By Kavita Dehalwar

Estimation is a critical activity in construction and project management, as it directly influences decision-making, budgeting, scheduling, and resource allocation. The attached image clearly illustrates how estimating methods evolve from quick, perception-based approaches to highly detailed, fact-driven techniques, with a corresponding increase in accuracy and level of detail. This progression reflects the maturity of project information and the purpose for which the estimate is prepared.

The horizontal axis in the image represents a shift from perception to fact, while the vertical axis highlights the movement from “quick and dirty” estimates to high accuracy and detail. As projects move forward, estimation methods transition along this curve.

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1. Expert Judgment Estimate

At the earliest stage of a project, expert judgment is often the primary estimation method. This approach relies on the experience, intuition, and professional knowledge of experts who have worked on similar projects.

Characteristics:

• Based largely on perception and past experience
• Minimal data or documentation required
• Very fast and inexpensive

Applications:

• Conceptual planning
• Initial idea screening
• Early discussions with stakeholders

Limitations:

• Highly subjective
• Accuracy depends heavily on expert competence
• Difficult to justify quantitatively

This method is positioned at the far left of the image, emphasizing its low accuracy but high speed. It is useful for rough direction-setting rather than firm decision-making.

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2. Three-Point Estimate

The three-point estimate improves upon pure expert judgment by incorporating uncertainty into the estimation process. Instead of a single value, three scenarios are considered:

• Optimistic (O)
• Most likely (M)
• Pessimistic (P)

These values are combined to produce a weighted average estimate.

Characteristics:

• Accounts for risk and uncertainty
• More structured than expert judgment
• Still relatively quick

Applications:

• Risk assessment
• Early feasibility analysis
• Schedule and cost forecasting

Advantages:

• Reduces bias
• Encourages realistic thinking

Although still partially perception-based, this method moves slightly upward on the accuracy scale, as shown in the image.

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3. Comparative Estimate

A comparative estimate (also known as analogous estimation) uses historical data from similar completed projects as a reference.

Characteristics:

• Relies on documented past projects
• Adjustments made for size, location, complexity, and inflation
• Moderately accurate

Applications:

• Feasibility studies
• Preliminary budgeting
• Alternative evaluation

Strengths:

• Faster than detailed estimation
• More objective than judgment-based methods

Weaknesses:

• Accuracy depends on similarity of reference projects
• Adjustments may introduce errors

In the image, comparative estimates occupy the mid-zone, representing a balance between speed and reliability.

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4. Parametric Estimate

The parametric estimating method uses statistical relationships between variables to estimate cost or time. For example, cost per square meter, cost per bed, or cost per classroom.

Characteristics:

• Uses mathematical models and cost drivers
• Requires reliable historical data
• Scalable and repeatable

Applications:

• Large-scale projects
• Budget forecasting
• Institutional and infrastructure planning

Advantages:

• Higher accuracy than comparative estimates
• Data-driven and transparent

Limitations:

• Requires validated parameters
• Less effective for unique or complex designs

As shown in the image, parametric estimation is closer to the “fact” end of the spectrum, offering higher accuracy and greater confidence.

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5. Bottom-Up Estimate

The bottom-up estimate represents the most detailed and accurate estimation method shown in the image. It involves breaking the project into individual components or work items and estimating each separately before aggregating the total cost.

Characteristics:

• Item-by-item quantity take-off
• Detailed rate analysis
• High time and effort requirement

Applications:

• Tendering and bidding
• Final project approval
• Cost control during execution

Advantages:

• Highest accuracy
• Strong justification and traceability
• Suitable for contracts and audits

Disadvantages:

• Time-consuming
• Requires complete drawings and specifications

This method appears at the far right and highest point in the image, clearly indicating maximum accuracy, detail, and factual basis.

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The image conveys a powerful message: no single estimating method is universally best. Instead, the choice of method depends on:

• Project stage
• Availability of information
• Required accuracy
• Time and resources

Early-stage decisions benefit from fast, perception-based methods, while later stages demand rigorous, fact-based approaches. Attempting a bottom-up estimate too early can waste effort, while relying on expert judgment too late can lead to cost overruns.

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Conclusion

The progression of estimating methods—from expert judgment to bottom-up estimation—reflects the natural evolution of project information and decision needs. As shown in the image, accuracy and detail increase as estimates move from perception to fact. Effective project management lies in selecting the right estimation method at the right time, ensuring informed decisions without unnecessary complexity.

Understanding this hierarchy of estimating methods enables engineers, planners, and project managers to balance speed, accuracy, and reliability, ultimately contributing to successful project outcomes.

By Kavita Dehalwar

Construction estimates are prepared at different stages of a project depending on the level of information available. The main types are:

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1. Order of Magnitude Estimate

This is the earliest and roughest estimate prepared.

