Table 1. Cost estimate classification... | Emerald Publishing

Table 1.

Cost estimate classification and the expected accuracy rate of costs

Estimate class	Maturity level of project definition deliverables	End usage	Methodology	Expected accuracy rate
Class 5	0%–2%	Functional area or concept screening	Stochastic factors or quantity-based factoring, parametric models, judgement or analogy	L: - 20% to −30% H: +30% to 50%
Class 4	1%–15%	Schematic design or concept study	Parametric models, assembly driven models	L: −10% to −20% H: + 30% to + 50%
Class 3	10%–40%	Design development, budget authorisation, feasibility	Semi-detailed unit costs with assembly level line items	L: −5% to −15% H: + 10% to + 20%
Class 2	30%–75%	Control or bid/tender, semi-detailed	Detailed unit cost with forced detailed take-off	L: −5% to −10% H: + 5% to + 15%
Class 1	60%–100%	Check estimate or pre bid/tender, change order	Detailed unit costs with detailed take-off	L: −3% to −5% H: + 3% to + 10%

Estimate class	Maturity level of project definition deliverables	End usage	Methodology	Expected accuracy rate
Class 5	0%–2%	Functional area or concept screening	Stochastic factors or quantity-based factoring, parametric models, judgement or analogy	L: - 20% to −30% H: +30% to 50%
Class 4	1%–15%	Schematic design or concept study	Parametric models, assembly driven models	L: −10% to −20% H: + 30% to + 50%
Class 3	10%–40%	Design development, budget authorisation, feasibility	Semi-detailed unit costs with assembly level line items	L: −5% to −15% H: + 10% to + 20%
Class 2	30%–75%	Control or bid/tender, semi-detailed	Detailed unit cost with forced detailed take-off	L: −5% to −10% H: + 5% to + 15%
Class 1	60%–100%	Check estimate or pre bid/tender, change order	Detailed unit costs with detailed take-off	L: −3% to −5% H: + 3% to + 10%

Source(s): Adapted from AACE, 2020