There are a few types of estimates or levels of estimates, if you will.
The most common type is a bid estimate, which is used when a company tries to win a project by being the lowest responsible bidder. This type of estimate has a high level of detail and understanding of the project.
Sometimes, companies are asked to give a rough idea of the cost of construction for planning purposes. This is commonly referred to as a budget estimate or an order of magnitude. Typically, all of the details needed to create a bid estimate are not yet available for a budget estimate, and is commonly used in the planning process of a project.
These are normally within 20% of the actual price.
A detailed estimate is similar to a bid estimate in that it relies on great detail or takeoff in composition. However, this estimate may be used to determine individual pieces or systems of the construction. For example, a detailed estimate can reveal the likely cost of just the drywall installation of a particular project.
Unit Price Estimates
Unit price estimates are used when the pricing of individual pieces of work may be used to award some or all of the job.
For instance, a paving company may give a unit price for paving 100 feet of road.
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