Purpose

• To get a broad idea of project cost
• Used for initial decision-making

Basis

• Past experience
• Cost of similar projects
• Very limited data

Accuracy

• ±30–40%

Use

• Project idea stage
• Go / No-go decision

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2. Feasibility Estimate

Prepared to assess whether the project is financially viable.

Purpose

• To evaluate economic feasibility
• To compare alternatives

Basis

• Approximate quantities
• Area or unit rates
• Preliminary layouts

Accuracy

• ±20–25%

Use

• Feasibility studies
• Investment appraisal

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3. Preliminary Estimate

Prepared once the basic design and layout are available.

Purpose

• To obtain administrative approval
• To estimate project budget

Basis

• Plinth area / floor area / cubic content method
• Approximate specifications

Accuracy

• ±15–20%

Use

• Budget sanction
• Planning stage decisions

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4. Substantive Estimate

Prepared after the design is finalized.

Purpose

• To obtain technical sanction
• To refine cost estimates

Basis

• Detailed drawings
• Updated specifications
• Refined quantities

Accuracy

• ±10–15%

Use

• Before tendering
• Final cost assessment

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5. Detailed Estimate

This is the most accurate and comprehensive estimate.

Purpose

• For tendering and execution
• To control project cost

Basis

• Item-wise quantity take-off
• Rate analysis using SOR
• Detailed specifications

Accuracy

• ±5–10%

Use

• Contract award
• Construction and payment

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Summary Table

Type of Estimate	Project Stage	Accuracy
Order of Magnitude	Concept stage	Very Low
Feasibility Estimate	Feasibility stage	Low
Preliminary Estimate	Planning stage	Medium
Substantive Estimate	Design finalization	Medium–High
Detailed Estimate	Execution stage	High

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Conclusion

As a project progresses, estimates become more detailed and accurate. Early estimates guide decisions, while detailed estimates ensure financial control and successful execution.

1. Plinth Area Method

This is the most commonly used preliminary estimation method.

Description

The cost of the building is estimated based on the plinth area (built-up area measured at floor level).

Formula

$$\text{Estimated Cost} = \text{Plinth Area} \times \text{Rate per sqm}$$Estimated Cost=Plinth Area×Rate per sqm

Features

• Rate includes walls, finishes, and basic services
• Based on past similar projects

Advantages

• Simple and quick
• Useful at planning stage

Limitations

• Less accurate
• Does not reflect design complexity

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2. Floor Area Method

Cost is estimated using floor area, excluding wall thickness.

Formula

$$\text{Estimated Cost} = \text{Floor Area} \times \text{Rate per sqm}$$Estimated Cost=Floor Area×Rate per sqm

Use

• Residential buildings with repetitive layouts

Difference from Plinth Area Method

Floor area is smaller, so rate per sqm is higher.

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3. Cubic Content Method

Cost estimation based on volume of the building.

Formula

$$\text{Estimated Cost} = \text{Volume} \times \text{Rate per cubic meter}$$Estimated Cost=Volume×Rate per cubic meter

Volume

$$\text{Length} \times \text{Breadth} \times \text{Height}$$Length×Breadth×Height

Advantages

• Considers height of rooms
• More accurate than area methods

Limitations

• Complex measurement
• Not suitable for buildings with varying heights

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4. Approximate Quantity Method

Estimation is based on percentage distribution of major components.

Typical Distribution

• Foundation & plinth: 10–15%
• Superstructure: 45–50%
• Finishing: 25–30%
• Services: 10–15%

Advantages

• Useful for budget comparison
• Quick feasibility analysis

Limitations

• Not item-specific
• Approximate accuracy

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5. Unit Rate Method

Cost is estimated per functional unit.

Examples

• Per classroom
• Per hospital bed
• Per hotel room

Use

• Institutional buildings

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6. Bay Method

Cost is calculated per structural bay.

Used For

• Industrial buildings
• Warehouses

Advantage

• Accounts for structural repetition

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7. Service Unit Method

Used where service demand defines cost.

Examples

• Cost per patient (hospital)
• Cost per student (school)

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8. Detailed Estimate Method

This is the most accurate method.

Process

• Quantity take-off for each item
• Rate analysis using SOR
• Preparation of abstract of cost

Accuracy

±5–10%

Use

• Tendering
• Final approval

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9. Comparison of Cost Estimation Methods

Method	Stage	Accuracy
Plinth Area	Preliminary	Low
Floor Area	Preliminary	Low–Medium
Cubic Content	Preliminary	Medium
Approximate Quantity	Feasibility	Medium
Detailed Estimate	Final	High

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10. Conclusion

• Preliminary estimates → Plinth / Floor / Cubic methods
• Feasibility studies → Approximate quantity method
• Execution & tendering → Detailed estimate method

By Kavita Dehalwar

1. Project Definition and Scope

The estimation process begins with a clear understanding of the project.

