AEC definitions
A conceptual estimate prices a project before detailed drawings exist, using building systems, historical unit costs, and stated assumptions. It is a budget tool during programming or schematic design. It is not a number a contractor should be asked to hold as a lump sum.
Definition
The estimator prices an assembly: dollars per square foot of a defined building type, or a system such as structure, envelope, and HVAC at a schematic quantity. The range is wide because the design is not there. Design contingency is part of the honesty. As design development adds detail, the conceptual estimate is replaced by a more detailed one, and the variance is explained. Treating the first number as a promise is how projects get value-engineered in a panic later.
In depth
A cost per square foot is only meaningful for a comparable building in a comparable market. A systems estimate is better once there is a structural concept and an HVAC concept. Name the comps or the systems.
Location, time, and quality level adjust the number. An unadjusted national average is not a local estimate.
Occupancy, story height, site work included or excluded, escalation date, and what contingency covers. Two conceptual estimates that differ are often pricing two different assumptions. Put them on page one.
Owner soft costs, land, and financing are either in or out. Do not mix them into construction cost without a label.
When design development arrives, reconcile. If the number moved, say whether scope grew, the market moved, or the concept was thin. A new total with no bridge looks like a mistake even when it is information.
Design contingency should drop as the unknowns become drawings.
A GMP or a lump sum needs documents. A conceptual estimate can support a design-build budget target only with a thick list of qualifications.
The target is not the conceptual total copied into a contract.
Examples
A schematic systems estimate prices structure, envelope, and MEP separately and states a 20 percent design contingency. The cover lists the assumptions.
The design-development estimate is higher. The reconciliation shows added site work the concept had excluded.
The owner uses the range to choose between two massing options, not to sign a lump sum.
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