What are some of the advantages and disadvantages of using unit cost estimating? (2024)

One of the main advantages of unit cost estimating is that it can provide a high level of accuracy and simplicity, especially for projects with well-defined scope and specifications. By using standardized unit prices from reliable sources, such as databases, publications, or historical data, you can easily estimate the cost of each work item based on the quantity and quality required. This can help you avoid errors, omissions, and inconsistencies that may arise from other methods, such as lump sum or parametric estimating. Unit cost estimating can also simplify the process of updating and revising the estimate as the project progresses, as you only need to adjust the quantities or unit prices accordingly.

Another advantage of unit cost estimating is that it can offer a high degree of flexibility and transparency, both for the estimator and the client. By using unit cost estimating, you can break down the project into manageable and measurable work items, which can help you identify and analyze the cost drivers, risks, and opportunities of the project. You can also customize the unit prices to reflect the specific conditions and requirements of the project, such as location, labor, materials, equipment, overhead, and profit. Moreover, unit cost estimating can enhance the communication and trust between the estimator and the client, as it can show the details and assumptions behind the estimate, and allow for easy comparison and negotiation of different options and alternatives.

However, unit cost estimating also has some limitations and challenges that you should be aware of. One of the main disadvantages of unit cost estimating is that it can be time-consuming and labor-intensive, especially for complex and large-scale projects with many work items and variables. You may need to spend a lot of time and effort to collect, verify, and adjust the unit prices and quantities for each work item, and to account for the interactions and interdependencies between them. You may also need to use other methods, such as lump sum or parametric estimating, to estimate the cost of some work items that are not suitable for unit cost estimating, such as design, management, or contingency.

Another disadvantage of unit cost estimating is that it can be affected by uncertainty and variability, both in the unit prices and the quantities. Unit prices are not fixed or constant, but depend on various factors, such as market conditions, supply and demand, inflation, productivity, quality, and competition. Therefore, you may need to update and revise the unit prices frequently to reflect the current and expected situation. Quantities are also not exact or certain, but depend on the accuracy and completeness of the scope and specifications, as well as the changes and variations that may occur during the project execution. Therefore, you may need to include some allowances and contingencies to cover the possible deviations and fluctuations in the quantities.

To use unit cost estimating effectively and efficiently, you should follow some best practices and tips. First, you should use reliable and relevant sources of unit prices, such as databases, publications, or historical data, and adjust them to suit the specific project conditions and requirements. Second, you should use accurate and complete scope and specifications, and measure the quantities carefully and consistently. Third, you should consider the interactions and interdependencies between different work items, and use appropriate methods to estimate the cost of work items that are not suitable for unit cost estimating. Fourth, you should update and revise the unit prices and quantities regularly to reflect the changes and variations that may occur during the project. Fifth, you should communicate and document the details and assumptions behind the estimate, and explain the uncertainties and risks involved.

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

Construction Estimating

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