What is ROM (Rough Order of Magnitude) & How to Use It

A Rough Order of Magnitude, or ROM, is a quick construction estimate used to forecast construction project cost and effort in the very early stages. These steps show how to apply the ROM formula using different types of input data and assumptions.

In this guide, you’ll learn exactly what ROM means in construction, how accurate it is, when to use it, and how to calculate one that holds up even with limited information. Let’s start with the basics.

What is a ROM Estimate, and Who Prepares it for Construction Projects?

A ROM estimate supports fast decisions when full design inputs aren't available yet. In construction, it gives teams a directional cost range based on early scope and assumptions. It helps owners, consultants, and project teams understand what a job might cost based on early inputs.

The ROM is used in the concept phase to test feasibility, request funding, or compare options. You’re often working with a basic brief, maybe a square meter count, and a few early assumptions.

Now, who creates a ROM? That depends on the project.

• On larger builds, a cost consultant or estimator usually takes the lead.
• On smaller or client-side projects, the construction project manager may prepare it.
• In early bids or feasibility work, it might come from a design or pre-construction team.

Even when a PM doesn’t calculate it directly, they’re the one who manages it. They coordinate the inputs, validate the assumptions, and deliver the number to the client or internal stakeholders.

ROM estimates are based on:

• Past project data.
• Unit cost rates (like $/m² or $/fixture).
• SME input or early engineering advice.
• Concept-level drawings, if available.

Project managers use ROMs to keep momentum. They help teams respond quickly, shape early design choices, and start conversations with numbers, not guesses.

Read our construction estimating guide to learn how detailed forecasts help control costs across a project’s lifecycle.

What is the Accuracy Range of a ROM Estimate?

A Rough Order of Magnitude (ROM) estimate has an expected accuracy range of -25% to +75%. That means your actual project cost might land 25% below or up to 75% above the estimated number.

This wide range exists because ROM estimates are created before detailed scope, specs, or designs are available. You’re working with early inputs, rough assumptions, and broad cost models.

Use this ROM calculation formula to set cost boundaries:

• Lower bound: ROM estimate × 0.75
• Upper bound: ROM estimate × 1.75

Let’s say your ROM estimate is $4 million. That gives you a working cost range of:

This is what stakeholders see when they ask for a ROM. It’s a best guess with guardrails designed to show how much uncertainty still exists.

Some teams use a ±50% range if they want to present a tighter band. That’s fine, as long as you communicate it clearly and match the method to the level of scope available.

The more unknowns, the wider the band. Risk, complexity, location, and delivery method all affect the final spread.

A new build on a greenfield site with environmental permits pending? Stick to the full -25% to +75%. A repeat fit-out in a space you’ve built in before? You can narrow it down.

Project managers and estimators use ROM ranges to manage expectations, not overpromise. The range keeps room for movement, especially when key decisions haven’t been made yet.

When Should You Use a Rough Order of Magnitude Estimate?

Use a Rough Order of Magnitude (ROM) estimate at the very start of a project, when there’s interest, a general idea of scope, but no detail yet. It’s the tool you reach for before construction drawings exist, before consultants get engaged, and before cost plans are developed.

Construction PMs use ROMs when a decision needs to happen fast but information is still loose. It’s your best move when someone asks, “Can we afford this?” or “Is this even worth looking at?”

Here are the most common moments to use a ROM:

• Feasibility studies.
• Concept design or masterplanning.
• Preliminary business case development.
• Early-stage capex approvals.
• Bid strategy or go/no-go decisions.
• Project portfolio prioritization across multiple sites.

A ROM estimate in construction is also useful during project interviews or competitive bids. If a client wants directional pricing to shortlist vendors or align project scope, a ROM keeps things moving without waiting for detailed cost models.

You can also use a ROM when comparing multiple options fast:

• New build vs. renovation
• Shell-and-core vs. full fit-out
• Staged delivery vs. single-phase rollout

The goal is clarity, not certainty. ROMs help you sort direction from noise. They give teams a realistic sense of scale before investing time in precision.

If you want a quick starting point for your estimate, try our construction cost calculator.

