What are common industry-standard cost estimating techniques used in construction?

Unit cost estimating is a widely used industry-standard technique in construction because it provides a reliable and systematic approach to estimating costs based on the individual components of a project. This method involves breaking the project down into various units or categories, such as labor, materials, and equipment. Each of these units is assigned a specific cost based on historical data, current market prices, or other reliable sources.

Unit cost estimating is advantageous because it allows project managers to create detailed and precise budgets, making it easier to forecast total project costs. It also aids in comparing costs across different projects and helps identify any potential savings or overruns. The accuracy of this method makes it particularly effective for projects where comparable units can be easily identified and previous costing data is available.

In contrast, while time and materials estimating, fixed-price estimating, and contingency estimating are all relevant techniques used under various circumstances, they have different applications and limitations that make them less universally applicable as standard methods for all construction projects. Time and materials estimating can lead to uncertainty in final costs, fixed-price estimating requires an accurate assessment of the full scope of work upfront, and contingency estimating primarily focuses on risk management rather than establishing direct cost estimates.