Start with the cost summary
The first page of most estimates is a one-page cost summary: each CSI division with its subtotal, followed by general conditions, overhead, profit, contingency and the bid total. Read this page first. It tells you where the money is before you get lost in the detail.
A few quick checks are worth doing here:
- Does every division you expect appear? A commercial fit-out with no Division 09 Finishes is a red flag.
- Are there divisions with suspiciously round numbers? A $50,000 line with no detail behind it is usually a placeholder, not a price.
- Does the total per square foot sit in a sensible range for the building type and region? Our cost-per-square-foot guide explains how to use that check without being misled by it.
Understand how the divisions are organized
Most professional estimates follow the CSI MasterFormat structure: Division 03 for concrete, 05 for metals, 09 for finishes, 26 for electrical and so on. The value of that structure is consistency. When every estimate on your desk is organized the same way, you can compare them side by side and spot the one division that is out of line.
Read the line items: quantity × unit cost
Each line item should carry at least four things: a description, a quantity, a unit (SF, LF, CY, EA) and a unit cost. Better estimates split the unit cost into material, labor and equipment, because those three move for different reasons. Material follows the market, labor follows local wage rates and productivity, and equipment follows duration.
When a number looks wrong, it is almost always one of three things:
- The quantity is off, usually a missed area or a wrong scale on a sheet.
- The unit is wrong, for example square feet priced as square yards.
- The unit cost doesn't match the specification, such as a builder-grade product priced where the spec calls for a premium one.
Tip: Ask for the take-off markups behind the estimate. If each quantity can be traced back to a colored area on a drawing, checking a number takes minutes instead of hours.
General conditions are not overhead
General conditions (usually Division 01) are the job-specific costs of running the site: supervision, temporary facilities, toilets, fencing, dumpsters, permits, cleaning and the like. They scale with the schedule, so a longer job carries more of them. Overhead is the cost of running the company itself and is normally applied as a percentage. Keeping the two separate shows whether a bid is heavy because of the site or because of the markup.
Markups, contingency and allowances
Below the direct costs you will usually find the markups: overhead and profit, bonds, insurance and sometimes tax. Then come contingency and allowances, which are easy to confuse:
- Contingency is money for risk that is real but not yet defined, such as unknown site conditions.
- Allowances are placeholders for items that are in scope but not yet selected, like a fixture package the owner hasn't chosen.
- Alternates are priced options the owner can add or deduct.
We cover how to set each of these in contingency, allowances and alternates.
Check the exclusions and assumptions
The most important page in an estimate is often the shortest one: the list of inclusions, exclusions and assumptions. It is where you find out that the price excludes rock excavation, winter protection or utility connection fees. Two estimates can differ by six figures and both be "correct" because they assumed different things. Always read this page before comparing totals.
What a good estimate gives you
A well-built estimate is more than a number. It is a document you can defend in a bid review, hand to a project manager at buyout and use to price change orders later. If you can trace every quantity to a drawing and every price to a source, you have an estimate you can build on. The 7500 South Exchange estimate is a good example of the full structure: cost summary, line items, schedule of values and cost per square foot.
