Conceptual Estimating - Turning Drawings Into Estimates

Conceptual estimating requires a contractor to take early stage conceptual drawings and turn them into detailed estimates with a Work Breakdown Structure (WBS) that is useful during the initial programming, schematic, and design development phases.

D. Brown Management Profile Picture
Share

It is important to remember that during these early stages, the developer is working to put together financing for the project.   

CM at Risk: Conceptual Estimating Technology.

There is a lot of risk for all parties in a new development and as with any type of financing, banks are looking at the 5Cs with covenants, just a like a contractor has on their credit line.

The difference between a project moving forward or not is often in the single-digit percentage on cost and revenue projections. With construction costs being about half the total cost of the development, it is critical that the contractor can create a realistic budget even at this early stage.  

  • Too high of a plug number and the development won’t pencil out for cash flow. They will likely source a second opinion from another contractor or pull the plug on the development. 
     
  • Too low of a plug number and it won’t be constructable. Raising the number later in the process may cause the financing to get pulled from the project.  

  • That budget must be detailed in a way that is truly useful for the project owner, architect, consulting engineers and contractor to make good decisions during the schematic, design development, and construction document phases.  

The better a contractor is at this, the earlier and more often they will be brought into the process. 


CM at Risk
The preferred project delivery method. There is a reason 100 of ENR's Top 400 General Contractors use CMAR as the project delivery method for over 75% of their work. Leverage CMAR as part of your growth strategy....

CM at Risk
The preferred project delivery method. There is a reason 100 of ENR's Top 400 General Contractors use CMAR as the project delivery method for over 75% of their work. Leverage CMAR as part of your growth strategy....

Project Cash Metric and Cash vs. Margin Variance
Contracting is a very capital-intensive business and it is critical to constantly be watching cash flow performance. This metric is the highest level of an “OUTCOME” for cash flow at the project level, summarizing the performance of ops and finance.
Our Principles
“As to methods, there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble.” - Harrington Emmerson
Succession Process and Architectural Design Phases
As contractors prepare for succession, they should use the same lessons they have learned in developing and then building projects.