What Is A Should-Cost Estimating?
Should-cost estimating determines what a project, scope, or procurement package should reasonably cost based on market conditions, labor requirements, materials, and productivity.
Rather than accepting submitted pricing at face value, should-cost estimates establish an independent benchmark.
Benefits of Should-Cost Estimating
- Improves negotiations
- Validates subcontractor pricing
- Identifies cost drivers
- Reduces procurement risk
- Supports owner decision-making
Common Applications
Should-cost estimating is often used for:
- Procurement packages
- Change orders
- Vendor negotiations
- Budget validation
- GMP reviews
Key Components
A should-cost estimate typically evaluates:
- Labor
- Materials
- Equipment
- Productivity
- Escalation
- Risk factors
Final Thoughts
The best negotiators rely on data, not assumptions.
Should-cost estimating creates transparency, improves procurement outcomes, and helps organizations make more informed decisions.
At TBT Estimating Services, we develop independent should-cost estimates that help clients validate pricing, strengthen negotiations, and improve project profitability.