the world of electrical estimating

Navigating the world of electrical estimating can be daunting. Our comprehensive glossary is designed to be your go-to resource of common terms and phrases used in electrical estimation and the industry. 

This resource is designed Designed to provide clear, concise and accurate definitions, ensuring you can communicate effectively and confidently.  

• Bill of Quantities (BOQ): A detailed document that itemises all materials, parts, and labour required for a construction project, used to provide accurate pricing during tendering.

• Take-off: The process of measuring and listing all materials and quantities required from project drawings and specifications.

• Preliminary Estimate: An initial cost approximation based on limited information, often used in the early stages of project planning.

• Detailed Estimate: A comprehensive calculation of all costs associated with a project, including materials, labour, equipment, and overheads, prepared when detailed project information is available.

• Provisional Sum: An allowance in the contract sum for work that is anticipated but not yet defined in detail, to be adjusted once the scope is clarified.

• Prime Cost (PC) Item: A monetary allowance in the contract for the supply of specific items (e.g., fixtures or fittings) that have not been selected at the time of tendering.

• Contingency: A budgetary allowance to cover unforeseen expenses or risks that may arise during a project.

• Overheads:  Indirect costs associated with running a business, such as administrative expenses, utilities, and insurance, which are allocated to projects.

• Labour Rate: The cost of labour per unit of time, including wages, taxes, and benefits, used in estimating labour costs for a project.

• Unit Rate: The cost per unit of measurement (e.g., per square meter or per linear meter) for materials or work items, used in estimating and billing.

• Scope of Work: A detailed description of the work to be performed under a contract or subcontract, outlining tasks, deliverables, and timelines.

• Variation (Change Order): An alteration to the original scope of work, which may affect the contract sum or completion date, typically documented and agreed upon by all parties.

• Schedule of Rates: A list of predetermined prices for specific work items or services, used for estimating and valuing variations.

• Cost Plan: A financial plan that outlines the anticipated costs of a project, used to manage budgets and monitor financial performance throughout the project lifecycle.

• Direct Costs: Expenses directly attributable to a specific project, such as materials, labor, and equipment.

• Indirect Costs: Expenses not directly linked to a specific project but necessary for overall operations, such as administrative salaries and office rent.

• Subcontractor: A third-party contractor hired to perform specific tasks or services as part of a larger project, often providing specialised skills.

• Tender: A formal offer submitted by a contractor to undertake work at specified prices, based on provided project information.

• Cost Plus Contract: A contract where the contractor is reimbursed for actual costs incurred plus a fee or percentage for overhead and profit.

• Australian and New Zealand Standard Method of Measurement (ANZSMM): A standardised guideline for measuring building works, ensuring consistency and accuracy in estimating and billing practices across both countries.

• Addendum: A document issued during the tendering process that modifies or clarifies the original contract documents.

• Allowance: A specified amount included in an estimate to cover the cost of known but undefined work.

• As-Built Drawings: Revised drawings created after project completion, reflecting all changes made during construction.

• Back Charge: A charge against a subcontractor for work the general contractor had to perform due to the subcontractor's failure to do so.

• Base Bid: The cost proposed for the basic scope of work, excluding any alternates or options.

• Bid Bond: A guarantee that the bidder will enter into a contract if awarded, providing financial assurance to the project owner.

• Cost Breakdown Structure (CBS): A hierarchical representation of project costs, organised by categories and subcategories.

• Cost Plus Contract: A contract where the contractor is reimbursed for actual costs incurred plus a fee or percentage for overhead and profit.

• Critical Path Method (CPM): A project scheduling technique that identifies the sequence of crucial steps determining the project's duration.

• Dayworks: Work charged at agreed-upon rates, typically for tasks not included in the original contract scope.

• Direct Labour Costs: Wages and benefits paid to workers directly involved in the construction activities.

• Escalation Clause: A contract provision allowing for adjustments in the contract price due to changes in costs, such as materials or labour.

• Feasibility Study: An analysis conducted to assess the viability and potential costs of a proposed project.

• Final Account: A statement prepared at project completion detailing the total contract sum, including adjustments for variations and claims.

• Indirect Labour Costs: Wages and benefits for workers not directly involved in construction activities, such as supervisors and support staff.

• Labour Burden: The additional costs associated with employing labour, including taxes, insurance, and benefits.

• Life Cycle Costing: An analysis method that considers all costs associated with a project or asset over its entire lifespan.

• Overtime: Work performed beyond standard working hours, often at increased pay rates.

• Preliminary Costs: Expenses incurred before construction begins, such as design fees, permits, and site investigations.

• Principal Contractor: The main contractor responsible for the overall execution of a construction project.

• Productivity Rate: A measure of the output per unit of labour input, used to estimate labour requirements.

• Progress Payment: A partial payment made to a contractor based on the amount of work completed during a specific period.

• Punch List: A list of minor tasks or corrections required to complete a project, typically compiled during the final inspection.

• Retention: A percentage of the contract sum withheld until project completion to ensure all work is satisfactorily completed.

• Scope Creep: The gradual expansion of a project's scope without corresponding adjustments to time, cost, or resources.

• Shop Drawings: Detailed drawings provided by contractors or suppliers to illustrate specific portions of the work, such as fabrication details.

• Site Overheads: Indirect costs associated with managing a construction site, including site offices, utilities, and security.

• Submittals: Documents, samples, or mock-ups provided for approval before incorporating materials or products into the project.

• Takeoff Sheet: A document used to record measurements and quantities extracted from drawings during the takeoff process.

• Value Engineering: A systematic approach to improving the value of a project by analysing functions and identifying cost-effective alternatives.

• Bank Guarantee: A financial security provided by a bank on behalf of a contractor to ensure contractual obligations are met. If the contractor fails to fulfill their obligations, the client can claim the guarantee as compensation.

• Retention Money: A percentage of the contract value withheld by the client to ensure the contractor completes the work satisfactorily. It is typically released in stages, such as half upon practical completion and the remainder after the defects liability period.

• Defects Liability Period (DLP): A specified timeframe after project completion during which the contractor is responsible for rectifying defects. Retention money is often held until the end of this period to ensure compliance.

• Unconditional Performance Bond: A type of bank guarantee that provides immediate payment to the client upon demand, without requiring proof of contract breach. This ensures financial security for project owners in case of contractor failure.