Definition:
A control or bid-level estimate used for project execution planning, contract negotiation, and detailed cost tracking when 30% to 70% of scope is defined.
Key Components:
- Project Definition: 30% to 70% scope maturity.
- Accuracy Range: Typically -10% to +20%.
- Methodology: Based on vendor quotes, final material quantities, and detailed scheduling.
- Contingency Level: Low to moderate, adjusted for known risks.
Use Cases/Industries:
- Engineering & Construction Contracts: Used by contractors to submit bids.
- Procurement Negotiations: Establishing equipment and labor cost expectations.
- EPC Project Cost Control: Ensuring projects remain within allocated budgets.
Advantages:
- Reliable for Contracting Purposes: Minimizes surprises in final costs.
- Detailed Cost Breakdown: Essential for EPC project scheduling and execution.
Challenges:
- Scope Changes Can Impact Validity: Late-stage design modifications may require revisions.
- Time-Intensive: Requires in-depth engineering and procurement input.
Related Terms:
Pre-Tender Estimate, Procurement Costing, Baseline Cost Analysis
Example:
A refinery contractor develops a Class 2 estimate for a new distillation unit, incorporating supplier bids and detailed labor rates.
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Synonyms:
Bid Estimate, Control Estimate, Tender Estimate
