A cost estimate is a prediction of the resources that will be required, in terms of materials, labor, and other costs, to complete an agreed upon scope of work for a project. At the heart of a cost estimate is the level of project definition or design. When a project is initially conceived, and before a full design has been developed, the level of accuracy of a cost estimate cannot be expected to be too accurate. As the level of project design matures the expected accuracy of a cost estimate improves. However, some level of inaccuracy in a cost estimate is always expected because of the difficulty in predicting changes in the construction market. Difficult bidding environments, labor shortages, or challenging supply chains can all impact a project budget.
Additionally, even completed project designs sometimes make predictions of the conditions that may be encountered after construction begins. These predictions might involve the quantity of hazardous materials encased in existing building systems during renovation projects, the condition of soils that will be encountered, or the types of unknown underground utilities that may be discovered during the construction of new buildings or site improvements. PSPM's project managers build teams of architects, engineers, cost-consultants, and other professionals to minimize these types of risks to the greatest extent possible.