---
tags:
  - topic/estimating
  - type/philosophy
  - topic/construction
title: The Purpose of Construction Estimating
---
# The Purpose of Construction Estimating

The purpose of [[construction-estimating]] in practice
is not to determine the actual cost of the scope,
which would take far longer than allotted for bid,

## The Myth of Estimate Accuracy

This is a dangerous superstition
which encourages unproductive conflict.

Operations is blamed for failing to meet targets
not intended for the purpose,
...

***

Construction contract bids are inherently risky.

Executives want to bid because construction can be profitable.
Executives hire estimators to mitigate risk of loss.

An estimator's value is determined by their

An estimator's job is to mitigate

Estimators downplay estimate risk
in order to receive approval to bid

It is not possible to measure productivity from estimate quantities.[^1]

[^1]: Not with certainty anyway. With Bayes, though, anything is possible.

## For Each Party

### For the Solicitor

#### System Coordination

#### Determine Feasibility of Functional Requirements

See [[gold-plating]].

### For the Contractor

* Make profit to meet growth target
* Secure work for current and projected employees (fill backlog)

%% TODO: "Determine the sale price of a service" %%

> [!aside]
> I take increasing issue with the common model
> of measuring operational success by negative overrun,
> as it is incompatible with the preferable target of estimate certainty.

#### The Role of the Estimator

The role of the estimator
is to model the potential cost distribution of the project,
taking actions to reduce the model's uncertainty.

The effect of estimating methods can be represented as $d\sigma$,
thus efficiency is $\frac{d\sigma}{dt}$.

#### The Role of the Executive

The role of the executive is to allocate profit and contingency
according to the potential cost distribution
weighted by the organizational desire to win the project.
