In construction, a control estimate is a crucial tool used for monitoring the project during construction.
Understanding the Construction Control Estimate
A control estimate serves as a benchmark throughout the building process. Unlike initial estimates used for bidding or securing financing, the control estimate is specifically designed for active project management. Its primary purpose is to track actual costs against planned costs as the work progresses, helping project managers identify potential cost overruns or savings opportunities in real-time.
Components of a Control Estimate
According to the definition, a control estimate is not a single figure but is comprised of three separate estimates:
- The Budget Estimate for Financing: This is often the initial estimate used to secure project funding. It sets the overall financial framework.
- The Budgeted Cost After Contracting but Prior to Construction: This estimate refines the initial budget based on actual contract prices awarded to subcontractors and suppliers before physical work begins on site. It provides a more accurate baseline for the project's expected cost.
- The Estimated Cost to Complete During the Project: This is a dynamic estimate updated regularly throughout construction. It projects the cost required to finish the remaining work, taking into account costs incurred to date, progress made, and any changes or unforeseen issues.
How It Works in Practice
By comparing actual costs to the budgeted cost and continuously updating the estimated cost to complete, project teams can:
- Monitor financial performance against the plan.
- Forecast the final project cost more accurately.
- Make informed decisions to mitigate risks or adjust strategies.
- Ensure the project stays within budget or provide early warnings if it's likely to exceed it.
This iterative process of tracking and forecasting makes the control estimate an indispensable tool for effective cost control and financial health throughout the construction lifecycle.
