Article 2: Types of Estimates and When to Use Them
Part 2. The four types of estimate, from order of magnitude to pre-tender. Shows how to match each to the design stage, with Project Parkside's costs tracked throughout.
Introduction
Not all types of estimates in construction are the same. A quick order of magnitude figure at feasibility stage does a very different job from a detailed pre-tender estimate built from finished technical drawings. Confusing the two is one of the most common causes of cost disputes on construction projects.
The type of estimate must match three things. These are the stage of design, the information available and the decision the estimate is meant to support.
This article is the second in the estimating series. It looks at the four main types of cost estimate used on the client side. These are the order of magnitude estimate, the elemental cost plan, the approximate quantities estimate and the detailed pre-tender estimate.
Each type is explained with its method, typical accuracy, strengths and weaknesses. Each is then applied to Project Parkside, our recurring 24-apartment residential scheme in Salford. The same project is estimated four times using increasingly refined methods. You will see exactly how the estimate moves as the design develops, and why.
All Project Parkside figures are illustrative. They are designed to show method and reasoning, not to serve as published benchmark rates.
The Four Types at a Glance
| Type | RIBA Stage | Method | Typical accuracy | Time to prepare |
|---|---|---|---|---|
| Order of magnitude | 0–1 | £/m² GIFA or cost per functional unit from benchmarks | ±15 to 20% | Hours to 1 day |
| Elemental cost plan | 2–4 | NRM 1 element unit quantity × element unit rate | ±8 to 12% (Stage 2) narrowing to ±3 to 5% (Stage 4) | 1 to 2 weeks |
| Approximate quantities | 3–4 | Measured quantities from drawings × composite rates | ±5 to 10% | 3 to 7 days |
| Detailed / pre-tender | 4 | Full NRM 2 measurement, each item priced separately | ±2 to 5% | 2 to 4 weeks |
These accuracy ranges are rules of thumb used across the profession. NRM 1 does not prescribe them. They depend heavily on the quality of the design information and the benchmark data behind each estimate.
Type 1: Order of Magnitude Estimate
NRM 1 calls this the order of cost estimate. It is the first formal cost assessment of a proposed project and is prepared at RIBA Stages 0 and 1, when design barely exists. The QS may have little more than a site boundary, a statement of requirements such as “24 apartments” and an approximate gross internal floor area (GIFA).
Methods
The floor area method is the most common. Total cost equals GIFA multiplied by a £/m² rate taken from comparable projects. The rate is selected from schemes of similar type, quality and region. It is then adjusted to the expected tender date using the BCIS Tender Price Index and to the site using a BCIS location factor. For Project Parkside, the QS adopted £1,900/m² for medium-rise residential in the North West at Q1 2026 prices.
The functional unit method uses a cost per unit of use. That might be per dwelling, per bed or per pupil place. For Project Parkside, a benchmark of £158,000 per apartment gave a useful cross-check.
The storey enclosure method is a less common alternative. It weights floor, roof and wall areas to reflect building shape and height. It is most useful where the envelope is a major cost driver, such as tall buildings with expensive façades.
Strengths and Weaknesses
The order of magnitude estimate is fast and cheap. It is well suited to the go or no-go investment decision.
Its weakness is that it ignores design intent. It cannot tell a standard specification from a premium one. It cannot tell good ground from contaminated land, or an efficient building form from a complex one. Accuracy of ±15 to 20% means the final cost could sit anywhere within a band of 30 to 40%.
Common errors at this stage include mixing up GIFA and net internal area (NIA). Using a GIFA rate against an NIA quantity can understate cost by 15 to 25%. Other errors are using out-of-date benchmarks without a Tender Price Index adjustment, choosing a non-comparable scheme and failing to state what the estimate excludes.
Project Parkside: Order of Magnitude (Recap)
As shown in Article 1, the QS estimated Project Parkside at £3,800,000. The floor area method gave 2,000 m² × £1,900/m² = £3,800,000. The functional unit method gave 24 apartments × £158,000 = £3,792,000. The two methods agree within 0.2%.
