Design Driven by Accurate Cost Data

Using independent, up-to-date sources helps assure project success
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Sponsored by RSMeans data from Gordian
By Peter J. Arsenault, FAIA, NCARB, LEED AP
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Having access to this longer-term predictive cost data can help construction projects from several standpoints. For building owners and developers, predictive cost data dives deeper than just the costs of site selection and land acquisition—it provides a view into the market for labor availability and material price increases that could support building in the identified location. Furthermore, real estate developers often negotiate tenant fit-outs and build to suit projects. These negotiations include determining the price of certain items up to two years in advance. If the prices have increased by the time construction begins, the overall project is already over budget. To avoid that, predictive cost data allows real estate professionals to evaluate markets for labor availability and accurately predict material prices to negotiate better future contracts for long-term project success.

For design and construction teams, managing a budget over time can be a real challenge. Take, for example, a fast-food restaurant that plans to open 100 new stores over the next five years. Each store will be in a different location, and in time, the costs of materials and labor will rise and fall in different markets. Predictive data does more than give an estimate of the total cost or even scaling cost over time; rather, it allows the project team to optimize the build schedule and determine when and where the next store should be erected based on market conditions. When using a true predictive multivariate database including individual material, labor, and equipment data, statistical tests show that cost estimates have been accurate within less than 3 percent up to three years in advance of the construction start. This means that owners, architects, engineers and other construction professionals can confidently predict future costs by applying a predictive cost dataset to even conceptual construction square foot models.

Ultimately, the core value of using accurate predictive cost data at the material, labor, and equipment level is the unprecedented ability afforded to construction professionals to understand future costs of projects. It also provides a reliable source to help building owners to plan on a reasonable contingency to cover price fluctuations if they are expected to occur. Of course, such future-proofing techniques can be complex to develop, maintain, and incorporate. Therefore, it is likely going to be best to rely on independent, third-party sources to provide reliable predictive cost data.


Accurate and reliable cost estimating is an important part of any construction project. There are a variety of factors that can influence the quality and credibility of any cost estimate. Once a process is established though, regular updating of a cost estimate, including variations to suit different design options, can help design professionals make better, more informed decisions to work within a building owner’s budget. When appropriate, incorporating a proper value-engineering process based on accurate estimates can reveal the best choices to give the owner the best value for the investment. In situations where the actual construction is in the future, predictive cost data is an emerging but extremely valuable tool to achieve greater accuracy. In all cases, independent, professional, third-party cost-estimating data sources provide design professionals with an added layer of credibility and reliability to meet budget and cost requirements for all types of construction projects.

Peter J. Arsenault, FAIA, NCARB, LEED AP, is a nationally known architect and the author of more than 200 continuing education courses for design professionals.,


Gordian Gordian is the world’s leading provider of construction cost data, software, and services for all phases of the construction life cycle. From planning to design, procurement, construction, and operations, Gordian delivers groundbreaking solutions to contractors, architects, engineers, educational institution stakeholders, facility owners, and managers in nearly every industry.
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Originally published in Architectural Record
Originally published in August 2019