Using Historical Cost Data to Generate Accurate Estimates
Cost estimates often require the consideration of historical data on construction costs to accurately estimate costs of future projects. Historical cost data only benefits your cost estimation efforts when the data is gathered and organized for future applications. In some cases, the cost estimator you hire may have access to files from past estimates that can help them more accurately predict the cost of your project. However, as the cost of supplies and labor fluctuates, cost estimators will need to update their files accordingly to continually provide accurate estimates.
Historical cost data can be a tremendous boon for contractors working on a tight budget, and when you consider the alternative — entrenching yourself in a pricing dispute with your investor — it seems logical to utilize this data to closely approximate your construction costs. Remember, if you find yourself locked in a legal dispute with an investor, contact a construction lawyer in Brentwood, TN.
Who Publishes Construction Cost Data?
A number of organizations regularly publish construction cost data that can be utilized for a comparative cost analysis. Types of available information include:
Catalogs of vendors’ data: includes cost quotations for products and highlights important features and specifications. Sweets Catalog, published by McGraw-Hill Information Systems Company, is one such catalog.
Periodicals: contain cost data and indices. The Engineering News-Record (ENR) publishes quarterly cost reports that feature comprehensive cost data about construction costs.
Commercial cost reference manuals for estimating guides: lists unit prices on building construction items. Some examples include the Building Construction Costs Book published every year by R.S. Means Company, Inc. and the Dodge Manual for Building Construction published by McGraw-Hill.
Digests of actual project costs: provide detailed descriptions and price breakdowns for various projects. ENR publishes the bid prices for an array of projects across all types of construction every week.
Errors in Historical Cost Data
Although historical cost data can be extremely useful, you must exercise caution when using it to help determine your cost estimates. Changes in the relative price of certain construction costs can have a major impact on the accuracy of your estimate and changes that take place over a long period of time can be nearly impossible to predict. Of course, there’s also a chance that your cost estimator could err as well, and some evidence suggests that understated cost estimates are the norm.
Historical cost data can be an extremely useful tool for contractors and cost estimators looking to trim away any uncertainty clouding the financial feasibility of a project, but before you make any moves, it’s always advisable to meet with a construction law attorney in Brentwood, TN to discuss any possible legal risks associated with your next project.
If you would like to speak with a construction attorney in Brentwood, TN, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.