What is a estimate? #
Estimate is a challenging word in construction, since it can refer to so many different things. An estimate can mean a quote for a project. It can also be an internal cost budget prepared by the estimator. It can even be a ‘best guess at final cost’ in a Time and Materials contract. If you’re hearing the word “Estimate”, be sure you’re clear on whether you’re hearing a cost or revenue-side item!
Also known as: Proposal, Bid, Quote, Budget
Estimates in different scenarios #
As a proposal or quote #
A contractor submits a fixed price estimate to the client establishing the total cost of the job if the client chooses to proceed.
As an approximate cost on a T+M job #
A contractor presents a time and materials contract, along with an estimate of total cost. Note that this estimate is non-binding!
As cost budget #
The estimator puts together an estimate of the total cost of the job based on the takeoff sheets, then adds the markup when she/he goes to prepare the bid.
Estimates in Knowify #
We do not use the term estimate in Knowify, given that it has so many potential meanings.
- For quotes/proposals, we use the word bid.
- Cost estimates are managed through Plan & Track.