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Performing Engineer's Cost Estimates for Small Construction Projects

Jan 27, 2023

Performing Engineer’s Cost Estimates for Small Construction Projects

Should we stop using him? Why did he tell us it would only cost $13,000 when it actually cost $36,000? We have been using him for almost four years, and all of his engineer's estimates have been close enough for financial planning purposes. It may take well over ten thousand dollars to find another consultant and familiarize him with our procedures. Well, maybe we should find out why his engineering cost estimate was so far off. What method(s) did he use? Why is cost estimating small construction projects so complicated?

To develop and prepare a reliable estimate, you may choose to estimate the project by several methods. A construction cost estimate, which is also called an engineer's cost estimate, is a decision-making tool.

How to Create a Cost Estimate

These include searching your project records, searching the internet to find lump sum costs for similar projects, asking the city or governing body (whether it is a local, county, federal or tribal government) what they think the project will cost, using your own professional judgment, or estimating the project cost by counting the approximate number of hours and cost of materials. Include what you think overhead and profit will be for this project. Some advantages of contacting the governing authority are that you will learn whether a building permit is needed, and you can find out which construction contractor has successfully performed work in your jurisdiction. A good question to ask is whether the contractor is licensed and insured.

When you have an estimate ready to submit to the owner, have someone in your office who has experience performing these types of estimates check your work. Unit cost pricing and price per square foot estimating are of limited use when estimating the cost of small projects.

Defining a Small Project

For the purpose of this article, a small project is something that can be built for under $25,000 and requires formal design by a licensed landscape architect, licensed architect, or professional engineer. The price guidelines are for something built in a location with a reasonable cost of living as opposed to Northwest Los Angeles, the more expensive areas of Manhattan, or the San Francisco Bay Area. Many cost-estimating tools or guides provide an easy-to-use chart on the differences in pricing between varying locales within the country.

For a project in a rural area, it may be acceptable if a boundary is off by a few inches, whereas in Manhattan, an inch would be unacceptable deviance. More precise surveying will cost significantly more. Costs such as these are reflected in the engineer's cost estimate.

Example Scenarios

Small bedroom: As an example, there are so many variables to estimating the cost of adding a small bedroom. Questions that the estimator may seek answers to are: Will a significant amount of earthwork need to be done, and will it be a stand-alone structure? Does the contractor have a safety program, and has she had accidents in the past? What are the current costs of wood, concrete, and steel?

It is important to know if the contractor is environmentally conscious. Would she pour solvent or unused paint on the ground rather than bear the cost of disposing of it properly?

Short culvert: Another example of a small project is a short culvert constructed under a driveway. Even a seemingly simple project requires engineering and at least one bid. Design factors include the size of the culvert, the material that the culvert is constructed of, length, depth of cover, and anything added to the inlet and outlet of the pipe because an unsightly culvert can ruin the appearance of a front yard and profile of the lovely home.

Safety Considerations

If you have been awarded a building permit, then the city or governing authority will inspect the project and work at the appropriate time(s). If you have been working as an engineer, architect, or scientist, you may have seen deadly construction accidents or those that resulted in the loss of body parts such as fingers. When a person works with his hands and they are mangled, he can no longer perform his job function, which makes it hard for him to support his family. The cost of safety should be part of the estimate.

Obtaining Multiple Bids

For small projects, it may not be necessary to obtain multiple bids. It may be fine to do your research on builders and ask one of them for a quote. If it is acceptable and in line with the engineer's cost estimate, you could just select them. This would save you the time of showing the site to potential bidders, copying multiple sets of plans, and answering questions.


An engineer's cost estimate is meant to inform you whether you have enough funds to complete the project, and it can help you to decide whether you want to proceed with the project. For a large project, profit and overhead may be low compared to the cost of the work. For a small project which may take parts of one or two days, the overhead may be higher because the contractor may not be able to perform other work that day, so the owner actually must pay for the anticipated downtime. Also, equipment, supplies, and materials may need to be ordered or reordered to make up for the materials used on this small job; as an example, outdoor piping includes pipe, bedding, and backfill material. The city may require that special inspection and soil compaction testing be performed. This can cost a significant dollar amount which is passed onto the owner.

Contractors are in business to make money, so they must make a profit on every job. I have seen situations where "small-time" local contractors are struggling to survive and live in someone's garage or sleep in their car. Small contractors, not major engineering and construction companies, construct these small projects.

These estimating techniques are for engineering and construction but are not generally useful for scientific research, which is difficult to perform within a specific budget or timeframe.

Even a simple short retaining wall that is generally constructed of concrete block or cast-in-place concrete with reinforcing steel (rebar) can cost a significant amount, so it should be estimated before a contractor is chosen.

Hopefully, the writer of this little blog will have helped you to be up to the challenge of addressing the variations in the scope of the project and developing a cost estimate for small projects.

Interested in earning your professional engineering license? School of PE's comprehensive courses provide what you need to succeed when exam day arrives! Register today.
About the Author: Keith Warwick, PE

Keith Warwick has been a licensed professional civil engineer since 1983. He earned a Bachelor of Science Degree in Civil Engineering from the University of Davis and completed coursework in Biblical Counseling from Grace Theological Seminary in Winona Lake, Indiana. He has managed his own firm, PATTY and KEITH, INC. since 2008. He has performed civil engineering design, worked as an engineering instructor for Yuba College in Marysville CA, performed safety and environmental inspections, and performed Commercial Real Estate Due Diligence. He is the author of several books including California's Highway 99: Modesto to Bakersfield.

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