First Principles Estimate definition
First Principles Estimate means a cost estimate derived by calculating the cost of each item of a project by multiplying the quantity of work by historical unit rates. The project cost is then determined by the sum of the elemental costs. The unit rate is normally determined from a careful analysis of unit costs from a number of recently completed projects of the same type, with allowances being made for project differences. The cost estimate may be adjusted to consider differences in inflation, site conditions, market conditions, scale of the works, site location, design complexity, risk profile, ground condition, specialised construction methods and standard of material specification.