Ask a contractor to explain the difference between an estimate, a cost plan, a takeoff and a bill of quantities and most will get close, but the lines blur fast, especially when a client uses one word and means another. "Can you send me an estimate" might mean a ballpark figure for a planning application. It might mean a fully priced tender. Knowing the types of construction estimates, and what each one is for, saves a lot of wasted evenings and a few awkward conversations.
Here's what each one actually is, in plain terms, and when you need it.
Takeoff: the measured list underneath
The takeoff is the measured list underneath everything else. It's every element of the job, quantities taken off the drawings item by item, before any price is applied. Cubic metres of concrete, square metres of blockwork, linear metres of drainage, numbers of doors.
No takeoff, no reliable number, whatever else gets built on top of it. Strictly speaking a takeoff isn't an estimate at all, because there's no money in it yet. But it's the foundation of every priced type that follows, which is why it belongs at the top of the list.
Estimate: the priced number
The estimate is the priced number that comes from applying rates to that takeoff, plus prelims, overheads and profit. It's what you put in front of a client or use to bid a tender. A good estimate is only as accurate as the quantities feeding it, which is why a rushed takeoff underneath a careful-looking estimate still produces a wrong price.
"Estimate" gets used loosely, so it's worth asking what the client wants. A rough figure based on a rate per square metre is an estimate of sorts. So is a fully measured, element-by-element price. They're not the same thing, and only one of them is safe to sign a contract on.
Bill of quantities: the takeoff laid out for pricing
A bill of quantities, or BoQ, is the same measured information as a takeoff, but laid out item by item with descriptions so it can be priced, checked and compared. In the UK, bills for building work are usually prepared to NRM2.
On bigger jobs the client's QS issues one for you to price against, so every contractor tendering prices the same quantities and the bids can be compared line for line. On smaller jobs, having your own BoQ built from your takeoff means your priced items and your final account numbers come from the same document, start to finish. It's also handy for sending sections out to your own subcontractors.
Cost plan: the early figure that develops
A cost plan sits earlier, before the drawings are locked down, and gives a running figure for the job as the design develops. It's less precise than a measured estimate because there's less to measure yet, and it's typically worked up in stages: an early figure based on floor area and similar jobs, then more detail as the design firms up. RICS publishes NRM1 for this stage, covering order of cost estimates and cost planning.
A cost plan does a different job from an estimate. It's there to keep the design within budget while it's still changing, so the client doesn't find out at tender that they've designed something they can't afford. It gets replaced by a proper measured estimate once the drawings are settled enough to take off properly.
They're not four separate jobs. They're four stages of the same measured information, from early figure to priced bid.
Which of the types of construction estimates you actually need
A quick guide based on where the job is:
- Early design, no firm drawings. You need a cost plan. Cost planning services give a working figure the design can be checked against until there's enough to measure.
- Drawings settled, pricing a tender with no bill. You need a takeoff underneath an estimate. The quantities are your risk, so they need measuring properly.
- Client has issued a bill. You need it priced, and checked against the drawings. Don't assume every quantity in it is right.
- Sending packages to subcontractors. A bill of quantities, or sections of one, so every trade prices the same measured work.
- Ordering materials. A takeoff, or a material schedule drawn from it, that a supplier can quote from.
Most of the confusion between these four disappears once you see them as stages. The cost plan should be refined into the estimate. The takeoff should feed the estimate and the bill. When all of them come from the same measured source, the number the client saw at design stage and the number you tendered on can be traced back to each other. There's more on keeping them lined up in cost planning and a BoQ working from the same numbers.
For our part, we measure every element off your drawings to NRM2 and price it on current UK rates, local to the job, whichever of these you need. The fee is fixed and agreed up front. If you want to see what a finished estimate, takeoff and bill of quantities actually look like before deciding which one you need, the sample estimate shows all three. Seeing them side by side is often the quickest way to understand how one feeds the next.
The one question to ask a client
When someone asks you for "an estimate", ask what they're going to do with it. Checking a design against a budget needs a cost plan. Signing a contract needs a measured estimate. Matching the answer to the right one of the types of construction estimates is what stops you spending three evenings on a figure they only needed as a ballpark, or giving a ballpark they then hold you to.