Difference Between Conceptual and Detailed Cost Estimates

In construction, one of the most paramount tasks in estimating the costs of a project is conducted in the form of Conceptual and Detailed Cost Estimates.

These estimates provide financial guidance that helps project managers and clients prepare a budget. Estimates in construction are done in various forms, where some offer a preliminary overview while other provides an extensive line-item breakdown of the costs. Also, accuracy in the estimates is a must-have. This is because the more accurate the estimates are, the more controlled expenses will be. In other words, it means that you have complete control over how finances are going to be spent.

As mentioned above, the process of cost estimation in construction is done in multiple ways. That is why all the estimates are not the same. Depending on what phase of construction you are in, the estimates will serve a different purpose because of the detail level it involves.

Among a plethora of estimation types, we will be discussing the most common ones in this informative article.

An Introduction to Construction Cost Estimates

Before delving into the estimation types, let’s understand with us what Construction Cost Estimates dictate.

In simple words, it is the process of forecasting all the expenses required to complete a construction project. This forecasting is done based on the available information and current market prices. Some of the key construction expenses categories are:

• Direct Expenses, such as materials, labor, equipment, and any other expense directly related to the construction activity.
• The indirect cost may include charges for permits, utilities, transport, and fuel, among other soft costs not directly linked to construction activities.

Now, we’ll move towards discussing our key topic, which is how Conceptual and Detailed Cost Estimates can be different from each other.

Conceptual Cost Estimates

These construction estimates are the cost projections that are formulated in the initial stages of a project. The information at this point is scarce, and these estimates provide a rough financial sketch. Thus, providing the information regarding how financially practical the project is.

When are Conceptual Estimates done?

These estimates are done in the initial planning and pre-design phase to assess a project’s feasibility.

Conceptual Estimate’s Purpose

These estimates are done to determine how viable it is to start a project. These estimates also help to compare alternative options.

Protip

As the project is in its initial stage, the development is up to or less than 15%. This leads to a very low level of accuracy in the estimates. Therefore, the information is limited, which focuses only on major cost categories. 

Type of Information Available

Based on the above, the information that is available for the estimates will be:

• Basic scope and objectives of a project
• Preliminary construction plans
• Rough dimensions of a project
• Historical data from similar construction projects

Conceptual Estimation Methods

• Analogous Method

In this method, a proposed project will be compared to a similar completed project. 

• Parametric Method

This method utilizes past data with statistical analysis by including cost per unit factors. 

• Expert Judgement

The knowledge and expertise of experienced estimators for a similar project are integral in this method.

Detailed Cost Estimates

These estimates are comprehensive calculations that are based on near-complete construction information. It means that the construction planning documentation is completed, which is then used for the cost estimation. These estimates are detailed cost projections for all the components and tasks of a construction project.

When Detailed Estimates Are Used?

These estimates are done when the construction design is in the final stages. Also, detailed estimates are utilized for bidding preparation as well.

Purpose of Detailed Estimates

These estimates are responsible for preparing the construction budget as well as securing the investments for construction. On top of that, they play a role in controlling all the costs involved in a project.

Protip

A project is in the final design phase, which leads to an abundance of available information. Thus, contributing greatly towards the accuracy of the cost estimates.

Type of Available Information

• Complete set of construction drawings and other plans
• Extensive resource quantities, which encompass materials, labour, and equipment
• Site evaluation reports
• Detailed project schedules
• Current market price for construction resources.

Methods of Detailed Estimates

• Unit Cost Pricing

In this method, the current market price is applied to all measured quantities

• Quantity Takeoff

In this method, Comprehensive Construction Takeoff Services are conducted by counting all materials directly from the construction drafts.

• Activity-Based Costing

In this method, estimates are done by breaking down construction into different activities and analyzing their costs and duration.

Get the Best by Hiring the Best!

Whatever your project is, whether a large building, highway, or bridge, and whatever your estimates are for the construction, it is very important to hire a reliable and reputable Construction Estimating Company.

A professional and well-known estimating firm will ensure that the estimates are accurate throughout the construction. They will also ensure that the accuracy is maintained till completion.

Thus, hire SMA Estimating LLC for your project’s estimates and get the ultimate level of maintained accuracy for successful and profitable delivery.

End Note

In the end, Conceptual and Detailed Cost Estimates significantly vary from one another. Where conceptual estimates are used in the early stages of a project, detailed estimates are done when a project’s design is in the final stages. But both of them can be utilized for a particular project to ensure the highest level of accuracy in the estimates. Furthermore, this article will help you understand what each of these estimates includes and how they shape a construction project.