Cost estimation in commercial construction project management is the process by which a general contractor forecasts needed financial and related resources to complete a project within its defined scope. This involves accounting for all elements of a building project to calculate a working figure for the project budget.

For a commercial construction contractor, holding the line on expenses is essential. An accurate estimate reduces the hazard that the contractor will lose money on a project. Owners use bidding along with the cost estimation process to select a contractor who will fulfill the requirements of a building project for the lowest possible cost. Owners rely on accurate cost estimations to determine a project’s feasibility and avoid overpaying for a contracted building project.