EA6: What Is a Preliminary Estimate?

What Is a Preliminary Estimate?

A preliminary estimate is the first early-stage cost calculation prepared for a construction project—before full drawings, engineering details, or final specifications are available. It provides an initial budget based on concept plans, design narratives, historical data, cost models, and rough quantity takeoffs.

Unlike a detailed bid, a preliminary estimate relies on assumptions and ranges rather than precise subcontractor quotes. Its purpose is to determine financial feasibility, guide design decisions, and help owners or developers decide whether (and how) to move forward.

Typically accurate within –15% to +30%, this estimate includes a high-level cost breakdown by major divisions or systems, general conditions, and a contingency of 10–25% to account for unknowns. It is commonly prepared during schematic design, feasibility studies, or early preconstruction planning.

In simple terms:

A preliminary estimate is your first realistic cost picture — used to set budgets and make go/no-go decisions before detailed design begins.

A preliminary estimate is an early-stage cost estimate created before detailed construction documents are available. It relies on:

• Conceptual drawings

• Design narratives

• Historical data

• Unit costs

• Cost models

It’s NOT yet a detailed line‐item bid — it’s a decision-making tool based on what is known at the moment.

What Is the Purpose of a Preliminary Estimate?

It helps:

• Evaluate feasibility

• Establish initial budgets

• Support funding discussions

• Guide design decisions

• Compare project options or scenarios

If a project is projected at $12 million but the budget is $7 million — this is the moment to course-correct.

When Is a Preliminary Estimate Used?

Typically prepared at:

• Concept design

• Schematic design

• Programming phase

• Feasibility studies

Owners often request it before bringing a GC onboard — but general contractors, estimators, and design-build firms also create them for planning.

What’s Included in a Preliminary Estimate?

Unlike a detailed bid, this estimate still relies on assumptions — but it must be structured and logical.

Typical elements include:

1. Executive Summary

Project overview, scope, and assumptions.

2. Cost Breakdown

Often grouped by major construction divisions:

• Earthwork

• Structural concrete

• Steel

• Exterior envelope

• Interior construction

• MEP systems

• Sitework

Or grouped by systems:

• Site preparation

• Shell & structure

• Interiors

• MEP

• General requirements

3. Soft Costs (optional)

• Fees

• Permits

• Insurance

• Contingency

4. Contingencies

Because the design is not final, contingencies may range from 10% to 25%.

Example: Preliminary Estimate Summary Table

Category

Estimated Cost

Sitework & Utilities

$1,200,000

Concrete & Foundations

$2,100,000

Structural Steel

$900,000

Building Envelope

$1,850,000

Interior Construction

$2,150,000

Mechanical Systems

$1,000,000

Electrical Systems

$970,000

Plumbing

$680,000

General Conditions

$550,000

Contingency (15%)

$1,200,000

TOTAL

$12,600,000

Real Project Example

Adult Residential SUD Treatment Facility — California

Preliminary Estimate Prepared April 2025

Value: $12.1M

Phase: Conceptual Design

Scope Included:

• Demolition & Site Prep

• Earthwork & Grading

• Underground Utilities

• Concrete & Masonry

• Structural Steel

• Thermal & Moisture Protection

• Openings

• Finishes

• HVAC, Electrical, Plumbing

Purpose:

To validate the feasibility before the architect moved into Design Development.

How Accurate Is a Preliminary Estimate?

Industry standards (AACE, ASPE, GSA) expect a range of:

–15% to +30%

Depending on how much is known.

Accuracy improves as:

• drawings develop

• Subcontractor quotes come in

• scope solidifies

Preliminary vs Conceptual vs Detailed Estimates

Conceptual

Before drawings exist

–30% to +50%

Preliminary

Schematic/early plans

–15% to +30%

Budget Estimate

Design Development

–10% to +20%

Detailed / Final

Construction Docs

–5% to +10%

Tools Commonly Used

• RSMeans / Cost Data Books ( more about RSMeans)

• Historical project cost databases

• PlanSwift (when drawings allow)

• On-Screen Takeoff

• Excel cost models

• Conceptual estimating software

• Cost per SF or cost per bed/unit

Who Prepares a Preliminary Estimate?

• General Contractors

• Independent Estimators

• Preconstruction Managers

• Cost Consultants

• Design-Build Teams

• Owner’s Reps

Key Takeaway

A preliminary estimate is not the final price — it’s the first realistic cost picture of a project.

It’s the tool that answers:

“Can we afford to build this?”

When done right, it:

• prevents redesign

• avoids budget shocks

• supports smarter project planning

Need Help Preparing a Preliminary Estimate?

Kubus Construction provides:

• Early-phase estimating

• CSI‐formatted reports

• Budget validation

• Value engineering options

• Conceptual cost modeling

📩 Contact us https://www.kubuska.com/contact