At ±15 to 20%, the probable cost range is roughly £3.0M to £4.6M. The client sets a budget of £3.8M.
Type 2: Elemental Cost Plan (NRM 1)
The elemental cost plan is the workhorse of client-side cost management. It splits the estimate into building elements such as substructure, superstructure, services and finishes. This links cost directly to design decisions. It is the first estimate that answers not just “how much?” but “where does the money go?”
NRM 1 Framework
NRM 1 organises cost into 15 group elements, numbered 0 to 14. Groups 0 to 8 cover the building works. Groups 9 to 14 add the contractor’s preliminaries, overheads and profit, fees, other costs, risk and inflation.
| Group | Group element | Typical content |
|---|---|---|
| 0 | Facilitating works | Hazardous material removal, major demolition, specialist groundworks, temporary diversions |
| 1 | Substructure | Foundations, piling, lowest floor construction, basements |
| 2 | Superstructure | Frame, upper floors, roof, stairs, external walls, windows and external doors, internal walls and partitions, internal doors |
| 3 | Internal finishes | Wall, floor and ceiling finishes |
| 4 | Fittings, furnishings and equipment | Kitchens, fitted storage, signage, furniture |
| 5 | Services | Sanitary installations, drainage above ground, water, heating, ventilation, electrical, gas, lifts, fire protection, communications, builder’s work in connection |
| 6 | Prefabricated buildings and building units | Modular and volumetric units |
| 7 | Work to existing buildings | Alterations, refurbishment, repairs |
| 8 | External works | Site works, roads and parking, landscaping, boundaries, external drainage and services |
| 9 | Main contractor’s preliminaries | Site management, welfare, temporary works, insurances |
| 10 | Main contractor’s overheads and profit | Head office costs and profit |
| 11 | Project and design team fees | Consultant and, where relevant, contractor design fees |
| 12 | Other development and project costs | Planning costs, surveys, client-side costs |
| 13 | Risks | Design development, construction, employer change and employer other risks |
| 14 | Inflation | Tender inflation and construction inflation |
Note that internal walls, partitions and internal doors sit in Group 2, not Group 3. Bathroom suites and sanitaryware sit in Group 5 under sanitary installations, not with the fittings in Group 4. These are common allocation errors.
Method
For each element, the QS identifies the element unit quantity (EUQ). This is the measurement that drives cost for that element. The QS then applies an element unit rate (EUR) taken from BCIS elemental analyses or comparable projects. The formula is simple. Element cost = EUQ × EUR.
NRM 1 links three formal cost plans to the RIBA stages. Formal Cost Plan 1 is prepared at Stage 2 (Concept Design). Formal Cost Plan 2 follows at Stage 3 (Spatial Coordination). Formal Cost Plan 3 follows at Stage 4 (Technical Design). Each update refines quantities and rates as the design firms up.
Strengths and Weaknesses
The elemental cost plan is linked to the design. It allows cost checking as the design develops and gives a sound basis for value engineering. If services look high against benchmark, the QS can see it straight away and raise it. Client reporting is also clear, because a breakdown by element is easy to follow and act on.
The weakness is that it needs some design information, so it cannot be prepared at Stage 0. It also relies heavily on the QS’s judgement when selecting rates. An EUR taken from a non-comparable scheme can introduce errors that stay hidden until tenders return.
Project Parkside: Formal Cost Plan 1 (Stage 2)
At Stage 2, the architect has produced concept floor plans, an outline structural grid and initial elevations. No ground investigation results are back yet, so the QS assumes conventional pad foundations. The QS prepares Formal Cost Plan 1.
