Definition:
A budgetary estimate used for project authorization, cost control, and funding decisions, typically developed when 10% to 40% of project scope is defined.
Key Components:
- Project Definition: 10% to 40% scope maturity.
- Accuracy Range: Typically -20% to +30%.
- Methodology: Uses bottom-up estimating, quantity takeoffs, and preliminary vendor quotes.
- Contingency Level: Moderate, adjusted based on risk analysis.
Use Cases/Industries:
- EPC (Engineering, Procurement, and Construction) Projects: Setting a baseline for project execution.
- Renewable Energy Bids: Defining capital costs for solar, wind, or geothermal developments.
- Industrial Facility Upgrades: Budgeting for chemical processing plant modifications.
Advantages:
- Detailed Cost Breakdown: Provides enough information for cost tracking.
- Used for Project Funding Approvals: Essential for securing financial commitments.
Challenges:
- Not Finalized Costs: Refinements needed as design progresses.
- Subject to Scope Adjustments: Changes can impact estimate reliability.
Related Terms:
Control Estimate, Project Baseline, CAPEX Planning
Example:
A utility company finalizes a Class 3 estimate to support the funding request for a new high-voltage transmission line.
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Synonyms:
Budget Estimate, Funding Estimate, Budgetary Estimate
