Cost Estimating - Art, Science or Both?

Ramani Sundaram
Cost estimating is a blend of both art and science. Science goes by proofs and rules whereas art consists of personal opinions and judgment.

One is objective and the other subjective. Estimating involves formulas and calculations to get the lengths, areas, volumes or weights. It also requires imagination, assumptions and judgment. It is science (though not fully) until the quantity take-offs and art comes into play during pricing. The science portion that involves formulas and math may be the same for everyone. The art element is the one that differentiates the total cost of a project. What is meant by art here is not the inspirational art of Picasso or Michael Angelo but the subjective elements involved in an estimate. Estimating is not just one or the other – it is a combination of both and that is why, given the same set of drawings, specifications and documents, no two estimators come up with the same total project cost.

Quantity Take-Offs – The Art-Science Ratio Varies

Quantity take-offs may have varying ratios between science and art depending upon the level of design and completeness of documents. Initially, when the scope is not fully developed, the art part is more than the science. The order of magnitude estimate starts with few sketches and narratives. The top down estimate will demand more creativity and imagination. With limited information, the estimator has to interpret the design intent and make assumptions. The estimator has to come up with quantities and pricing allowances, by making his or her own judgment based on experience and knowledge. This process may be repeated even at the later stages, when some drawings and documents are incomplete.

  • As the design advances with more details, the percentage of art may decrease and science may increase.
  • Initially, the split may be 30% science and 70% art at the concept level and after going through the Schematic Document (SD) and the Design Document (DD) stages with varying ratios, may end up as 80% science and 20% art at the final design or the Construction Document (CD) stage.

The science of estimating may be learnt but the art comes only through experience.

Pricing – More an Art

Beyond the basic math that it involves, pricing is always an art.

  • The estimator has to make judgment based on market conditions, bid requirements and other project specific conditions.
  • One has to take into account the scale of the project, volume discounts and assume productivity and labor premiums depending upon the hours of work such as regular, night shift or weekend work.
  • When there is no historical database or the item is very new, pricing requires an educated guess. 
  • Pricing needs to be adjusted depending upon whether the material is sole sourced, the work is self performed or subcontracted.
  • Pricing for new construction may differ from renovation work. Renovation pricing for work performed in an occupied facility may differ from an unoccupied facility. If there is a need for temporary relocation of the existing occupants until completion of construction, relocation costs have to be added.
  • Some markups may be standard but others may require judiciousness, depending upon factors like the company policy, risk tolerance of the firm, etc. 
  • The factors that are applicable to a change order price will be different from a bid estimate.

The same pricing may not be valid for every scenario. The intricate subjective elements that underlie pricing make it more an art than science.

In spite of the improved accuracy and consistency that is possible through technology, estimating still requires human input.

With the evolution of technology, we are able to standardize estimating methods, speed up quantity takeoffs and share pricing databases. With widespread use of digital takeoffs, estimating software and Building Information Modeling (BIM), the estimating process is advancing and maturing. With these advancements, one may hope that someday estimating could turn into 100% science. In spite of the improved accuracy and consistency that is possible through technology, estimating still requires human input. Estimating will always require at least some percentage of subjectivity and can never be fully automated. Therefore, estimating will always be a combination of both Art AND Science.