For the Tulsa commercial contractor, one of the most common questions is “can you get me a price for that?”, from any potential client. Some of the requests are more formal and some are just verbal. The American institute of Constructors or AIC listed 3 different types of estimates and defined them below:


A detailed estimate is used when 90% to 100% of the construction documents (CDs) are completed. With this estimate the estimator breaks the work down by the work breakdown structure (explained more in Chapter 6) and completes detailed quantity takeoffs (QTOs). QTOs are used to price material and to estimate the labor and equipment costs. Detailed estimates will include all of the direct costs, bonds, insurance, taxes, overhead, and profit. This type of estimate is the most labor intensive to create but has the lowest margin of error, which will range from ±2% to ±4%.


Semidetailed estimates, also known as preliminary estimates, are used when the construction documents are 30% to 90% complete. At this stage of the design some major systems, such as foundations and structures, are fairly well completed; however, other systems, such as HVAC and electrical systems, are only roughly outlined. Detailed estimates are created for components that are completed, but conceptual estimating Tulsa Commercial Contractor techniques are used to fill in the gaps of the incomplete portions of the design. The expected margin of error for a semidetailed estimate will range from ±5% to ±10%. Semidetailed estimates are often used as budget updates throughout the design process to make sure the design is aligned with the owner’s budget.

Conceptual Estimate

Conceptual estimates, also known as rough order of magnitude estimates, are used early in the development process. Conceptual estimates are completed by owners, even before the designer is hired, to test the feasibility of the project. This type of estimate typically has a margin of error of ±20% or more but is relatively easy and inexpensive to create. Several techniques are used to develop conceptual estimates…”

Below are some examples the AIC provided for Tulsa commercial contractors:

“…Square-foot estimate is a rough-order-of-magnitude estimate that uses a total square-foot cost of other similar buildings and multiplies it by the estimated size of the project.
Assemblies cost estimate is similar to square-foot estimates but breaks out major assemblies, such as foundations, finishes, and mechanical systems. The assemblies are commonly estimated by square-foot cost; however, other units of measure, such as cubic feet or linear feet, are often used.
Cost indices estimate is a type of estimating that uses known costs of previously constructed projects and adjusts the costs to current prices in a specific location
Parametric estimates are similar to square-foot cost estimates but use statistical relationships between building parameters to develop the costs. The equations in parametric estimates are very complicated, using log functions, ratios of parameters, and multiplication of parameters instead of just simply multiplying a square foot cost by the size. This estimate technique is used only early in the project and for high level conceptual estimates.…”
The Tulsa commercial contractor must consider many factors when preparing an estimate for a potential client, but the AIC list three key factors to consider when preparing an estimate below:

“…Overhead is a grouping of costs for items needed to construct a project that aren’t directly associated with the building itself. Job

overhead, which is sometimes referred to as general conditions, direct overhead, or indirect field costs, are costs that are specific to a particular project. They range from 10% to 40% of the total project costs and include the costs associated with the superintendent, job trailer, temporary toilets, and job utilities. Notice that these costs are specific to the job and the company would not incur them if the project wasn’t ongoing. This is different than home office overhead costs. Home office overhead, which is also called indirect overhead or general overhead, are costs incurred by the company independent of any particular job. These costs include home office rent, marketing, and executive salaries. These are all costs that are shared by all projects and typically added to the budget as a percentage of the work.

On nearly every project, some cost items will be left out of the estimate, or some unexpected scope item will be discovered after the estimate is completed. To account for these unexpected costs, contingency is included with most estimates. Contingency is a pool of money that is not associated with a specific scope of work. For bid jobs, contingency helps reduce the risk to the hard bid contractor. However, the higher the contingency included, the higher the bid price and the less competitive the contractor is. With construction management work, the contingency is often a shared pool used jointly by the owner, architect, and CM…”
Other than overhead, profit, and contingency, the Tulsa commercial contractor must consider productivity, and personnel as a biproduct of productivity. The AIC describes productivity as follows:

“…When looking up published productivity rates, such as those in R.S. Means or other reference guides, the rates are typically provided by an individual tradesperson, such as a carpenter or painter, or by a composite crew.
The crew work hours per day is the total number of hours the crew expends in an 8-hr day. For a single individual such as a single carpenter, the work hours per day would be 8 hr. However, for crews with multiple workers, the total number of workers is multiplied by 8 to determine the work hours.

The productivity rates are expressed in work hours per unit or units per work hours. The productivity rates expressed in work hours per unit are calculated by taking the number of crew work hours expended per day and dividing it by their production rate (daily output)

The productive rate units per work hour is calculated by taking the daily output and dividing by the crew work hours expended.
he total work hours needed to complete a construction activity is calculated by multiplying the work hours per unit by the quantity.
The total number of crew days required to complete a construction activity is calculated by taking the planned quantity to be installed and dividing by the daily output of the crew…”

The Tulsa Commercial contractor also has to account for equipment productivity when determining the estimate, because being able to complete the project is a large part of being able to bid the project. Owner’s can expect a quick turn around if they like your proposal, and in an economy with quickly changing prices, get a proposal to a client and executing on it quickly can help eliminate cost over runs for the Tulsa commercial contractor and owner alike.