| Project definition | 10% to 40% of full definition |
|---|---|
| Typical end usage | Full funding approval, business case, the first control budget |
| Estimating method (general, RP 18R-97) | Semi-detailed unit costs with assembly-level line items |
| Estimating method (road and rail, RP 98R-18) | Measured quantities and unit-rate line items, often at assembly level, with factoring only for minor areas |
| Expected accuracy (80% confidence) | Low: −10% to −20% High: +10% to +30% |
| Other names | Budget, sanction, authorisation, preliminary control, FEED, business case estimate, FEL 3 |
| Typical stage | FEL 3; Queensland PCEM: Development (business case, S1D) |
AACE Estimate Classification: Budget Authorisation
AACE Class 3 Estimate
The estimate that gets a project funded. A Class 3 estimate supports the final investment decision and becomes the first budget that actual costs are measured against.
Updated 2 October 2026
At a Glance
Class 3 Estimate Characteristics
The five attributes AACE uses to describe each class. Project definition maturity is the one that decides the class; the others follow from it.
Overview
What a Class 3 Estimate Is
A Class 3 estimate is prepared when 10% to 40% of the project is defined, and many owners tie it to a 30% design review. For road and rail work that usually means a completed concept design, a confirmed and surveyed route, materials and systems defined, land holders identified, approvals in preparation and an execution plan agreed.
Its expected accuracy is -10% to -20% on the low side and +10% to +30% on the high side. Projects in an existing corridor or shared right of way can sit at the tighter end; greenfield or politically sensitive projects at the wider end.
Because it supports funding, the Class 3 estimate is the one that is most often scrutinised, reviewed and later compared with the outturn cost. A clear basis of estimate and a risk-based contingency are what make it defensible.
What needs to be defined
Typical status of key deliverables for a road or rail project at Class 3. The class follows the weakest deliverable that materially affects cost, not the average.
- Concept design complete for road, rail and structures
- Route confirmed and optimised, with site conditions confirmed by survey and investigation
- Utilities, systems and materials defined well enough to obtain market pricing
- Land holders identified, approvals and environmental documentation prepared, execution and contracting plans agreed
How it is prepared
Class 3 estimates are mostly bottom-up. Quantities are measured from the design and priced with unit rates, though often at an assembly level (for example a rate per square metre of bridge deck) rather than every individual component. Factoring is kept for minor, less defined areas.
For Cenex this is where first-principles build-ups earn their place: major items are built up from crews, plant, materials and productivity, so the estimate can be reviewed line by line and carried forward into later classes.
Worked Example
What the Class 3 Range Means in Dollars
Illustrative figures for a business case estimate for a bridge replacement at around 30% design: an estimate of $25M including contingency.
| Project risk profile | Accuracy range | 80% confidence range of final cost |
|---|---|---|
| Well understood, low risk (tight end of the band) | −10% / +10% | $22.5M to $27.5M |
| Complex or high risk (wide end of the band) | −20% / +30% | $20M to $32.5M |
Try it with your own estimate
The accuracy range calculator applies the published bands for every class to your figure, and shows where your project might sit within them.
Open the calculatorAACE stresses that these bands are typical outcomes, not targets. The range for a particular estimate should come from a quantitative risk analysis. See P50 and P90 explained.
Avoid These
Common Class 3 Mistakes
- Classifying an estimate as Class 3 because the design is '30%' when key deliverables such as geotechnical data are not
- Adding a percentage contingency instead of one derived from risk analysis
- Omitting escalation to the midpoint of construction, which on long programmes can exceed the contingency
- Publishing a single number without the P50 and P90 values the decision-makers actually need
In Queensland, a Class 3 estimate broadly corresponds to the PCEM Development (business case, S1D) phase. The mapping is approximate; see AACE vs PCEM for how the two frameworks line up.
FAQ
Frequently Asked Questions
What is an AACE Class 3 estimate?
A Class 3 estimate is prepared with 10% to 40% of project definition, usually around a 30% design, to support full budget authorisation. It uses semi-detailed unit costs with assembly-level line items and has an expected accuracy of -10% to -20% on the low side and +10% to +30% on the high side at 80% confidence.
Is a Class 3 estimate accurate enough for a business case?
Yes. Class 3 is the class AACE associates with budget authorisation and funding approval, and it is the usual basis of a final investment decision. Its accuracy depends on a proper risk analysis and contingency, not on the class label alone.
What does -20% to +30% mean for a Class 3 estimate?
It means there is roughly an 80% chance that the final cost will fall between 20% below and 30% above the estimate (including contingency) for a project at the less certain end of Class 3. Better-understood projects can expect a tighter range, as narrow as -10% to +10%.
Need AACE-Classified Cost Estimates?
Cenex delivers rigorously classified cost estimates aligned with AACE Recommended Practices for Australian infrastructure projects.