Estimating for Unknowns

Deen Gabriel
Jul 18
2 min read

The Estimator’s Balancing Act

Uncertainty is baked into construction — from evolving designs to unpredictable site conditions. Estimators must walk the line between precision and flexibility, especially when dealing with provisional sums, contingencies, and scope creep.

📦 Provisional Sums: Pricing the Undefined

Definition: A placeholder amount for work not fully defined at tender stage.

Techniques:

Defined vs. Undefined Sums: Clarify scope, location, and limitations to determine whether the contractor should allow for preliminaries2.
Transparent Documentation: Record assumptions and scope clearly to avoid disputes.
Valuation Strategy: Use fair rates or Schedule 2 quotations when instructed to proceed.
Risk Allocation: Undefined sums shift risk to the employer; defined sums imply contractor planning.

💰 Contingencies: Budgeting for the Unexpected

Definition: Reserved funds for unforeseen costs not tied to specific scope items.

Techniques:

Risk-Based Allocation: Use historical data and project complexity to set contingency percentages.
Periodic Review: Adjust as risks evolve and more information becomes available.
Stakeholder Communication: Keep clients informed about contingency usage and rationale.

🔄 Scope Creep: Managing the Slow Expansion

Definition: Uncontrolled changes or continuous growth in a project’s scope.

Techniques:

Change Control Protocols: Formalize variation requests and approvals.
Estimate Buffering: Include allowances for likely client-driven changes.
Client Education: Use estimate sets to explain base vs. optional vs. alternative pricing — a strategy you already apply well.

🛠️ Tools & Best Practices

Digital Estimating Platforms: Use tools that allow real-time adjustments and audit trails.
Collaborative Reviews: Engage design teams early to refine provisional scopes.
Cost Reporting: Track provisional sum usage and contingency drawdowns to maintain transparency4.

🧠 Conclusion: Estimating with Foresight

Handling unknowns isn’t about guessing — it’s about building resilient estimates that adapt as clarity emerges. With the right techniques, estimators can turn uncertainty into strategic advantage.