Quantity Surveying & Approximate Cost Guide Module 5: Preparing the Cost Estimate File — The Art of Bringing All Pieces Together

Dec 1, 2025

In the first four modules, we learned how to convert a project’s presence on paper — its plans, sections, and details — into real, measurable quantities and then into priced items. By now, you have a detailed table showing thousands of rows of quantities and their prices. Module 5 is where this complex dataset is transformed into the final cost estimate file that enables decision-makers — investors, procurement committees, and project managers — to allocate a budget quickly and accurately. This final phase does more than just aggregate data. It presents information in a logical, orderly format ready for tender, including required additions like profit, overhead, and tax.

I. Cost Summary Preparation: From Detail to Overview

Raw quantity lists often contain thousands of lines with no order. To make these quantities meaningful for financial and structural analysis, they must be organized into logical groups.

Classifying Quantities by Work Category

In large projects, tens of thousands of lines of measured work can be overwhelming. To make this readable and useful, quantities must be categorized by major structural or functional work groups. This classification is essential for understanding which parts of the project dominate the budget.

Common Work Group Examples

  • Excavation and Site Work
  • Structural Works (Concrete, Walls)
  • Finishing Works (Plaster, Flooring, Paint)
  • Mechanical Systems

Work Group Summaries and Overall Cost Summary

Once work group classification is complete, two key reports are created:

  1. Work Group Summary — A detailed table showing the total cost of all items within each main work group.
  2. Cost Summary — The highest-level report that lists subtotal costs from all work groups to show the project’s overall cost before profit, overhead, and tax.

II. Approximate Cost Calculation: The Final Formula

The total cost derived from the summary is the base construction cost with no profit, general expenses, or tax. To obtain the official approximate cost, additional components must be added.

Adding Profit and Overhead

Contractors do not only incur material and labor costs. There are office expenses, personnel costs, insurance, and (naturally) the profit margin.

In many markets, profit and general overhead are added as a percentage of the base cost (often around 25%, though this may vary).

  • Overhead & Profit Amount = Base Cost × 0.25
  • Approximate Cost (before tax) = Base Cost + Overhead & Profit

This results in a figure that reflects both the true cost of construction and the business realities of executing the work.

III. Tender File and Reporting Flexibility

The approximate cost serves two purposes:

  1. It helps the owner determine an appropriate budget.
  2. It becomes the benchmark against which contractor bids are evaluated.

Low Bid Review Logic

When a contractor’s offer falls below a certain threshold compared to the approximate cost, a low bid analysis may be required. This forces the bidder to demonstrate how they intend to complete the work at their quoted price, including the pricing logic and profit assumptions.

This process emphasizes not just low price, but well-documented financial reasoning behind the price.

Reporting Flexibility with Approx

Traditional cost estimate files are often static Excel spreadsheets. In modern projects, different stakeholders (finance, design, site teams) need reports in different formats. That’s why Approx offers advanced reporting capabilities:

  • Floor-Level Reporting: Shows total and per-square-meter costs for each floor.
  • Building-Level Reporting: Useful for multi-block projects like campuses or housing estates by comparing each building’s budget.
  • Room-Level Reporting: The most granular view, showing how costs are distributed across individual rooms like kitchens, bathrooms, and offices.
  • Custom Report Outputs: Ready formats for summary reports, percentage reports, and detailed quantity sheets that can be directly included in tender documents.

This flexibility makes budget control easier and plays a critical role in risk management.

IV. Congratulations — You Can Now Produce a Full Project Cost

Over five modules, we have guided you from reading a project to measuring quantities, assigning prices, and preparing the cost estimate ready for tender.

You now have a clear, logical cost breakdown — a transformation that traditionally takes weeks — and the knowledge to do it accurately, consistently, and efficiently.

Key Advantages You Gain with Approx

  • ✅ Faster Results: Up to 5× quicker measurement and pricing with minimal manual effort
  • ✅ Up-to-Date Official Prices: Automatic and reliable access to official price lists
  • ✅ Flexible Reporting: Customizable by floor, room, or work group
  • ✅ Collaborative Work: Multiple users can work on the same project with ease
  • ✅ Cloud-Based Platform: No installation or local setup required — accessible anywhere

This flexibility and automation make cost management not just faster, but smarter.

Don’t Miss the Next Articles in the Series!