• Type of building: residential / commercial / institutional / industrial
• Nature of construction: new construction / addition / renovation
• Number of floors and plinth area
• Construction system: RCC framed / load-bearing / steel structure
• Level of finish: basic / standard / premium

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2. Collection of Drawings and Documents

Accurate estimation depends on complete technical inputs.

• Architectural drawings (plans, elevations, sections)
• Structural drawings (foundation, columns, beams, slabs)
• Service drawings (electrical, plumbing, HVAC, fire-fighting)
• Specifications and material standards
• Local schedule of rates (SOR/DSR)

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3. Measurement of Quantities (Quantity Take-Off)

Quantities are calculated item-wise using standard measurement rules (IS 1200).

3.1 Earthwork

• Excavation for foundations
• Backfilling and disposal

$$\text{Volume} = \text{Length} \times \text{Breadth} \times \text{Depth}$$Volume=Length×Breadth×Depth

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3.2 Foundation and Substructure

• PCC bed
• Footings
• Foundation masonry or RCC
• Plinth beam and DPC

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3.3 Superstructure

• RCC columns, beams, slabs, staircases
• Brick/block masonry
• Lintels and chajjas

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3.4 Finishing Works

• Plastering (internal & external)
• Flooring and tiling
• Painting and polishing
• Doors and windows

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3.5 Services

• Water supply and sanitary installations
• Electrical wiring and fittings
• Fire safety and HVAC (if applicable)

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4. Rate Analysis

Rates are derived for each item of work.

4.1 Components of Rate

• Material cost (cement, steel, bricks, sand, aggregates)
• Labour cost (skilled, semi-skilled, unskilled)
• Equipment and machinery charges
• Transportation and handling
• Wastage allowances

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4.2 Rate Calculation Formula

$$\text{Rate} = \frac{\text{Material} + \text{Labour} + \text{Equipment} + \text{Overheads}}{\text{Unit Quantity}}$$Rate=Unit QuantityMaterial+Labour+Equipment+Overheads​

Rates are taken from:

• Schedule of Rates (SOR/DSR)
• Market analysis (for non-scheduled items)

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5. Abstract of Cost (Cost Compilation)

Item-wise cost is summarized.$$\text{Total Cost} = \sum (\text{Quantity} \times \text{Rate})$$Total Cost=∑(Quantity×Rate)

Major heads:

• Substructure cost
• Superstructure cost
• Finishing cost
• Services cost

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6. Additions to Basic Cost

Additional percentages are added to arrive at final project cost.

6.1 Contingencies

• 3%–5% of estimated cost

6.2 Work-Charged Establishment

• 1.5%–2%

6.3 Contractor’s Profit

• 10%–15%

6.4 Taxes and Duties

• GST, royalty, cess (as applicable)

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7. Cost per Square Meter (Plinth Area Method)

Used for preliminary estimates.$$\text{Cost per sqm} = \frac{\text{Total Project Cost}}{\text{Plinth Area}}$$Cost per sqm=Plinth AreaTotal Project Cost​

This method is useful at the planning stage when detailed drawings are unavailable.

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8. Final Estimated Cost

The final construction cost includes:

• Civil works
• Services
• External development
• Professional fees (if included)

This figure is used for:

• Budget approval
• Tendering
• Financial planning

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9. Accuracy and Revision

• Preliminary estimate: ±15–20%
• Detailed estimate: ±5–10%
• Revised estimates prepared if cost exceeds sanctioned limit (usually 5–10%)

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10. Summary Flow of Estimation Process

1. Define project scope
2. Study drawings & specifications
3. Measure quantities
4. Analyze rates
5. Prepare abstract of cost
6. Add contingencies, profit, taxes
7. Arrive at final estimated cost

References

V Montes, M., M Falcón, R., & Ramírez-de-Arellano, A. (2014). Estimating building construction costs by production processes. The Open Construction & Building Technology Journal, 8(1).

Holm, L., & Schaufelberger, J. E. (2021). Construction cost estimating. Routledge.

Asal, E. M. (2014). Factors affecting building construction projects’ cost estimating. Arab Academy for Science, Technology and Maritime Transport (AASTMT), 95.

Fazeli, A., Dashti, M. S., Jalaei, F., & Khanzadi, M. (2021). An integrated BIM-based approach for cost estimation in construction projects. Engineering, Construction and Architectural Management, 28(9), 2828-2854.

Ji, S. H., Park, M., & Lee, H. S. (2011). Cost estimation model for building projects using case-based reasoning. Canadian Journal of Civil Engineering, 38(5), 570-581.