How Does Conceptual Budgeting Work?
Conceptual budgeting is part art, part science, and draws from the experience of the estimator. The estimator has to have a big picture view, looking for long-range design solutions rather than short-sighted projections by basing their estimates on proven examples and past projects. Conceptual construction estimating describes the practice of calculating an approximate cost or time-schedule for a particular project before all details are known, taking in the big picture view of the project. Conceptual estimates are used primarily for budgeting or test fit purposes and usually are approached in three general phases.
Initial Cost Analysis
This process is performed using a database of information from projects of similar size and complexity. This is a cost per square foot analysis and is calculated from an average of previously constructed projects. Expected changes and unique specifications of a project will also be reflected in this analysis.
Detailed Cost Analysis
This approach is a more specific itemized cost analysis from design drawings which are usually 50% complete. This analysis gives the architect and engineers an early opportunity to make adjustments to materials and the design elements, if the project appears to be over budget. The comparison of various types of structural, finish elements and building systems can give the architect the necessary tools for critical design decisions and value engineering.
Construction Document Cost Analysis
This progression is typically a detailed review of the drawings at 90% completion. Any incomplete details that are necessary for the general contractor to provide a competitive bid will be noted by the architect and can be identified with an estimated allowance or unit cost. A detailed cost analysis of the Plumbing, HVAC and Electrical divisions usually will be included in this analysis.