1. Building Economy ARE 431
Dr. Mohammad A. Hassanain
Types of Estimates
٢
Types of Estimates.
Conceptual Phase Estimate.
Schematic Phase Estimate.
Design Development Estimate.
Procurement Estimate.
Today’s Lecture

2. Building Economy ARE 431
Dr. Mohammad A. Hassanain
٣
Types of Estimates
When beginning to prepare an estimate, it is important to
understand its intended use.
An estimate can be prepared at any point throughout the
life of a project.
Depending on the information available and the time spent
preparing the estimate, the accuracy it provides will vary.
There are four different stages at which estimates take
place:
Conceptual phase.
Schematic phase.
Design development phase.
Procurement phase.
٤
Conceptual Phase Estimate
This type of estimate is called a Conceptual or Rough Order
of Magnitude (ROM) and is generally prepared long before
the construction starts.
The owner needs cost information very early on in a project
so that decisions as to the location and scope can be made
before money is spent on design or property purchase.
This estimates will be prepared with very little information,
relying mostly on historical data.
The description of a project may be a sketch or a brief
written description.

3. Building Economy ARE 431
Dr. Mohammad A. Hassanain
٥
Conceptual Phase Estimate
The size of the project is generally known, although it may
be described in terms of capacity such as:
The number of beds for a hospital.
The number of students for a school.
The number of rooms for a hotel.
The time needed to prepare this type of estimate is short,
generally in the range of a half day or less
The accuracy of this type of estimate ranges between + and
– 20%.
٦
Conceptual Phase Estimate
The presentation of the conceptual phase estimate is generally
informal for the purpose of providing a target budget.
Estimates are often prepared for many different options so that
owners can select the best alternatives(s).

4. Building Economy ARE 431
Dr. Mohammad A. Hassanain
٧
Schematic Phase Estimate
As the project moves into the schematic stage, the designer
and possibly the construction manager have become
involved in the design and estimating of the project.
The program (list of project requirements) for the project has
been provided by the owner.
The project team may be incorporating different design
alternatives into the basic design.
A schematic estimate will be based on a design that is
approximately 30% designed and include the following
information:
Floor plans, elevations, and sections.
Outline specifications for most trade sections.
Drawings for mechanical and electrical systems.
٨
Schematic Phase Estimate
This estimate include some area take-off, and calculation of
the major project elements such as:
The gross area of the building.
The exterior wall area.
The gross cubic meters of earth to be excavated.
At this stage, some of the key sub-contractors might be
asked for input for complicated systems.
This estimate will take one to two weeks and will carry a
10% contingency for unknown design and engineering
details that will be developed during the next design stage
and an accuracy ranging between + and – 15%.
At the end of the schematic design stage the presentation of
the design to the owner is accompanied by an estimate of
the cost of the project.

5. Building Economy ARE 431
Dr. Mohammad A. Hassanain
٩
Schematic Phase Estimate
Any design alternatives will also be accompanied by an
estimate of the cost of the project.
Before the project team moves on to the next phase of the
design, the owner will decide on the basic design
parameters and on the project budget.
Any cost reduction ideas will be presented and priced by the
estimators.
Some of these ideas may be accepted or rejected
at this stage, and some may be carried forward to
be better defined in the next phase.
١٠
Design Development Phase Estimate
The design development estimate is based on much more
defined information.
Because of this, the time taken to prepare this type of
estimates is longer, but the accuracy is greater.
The estimate in this stage will be based on a design that is
60% complete and includes the following information:
Floor plans at a larger scale.
Elevations, sections, and details at a larger scale.
All relevant specification sections.
Well-defined mechanical and electrical systems.
Most of the major project items will be quantifiable, and the
more important unit prices should be known at this point.

6. Building Economy ARE 431
Dr. Mohammad A. Hassanain
١١
Design Development Phase Estimate
The preparation of this estimate should take two to three
weeks and the accuracy is within 5 to 10% of the final cost.
With the presentation of this estimate, the costs of the
materials and methods will be known and should be
compared to past similar projects.
Network scheduling will begin, allowing a better
understanding of the overall duration of the project as well
as when each of the major project elements is to be
constructed.
Major assumptions should be noted and compared to what
was assumed at the schematic design stage.
١٢
Design Development Phase Estimate
The estimate at this stage is a tool used to verify that the
design is within the owner’s budget, and to identify any
good cost saving ideas.

7. Building Economy ARE 431
Dr. Mohammad A. Hassanain
١٣
Procurement Phase Estimate
In this stage, an estimate would be prepared by all the
contractors who are bidding for the construction of the
project, as well as the project team.
The contractors prepare the estimate to identify a price to
bid.
The owner team prepares an estimate to negotiate a fair
price and to verify the accuracy of the contractor’s price.
The estimate is prepared based on a complete set of
contract documents.
The contractors bidding for the project will break the project
down into work packages.
١٤
Procurement Phase Estimate
These work packages are:
Work Package Cost
Excavation
Foundations
Structural Steel
Roofing
Wall Systems
Mechanical Systems
Electrical Systems
Finishes
Total
The contractor
would request bids
from pre-qualified
subcontractors for
each package.
Most contractors will
do some of the work
with their own
workforces and
therefore will not
request bids in these
areas.

8. Building Economy ARE 431
Dr. Mohammad A. Hassanain
١٥
Procurement Phase Estimate
Estimates done for bidding require a complete
understanding of material quantities, which are taken from
the drawings.
Estimates also require accurate unit prices, which usually
involves input from local material suppliers.
An exact schedule will be prepared.
This will be used to identify the duration of the project.
Depending on the size of the project, a bid estimate can
take three weeks or longer to prepare.
These detailed estimates are extremely accurate.
Usually, the difference between bidders is the profit margin
that the contractors include.