The 4 Types of Construction Estimating

There’s a saying in the construction industry- “A project is only as strong as its estimate!” Whether you’re an estimator bidding on work or a project manager juggling budgets, the type of estimate you use can make or break outcomes.

In this blog, we’ll walk through the following four core types of construction estimates-their definitions, what they are used for and how accurately they reflect real-world conditions and the right moments to apply them in your project lifecycle:

Type 1: Conceptual (Order of Magnitude) Estimates

Type 2: Preliminary (Detailed) Estimates

Type 3: Bid (Tender) Estimates

Type 4: Control (Project Control) Estimates

The last three categories above are named based on how the estimates are used. Let’s dive deeper into each category:

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Why Accurate Construction Estimates Are Crucial

A survey¹ by Procore Technologies found that 75% of construction projects exceeded their planned budgets, with an average cost increase of 15% due to mid-project changes. In case of large projects that run over schedule and budget, a key reason for spilling costs is inaccurate or misapplied estimates.

Here’s why accurate estimating matters:

• Financial viability: Ensures the project is affordable and fundable.
• Competitive edge: Helps contractors win bids without undercutting profits.
• Risk management: Prevents costly surprises mid-project.
• Cost control: Provides benchmarks to monitor spending as the project progresses.

As the American Society of Professional Estimators² (ASPE) emphasizes, choosing the correct estimate type for each stage is fundamental to good project management. 

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Type 1: Conceptual (Order of Magnitude) Estimates

What is a Conceptual Estimate?

A conceptual estimate, also known as an order of magnitude estimate, is the roughest form of cost estimation. It’s created in the very early stages of project planning, often before detailed drawings or specifications exist. For instance, a developer considering whether or not to build a new hospital might use a conceptual estimate based on cost per square foot of similar facilities.

When to Use Conceptual Estimates

1. Feasibility studies: To decide whether the project idea is financially viable.
2. Early budgeting: To give owners and investors a ballpark figure.
3. Funding requests: To support initial financing conversations.

Accuracy and Characteristics of Conceptual Estimates

• Accuracy range varies from –25% to +75% (ASPE Class 5). *ASPE classification has been covered later in the blog.
• Basis: Historical data, unit costs, cost indexes.
• Speed: Quick to prepare, but highly approximate.

Key takeaway: Conceptual estimates are for decision-making, not for committing to contracts.

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Type 2: Preliminary (Detailed) Estimates

What is a Preliminary Estimate?

A preliminary estimate, sometimes called a budget estimate or design development estimate, refines costs as project details emerge. It relies on schematic drawings and outline specifications. For instance, an architect preparing plans for a school might use a preliminary estimate to test whether the design fits the district’s funding.

When to Use Preliminary Estimates

1. Design development phase: To ensure designs align with budget goals.
2. Early procurement planning: To identify cost drivers and value engineering opportunities.
3. Stakeholder alignment: To adjust scope before detailed bids are sought.

Key Components and Accuracy of Preliminary Estimates

• Accuracy range varies from 15% to +30% (ASPE Class 3–4). *ASPE classification has been covered later in the blog.
• Basis: Material quantities from schematic drawings, unit pricing, vendor quotes.
• Characteristics: More detailed, but still not final.

Key takeaway: Preliminary estimates bridge the gap between big-picture vision and actionable budgeting. Material takeoff software provides export-ready quantities and helps in eliminating manual takeoff processes with AI-based, fully automated takeoffs and human-in-the-loop quality assurance.

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Type 3: Bid (Tender) Estimates

What is a Bid Estimate?

A bid estimate (or tender estimate) is prepared by contractors in response to project tenders. It’s the basis for contractual pricing. For instance, a plumbing subcontractor may prepare a bid estimate using detailed takeoffs from construction documents to price labor, materials, and equipment. Even for bid (tender) estimates, material quantity takeoff is a necessary prerequisite- Material takeoff software gives you ready-to-use material lists and quantities- hence replacing slow, manual counting with fast, AI-powered takeoffs which are double-checked for accuracy by experts.

When to Use Bid Estimates

1. Competitive bidding: To submit proposals to owners or general contractors.
2. Negotiated contracts: To set final prices in design-build arrangements.
3. Subcontractor bids: To provide accurate trade-specific pricing.

Elements of a Comprehensive Bid Estimate

• Accuracy range varies from –5% to +15% (ASPE Class 1–2). *ASPE classification has been covered later in the blog.
• Basis: Detailed material quantity takeoffs, subcontractor quotes, vendor pricing, labor rates.
• Includes: Overheads, profit margins, contingencies.

Key takeaway: Bid estimates are the most detailed and binding. They require precision and often leverage construction estimating software to avoid errors.

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Type 4: Control (Project Control) Estimates

What is a Control Estimate?

A control estimate is used during project execution to monitor and manage costs. It serves as a baseline for evaluating actual expenditures against planned budgets. For instance, a project manager might use control estimates to compare monthly cost reports against the approved budget, flagging variances early.

When to Use Control Estimates

1. Construction phase: To track spending in real time.
2. Change management: To assess the cost impact of scope changes.
3. Project closeout: To measure performance and improve future estimating accuracy.

Managing Costs with Control Estimates

• The accuracy range is narrow, since it is based on contracted values. A narrow accuracy range means higher accuracy and the least variance from actual project costs.
• Basis: Bid estimate adjusted for change orders, progress reports.
• Use: Budget tracking, cost forecasting, performance evaluation.