How to Calculate a Rough Order of Magnitude Estimate

To calculate a ROM, start with a base estimate using unit costs, early inputs, or expert judgment. Then apply a range—usually –25% to +75%—to reflect uncertainty.

The steps below show different methods based on the type of data or scope you’re working with.

1. Use the ROM Formula to Set Your Estimate Boundaries

Start with a base number - this might come from a similar past job or high-level pricing. Then apply the standard ROM accuracy range.

• Lower bound = Estimate × 0.75
• Upper bound = Estimate × 1.75

Example:

Early estimate for a regional ambulance depot: $12 million

• ROM range = $9 million to $21 million.
• Presented as: “Based on early assumptions, ROM pricing falls between $9M and $21M.”

This communicates uncertainty while keeping the conversation moving.

2. Start With Analogous Estimates Based on Past Projects

Use a completed project as your base. It should match closely in type, size, and spec.

Example:

You're estimating a new 6,000 m² warehouse shell.

• A similar facility was delivered two years ago for $2,400/m².
• Adjusted for escalation (+8%) and new site constraints (+4%).
• ROM base = 6,000 × $2,700 = $16.2 million.
• ROM range = $12.15 million to $28.35 million.

This approach is fast and reliable when applied to familiar scopes.

3. Use Parametric Estimating When Unit Rates Are Known

This method works when scopes are repetitive and design variation is low. It’s especially useful for early pricing on modular or multi-unit builds.

Example:

You’re estimating an affordable housing block with 40 units.

• Cost per unit (from historical data): $360,000.
• ROM base = 40 × $360,000 = $14.4 million.
• ROM range = $10.8 million to $25.2 million.

Common unit cost types in construction:

• $/m² (for commercial fit-outs).
• $/MW (for solar farms).
• $/bed (for healthcare).
• $/seat (for education or stadium projects).

Parametric estimating gives you speed and scalability when you have solid unit benchmarks. Just make sure the cost driver aligns with the project's actual scope.

4. Use Expert Judgment If You Lack Hard Numbers

Use this method when you have limited data and the scope is still evolving. Expert input helps ground the estimate in real-world experience.

Example:

You’re estimating a new wastewater treatment plant with early scoping only.

• Lead engineer provides a ROM of $30–45 million.
• Based on plant size, design intent, and recent regional benchmarks.
• You document assumptions and note that scope refinement is underway.

This approach is common in utility, infrastructure, and public sector work. It gives teams a directional estimate when data isn’t yet available but decisions still need to be made.

5. Apply Three-Point Estimating to Handle Uncertainty

Use this method when there’s wide variability in risk, cost, or scope. It captures possible outcomes across best-case, likely, and worst-case scenarios.

Example:

You're estimating a retrofit of a live data centre.

• Optimistic (O): $18 million.
• Most likely (M): $22 million.
• Pessimistic (P): $30 million.

ROM base = (O + 4M + P) ÷ 6

(18 + 88 + 30) ÷ 6 = $22.67 million

ROM range = $17 million to $39.6 million

Three-point estimating helps you quantify uncertainty instead of guessing. It works well when the risk range matters more than a single number.

6. Validate With a ROM Range Table Before Presenting

Make your estimate easy to digest. Structure it clearly.

Here’s a sample ROM range table to show how to structure your estimate clearly:

This gives stakeholders something they can work with. Even at an early stage, clarity matters.

7. Final Check: Ask These Before You Submit

Always review your ROM before it goes out. A quick check can prevent confusion later.

Before submitting your ROM estimate, double-check these key questions to avoid costly mistakes:

• Does the estimate reflect current market conditions?
• Are the scope assumptions clear and realistic?
• Have I matched the range to the right project type and risk level?
• Would another team member come to a similar number?
• Can I explain every line if asked?

ROM estimates need to be fast, but they also need to hold up under pressure. When they do, they unlock planning, buy-in, and better outcomes.

What Estimating Techniques Can You Use for ROM in Construction?

The method you choose to create a ROM depends on what you know early. In construction, the best method depends on the scope, data, and certainty needed. Each method suits different data and urgency needs.

