What is the difference between the estimated cost and the actual cost of construction work?
The estimated cost is the cost that the concerned engineering has estimated using the quantity and the cost from the schedule of rates (rate provided by govt.). Let's take the example of a building. While finding its estimated cost we consider the plan, section, and elevation of it to find the actual quantity of materials required and then multiply it with their costs to get the estimated price.
Now the actual cost is the cost that is incurred in completing the project on-site in real. Let's again take the building example. Now estimated cost of the building is used to sanction the project and get administrative and technical approval.
Now the building is constructed. After construction, a junior engineer takes measurements on-site to prepare bills. This bill represents the actual cost of construction. This may be the same or different from the estimated cost as sometimes difficulties arise on-site and certain structure dimensions may not be as per the detailed estimate.
So the measurement taken will differ from the estimate and corresponding to the actual cost too.