Order of cost estimate
An order of cost estimate may form part of the initial build-up to the cost planning process. It involves determining the possible cost of a building project, early in the design stage before a full set of working drawings and bill of quantities have been prepared.
The purpose of an order of cost estimate is to establish affordability for the client, by looking at whether the proposed project is affordable and what a realistic budget might be.
Methods for preparing order of cost estimates are set out in the New Rules of Measurement:
- NRM 1: Order of cost estimating and cost planning for capital building works
- NRM 3: Order of cost estimating and cost planning for building maintenance works.
A wide range of information may be required from the parties to the project to prepare an order of cost estimate:
From the employer:
- Location and availability of site.
- Statement of building use and size.
- Any refurbishment requirements.
- Initial project/design brief.
- Enabling works details.
- Draft programme.
- Site conditions.
- Budget/cash flow constraints.
- Construction procurement options.
- Life span of the proposed building.
From the architect:
- Design study sketches or drawings.
- Schedules of areas.
- Legislative constraints.
- Initial risk register.
Information can also be provided by the services engineer, structural engineer, and other consultants if these have been appointed.
The key constituents of an order of cost estimate are typically:
- Facilitating works.
- Building works.
- Contractor’s preliminaries.
- Contractor’s overheads and profit.
- Construction cost.
- Fees.
- Other development/project costs.
- Risk allowances.
- Inflation.
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