The three most common ROM estimating techniques in construction are:

1. Analogous Estimating

This is the fastest method. You base your ROM cost on a similar, completed project.

Analogous estimating works best when:

• You’ve delivered a similar scope recently.
• Costs and conditions were well-documented.
• The project type is repeatable (e.g. warehouses, schools, fit-outs).

Example:

Last year, your team completed a two-storey office building at $2,300/m². You now apply that rate to a new 5,000 m² facility with minor design changes.

• Base cost: 5,000 × $2,300 = $11.5 million.
• ROM range: $8.6 million to $20.1 million.

This method relies on clear comparisons and professional judgment.

2. Parametric Estimating

Parametric estimating multiplies unit costs by known quantities to build a quick estimate. It’s best when scopes are repeatable and cost data is strong.

Parametric estimating works well when:

• You know the key driver (e.g., area, beds, seats, panels).
• Past cost data is reliable and relevant.
• The design approach is standard or modular.

Example:

You’re estimating a hospital wing with 36 inpatient beds.

• Unit cost per bed: $520,000.
• ROM base = 36 × $520,000 = $18.72 million.
• ROM range = $14 million to $32.8 million.

You can also apply parametric costs per square meter, per MW, per parking bay, or classroom.

3. Three-Point Estimating

Three-point estimating helps account for uncertainty in early scope and cost. It balances risk by capturing a range of possible outcomes.

This three-point estimating method helps reflect uncertainty using three values:

• Optimistic (O): best-case cost.
• Most Likely (M): expected cost.
• Pessimistic (P): worst-case cost.

Then use this formula:

E = (O + 4M + P) ÷ 6

Example:

You’re estimating a complex library upgrade.

• O = $8 million
• M = $10.5 million
• P = $14 million
• E = (8 + 42 + 14) ÷ 6 = $10.67 million

Apply a ROM range if needed to show early tolerance. Three-point estimating is useful for custom projects, risk-heavy scopes, or work in unknown conditions.

Each of these methods helps you build a ROM that's grounded, not guessed. Pick the one that fits your project and available data.

Rough Order of Magnitude vs Definitive Estimate: What’s the Difference?

A ROM estimate helps you move quickly when details are still taking shape. It’s used to guide early conversations, test feasibility, and offer a rough cost range for new projects. A definitive estimate comes later, when scope is locked and drawings are complete. You build it to support pricing, tendering, or funding decisions with greater accuracy.

Use this quick comparison table to decide when to use a ROM estimate vs a definitive estimate:

Here's how ROM and definitive estimates differ across real construction workflows:

A clear understanding of both estimates helps you plan smarter across phases. Knowing when to use each type lets you manage expectations, control cost exposure, and reduce rework before it happens.

Example of a Rough Order of Magnitude Estimate

Let’s say you’re managing a new commercial construction - a warehouse project. The client wants a quick sense of what it might cost before committing to detailed design.

You know the site is 8,000 square metres and the build is a basic single-storey shell with minimal services.

You look at two recently completed warehouses of similar scale:

• Project A: $2,150/m² (built last year in a nearby region).
• Project B: $2,280/m² (with similar finishes and site conditions).

You average the two and apply $2,200/m² as your ROM base rate.

• ROM base = 8,000 × $2,200 = $17.6 million

Now apply the ROM estimate range:

• Lower bound (–25%) = $13.2 million.
• Upper bound (+75%) = $30.8 million.

You present it as:

“ROM estimate based on comparable builds is $17.6M. Expected cost range: $13.2M to $30.8M.”

You include a short list of assumptions:

• Warehouse shell only, no fit-out.
• Flat site, no major groundworks.
• Services are limited to basic lighting and ventilation.
• Rates adjusted for location and current pricing.

This estimate helps the client move ahead with land planning and confirms the job sits within their capital budget. No need for a QS or cost plan just yet - this ROM keeps things moving.

Why ROM Estimates Are Essential for Stakeholder Buy-In and Budget Control

A ROM estimate gives your stakeholders something to react to early. It sets the tone for budget conversations before scope creep, design revisions, or competing priorities take over. Without a ROM, you’re guessing. With one, you’re leading.

