What to Include in a Construction Estimate: A Checklist for Contractors

Most estimates that go wrong don't go wrong on the big items. They go wrong on what was never in the number at all: the temporary power nobody priced, the escalation nobody carried, the exclusion nobody wrote down. This checklist covers what a complete construction estimate should contain, section by section, so you can check your own estimates or know what to expect from an estimator.

The structure below follows the cost elements in the U.S. General Services Administration's estimating requirements for federal buildings (GSA P-120). Private work isn't bound by GSA rules, but it's one of the most detailed public descriptions of what a professional estimate includes, and it applies well to commercial, residential and industrial jobs alike.

1. The documents behind the number

Before any pricing, record what the estimate is based on. GSA's requirements ask for a basis of estimate that starts with a list of the documents used (GSA P-120). For a bid, that means:

• Plan set, with sheet numbers and revision dates
• Specifications (project manual), including the general requirements
• Every addendum and bulletin issued
• Bid form, alternates and unit-price requests
• Site information: survey, geotechnical report, photos

Tip: If the drawings get revised after you finish, this list is what tells you (and everyone else) which version your number reflects.

2. Measured quantities

Every priced line should trace back to a quantity. GSA requires work items to be priced from measured quantities wherever the design allows, and requires the quantity takeoff and calculation reports to be submitted as backup to the estimate (GSA P-120).

• Quantities organized by trade or specification division (most estimates use CSI MasterFormat)
• Waste factors shown separately, not buried in the quantity
• Marked-up drawings showing what was measured
• No lump sums without a description and quantity behind them. GSA states plainly that lump-sum pricing is not acceptable without description and quantification (GSA P-120).

3. Direct costs

Direct costs are the physical work. GSA's definition includes (GSA P-120):

• Labor, material and equipment for the permanent work
• Temporary work tied to a specific item, such as concrete formwork
• Working supervision directly tied to the permanent work
• Subcontractor overhead and profit, when work is subcontracted
• Allowances for permanent items not yet detailed, such as miscellaneous metals
• Sales and use taxes on construction materials and inputs, where they apply

For estimates prepared from detailed design, GSA calls for labor, material and equipment to be priced separately rather than as a single combined unit price (GSA P-120). Separate pricing makes it far easier to check a number, compare subcontractor quotes and adjust for local labor rates.

Don't forget the conditions of the job

Unit prices should reflect how the work will actually be built. GSA lists premium factors that must be priced, including (GSA P-120):

• Logistics: phasing, tight or constrained sites, difficult access
• Existing conditions, including hazardous materials
• Non-standard hours, overtime and shift premiums

4. General conditions

These are the costs of running the job rather than building any single item. GSA references ASTM E2083 for this category, and its list includes (GSA P-120):

• Site set-up and field offices
• Project management, supervision and field engineering
• Travel and lodging, if crews or staff travel
• Safety and protection
• Construction aids, equipment and tools
• Temporary construction and environmental requirements
• Quality control, inspection and testing
• Maintenance, housekeeping and cleanup
• Bonds, permits, fees and insurance

GSA notes these can be estimated as a percentage allowance or by a detailed build-up (GSA P-120). A detailed build-up based on the actual schedule and site is usually easier to defend.

5. Overhead and profit

• Home office overhead: the share of office costs, staff and business operations allocated to this contract
• Profit: the fee for taking on the work and its risk

Both appear in GSA's general conditions and profit category (GSA P-120). The percentages are a business decision, so keep them visible on the summary sheet where they can be reviewed and adjusted, not mixed into unit prices.

6. Allowances and contingency, shown separately

GSA follows ASTM E2168, which separates three kinds of money for the unknown (GSA P-120):

Type	Covers	Example
Allowance	Planned items not yet fully defined	Finishes still being selected
Contingency	Unforeseen events that aren't directly controllable	Unexpected site conditions
Reserve	Changes in project requirements, held by management	Owner-added scope

The most important rule: allowances and contingency must always be identified separately, and must never be hidden inside unit prices, quantities or takeoffs (GSA P-120). Hidden contingency makes an estimate impossible to review and easy to cut by mistake.

How much to carry depends on how complete the design is. GSA's guideline percentages for design contingency decrease as documents progress, down to zero at final construction documents (GSA P-120), and AACE International's estimate classification system uses the maturity of the project definition as its primary measure of an estimate's class (AACE 17R-97).

7. Escalation

If construction starts months after the bid, or runs a long time, prices may move. GSA treats escalation as a provision for market inflation and for cost changes due to code or practice, and describes a common simplification: assume half the work happens before the midpoint of construction and half after, and escalate the estimate to that midpoint (GSA P-120).

• Construction start date and duration stated
• Escalation method and rate stated (or a note that none is carried)

8. Assumptions, exclusions and risks

This is the section that protects you. GSA's basis of estimate calls for, at a minimum, the basis for pricing, the assumptions and allowances made, the escalation basis, exclusions, and risks and opportunities (GSA P-120).

• Assumptions: anything you had to assume because the documents didn't say
• Exclusions: everything not included (for example: permits by owner, testing by others, winter conditions)
• Clarifications: how you interpreted anything ambiguous
• Quotes used: which supplier and subcontractor quotes the number relies on. GSA requires quotes to be documented and submitted with the estimate (GSA P-120).

9. A summary someone can review in a minute

GSA asks for one-page cost summaries organized at a high level of a standard classification, such as MasterFormat (GSA P-120). Whatever format you use:

• One-page summary by division or trade
• Markups, allowances, contingency and escalation each on their own line
• Alternates priced separately from the base bid
• Detailed line items behind the summary
• A final check of every calculation. GSA makes the estimator responsible for checking calculations for accuracy and completeness (GSA P-120).

Using this checklist

Run through it before every bid goes out, or hand it to whoever prepares your estimates. If you'd like help with the measuring and pricing, I prepare quantity takeoffs and detailed cost estimates organized by CSI division, with assumptions and exclusions written out. New to the terms? Start with what estimating in construction means. Ready to price a project? Send your plans for a free quote.