Pre-calculation in construction – purpose, content and practical use
Created December 2025, Reading time: approx. 2-3 minutes
In construction projects, many crucial decisions are made before the first shovel is turned. One of the most important is related to finances. Here, the preliminary estimate plays a central role. Even though the level of detail is limited, the preliminary estimate sets guidelines for the project's further development, level of ambition and feasibility.
This article goes into depth on what a preliminary estimate is, why it is important, how it is constructed, and how it is used in practice in the construction industry.
What is meant by precalculation?
A preliminary estimate is an early-phase cost estimate that is prepared before the project is fully designed. It is often based on sketches, concept choices, room programs, functional descriptions, or overall quantity estimates.
Unlike a detailed estimate, which is based on complete drawings and descriptions, a preliminary estimate is about providing an estimate – not an exact price. It is therefore used primarily for strategic decisions, not for entering into contracts.
When in the project is the preliminary estimate prepared?
Pre-calculations are typically used in the following phases:
Idea and concept phase
Early design
Feasibility studies and preliminary projects
Before purchasing land or initiating zoning
As a basis for investment decisions
In construction projects, contractors can also create internal estimates to assess whether they should participate in competitions or tenders.
The purpose of a preliminary estimate
The main purposes of a preliminary estimate are:
Decision support
Provides the builder or developer with a financial basis to proceed with the project.Framework determination
Defines a financial framework within which further design must remain.Comparison of alternatives
Different solutions, material choices or concepts can be assessed economically.Early risk understanding
Identifies cost drivers and uncertainties at an early stage.Communication
Creates a common picture of the project's cost level for all parties involved.
Typical content of a preliminary estimate
Although the content varies with the nature and size of the project, a construction estimate often consists of the following main items:
1. Construction costs
Groundwork
Concrete and load-bearing structures
Carpentry and construction work
Surfaces and furnishings
2. Technical subjects
Plumbing
Electro
Automation
Any special installations
3. Rig and operation
Establishment of construction site
Temporary installations
Operation and decommissioning
4. Project planning and administration
Architect
Consulting engineers
Construction management and project administration
5. Uncertainty and reserves
Surcharge for missing details
Risks related to ground conditions, market, progress
6. Any additional charges
Land costs
Government fees
Financing costs
Methods for preliminary calculations
There are several methods for preparing preliminary estimates :
Experience-based calculation
Based on previous projects of similar size, type and complexity. This is common in the early phase.
Key figures and unit prices
For example, NOK/m² BTA, NOK per home, or NOK per running meter of road.
Function-based calculation
Costs are linked to functions and services rather than detailed quantities.
Rough quantity calculation
Based on sketch drawings and simple quantity estimates.
Often several methods are combined to achieve the best possible precision.
Uncertainty in preliminary calculations
Uncertainty is a natural part of calculations. Common sources of uncertainty are:
Unresolved underlying conditions
Changes in requirements and scope
Market prices for materials and labor
Choice of contract form
Therefore, it is important that preliminary calculations are never presented as exact numbers , but as intervals or estimates with assumptions clearly described.
The difference between pre-calculation and post-calculation
Pre-calculation: Estimate before construction starts
Post-calculation: Actual costs after project completion
Post-cost estimates are often used for learning and improving future preliminary estimates, and are crucial for good cost management over time.
Who uses pre-calculations?
Builders and property developers
Contractors
Advisors and project managers
Public builders
Banks and investors
A preliminary estimate is one of the most important tools in the early stages of construction projects. It provides overview, direction and control before major costs are incurred. Although it is fraught with uncertainty, a well-prepared preliminary estimate is crucial for profitable, feasible and sustainable projects.
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