Clients and internal teams need a number to anchor expectations. Even if it’s a range, it helps them say yes, no, or not yet. ROM pricing gives that number before things get too expensive to pause or pivot.

Here’s why ROM estimates matter:

• They frame expectations early. You avoid sticker shock later when real costs emerge.
• They help shape the scope. Knowing if you’re in the $5M or $15M range changes what you plan for.
• They support board approvals. Capital projects can’t wait for full design to get funded.
• They give consultants and designers a working target. No one wants to waste time designing something no one can afford.
• They let you flag risk and uncertainty upfront. When you show a ROM range, you also show how much room still exists for change.

ROM estimates also keep budgets under control. If you're tracking early assumptions, it's easier to see when costs start drifting. That’s valuable when projects stretch over months or years.

Early ROMs help project managers lead with clarity. They support faster decisions and tighter project cost control.

Best Practices for Managing ROM Estimates in Construction

ROM estimates work best when they’re structured, easy to read, and shared clearly across the team. They help guide early decisions, support alignment, and avoid rework before it starts.

Use these ROM estimate best practices to improve accuracy, version control, and team alignment:

• Keep ROMs consistent across the team: Use a standard template with fixed fields for scope, assumptions, and range. Consistency helps everyone review, compare, and update estimates quickly.
• Track every version and update: Add a version number, date, and owner to each ROM. Log changes when scope or inputs shift so the whole team stays on the same page.
• Review at each project gate: Before a decision is made, revisit the ROM. Make sure it reflects the current scope, timing, and risk profile.
• Share your logic early and often: Add notes that explain the data source, method used, and key assumptions. When your estimate is traceable, it’s easier to trust.

Clear ROMs help teams act with confidence. They support early decisions, reduce confusion, and keep momentum. When your estimate is easy to follow, it’s easier to use.

Tools and Templates for Creating ROM Estimates

Rough Order of Magnitude estimates are easier to build and manage with the right tools. Construction teams use software and structured templates that support early estimating logic, cost range clarity, and shared visibility.

Here are some of the most useful tools for preparing ROM estimates in construction:

1. Mastt

Mastt is purpose-built for capital projects, government clients, and owner-side PM teams. It tracks ROM estimates alongside scope, budgets, and approvals, so early assumptions stay visible through the full project lifecycle. Mastt also simplifies version control and gives internal and external teams access to the latest ROM data without the email back-and-forth.

2. Excel or Google Sheets

These tools are ideal for quick ROM builds, especially in early feasibility or client-side scoping. You can apply standard ROM formulas, define cost ranges, and document assumptions in one place. They're flexible and widely understood, which makes them useful when speed matters and inputs change often.

Just keep in mind that spreadsheets are prone to manual errors. Always double-check formulas and version control.

3. Wrike

Wrike works well for collaborative estimating during design, consulting, or bid phases. You can structure estimation tasks, assign inputs, attach briefs or historical data, and track feedback across multiple users. It’s especially useful for coordinating ROMs across multiple contributors in a shared workspace.

4. PlanSwift

PlanSwift is a US-based digital takeoff and estimating tool that helps with early quantity reviews and budget inputs. It’s especially useful when ROMs are based on concept drawings or schematic plans. Estimators and PMs can use it to pull rough quantities and apply unit rates quickly, even before full design is available.

5. ProEst by Autodesk

ProEst supports early construction estimating by combining cloud-based takeoff tools with cost libraries and historical pricing. It’s well suited for US contractors, estimators, and preconstruction teams looking to align ROM estimates with real market benchmarks, even at the feasibility stage.

The tools you use shape how estimates are created and shared. Mastt helps teams manage ROMs with scope, budget, and approval tracking in one place. It’s built for construction projects where early estimates support real-time decisions.

Setting the Foundation for Better Cost Decisions

A strong ROM estimate gives your team early control. It shows you've made informed calls with what’s available. That clarity builds trust, especially when the next step depends on the numbers you share.

Keep it practical. Define the range. Document your inputs. Let it reflect the phase you’re in, not where you’re heading. If it’s honest and well structured, it will support the decisions that matter most.