For simplicity, every element below is expressed per m² GIFA. NRM 1 allows element-specific EUQs, and these are used more as design develops.
| Element | EUR (£/m² GIFA) | Cost | % of total |
|---|---|---|---|
| 0: Facilitating works | £18 | £36,000 | 0.9% |
| 1: Substructure | £120 | £240,000 | 6.2% |
| 2: Superstructure | £620 | £1,240,000 | 32.3% |
| 3: Internal finishes | £140 | £280,000 | 7.3% |
| 4: Fittings, furnishings and equipment | £85 | £170,000 | 4.4% |
| 5: Services | £595 | £1,190,000 | 31.0% |
| 8: External works | £120 | £240,000 | 6.2% |
| Building works subtotal | £3,396,000 | 88.4% | |
| 9: Main contractor’s preliminaries (7.7%) | £261,000 | 6.8% | |
| 13: Risk allowance (5%) | £183,000 | 4.8% | |
| Total | £3,840,000 | 100% |
Cost per m² GIFA: £1,920. This is 1.1% above the order of magnitude estimate of £3,800,000. Good alignment between two independent methods builds confidence in both.
The plan also shows where the money sits. Superstructure (32.3%) and services (31.0%) account for 63% of the total. These two elements are the main levers for any value engineering.
Services at £595/m² sit near the top of the benchmark range the QS is using for medium-rise residential in the North West. That prompts a conversation with the client. Is the assumed ventilation and controls specification actually needed, or would a simpler system meet the brief?
Type 3: Approximate Quantities Estimate
An approximate quantities estimate measures the principal quantities from design drawings and prices them at composite rates. The elemental cost plan relies on benchmark rates per m² GIFA. Approximate quantities use actual measured items instead, such as m² of external wall, m² of slab, numbers of doors and linear metres of ground beam.
The rates are still composite. Each one includes labour, materials, plant and the contractor’s overheads and profit. But each rate is now tied to a specific measured item.
Method
The QS takes off quantities from Stage 3 or Stage 4 drawings. Typical items include façade area, floor areas, roof area, partition areas, window and door numbers and drainage runs. Each is priced at a composite rate from BCIS, Spon’s or recent comparable projects.
For example, a composite rate for “external cavity wall including facing brick, block, insulation, ties, DPC and cavity trays” might be £305/m². That single rate replaces the ten or more separate items a detailed measurement would need.
Distinction from Detailed Measurement
The key difference is granularity. In an approximate quantities estimate, the external walls might be one line. That line would read 820 m² at £305/m² = £250,100.
A detailed NRM 2 measurement breaks the same wall into its parts. These include blockwork, insulation, brickwork, wall ties, DPC, cavity trays, pointing, lintels and sills, each measured and priced separately. An approximate quantities estimate typically has 50 to 150 lines. A detailed bill of quantities can run to 500 to 2,000 items or more.
Strengths and Weaknesses
Approximate quantities are more reliable than an elemental cost plan because they use measured quantities rather than benchmark assumptions. They are quicker than a full detailed estimate, taking days rather than weeks. They also make cost drivers visible. The QS can see that 820 m² of cavity wall is a major cost and test whether a different system or a smaller façade would save money.
The weakness is that composite rates can hide what drives them. A single £305/m² wall rate does not show whether the cost sits in the brick, the insulation or the cavity detailing. The method also needs drawings to at least RIBA Stage 3 and depends on the quality of the composite rates used.
Project Parkside: Approximate Quantities (Stage 3)
At Stage 3, the design has moved on. The architect has issued dimensioned plans, elevations with window schedules and initial sections. The structural engineer has confirmed that the Salford site needs 44 driven piles to around 10m. The M&E consultant has specified individual gas boilers and MVHR in each apartment. The QS measures the principal quantities.
