Many people have the impression that developing a construction budget is as simple as taking the square footage of a proposed building and multiplying it by standard cost per square foot rates, which are available in publications such as RSMeans. While technically that is one method that can be utilized for construction budgeting, Cambridge Companies prefers to perform a deeper dive based on the needs of our customers and our experience in the waste industry.


Tasks required for construction budget development begin long before any numbers are crunched for a potential client. Before any pricing activities, there must first be preliminary scoping and programming activities performed to ensure that the proper scope is developed from the onset. During the scoping phase, our VP of Business Development and Scoping Manager will work with the client to define the programmatic requirements. During this phase, we will work with the client to gather initial information, perform a needs assessment, and prepare the preliminary site and floor plan options for the client. Once the site and floor plans are reviewed and refined to meet the needs and desires of the client, the conceptual budgeting process can begin.

As a nationwide design-build contractor, Cambridge has dozens of completed projects throughout the country to refer to while preparing preliminary conceptual budgets. As a result, Cambridge can review previously engineered details and incorporate the appropriate information into conceptual budgeting. We perform takeoffs on the conceptual site and floor plans and apply the quantity information in conjunction with previous project details against relevant historical pricing to identify line item pricing by construction CSI divisions. This allows our conceptual budgets to be more robust than a simple $/SF calculation and ensures that the conceptual budgeting is as realistic as possible with current cost information applied.

However, conceptual budgets are not only limited to the building construction and projected site development costs. Cambridge must also consider and properly budget the following items:

  • Project Schedule – accurately projecting the project schedule is imperative to include proper projections for field and office labor as well as soft costs and temporary items that will be required during construction.
  • Design Development Fees – accurate projection of design costs is crucial as this will be the first project-related expenditure. Costs must be properly conceptualized for architecture, MPE-FP Engineering, civil engineering, geotechnical engineering, and any specialized engineering that may be required for the project.
  • Contingency Fund – the contingency fund that is included during the conceptual budgeting phase should be based on the comfort level developed during the scoping/programming phase. The conceptual contingency fund will be used to cover unexpected costs that may arise during design development, material, and labor escalations, and other unknowns or budget misses that may occur before preparing the final construction budget.

Upon completion of the conceptual budget, it is beneficial to all parties involved for Cambridge to further clarify what has been specifically included. This is accomplished by preparing a conceptual Scope of Work and a conceptual Exclusions and Clarifications document for the potential client. These documents, used in conjunction with the conceptual budget and floor/site plan, allow for clarity in what has been included in the preliminary budget, detecting unknowns and specifically identifying scope exclusions.

Although our preferred method of conceptual budget development is not performed as quickly as standard $/SF pricing, we believe the method laid out above leads to a more complete and more accurate preliminary budget that potential clients can utilize for their internal evaluations and decision-making processes.

Lenny Zelms – Pre-Construction Services