Construction cost estimating is the process of forecasting what it will cost to build a project before it is built. A good estimate wins work at a price that still makes money. A poor one either loses the tender or wins a job that loses money.
This guide combines our earlier articles on what construction estimating is and our complete guide to cost estimating. It covers the types of estimate, a 10-step process, the cost drivers specific to Western Australia, and the mistakes to avoid.
What is construction estimating?
Estimating means turning drawings and specifications into a price. The estimator measures the quantities of work, applies labour, material, plant and subcontract costs, and adds preliminaries, risk and margin. Owners use estimates to set budgets and secure finance. Builders and subcontractors use them to tender. Read why construction estimating is important.
Types of construction estimate
| Estimate | When | Based on | Typical use |
|---|---|---|---|
| Order of cost / feasibility | Concept | Floor area rates, benchmarks | Go / no-go, land purchase, finance |
| Elemental cost plan | Schematic and design development | Measured elements (walls, roof, finishes, services) | Design to budget, value engineering |
| Pre-tender estimate | Documentation complete | Detailed measurement | Benchmark for assessing tenders |
| Tender (bid) estimate | Tender | Full take-off, quotes, first-principles rates | Builder’s or subcontractor’s price |
| Control estimate / budget | Post award | Tender estimate re-cut by cost code | Cost control during construction |
Accuracy improves as the design develops. A concept estimate carries a wide range. A tender estimate based on full documents and firm quotes should be much tighter.
The estimating process in 10 steps
1. Review the documents and define the scope
Read the drawings, specification, geotechnical report, tender conditions and contract. List any gaps and raise RFIs early. Decide what is in, what is out and what is provisional.
2. Visit the site and understand the conditions
Check access, existing services, neighbours, slope and ground. On the Swan Coastal Plain, allow for sand stability, buried limestone, groundwater and possible dewatering. In the hills and some eastern suburbs, reactive clay can drive footing costs up.
3. Take off the quantities
Measure every item to a consistent method, using on-screen tools such as Bluebeam Revu, and Kubla Cubed for earthworks. Our material take-off accuracy tips cover how to do this well.
4. Price labour
Build rates from crew size, productivity and current wage costs, including award and enterprise agreement on-costs, superannuation, workers’ compensation and payroll tax where it applies.
5. Price materials
Get current supplier quotes and allow for delivery, minimum orders and short loads, cutting waste and price validity.
6. Price plant and equipment
Allow for hire, operators, fuel, mobilisation and standing time. See how to estimate equipment cost.
7. Get and level subcontractor quotes
Compare quotes like for like, adjusting for exclusions so the comparison is fair.
8. Add preliminaries
Site establishment, supervision, temporary works and fencing, amenities, cranes and hoists, insurances, permits and cleaning. Preliminaries are time-related, so they depend on the programme.
9. Assess risk, contingency and escalation
Price identified risks rather than adding a flat percentage, and allow for escalation over the construction period. Read what a contingency sum is.
10. Review, qualify and submit
Check the estimate against benchmarks, have someone else review it, write clear qualifications and exclusions, and record the assumptions.
Cost drivers specific to Western Australia
- Labour availability: the resources sector competes for trades, which affects rates and programme.
- Construction type: double-brick construction is still common in Perth housing, which changes trade sequencing and costs compared with framed construction.
- Ground conditions: site classification under AS 2870 drives footing design and earthworks.
- Regional and remote work: projects in the Pilbara, Kimberley and Goldfields carry freight, accommodation, travel and productivity costs. Cyclone wind regions in the north also affect structural design.
- Escalation: track published indices such as the ABS Producer Price Indexes for Perth building construction alongside current quotes.
Estimating methods
- Unit-rate (measured) estimating: quantities × all-in rates. This is the standard for building work.
- First-principles estimating: crew, plant and productivity built up for each activity. This is the standard for civil work.
- Parametric / benchmark estimating: cost per m² or per unit from comparable projects. Used for early budgets.
- Assembly estimating: pre-built assemblies such as a wall type or a slab system, for speed.
Common estimating mistakes
- Measuring from superseded drawings.
- Missing scope between trades (for example who supplies lintels, flashings or waterproofing).
- Under-pricing preliminaries on a longer programme.
- Using old rates without allowing for escalation.
- No independent check before submission.
We cover more in 10 common mistakes in construction estimating.
Frequently asked questions
How long does a construction estimate take?
Anything from a day for a small residential take-off to several weeks for a large commercial or civil tender. It depends on the size and completeness of the documents.
Should I outsource estimating?
Many builders and subcontractors outsource during busy tender periods or for unfamiliar project types. Compare the options in estimating services vs DIY estimating.
What is the difference between an estimate and a quote?
An estimate is a forecast of cost. A quote is a firm offer to do the work for a price, usually built on an estimate plus margin and conditions.
Need an estimate for a Perth or WA project? Call Measure Manage on 0498 202 445 or see our construction estimating services.