| Item | Unit | Qty | Composite rate | Cost |
|---|---|---|---|---|
| 0: Facilitating works | ||||
| Site clearance, remove hardstanding and vegetation | m² | 1,800 | £10 | £18,000 |
| Remove contaminated made ground to licensed tip | m³ | 400 | £60 | £24,000 |
| Subtotal | £42,000 | |||
| 1: Substructure | ||||
| Excavate to reduce levels, incl. disposal | m³ | 300 | £35 | £10,500 |
| Driven precast concrete piles, 400 × 400mm, 10m, incl. mobilisation and testing | nr | 44 | £1,350 | £59,400 |
| Pile caps, reinforced concrete, incl. excavation and formwork | nr | 44 | £1,650 | £72,600 |
| Ground beams, reinforced concrete, 600 × 450mm, incl. excavation | m | 210 | £420 | £88,200 |
| Suspended ground floor slab, reinforced concrete, 225mm, on void former | m² | 500 | £130 | £65,000 |
| Underslab insulation and gas-resistant membrane | m² | 500 | £38 | £19,000 |
| Subtotal | £314,700 | |||
| 2: Superstructure | ||||
| Frame, reinforced concrete columns and core walls | m² GIFA | 2,000 | £120 | £240,000 |
| Upper floors, reinforced concrete flat slab, 250mm | m² | 1,500 | £150 | £225,000 |
| Roof, timber trussed rafters, natural slate, insulation and rainwater goods | m² | 600 | £215 | £129,000 |
| Stairs, precast concrete, incl. balustrades | flight | 6 | £8,000 | £48,000 |
| External walls, facing brick and block cavity, insulation, ties, DPC and cavity trays | m² | 820 | £305 | £250,100 |
| Windows, PVCu double-glazed, incl. lintels and sills | nr | 48 | £1,250 | £60,000 |
| Communal entrance doors, secure, glazed | nr | 3 | £6,000 | £18,000 |
| Balconies, steel bolt-on, incl. balustrades | nr | 12 | £6,500 | £78,000 |
| Separating walls, acoustic blockwork | m² | 1,200 | £95 | £114,000 |
| Internal partitions, metal stud and plasterboard | m² | 1,800 | £58 | £104,400 |
| Flat entrance doorsets, FD30S | nr | 24 | £950 | £22,800 |
| Internal doorsets, incl. ironmongery | nr | 96 | £420 | £40,320 |
| Subtotal | £1,329,620 | |||
| 3: Internal finishes | ||||
| Wall finishes, plaster skim and decoration | m² | 6,000 | £18 | £108,000 |
| Floor finishes, screed and mixed finishes | m² | 2,000 | £55 | £110,000 |
| Ceiling finishes, plasterboard and decoration | m² | 2,000 | £38 | £76,000 |
| Subtotal | £294,000 | |||
| 4: Fittings, furnishings and equipment | ||||
| Fitted kitchens, incl. worktops and appliances | nr | 24 | £5,200 | £124,800 |
| Built-in wardrobes and storage | nr | 24 | £1,500 | £36,000 |
| Signage, post boxes and communal fittings | item | 1 | £15,000 | £15,000 |
| Subtotal | £175,800 | |||
| 5: Services | ||||
| Sanitary installations, bathroom suites | nr | 24 | £2,800 | £67,200 |
| Disposal installations, soil and waste | m² GIFA | 2,000 | £27 | £54,000 |
| Water installations, hot and cold | m² GIFA | 2,000 | £40 | £80,000 |
| Heating, individual gas combination boilers and radiators | nr | 24 | £9,000 | £216,000 |
| Ventilation, mechanical ventilation with heat recovery (MVHR) | nr | 24 | £5,500 | £132,000 |
| Electrical installations, incl. lighting | m² GIFA | 2,000 | £140 | £280,000 |
| Fuel installations, gas distribution | nr | 24 | £1,500 | £36,000 |
| Passenger lift, 8-person, 4 stops | nr | 1 | £95,000 | £95,000 |
| Fire alarm, smoke ventilation and emergency lighting | item | 1 | £95,000 | £95,000 |
| Door entry, data and TV distribution | nr | 24 | £2,500 | £60,000 |
| Photovoltaic array, roof-mounted | item | 1 | £45,000 | £45,000 |
| Builder’s work in connection with services | item | 1 | £70,000 | £70,000 |
| Testing and commissioning | item | 1 | £25,000 | £25,000 |
| Subtotal | £1,255,200 | |||
| 8: External works | ||||
| Roads, parking and paths (24 spaces) | m² | 650 | £95 | £61,750 |
| Soft landscaping | m² | 500 | £35 | £17,500 |
| Fencing, boundary walls and gates | m | 180 | £120 | £21,600 |
| External drainage, incl. attenuation | item | 1 | £55,000 | £55,000 |
| Utility connections | item | 1 | £45,000 | £45,000 |
| Bin and cycle stores | item | 1 | £18,000 | £18,000 |
| External lighting | item | 1 | £3,000 | £3,000 |
| Electric vehicle charge points | nr | 6 | £1,700 | £10,200 |
| Subtotal | £232,050 | |||
| Building works subtotal | £3,643,370 | |||
| 9: Main contractor’s preliminaries (7.7%) | £279,630 | |||
| 13: Risk allowance (4%, rounded) | £157,000 | |||
| Total estimate | £4,080,000 | |||
Cost per m² GIFA: £2,040. Composite rates include the main contractor’s overheads and profit, so NRM 1 Group 10 is not shown separately.
