Estimating projects for any size and type of contractor can be a very detailed and cumbersome task. Nothing affects the end profit % more than the initial estimate so it is extremely important to be as accurate as possible when estimating costs for a project.

Defining the project scope should be the first step in your cost estimating process.

A scope statement typically found in a bid package documents your project’s scope and defines the specific tasks, key stakeholders, milestones, deadlines and other information that is required to make the project successful.

Clearly defining and documenting the scope of a project helps your team account for all of the work that needs to be completed so you can accurately estimate costs and set a well thought-out project plan. It also enables your team to guard against ‘scope creep’ throughout the project lifecycle, allowing you to deliver against what you’ve promised to clients but also get paid for work outside of your agreed scope.

Below I’ve outlined some tips to help you define and manage scope before you begin working on a new project.

1. Ask the right questions in order to understand the full scope of the project

The more you know up front, the better. Oftentimes, your client won’t know to provide you with all of the information you need to produce an accurate estimate.

If your company is working on a design-build project, lean on your expertise to drive the conversation and uncover exactly what the client is expecting from your services. Does the client also require new faucets, or additional landscaping? What are the technical specifications you need to deliver (electrical, security, audio/visual, etc.)? How will you measure success?

You should ask questions that will enable your team to understand the specific tasks that will need to be completed and when. It is also very important for you to establish all client stakeholders and decision makers, and identify potential risks that will impact project delivery.

The information you gather while defining the project scope will vary depending on your specific industry or project. However, it’s helpful to put together a standard list of questions that can guide your discovery sessions with clients. Use these general questions as a starting point when building out your list:

• What is the overall goal for this project?
• What type of project is this? Is it a special type of build, or more standard?
• What is the project deadline?
• Are there any key dates or milestones to be aware of?
• Who are the key project stakeholders and decision makers?
• What are the obstacles or risks that might impact project delivery?
• Have you done this type of project before? If not, who can I speak with to learn about their experience(s)?
• Who are the other bidders/competitors for this project?

The answers to these questions will reveal important background information on the project that will inform your company on how you plan your resources and help to prepare your cost estimate.

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