Guide to Cost Analysis: Understanding a Detailed Cost Analysis for an Extension and Renovation



The construction quote should begin with an introduction that clearly states the document’s purpose, identifies the project and provides contact information for both the builder and the client.


Scope of Work

This section outlines the specific tasks and services included in the construction quote. It should include a detailed description of the architectural extension and renovation work. The scope of work may encompass areas such as demolition, site preparation, foundation work, structural modifications, plumbing, electrical, HVAC (heating, ventilation, and air conditioning), finishing, and any additional special features or requirements.


Materials and Specifications

The quote should list the materials to be used for different aspects of the project. This includes specifying the type and quantity of materials required.


When undertaking an architectural extension and renovation project, it’s important to have a comprehensive understanding of the construction quote provided by your builder. A detailed quote helps you comprehend the scope of work, the costs involved, and the timeline for completing the project. This guide aims to assist you in deciphering and analysing the components of a construction quote, making it easier for you to assess.



The pricing section is crucial for understanding the financial aspects of the project. It should be divided into different cost categories, including:

  • Labour Costs
    This details the estimated cost of labour, broken down by the number of hours or days required for each task. It may also include labour rates per hour or per day.
  • Material Costs
    This section should specify all materials, including a breakdown of individual items and their quantities.

  • Subcontractor Costs
    If the builder plans to engage subcontractors for specific tasks, they should be itemised separately.

  • Provisional Sums
    Provisional sums are estimates for specific work that cannot be accurately determined at the time of quoting. These may include items like specialised fixtures or unforeseen site conditions. It’s important to discuss and agree upon an appropriate amount for provisional sums with the contractor.

  • Prime Costs
    Prime costs refer to allowances set aside for items like fixtures, fittings, or appliances that have not been specifically selected or specified at the time of quoting. Similar to provisional sums, it’s advisable to discuss and agree upon an appropriate amount for prime costs with the contractor.

  • Equipment Hire
    If any specialised equipment needs to be hired for the project, the items should be clearly mentioned.

  • Permits and Inspections
    The quote should indicate if the cost of permits and inspections is included or if it is the responsibility of the client.

  • Contingency
    It is a good idea to include a contingency amount, usually a percentage of the total cost, to account for unexpected expenses or changes during the construction process. Overestimating the costs and including a higher contingency may provide a buffer and ensure that any additional funds not utilised are returned to the client at the end of the project.

  • Taxes
    Any applicable taxes, such as Goods and Services Tax (GST), should be clearly stated.



A construction quote should provide an estimated timeline for the project. This can be presented in the form of a Gantt chart, table or bullet points, indicating the start and end dates for each major phase or task. The timeline should also include any important milestones or deadlines.


Terms and Conditions

This section outlines the terms and conditions of the project, including payment terms, warranties, insurance, dispute resolution procedures, and any other legal or contractual considerations.


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