Why has the estimate increased?
The approximate quantities total is £4,080,000. That is £240,000 (6.3%) above Formal Cost Plan 1. Three changes explain most of it.
- Piled foundations. Substructure rises from £240,000 to £314,700, an increase of £74,700. Cost Plan 1 assumed pad foundations. The confirmed piling, pile caps and ground beams cost more.
- Measured superstructure. Superstructure rises from £1,240,000 to £1,329,620, an increase of £89,620. Measured walls, partitions and roof area exceed what the benchmark implied, and the design now includes 12 balconies.
- Developed services. Services rise from £1,190,000 to £1,255,200, an increase of £65,200. Individual boilers, MVHR to every apartment and a roof-mounted PV array are now confirmed.
Smaller movements in facilitating works, finishes, fittings and preliminaries add a further £44,430. External works fall by £7,950. The risk allowance drops from 5% to 4%, saving £26,000, because the design is now more certain.
These are not estimating errors. They are design development. Cost Plan 1 relied on benchmarks. The approximate quantities estimate uses real design data. The estimate has become more accurate, not less reliable.
The QS’s job is to explain this clearly. A typical message to the client would be: “The increase reflects design decisions now visible in the drawings. To hold the budget at £3.8M, we need to value engineer the substructure, superstructure or M&E specification.”
Type 4: Detailed / Pre-Tender Estimate
The detailed estimate is the most thorough assessment available before contract award. All building work is measured to NRM 2 and every item is priced separately.
The approximate quantities estimate might have one line for the cavity wall. The detailed estimate breaks it into blockwork, insulation, ties, brickwork, DPC, cavity trays, pointing, lintels and sills. Each is measured and priced on its own.
Method
The QS measures from fully detailed Stage 4 technical drawings. Quantities are precise and descriptions follow NRM 2 rules. This lets contractors price each item against their own supply chain, labour costs and methods.
Under traditional procurement, the result becomes a formal bill of quantities issued to tenderers. Under design and build, it stays an internal pre-tender estimate used to judge the tenders when they come back.
Sample Detailed Measurement: Substructure (Extract)
The extract below shows the substructure of Project Parkside measured to NRM 2. Compare it with the six substructure lines in the approximate quantities estimate.
