructures, selecting the best types of cost estimates is critical.

A cost estimate is a projection of project expenses that are often created before the projects is started.

It is made in a number of ways depending on the demands of the project.

The building cost estimates can be determined either roughly without going into depth or in a precise manner by considering each component individually.

In this article you’ll learn:

So, if you’re ready to go with a type of estimate, this article is for you.

Let’s dive right in.

What is Cost Estimates?

An estimate is a method for calculating the quantities of various work items and the cost anticipated to be associated with them.

The projected cost of the task is the sum of these approximations of the costs that will be expended on it.

A work’s estimated cost is a reliable estimate of its actual cost.

Types of Cost Estimates in Project Management:

1. Preliminary Cost Estimate:

The preliminary cost estimate is also known as the abstract cost estimate, approximate cost estimate, or budget estimate.

This estimate is often formed in the project’s early phases to determine an approximate cost.

The appropriate sanctioning authority can use this assessment to determine the administration section’s financial situation and policy.

In a practical approach, preliminary estimates are created by looking at the price of projects of a comparable nature.

To understand the importance and value of each significant piece of work, the estimated cost for each one is presented separately in this estimate.

The costs of land, roads, electrification, water supply, each building’s cost, etc. are among the components of work.

2. Plinth Area Cost Estimate:

These types of cost estimates are based on the building’s plinth area, which is the area surrounded by exterior building measures at the floor level.

The construction site’s plinth area rate is the pricing of a structure with equal specifications in that region.

By dividing the building’s plinth area by the plinth area rate, the estimated plinth area is derived.

For instance, if a building in the same neighbourhood has a plinth area rate of 2000 per square meter and we need an estimate for a plinth area of 100 square meters, our estimate for the plinth area is 100 X 2000, or 200000.

The plinth area does not include open spaces like courtyards.

If the building has more than one story, an estimate of the plinth area is created independently for each floor level.

3. Cubic Rate Cost Estimate:

By dividing the plinth area by the building’s height, one may get the cube rate cost estimate for a structure.

Building height should be measured from the ground up to the peak of the roof, it works well for multi-story structures.

This types of cost estimation technique is more accurate than the plinth area technique.

Based on the prices of nearby buildings of a comparable kind, the rate per cubic meter is taken into account.

 The foundation, plinth, and parapet above the roof level are not considered in this calculation.

4. Approximate Quantity Method Cost Estimate:

In the approximation amount method cost estimates types, the entire wall length of the construction is determined, and this length is multiplied by the rate per running meter to calculate the cost of the structure.

The foundation and superstructure rates per running meter are established separately.

When determining the rate per running meter for a foundation, factors including the cost of excavation and brickwork up to the plinth are taken into account.

 While superstructure quantities such as brickwork for walls, woodworking, finishing for the floors, etc. are taken into consideration while determining the rate per running meter.

5. Detailed Cost Estimate:

When the preliminary estimates have received approval from the appropriate administrative body, a detailed cost estimate is created.

Measurements are made on the quantity of each work item, and individual cost calculations are made for each one.

According to the current practical rates, the prices of various things are given, and the estimated total cost is computed.

The increase might be the consequence in the cost of supplies or transportation for instance.

The following information and documents should be included in the detailed estimate:

• Report.
• General requirements.
• Specifications in detail.
• Plans and drawings include floor plans, elevations, sectional views, and detailed drawings.
• Designs and computations for buildings, design of the slab, beams, and foundations.
• List of prices.

6. Cost Estimation Revised:

When the initial sanctioned estimate amount is surpassed by 5% or more, a revised types of cost estimates are created.

For example, the increase may be the result of an unexpected rise in the price of materials or transportation.

On the final page of the updated estimate, the revision’s justification should be stated.

7. Cost Estimate Supplementary:

A thorough estimate known as a supplemental cost estimate is created when more work is needed while the initial project is still in process.

The estimate sheet should include the initial estimate’s cost as well as the final cost of the job, which include any supplemental costs that call for approval.

8. Estimate of Annual Repair Costs:

These types of cost estimates also known as the annual maintenance estimate is created to determine the building’s maintenance expenses in order to maintain the structure safe.

When creating an annual repair estimate for a structure, simple repairs like painting and whitewashing are taken into account.

9. Service Unit Method:

The most crucial component of a structure is identified as the service unit in the service unit method.

Several service units make up the total framework.

Construction styles and their service unit (service unit method):

When selecting a service unit from a comparable construction, the following aspects should be considered.

• A rise in land prices.
• Modification in the pricing of certain commodities.
• A shift in the labour rate.
• Modification to the construction’s specification.

In situations when units are well established, this form of approximation is typically utilized.

10. Cost Comparison Method:

This approach is appropriate for estimating the prototype structure.

For instance, when the approximate cost of a prototype staff quarters, railway station, etc. is needed.

The estimate for such a prototype work is generated by comparing the prior cost with the current market prices, often by raising the prior cost on a percentage basis.

Even in the middle of a conference, such an estimate may be made quickly.

To estimate the current cost of building relative to previously documented costs, however, professional knowledge is required.

11. Standard Bay Method:

These types of estimates are beneficial for structures with several comparable bays.

 A bay is an area between the centers of two subsequent columns.

A typical interior bay is chosen, and the cost is calculated.

Then, Building’s estimated cost is calculated by multiplying the number of bays by the cost of one bay.

It is important to remember the following:

• Due to end walls, necessary modifications for end bays should be done.
• There should be enough room left over to make up for the little details that are forgotten.

Advantages of Cost Estimates:

1. The projected duration of the task is given by estimation.
2. The estimate contains the projected cost of the job.
3. More precise estimates make the project easier to manage, hence unexpected charges and frozen operating capital can be avoided.
4. Work that has been correctly estimated is perfect, and projects are completed fast.
5. Various aspects of that work may be made available.
6. Estimated staff members include supervisors, engineers, senior engineers, etc.
7. Estimates may make work planning easier.
8. The estimate is produced with past years in mind so that previous years’ mistakes can be avoided.
9. Materials can be ordered as needed.

Disadvantages of Cost Estimates:

1. The estimate is unable to speak with the labour or the supervisor.
2. Changing the estimating technique has no effect on the material’s quality.
3. Every task cannot be completed efficiently.
4. Certain types of overhead expenditures are uncontrollable.

Applications of Cost Estimation in Civil Engineering:

• Several types of estimates are calculations of the anticipated or likely cost of a project that is often done before construction begins.
• Before beginning any project or job, it is important to know the likely cost that may be determined or inferred through estimation.
• The main goal of an estimate is to give the client a heads-up on the price of the task.
• The estimator should be skilled and well-versed in building processes to provide reliable estimates.

Also read: Components of Building | Valuation of Building | Principles of Planning

Conclusion:

The estimate is unable to communicate with either the labour or the supervisor, changing the estimation approach has no influence on the quality of the material.

 Every task cannot be accomplished in a timely manner, certain categories of overhead expenditures are uncontrollable.