Construction Estimate vs.

Project
Budget
Preparing a project budget is not a simple task, and is more than just getting an estimate for the
construction cost of a building shell and basic mechanical and electrical systems.

It is difficult to price what has not been designed, detailed, or described. Project budgets include
many unknowns at the conceptual stage and not accounting for them will underfund the budget.
From our experience, beyond the building shell and basic utilities, project budgets should include
the following:

SITE CONCERNS:

Land acquisition
Geotechnical investigation
Stormwater management
Road improvements
Reforestation

ENVIRONMENTAL ISSUES:

Asbestos, PCBs, lead, etc.

Air quality permits

MATERIAL HANDLING & STORAGE:

Cranes
Racking

UTILITY UPGRADES:

Electrical, gas, & water service

Emergency power
Compressed air
Boiler steam or hot water
Chilled water/process piping
Industrial exhaust
Sewer/waste water treatment
Communications/data/security

INDIRECT COSTS:

Temporary staging for office and production

Architectural & engineering fees
 Permit review fees - Municipal sureties/bonds
Contractors bond
Legal fees
Financing costs
Insurance builders risk, etc.
Workforce training

TECHNOLOGY:

Certification programs (e.g. LEED)

Automation & space and utility impacts
Integration
Controls
EU vs. USA standards
Upgrade of IT systems
System commissioning
A contingency should also be added to account for unknown variables. We typically recommend
10%-15% at the conceptual stage of the project. Also, escalation should be addressed if the project
is more than a year from the start of construction.

While the above list is not all inclusive, it is the basis of a well thought project budget.