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Michael Feeney is an estimating manager and Charles Cleary is an electrical subject matter expert at Connico Consulting in Nashville, Tennessee. The opinions are the authors’ own.
We live in a unique period in the history of technology where advances in artificial intelligence are outpacing industry regulations and creating unclear expectations about how long a proper cost estimate should take.
Across the construction industry and beyond, project teams are being pushed to commit to budgets earlier than ever. Meanwhile, owners and leaders want certainty, schedules demand speed, and in a volatile market, everyone is under pressure to move faster.
Qualified cost estimating takes time, and expecting accurate estimates without acknowledging the realities of today’s market is setting projects up for avoidable risk.
Michael Feeney
Courtesy of Connico
Construction projects, whether in aviation, infrastructure or commercial development, represent large capital investments. Project stakeholders understandably want early assurance that dollars are being spent wisely and that the resulting facilities will deliver long-term value. But too often preliminary estimates are interpreted as final answers rather than informed forecasts shaped by market conditions, timing and risk.
In today’s environment, this misunderstanding is increasingly costly.
The myth of the “quick” estimate.
A common misconception among projects is that cost estimating is as simple as “copy and pasting” a recent project. For example: refer to the cost per square foot of a similar project; adjust slightly by location, year and size; and present While benchmarks can be useful benchmarks, they are a poor substitute for project-specific analysis, especially in a market defined by labor shortages, material volatility, and a restrictive bidding environment.
In reality, high-quality estimation is neither quick nor formulaic. Even in the early phases of the project, when the scope is still evolving and the drawings are incomplete, clients often expect a level of accuracy that simply isn’t possible without more information and deeper analysis. Accuracy at this stage depends less on formulas and more on professional judgment based on experience, market research and an understanding of how variables interact over time.
What separates a reliable early estimate from a misleading one is not speed. It is the quality of the estimating process and the ability of the estimator to anticipate how the various components may affect the final cost of a project.
What really drives the cost variance
The estimate is a strategic forecast. Behind every credible number is a web of assumptions about the labor, materials and market conditions that customers rarely see but have a large influence on results. Ignoring these dynamics in advance can lead to significant budget gaps.
Labor availability is a key variable to consider. A project that looks simple on paper can become much more expensive when there is competition or shortages within regional labor pools. In markets like Los Angeles, where major projects and large-scale events such as the Olympics vie for equipment, material and skilled workers, contractor costs rise and windfall premiums follow.
The cost of materials introduces a similar uncertainty. Projects that require specialty products such as premium binders that are not regularly produced, and commodity-based materials such as copper that fluctuate daily make historical prices unreliable almost overnight. The challenge goes beyond knowing the current price: it is understanding whether the suppliers can meet the specific requirements of the project at scale and on time.
Charles Cleary
Courtesy of Connico
Then there is the bidder environment. Restrictive qualifications, specialized systems, or limited contractor availability can dramatically reduce competition. Fewer bidders almost always translate into higher prices. A strategic estimate accounts for this reality by analyzing who is likely to bid, not just what the scope says.
These factors do not exist in silos. A delay in one trade can, and often does, affect others. A late material shipment or a minor change in ceiling height can cause cost and schedule impacts across multiple operations. Taking these chain reactions into account is what makes estimating a checklist an art.
Set expectations
The reliability of an estimate is always linked to the quality and stability of the information on which it is based.
Many estimation challenges can be traced back to procedural breakdowns. Incomplete or constantly changing drawings slow progress and introduce risk, while misaligned scopes or conflicting documents can cause substantial discrepancies in estimates. Clear communication and early alignment between owners, designers and estimating teams is essential to avoid costly surprises later.
When details such as a finish plan or amount of furniture are not defined, estimators can rely on historical data or industry benchmarks to fill in the blanks. However, the more hypotheses required, the wider the potential range of outcomes.
Cost estimating is intended to be a collaborative, multi-layered discipline designed to reduce uncertainty, not eliminate it. Bringing together discipline-specific experts to perform an estimate ensures that each trade is evaluated by professionals who uniquely understand its risks and cost drivers. And layered quality control, including technical, cross-functional and executive reviews, adds another safeguard, challenging assumptions and validating results before the numbers are finalized.
Turn estimates into decision-making tools
A credible estimate reflects the reality of the market, including timing, location and constraints. A trusted team explains why costs look the way they do and what could move the number tomorrow.
When owners understand how all these dynamics interact, estimates stop creating false confidence and begin to enable more strategic planning. They become tools for stress-testing assumptions, anticipating risk, and deciding on difficult trade-offs before construction begins.
In today’s volatile market, relying on surface-level estimates is a liability. Projects remain viable when investment decisions are anchored in real-world conditions, not optimistic assumptions.
