Cost estimate

A cost estimate is built by estimators from whatever project definition exists when it is prepared. Early in a project that may be little more than capacity figures and historical analogies; later it is full quantity take-offs priced line by line. A complete estimate covers direct costs, indirect costs, escalation and contingency, and it should always state its basis: which drawing revisions, which price date, which exclusions.

Estimates mature in recognised stages — from order-of-magnitude through to definitive — and every estimating organisation classifies them by how much design definition sits underneath. The number is only as reliable as that definition; an estimate quoted without its class and basis is a number without meaning.

Where estimates go wrong is rarely arithmetic. It is scope drift: the design moves on, the estimate does not, and decisions continue to be made against a figure that no longer describes the project. The discipline of restating the estimate whenever the basis changes is what separates cost control from cost surprise.