Key takeaway: Control estimates are the financial “guardrails” of a project, ensuring costs stay in line with commitments.

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Finally, let’s compare the four in a one-view glance:

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Beyond the Four: Important Estimating Considerations

The Role of Material Quantity Takeoffs in Estimating

Every estimate-from conceptual to bid-relies on accurate material quantity takeoffs. Errors can cascade into budget overruns- to save the pain, Material takeoff software dramatically improves speed and accuracy.

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Understanding the ASPE Estimate Classification System

The American Society of Professional Estimators (ASPE)³ follows a cost estimate classification system very similar to the AACE (Association for the Advancement of Cost Engineering) International system. The “classes” basically describe how much information is available about a project when an estimate is prepared - and therefore, how accurate that estimate can be. This system helps standardize expectations across the industry.

Here’s how the estimate classes are typically defined in construction estimating (ASPE context):

Class 5 – Conceptual / Order of Magnitude

• Project stage: Very early idea or feasibility stage (0–2% design complete).
• Accuracy: Rough, very wide (as much as –25% to –75% on the low side and +75% to +100% on the high side depending on source).
• Purpose: Used to test if a project is even worth pursuing.

Class 4 – Feasibility / Study Estimate

• Project stage: 1–15% design complete.
• Accuracy: Better than Class 5, but still broad (e.g., –15% to –30% low side, +30% to +50% high side).
• Purpose: Helps in early feasibility studies and rough budgeting.

Class 3 – Preliminary / Budget Estimate

• Project stage: 10–40% design complete.
• Accuracy: Tighter (commonly –15% to +30%).
• Purpose: Used for budget approval and initial funding decisions.

Class 2 – Detailed / Control Estimate

• Project stage: 30–70% design complete.
• Accuracy: –10% to +20%.
• Purpose: Supports detailed control and planning, and sometimes used for bid evaluations.

Class 1 – Definitive / Bid or Tender Estimate

• Project stage: 50–100% design complete (construction documents ready).
• Accuracy: –5% to +15%.
• Purpose: Used for final bids, tenders, and establishing the baseline for project cost control.

The lower the class number, the more detailed the estimate and the narrower the accuracy range; Class 5 would be a rough conceptual guess whereas Class 1 is very detailed and close to actual bid numbers.

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Leveraging Technology: Construction Estimating Software

Modern construction projects demand both speed and precision, making material takeoff software an essential tool for estimators. This software automatically measures and quantifies materials directly from digital blueprints, eliminating tedious manual calculations and reducing human error. By accurately capturing quantities and ensuring a human-in-the-loop quality assurance process, it ensures that the export-ready quantities are precise rather than rough approximations, helping teams plan better and avoid costly miscalculations.

When integrated with comprehensive estimating software, material takeoff data seamlessly links to cost databases, labor rates, and project schedules. This integration allows estimators to generate real-time, accurate project costs, analyze multiple scenarios, and make informed decisions quickly. 

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Choosing the Right Construction Estimate for Your Project Stage

Understanding the types of construction estimating is more than just academic-it’s a practical skill that directly impacts project success. By applying the right estimate at the right stage, construction professionals can:

• Win more bids.
• Control budgets.
• Build stronger stakeholder trust.
• Deliver projects on time and within scope.

Whether you’re a contractor, project manager, or student, mastering these estimate types is a cornerstone of effective construction management. Let’s take a quick recap:

• Use conceptual estimates when exploring ideas.
• Use preliminary estimates to refine designs.
• Use bid estimates for contracting and procurement.
• Use control estimates to monitor execution.

Choosing the right estimate at the right time is critical for cost control in construction and ensuring smooth project delivery!

Frequently Asked Questions About Construction Estimating

Q1. What are the 4 main types of construction estimates?
Conceptual, Preliminary, Bid, and Control estimates. Each serves a unique purpose at different project stages.

Q2. Which type of construction estimate is the most accurate?
The bid estimate is the most accurate prior to construction, while the control estimate ensures accuracy during execution.

Q3. How accurate are conceptual estimates?
According to ASPE, conceptual estimates (Class 5) can vary from –25% to +75% depending on available data.

Q4. Why is cost control important in construction?
Without effective control estimates, projects risk overspending, delayed completion, and reduced profitability.

Q5. What tools improve construction estimating?
Modern construction estimating software and material takeoff tools improve speed, accuracy, and collaboration across teams.

Q6. What does it mean when a conceptual estimate has an accuracy of –25% to +75%?

A conceptual estimate is prepared very early in a project. The range –25% to +75% means the actual cost could be 25% less or up to 75% more than the estimate. It’s a rough number to help decide if the project is worth pursuing.

Q7. How is a preliminary estimate different from a conceptual estimate?

A preliminary estimate is done after some design work is completed. Its accuracy is –15% to +30%, which is tighter than a conceptual estimate. This means the estimated cost is closer to the actual cost, helping with budgeting and planning.

Q8. What does a bid estimate tell us?

A bid estimate is prepared when the project is ready for tender or contracting. Its accuracy is –5% to +15%, meaning it’s very close to the final cost. Contractors use this to submit realistic bids.

Q9. What is a control estimate and why is it important?

A control estimate is used during construction to track costs. It’s based on contracts and actual work, so it’s very accurate. This helps ensure the project stays on budget and any issues are spotted early.

Q10. What does accuracy range mean in cost estimating?

Accuracy range shows how close an estimate is likely to be to the final project cost. A wide range means more uncertainty, while a narrow range means higher accuracy.

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