A construction cost estimate is the full cost predicted for building a project, calculated from quantities measured off the design drawings and the price of each work item.
Put another way, an estimate answers one question: what will this building cost, and how does that money divide up.
This article answers the second half — what the estimate contains — under the rules currently in force in Vietnam. Since 1 July 2026 that is Decree 206/2026/ND-CP, issued on 15 June 2026, which repealed Decree 10/2021/ND-CP. One item inside it has moved, and a great deal of material online has not caught up.
Anyone who wants to learn the trade rather than look up a structure should read the six-week estimating path, or take the construction cost estimating course.
The six cost groups
Article 12 of Decree 206/2026 lists six groups. Five are real costs of the works; the sixth is calculated on the total of those five.
| Cost group | What it covers | How it is determined |
|---|---|---|
| Construction cost | The largest part of the estimate, set out below | From quantities in the design and the corresponding construction prices |
| Equipment cost | Buying building and process equipment, fabrication, remaining equipment costs | From the quantity, number and type in the design, and the purchase price |
| Project management cost | The client's cost of running the project | Under Article 25 of the Decree |
| Consultancy cost | Survey, design, appraisal, supervision and other consultancy services | Under Article 26 of the Decree |
| Other costs | Items not falling in the four groups above | By published cost norms, or by preparing an estimate |
| Contingency | For additional quantities and for price escalation | A percentage of the total of the five groups above |
Beginners misread contingency in one particular way. It is not a sixth group standing alongside the other five. It is calculated on the total of those five, so an error in the quantities does not stop there; it carries into the contingency as well.
The escalation part in particular must follow the construction period set out in the project programme, combined with a price index suited to the type of work. It is not a fixed percentage carried over from the last project.
What construction cost contains, and the item that moved
Construction cost is always the largest group in an estimate. Under Article 12 clause 2, it has five components.
- Direct cost: materials, labour, and plant and construction equipment. This is the part calculated from measured quantities multiplied by the corresponding construction prices.
- Indirect cost: overheads, plus work whose quantity cannot be taken from the design. Determined by a percentage norm, or by preparing an estimate.
- Pre-tax profit, determined by a percentage norm.
- Value added tax, as prescribed.
- Site accommodation and construction management cost, determined by a percentage norm or by preparing an estimate.
That last component is what changed. Under the repealed Decree 10/2021, site accommodation sat inside indirect cost alongside overheads. Decree 206/2026 pulls it out as a component of construction cost in its own right.
It sounds small, and the consequence is very concrete for anyone preparing a submission. The summary sheet gains a line of its own. The percentage applied to indirect cost no longer carries the accommodation, so lifting a 2025 spreadsheet across produces an error on the first line.
This is also why, when choosing study material, you check which document it was written against before trusting it. A quick way to check is in the map of construction decrees still in force.
Three things all called an estimate
In one meeting, three people can say "estimate" and mean three different things. Decree 206/2026 separates them across three consecutive articles.
The construction cost estimate (Article 12) is what most people in the trade mean. It is based on quantities taken from the design produced after the project is approved, together with the technical specification, the programme and the construction method.
The tender package estimate (Article 13) is narrower, covering one or several items: consultancy, construction work, supply of materials and equipment installed in the works. It follows the scope of the package, or is taken from the approved total investment and construction cost estimate. It leads to the package price — the figure a bidder has to work against, which connects to how an estimate differs from a tender price.
The work item estimate (Article 14) applies to work that has no construction norm yet, or no guidance for pricing it. It is built from the terms of reference, the content and the scope of the work.
The good habit here is simple: before starting, ask which estimate is wanted.
How an estimate differs from total investment and from the final account
These three figures all describe the money on one project, at three different moments, and they are never equal.
| Prepared when | Based on | Used by | |
|---|---|---|---|
| Total investment | At project formulation, before the detailed design exists | Basic design, investment rates, data from similar projects | The investment decision maker, to approve the project and allocate funds |
| Construction cost estimate | After project approval, once the detailed design exists | Quantities measured off the drawings and the price of each work item | The client, to manage cost and as the basis for tendering |
| Final account | On completion | Quantities actually built, the contract, and approved variations | Client and contractor, to settle the final sum |
Accuracy rises along that sequence, because each step has more information. A difference between the estimate and the final account is not automatically an error: it reflects variations, price adjustment and design changes during construction. The paperwork that justifies those differences is covered in what a payment and final account file contains.
Who prepares it, who checks it, who approves it
These three are often treated as one job by newcomers, but they belong to three different parties.
- Preparing the estimate is usually done by the design consultant or a cost consultant, and sometimes by the project management unit itself where it has the capability.
- Appraisal and verification is the checking step, set out in Article 16. The checking party is independent of the preparing party, and this is where measurement errors are usually caught.
- Approval rests with the client or the investment decision maker, under Article 17. An estimate only becomes usable after this step.
One more thing worth knowing for anyone planning a career. Since 1 July 2026 the construction cost practising certificate is no longer issued; capability is now assessed on conditions and real experience. The detail is at the end of what a quantity surveyor is.
The six steps of preparing an estimate
The working sequence has six steps, and the one that takes longest is always the second.
- Read and understand the drawings. If you cannot read the drawings you cannot measure. This is why the construction drawing reading course sits before the estimating course in the Institute's path.
- Measure the quantities for each work item, following the measurement rules. Seven common mistakes at this step are listed in what quantity take-off is.
- Look up the norms for each item, giving the material, labour and plant consumption.
- Apply prices for materials, labour and plant, from the published local prices or from market prices at the date of preparation.
- Calculate the percentage items: indirect cost, pre-tax profit, tax, site accommodation, contingency.
- Build the summary sheet and write the statement of basis, setting out every source used.
Software only helps from step three onwards. The first two steps remain human work, and that is exactly what separates someone who can do the job from someone who can only operate the software.
Frequently asked questions
What is a construction cost estimate in one sentence?
The full predicted cost of building a project, calculated from quantities measured off the design drawings and the price of each work item, in the six groups listed in Article 12 of Decree 206/2026.
What does preparing an estimate actually involve?
Reading the drawings, measuring each work item, looking up norms, applying prices, calculating the percentage items, then building the summary sheet with a statement of the basis used.
Are construction cost and the cost estimate the same thing?
No. Construction cost is one of the six groups in an estimate, though usually the largest. The estimate also carries equipment, project management, consultancy, other costs and contingency.
Which document currently applies?
Decree 206/2026/ND-CP, in force from 1 July 2026, replacing Decree 10/2021/ND-CP. The detailed methods sit in Circular 36/2026/TT-BXD.
How does an estimate differ from total investment?
Total investment comes earlier, from the basic design and investment rates, and supports the decision to proceed. The estimate comes after the detailed design, from measured quantities, so it is more accurate.
Is a practising certificate needed to prepare estimates?
Since 1 July 2026 the construction cost practising certificate is no longer issued. Capability is assessed on conditions and experience, so the record of projects you have worked on is what proves it.