The two basic laws of construction estimating are?

The two basic laws of construction estimating highlight the relationship between the accuracy of estimates and their impact on business outcomes. The correct statement emphasizes that low estimates can lead to reduced profits because they often do not cover the actual costs of the project. If a contractor sets a price that is too low, they may find themselves unable to complete the work within the estimated budget, resulting in financial losses.

Additionally, high estimates tend to decrease volume—the amount of work a contractor is awarded—because clients may be deterred by the potential costs. High estimates can lead to a lack of competitive advantage in bidding situations, where potential clients are looking for the best value.

This understanding is crucial for contractors, as it allows them to navigate the delicate balance of being competitive while also ensuring that their estimates cover all costs adequately, ensuring profitability. The other options do not reflect this relationship accurately, as they either make incorrect assumptions about the impact of estimates on profits and volume or simplify the complexities involved in construction estimating.