Early cost estimation is one of the most critical management functions in the initiation and planning stages of a construction project. It sets the foundation for the budget, financing strategy, design decisions, and project feasibility.
Why Early Estimates Matter
- Provides the first financial picture of a project before design is finalized.
- Enables go/no-go decisions by owners and investors.
- Helps compare alternative design concepts and materials.
- Guides budget allocation for design, procurement, and construction.
- Detects financial risks early and allows proactive planning.
Consequences of Poor Early Estimation
- Unrealistic budgets leading to funding shortfalls.
- Frequent design changes and scope revisions.
- Owner dissatisfaction and contractor disputes.
- Cost overruns and project delays.
Key Idea:
The accuracy of an early estimate determines the credibility of the entire project plan.