Cost Estimate Development Plan

Introduction Construction cost estimate development plan is a key ingredient for delivering high-quality cost estimates. Such plan is implemented every time we start working on a cost estimate. We adjust the plan to fit the current cost estimate requirements and make changes to our plan as we learn what works and what does not. Implement […]

Use of Allowances in a Cost Estimate

Cost Allowances in Detail and Conceptual Cost Estimates If we look at what allowances are and how they are used in a cost estimate prepared for construction contracts, vs. allowances used in conceptual cost estimating we will see that they can be very different. Firstly, let’s define the term “allowance” in the context of cost […]

Capital Cost Estimate – Indirect Costs

In the world of construction contracting, the term “indirect costs” are very well understood. Things can get somehow confusing when the cost estimate needs to include the project capital costs. Partly because there are two different types of indirect costs included in a capital cost estimate: contractor’s indirect costs which are part of construction costs, […]

Capital Cost Estimate – Direct Costs

CAPITAL COST ESTIMATE DIRECT COSTS In the field of cost estimating, the direct costs can be defined, in a simplistic way, as all the costs associated with a construction activity. If we perform the activity, we incur the costs and vice-versa. Only the resources allocated to construction activities are considered direct costs. Let’s say that […]

Direct vs Indirect Costs for Construction Projects CAPEX

There is a question that comes up quite often. What are the indirect costs for a capital cost estimate? For the person who is not very familiar with the various delivery methods and contract types for the construction projects, it can get confusing. I am writing this post to shed some light on the topic. […]