Which are the two basic laws of construction estimating?

The two basic laws of construction estimating center around the relationship between the estimates given for a project and their impact on business outcomes such as profits and project volume. When you provide a low estimate, it may lead to reduced profits because operational costs, unforeseen expenses, and competitive pricing pressures can consume margins. Conversely, if the estimate is set too high, it risks losing out on potential contracts, thereby decreasing project volume. This dynamic is crucial in making strategic decisions about bidding practices.

In the construction industry, it is essential to strike a balance between offering a competitive bid that secures projects while ensuring that the bid amount also covers all potential costs and generates acceptable profit levels. Understanding this delicate balance is vital for long-term success and sustainability in the business.