| Ref | Description | Unit | Qty | Rate | Cost |
|---|---|---|---|---|---|
| SUB 01 | Mobilisation and demobilisation of piling plant | item | 1 | £18,000 | £18,000 |
| SUB 02 | Driven precast concrete piles, 400 × 400mm, nominal length 10m (44 nr) | m | 440 | £110 | £48,400 |
| SUB 03 | Cutting off tops of piles and preparing reinforcement | nr | 44 | £85 | £3,740 |
| SUB 04 | Static load test to working pile | item | 1 | £8,500 | £8,500 |
| SUB 05 | Integrity testing of piles | nr | 44 | £45 | £1,980 |
| SUB 06 | Excavation to reduce levels, maximum depth not exceeding 1m | m³ | 300 | £9 | £2,700 |
| SUB 07 | Excavation for pile caps and ground beams, maximum depth not exceeding 2m | m³ | 190 | £24 | £4,560 |
| SUB 08 | Disposal of excavated material off site, inert | m³ | 490 | £32 | £15,680 |
| SUB 09 | Plain in-situ concrete blinding, 75mm thick | m³ | 40 | £135 | £5,400 |
| SUB 10 | Reinforced in-situ concrete C32/40 in pile caps and ground beams | m³ | 108 | £190 | £20,520 |
| SUB 11 | Formwork to sides of pile caps and ground beams | m² | 760 | £65 | £49,400 |
| SUB 12 | Reinforced in-situ concrete C32/40 in suspended ground floor slab, 225mm | m³ | 113 | £195 | £22,035 |
| SUB 13 | Void former below suspended slab | m² | 500 | £32 | £16,000 |
| SUB 14 | High-yield bar reinforcement to caps, beams and slab | t | 27 | £1,850 | £49,950 |
| SUB 15 | Fabric reinforcement A393 to slab | m² | 1,050 | £12 | £12,600 |
| SUB 16 | Underslab insulation, 150mm rigid PIR board | m² | 500 | £28 | £14,000 |
| SUB 17 | Gas-resistant membrane, lapped and sealed | m² | 520 | £14 | £7,280 |
| Remaining substructure items (lift pit, below-slab drainage, earthwork support, groundwater control, sundries) | item | 1 | £29,255 | £29,255 | |
| Substructure total | £330,000 |
The 17 items shown total £300,745. A further 25 or so smaller items make up the balance. A full detailed estimate for Project Parkside would contain 500 to 800 items across all elements.
Notice how the piling alone breaks into five separate items. These are mobilisation, the piles themselves, cutting off, load testing and integrity testing. In the approximate quantities estimate they shared one composite rate.
Full Detailed Estimate Summary
The complete pre-tender estimate for Project Parkside, measured from Stage 4 technical drawings, is summarised below.
| Element | Cost | % of total | Change from AQ |
|---|---|---|---|
| 0: Facilitating works | £45,000 | 1.1% | +£3,000 |
| 1: Substructure | £330,000 | 8.0% | +£15,300 |
| 2: Superstructure | £1,360,000 | 33.1% | +£30,380 |
| 3: Internal finishes | £305,000 | 7.4% | +£11,000 |
| 4: Fittings, furnishings and equipment | £180,000 | 4.4% | +£4,200 |
| 5: Services | £1,255,000 | 30.6% | −£200 |
| 8: External works | £228,000 | 5.6% | −£4,050 |
| Building works subtotal | £3,703,000 | 90.3% | +£59,630 |
| 9: Main contractor’s preliminaries (7.6%) | £280,000 | 6.8% | +£370 |
| 13: Risk allowance (3%, rounded) | £120,000 | 2.9% | −£37,000 |
| Total | £4,103,000 | 100% | +£23,000 |
Cost per m² GIFA: £2,052. The detailed estimate of £4,103,000 is £23,000 (0.6%) above the approximate quantities figure. That close match confirms the Stage 3 estimate was well calibrated.
Detailed measurement added £59,630 to the building works. Most of this came from the superstructure (£30,380) and substructure (£15,300). The risk allowance fell from 4% to 3%, saving £37,000, because almost all design uncertainty has now been resolved.
Strengths and Weaknesses
The detailed estimate gives the highest pre-contract accuracy, typically ±2 to 5%. It is the QS’s definitive benchmark for assessing tenders. Under traditional procurement it also forms the basis of the bill of quantities. Every item is visible, so the QS and the contractor can see cost at every level of detail.
The weakness is time and cost. A detailed estimate for a £4M scheme typically takes two to four weeks of professional time. It also needs complete technical drawings, so late design changes mean expensive re-measurement.
On a design and build scheme such as Project Parkside, the detailed estimate is not issued to tenderers. It stays internal and underpins the QS’s judgement when tenders return.
