Difference Between Net & Gross Construction Estimating

The benefits and costs of a construction project must be investigated.

Construction estimating is the practice of calculating the cost and potential profit of a construction project. Anyone involved in this process estimates the financial factors and puts them together for a total cost.

Considerations

The factors taken into account are standard for any business or construction venture. The cost of the materials (the type and quantity) will be a main factor, as will the cost of labor (in wages, expertise and maintenance). The type and maintenance of the machinery and the amount of time needed would also factor into the equation.

Gross Estimate

A gross estimate of any project is a calculation of the financial gain (profit) from its completion without taking into account the initial cost of construction and continued cost of maintenance. Therefore, gross construction estimating would be taking the profit of the construction without the deducted costs.

Net Estimate

A net construction estimating is the exact opposite to a gross construction estimate. This takes all costs attributed to the construction project and deducts them from the profit estimation.

References

• The Associated General Contractors of America: Estimating Training