Over the past six months, Gordian’s Market Planning team has been dedicating significant time to answering a surprisingly nuanced question – how and where does cost estimating fit into the typical design workflow?  
 
Although we felt confident that we understood the general process and data behind this question, this topic led us into a deep review of the major stages of construction design. Our exploration with many customers and industry experts provided some interesting learnings that we want to share.

Most construction design projects can be broken down into four main stages.  

Design often starts with a Feasibility Study [5% design detail], wherein little is known of the project parameters beyond a high-level description of the desired outcomes. Feasibility studies may often be considered sales activity by design principals, and they are typically costed at a very high-level using historical square foot costs or a conceptual modeling tool. 

After approvals from the owner on Feasibility, enter the Schematic Design stage [15-20% design detail]. Here, major systems are developed and put together. For more complex projects, schematic designs may be distributed to experts in MEP, Structural or Civil system design for their specialized input. Cost estimating here, if shared with the project owner, is typically done at the system or assembly level.  

Design Development [30-60% design detail] is the next stage, and this is where our research indicated most cost estimating occurs within the AE firm. Value Engineering becomes a more frequent talking point, and across the board this is the stage where project owners push back on design where cost is concerned. Many design principals have professional estimators on staff or contract to review designs at this stage. With increasing granularity in the design, cost estimates are often taken all the way down to the unit cost, and parametric quantities become more and more important.    

In the final stage, design principals begin focusing on delivering Construction Documents [60-100% design detail]. Final value engineering decisions are mostly completed in Design Development, so project specifications are built during this stage. Our research indicated that by this stage of the design, most of the negotiation with project owners (and contractors in Design-Build) has been completed. This leaves cost estimating more focused on quantity management than on re-estimating.

We found through our research that these stages are almost universally understood, but that the lines between them can blur depending on the scope and parameters of the project. For example, we found that in Design-Build, the lines between Schematic Design and Design Development were much blurrier than in a traditional Design-Bid-Build model.

We found that principals at design firms deeply understand the value of cost estimating at every stage of the design process but feel the pain of wasted time in those efforts. Principals desire to spend more time collaborating on design with owners and creating designs with their designers. However, they're often forced to spend that time conducting manual cost estimating from various sources at different stages, they take time to revise and redesign if their costs come in over budget, and they spend time sourcing and interpreting detailed estimates from engineers/estimators during Schematic and Design Development.