Project Parkside: Cost Evolution Across All Four Types
The table compares all four estimates for the same project at successive design stages.
| Estimate type | RIBA Stage | Total estimate | £/m² GIFA | Typical accuracy | Change from previous |
|---|---|---|---|---|---|
| Order of magnitude | 0–1 | £3,800,000 | £1,900 | ±15 to 20% | n/a |
| Formal Cost Plan 1 | 2 | £3,840,000 | £1,920 | ±8 to 12% | +£40,000 (+1.1%) |
| Approximate quantities | 3 | £4,080,000 | £2,040 | ±5 to 10% | +£240,000 (+6.3%) |
| Detailed / pre-tender | 4 | £4,103,000 | £2,052 | ±2 to 5% | +£23,000 (+0.6%) |
Key observations
The estimate rose by £303,000 (8.0%) from the order of magnitude figure to the detailed estimate. This sits well inside the ±15 to 20% range of the original estimate. The Stage 0 figure was not wrong. The increase reflects design development, mainly piled foundations, measured superstructure quantities and a developed services specification.
The biggest step comes between Cost Plan 1 and the approximate quantities estimate, a rise of 6.3%. This is where real design data replaces benchmark assumptions, and it is where budget pressure usually surfaces. The QS must make the reason clear. The estimate is catching up with the design.
The detailed estimate confirms the approximate quantities figure to within 1%. That is expected, because both rely on the same design information, measured at different levels of detail.
Throughout, the risk allowance falls from 5% to 4% to 3%. Rising building costs and a falling risk allowance is a normal pattern as design certainty grows.
The client’s £3.8M budget is now £303,000 below the detailed estimate. The QS advises the client on three options.
- Value engineer the substructure, superstructure and services to save around £300,000.
- Increase the budget to £4.1M.
- Reduce scope, for example by building 22 apartments instead of 24.
Practical Tips
Match the method to the stage. An order of magnitude estimate is right at feasibility. A detailed estimate at feasibility wastes time and suggests false precision. Equally, a benchmark figure alone is not enough certainty at tender stage.
Cross-check between methods. Use two independent methods where you can. At feasibility, the floor area and functional unit methods should agree within about 5%. If they do not, investigate. The benchmark may come from a non-comparable scheme, or the building’s efficiency may be unusual.
State the basis, accuracy and exclusions every time. Every estimate should say what it includes, what it excludes, how accurate it is and which assumptions it rests on. A number without that context means very little.
Explain cost evolution. Do not apologise for it. When the estimate moves from £3.8M at Stage 0 to £4.1M at Stage 4, explain that the rise reflects design development and better information. The first estimate was fit for its purpose at its stage. So is the latest one.
Use BCIS data, but adjust it. Raw BCIS data must be adjusted for location using BCIS location factors and for time using the Tender Price Index. It must also reflect the right specification level, whether that is the lower quartile, median or upper quartile.
Allocate items to the right NRM 1 element. Partitions and internal doors belong in superstructure. Sanitaryware belongs in services. Misallocation distorts the percentage splits and makes benchmarking unreliable.
Watch the percentage splits. Compare each element’s share of cost against benchmark data for the same building type. An element that is well out of line is a signal to investigate the specification or the design assumptions behind it.
Further Reading
NRM 1: Order of Cost Estimating and Cost Planning for Capital Building Works. The RICS standard defining order of cost estimates, formal cost plans and the group element structure.
NRM 2: Detailed Measurement for Building Works. The RICS standard for detailed measurement behind pre-tender estimates and bills of quantities.
BCIS (Building Cost Information Service). The main UK source of elemental analyses, Tender Price Indices and location factors.
RIBA Plan of Work 2020. The stage framework that each estimate type aligns to.
Related Articles on ProQS
Article 1: Introduction to Estimating in Construction. What estimating is, the five key principles and the Project Parkside order of magnitude estimate.
Article 3: Elemental Cost Planning (Client-Side). NRM 1 in depth, with a stage-by-stage cost plan for Project Parkside.
Article 4: Contractor Estimating and Tender Pricing. The contractor’s view of pricing, from first-principles build-ups to bid strategy.
Article 5: Factors Affecting Estimates and Cost Accuracy. Location, time, procurement route, specification and risk adjustments.
Article 6: Technology in Estimating. Digital take-off, BIM and estimating software in modern QS practice.
Value Engineering and Quantity Surveying. How elemental cost analysis drives value engineering decisions, with worked examples.
Project Management and Quantity Surveying. How cost planning fits within the wider project lifecycle and the RIBA stages.