In Plain English
Quick Answer
A very rough cost ballpark used to decide if a project is even worth pursuing.
Definition
Definition
A rough order of magnitude (ROM) estimate is the most preliminary cost assessment, prepared with minimal project information to give decision-makers a very approximate idea of project cost. Accuracy typically ranges from minus 50% to plus 100% of actual costs. ROM estimates are used to evaluate project feasibility before committing to design investment.
Context
Why It Matters in Bidding
ROM estimates let owners and GCs decide whether to invest in design before detailed documents exist, so estimators use them to screen feasibility, set early budgets, and frame financing conversations. Because the accuracy range is wide, it is critical to communicate the assumptions and the level of contingency baked in so the number is not mistaken for a hard bid.
Example
Example
Asked whether a new warehouse is feasible, an estimator builds a ROM using a square-foot cost from comparable projects and tells the owner the result is a planning figure that could swing materially as design develops.
See Also
Related Terms
FAQ
Questions Contractors Ask
How accurate is a ROM estimate compared to a bid?
A ROM is a planning-grade number with a very wide range, often roughly minus 50% to plus 100%, because it relies on minimal information and historical unit costs. A competitive bid is built from a detailed takeoff and sub quotes. Never present a ROM as a firm price; label its accuracy class clearly.
What information is needed to produce a ROM?
Often just project type, approximate size or square footage, location, and intended quality level. Estimators apply historical cost-per-unit data, regional adjustments, and judgment. Documenting the assumptions, exclusions, and an appropriate contingency is essential so decision-makers understand what is and is not covered before authorizing design spend.
When should I use a ROM instead of a detailed estimate?
Use a ROM at the earliest feasibility or budgeting stage, before there are documents to take off. It supports go/no-go decisions and financing discussions. As design progresses to schematic and design-development drawings, replace it with progressively tighter estimates that reduce contingency and narrow the accuracy range.
Need more than definitions?
Get AI-powered bid alerts, automated form filling, and proposal drafting.
Start Free Trial