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LADOTD CONSTRUCTION COST ESTIMATING

LADOTD CONSTRUCTION COST ESTIMATING. Charles Nickel, P.E. Cost Estimate & Value Engineering Director. Office: (225) 379-1078 E-mail: Charles.Nickel@la.gov. Cost Estimating Process. GOAL:

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LADOTD CONSTRUCTION COST ESTIMATING

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  1. LADOTD CONSTRUCTIONCOST ESTIMATING Charles Nickel, P.E. Cost Estimate & Value Engineering Director Office: (225) 379-1078 E-mail: Charles.Nickel@la.gov

  2. Cost Estimating Process GOAL: To provide guidance in developing and maintaining accurate, consistent, and reliable project cost estimates.

  3. Project Management Body of Knowledge (PMBOK) Cost Management Involves 3 Processes: • Cost Estimating • Cost Budgeting • Cost Control

  4. Project Management Body of Knowledge (PMBOK) Cost Management Involves 3 Processes: • Cost Estimating • Cost Budgeting • Cost Control

  5. Cost Estimating Process Types of Project Cost Estimates: 1.) Engineering 2.)Construction 3.) Right-of-Way 4.) Utilities 5.) Mitigation (Permits, Approvals, etc.)

  6. Cost Estimating Process Types of Project Cost Estimates: 1.) Engineering 2.) Construction 3.) Right-of-Way 4.) Utilities 5.) Mitigation (Permits, Approvals, etc.)

  7. Cost Estimating Process Some common methods of Cost Estimating: • Historical Bid Based • Cost Based • Parametric • Risk Based

  8. Cost Estimating Process Some common methods of Cost Estimating: • Historical Bid Based • Cost Based • Parametric • Risk Based

  9. Historical Bid Based Estimating • Uses previous bid data as a basis for cost estimating. • Items with little or no bid history are much more difficult to estimate with this method, if not impossible.

  10. Historical Bid Based Estimating • Long Range Estimates • Detailed Estimates

  11. Historical Bid BasedLong Range Estimating Estimating UsingMajor Item Cost Groups

  12. Historical Bid Based:Long Range Estimating Cost groups are based on line items classified into major item categories such as: • Asphalt • Base • Concrete • Drainage • Earthwork • Erosion Control • Gates & Fences • Guiderail • Landscaping • Mobilization • Pavement marking • etc.

  13. Historical Bid Based:Long Range Estimating Item Group Cost = XX% Project Cost Project Cost = Item Group Cost / XX%

  14. 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

  15. Historical Bid Based:Long Range Estimating Item Group Cost = Quantity ∙ Unit Price

  16. 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.

  17. Historical Bid Based:Long Range Estimating Once the quantities are estimated, Unit Prices can be determined based on historical bid data.

  18. Historical Bid Based:Long Range Estimating Estimate of Asphalt Group: $1.5 M Estimate of Base Group: $1.2 M $2.7 M $2.7 M / (58% + 12%) = $3.8 M Construction Cost = $3.8 M + contingencies

  19. Detailed Estimates

  20. 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 • Location • Size • Type of Work • Etc., Etc., Etc., …

  21. Historical Bid Based:Detail Estimating Modeling Unit Price relationships • Simple Linear Regressions • Not so Simple Linear Regressions

  22. Historical Bid Based:Detail Estimating • Simple Linear Regression Models For example: Unit Price = b0 + b1 ∙(Bid Date) Log(Unit Price) = b0 + b1 ∙ Log(Quantity)

  23. Historical Bid Based:Detail Estimating • More Complex Linear Regression Models For example: Log(Unit Price) = b0 + b1 ∙Log(Quantity) + b2 ∙(Bid Date)

  24. Historical Bid Based:Detail Estimating Adjust the bid points to reflect only one relationship at a time.

  25. 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.

  26. 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.

  27. QUESTIONS? Charles Nickel, P.E. Cost Estimate & Value Engineering Director Office: (225) 379-1078 E-mail: charles.nickel@la.gov

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