A construction estimate is a contractor's projection of the cost to complete a defined scope of work. It includes itemized labor, material, subcontractor, equipment, and overhead costs typically rolled up by trade or phase. Estimates may be high-level (square-foot benchmarks for budgetary planning) or detailed (line-item with quantities and unit costs).
An estimate differs from a bid in two ways. First, an estimate is informational and revisable; a bid becomes a binding contract price when accepted. Second, estimates are typically one-on-one between contractor and owner; bids are competitive among multiple contractors. Many residential remodel and design-build projects close on an estimate that converts directly to a contract without a formal bidding process.