Construction cost estimates improved with Monte Carlo method over single figures

A DEV Community article critiques the standard practice of pricing construction bids using only a single 'most likely' cost for each line item, arguing it leads to underestimates. It explains that because potential cost overruns are often larger than potential savings, the average outcome exceeds the most likely one, a gap magnified across multiple skewed items. The article advocates for a three-point estimate method, requiring a minimum, most likely, and maximum cost for uncertain items, paired with a chosen distribution like Triangular or Beta-PERT for Monte Carlo simulation. This process aggregates the ranges to produce a total cost estimate at a chosen confidence level, such as P80, which is more reliable than a simple sum of single-point figures.