LADOTD COST ESTIMATING PROCESS. Charles Nickel, P.E. Value Engineering & Cost Estimate Director Office: (225)
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1 LADOTD COST ESTIMATING PROCESS Charles Nickel, P.E. Value Engineering & Cost Estimate Director Office: (225)
2 Project Management Body of Knowledge (PMBOK) Cost Management Involves 3 Processes: 1) Cost Estimating 2) Cost Budgeting 3) Cost Control
3 Project Management Body of Knowledge (PMBOK) Cost Management Processes: 1) Cost Estimating 2) Cost Budgeting 3) Cost Control
4 Cost Estimating Process Types of Project Cost Estimates: 1.) Engineering 2.) Construction 3.) Right-of-Way 4.) Utilities 5.) Environmental (Mitigation, Documents, etc.)
5 Cost Estimating Process Types of Project Cost Estimates: 1.) Engineering 2.) Construction 3.) Right-of-Way 4.) Utilities 5.) Environmental (Mitigation, Documents, etc.)
6 Cost Estimating Process GOAL: To provide guidance in developing and maintaining accurate, consistent, and reliable project cost estimates.
7 Cost Estimating Process Some common methods of Cost Estimating: Historical Bid Based Cost Based Parametric Risk Based
8 Historical Bid Based Estimating Uses previous bid data as a basis for cost estimating. Items with little or no bid history can not be estimated with this method. It is LADOTD s most common method of estimating.
9 Cost Based Estimating Breaks down items of work into individual basic components such as material, equipment, labor, time, overhead, and profit. Uses current costs of these components to estimate the total cost of each item of work. Requires significantly more in terms of effort, time, and skill than the Historical Bid Based method.
10 Parametric Based Estimating Uses costs of similar components of work from similar projects recently bid. Typically generates a cost per lane mile or cost per square foot. Commonly used during early project development when very little detail information is available.
11 Risk Based Estimating Identifies and Analyzes Risks associated with a project. Determines an impact and probability of occurrence for each risk. Based on impacts and probabilities, a cost is associated to each risk. These costs are considered contingencies and added to the project cost estimate.
12 Historical Bid Based Estimating Long Range Estimates Detailed Estimates
13 Historical Bid Based Long Range Estimating Estimating Using Major Item Cost Groups
14 Historical Bid Based: Long Range Estimating Cost groups are based on line items classified into major item categories such as: Asphalt Gates & Fences Base Guiderail Concrete Landscaping Drainage Mobilization Earthwork Pavement marking Erosion Control etc.
15 Historical Bid Based: Long Range Estimating Item Group Cost = XX% Project Cost Project Cost = Item Group Cost / XX%
16 Historical Bid Based: Long Range Estimating For example, for a particular type of roadway project, historically; Asphalt Items: 58% of Project Cost Base Items: 12% of Project Cost Mobilization: 10% of Project Cost Other Items: 20% of Project Cost
17 Historical Bid Based: Long Range Estimating Item Group Cost = Quantity Unit Price
18 Historical Bid Based: Long Range Estimating Quantities for cost groups can be estimated based on early project measurements such as: Length of roadway Width of roadway Depth of pavement Number of intersections Etc.
19 Historical Bid Based: Long Range Estimating Once the quantities are estimated, Unit Prices can be determined based on historical bid data.
20 Historical Bid Based: Long Range Estimating Estimate of Asphalt Group: Estimate of Base Group: $1.5 M $1.2 M $2.7 M $2.7 M / (58% + 12%) = $3.8 M Construction Cost = $3.8 M + contingencies
21 Detailed Estimates
22 Historical Bid Based: Detail Estimating Involves past item level relationships between the unit price and other measurable parameters of the item such as: Quantity Letting Date Number of Bidders Etc., Etc., Etc., Location Size Type of Work
23 Historical Bid Based: Detail Estimating Modeling Unit Price relationships Simple Linear Regressions Not so Simple Linear Regressions
24 Historical Bid Based: Detail Estimating Simple Linear Regression Models For example: Unit Price = β 0 + β 1 (Bid Date) Log(Unit Price) = β 0 + β 1 Log(Quantity)
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34 Historical Bid Based: Detail Estimating More Complex Linear Regression Models For example: Log(Unit Price) = β 0 + β 1 Log(Quantity) + β 2 (Bid Date)
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36 Historical Bid Based: Detail Estimating Adjust the bid points to reflect only one relationship at a time.
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41 Historical Bid Based: Detail Estimating The more relationships that can be identified and modeled, the closer the adjusted bid points will be to the trend lines. The amount of time and resources spent identifying and modeling these relationships will determine the level of accuracy achievable.
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44 Estimating Tools: Excel Spreadsheets Access Database Applications Trns*port CES All these tools rely on the EXPERIENCE of the ESTIMATOR to use them wisely to develop the Construction Cost Estimate.
45 QUESTIONS? Charles Nickel, P.E. Value Engineering & Cost Estimate Director Office: (225)
46 CES CES is a client-server estimating tool providing a full range of estimating capabilities from long range estimating to detailed estimating.
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