Post -by Gautam Shah


Jobs however complex, are composed of elemental parts and small tasks. The elemental parts and tasks are usually comparable to many others used in different items or situations. Elemental parts, though similar in form and constitution, acquire a unique personality depending on their position in the whole, nature of use, method of installation or erection and time schedule of installation. Often parts of different types are correlated based on external factors like guarantee mechanisms, life span, utility, depreciation, finance, cost, return, energy consumption, waste output, hazards, ecological value, replacement schedules, etc.

It is generally experienced that certain form characteristics, dimensions (widths, depths etc.), etc. of parts and components remain constant. To save labour such constants are defined and only other variables are sought. Modes of measurements generally take care of such definitions.

Quantity estimates generally are compounded-quantities of various measures. An Estimate, to be relevant, needs to be converted into other values (monetary etc.) There could be several levels of conversions before an estimate turns into a relevant statement. Such conversions are carried out by many different agencies, without the author or the originator of the estimate being aware of it, or being informed about it.


 Jobs are estimated in many different ways:

  • with varying Degree of Accuracy
  • at various Stages of Work
  • for many Different Reasons

Accuracy of an estimate depends on how well the job has been conceived and detailed. Estimates that cause secondary change elsewhere (item selection or elimination), create liabilities, or have any hazardous consequences, and are prepared with due care.

Estimates are primarily made at two stages of work: Any Estimate prepared at the beginning or during the work are called Budget costing. An Estimate compiled at the Completion stage is called Historic costing.


Budget costings are made to determine the likely cost of execution. It helps in planning of resources, to search options, to check quotations, to control likely cost over runs, to determine the bill amount for a percentage fee, etc. Pre-execution estimates are made with certain parameters (presumptions). When there is a variation in parameters like, the cost of input materials, labour etc., the cost estimates need revisions. Budget cost or pre execution estimates remain very variable. Budget cost, as a document must remain revisable or fluid till the item is executed. It will have very little relevance once the item is born.

Screenshot_2021-05-27 [Clerget Shoe Factory (Productivity Story)] - U S National Archives Public Domain Search

Historic costings are made, to determine the actual expenditure incurred. It also helps in assessing the value of absolute addition to the wealth, investigate conditions that caused cost over or under runs, to determine the set-off or depreciation amounts, to fix insurance cover charges, to fix operations or servicing costs, etc. Post execution cost estimates, on the other hand, is made on the basis of accomplished facts, soon after the birth of a product. Historic cost estimates are static documents and have an archival value.

Who makes the Estimates? Budget costing is usually made by the people involved in the design and execution of the project, because they have all the data resources. Historic costing however may also be carried out by third parties or people not necessarily involved with design or execution processes.


Why Estimates are made? Estimates are made for many diverse reasons. Estimates are made for solving problems, making decisions, for highlighting or projecting certain facts, for supporting or confirming facts, for calculating the value addition or deduction, for procuring grants, loans, subsidies, etc. The purpose, which the estimate is going to serve, determines its format and the level of accuracy.