DRAFT

In the construction industry in the United States, the order in which you create a project and an estimate can vary based on the project management approach and the contractual arrangement with the client. Let’s break down the process for different project types:

Cost Plus Projects:

Procedure: For cost-plus projects, where the final cost is not known upfront, it’s common to create the project first. This allows you to establish the project framework, including timelines, milestones, and overall scope. Once the project is defined, you can then work on the estimate based on the detailed project requirements. Additions or Scope added to the Project must be recorded by using Change Orders in Contractor Foreman.

Advantages: Creating the project first allows for better project planning and management. It provides a clear structure for all parties involved and helps in setting expectations.

Disadvantages: The disadvantage could be that you may need to revisit the project plan if the estimate significantly influences the scope or timeline.

Fixed Cost Projects:

Procedure: For fixed cost projects, where the project cost is predetermined, it’s common to start with the estimate. This involves detailed cost breakdowns and analysis to arrive at a fixed cost for the entire project. Once the estimate is agreed upon, the project is created based on the fixed cost.

Advantages: Starting with the estimate allows for precise budgeting and cost control. It helps in presenting a clear and fixed cost to the client from the beginning.

Disadvantages: The disadvantage could be that if there are changes to the project scope later on, it may impact the fixed cost, potentially leading to disputes.

Time and Material (T&M) Projects:

Procedure: Time and material projects involve billing clients based on the time spent and materials used. In this case, you might create the project first to define the overall structure, and then estimate costs based on hourly rates and material costs.

Advantages: Creating the project first allows for effective tracking of time and materials against a defined project structure. Using Contractor Foreman you have another bunch of advantages such as; setting up your Job Cost Report with the MLESO budget, setting up groups of Subcontractors and Vendors to create Subcontracts and Purchase Orders and having the ability to create theCMP Gantt Chart Schedule, among others.

Disadvantages: The disadvantage is that clients might prefer fixed costs, and there could be challenges in presenting a clear estimate for T&M projects.

In summary, the order of creating a project and an estimate can depend on the project type and management approach. For cost-plus projects, creating the project first is common, while for fixed cost projects, starting with the estimate is typical. For Time and Material projects, it might be a mix of both, with an emphasis on defining the project structure first. Always ensure that your approach aligns with the contractual requirements and industry best practices.