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AASHTO Technical Committee on Cost Estimating Annual Report Frank Csiga, Nevada DOT Committee Chair

AASHTO Technical Committee on Cost Estimating Annual Report Frank Csiga, Nevada DOT Committee Chair. 2006 Action Plan 1. Develop Guidance 2. Review NCHRP 8-49 3. FHWA minimum standards 4. FHWA Peer Review Program 5. Final Guidance Cradle to Grave.

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AASHTO Technical Committee on Cost Estimating Annual Report Frank Csiga, Nevada DOT Committee Chair

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  1. AASHTOTechnical Committee on Cost EstimatingAnnual ReportFrank Csiga, Nevada DOTCommittee Chair

  2. 2006 Action Plan1. Develop Guidance2. Review NCHRP 8-493. FHWA minimum standards4. FHWA Peer Review Program5. Final Guidance Cradle to Grave

  3. Committee Focus1. Historical Bid-Based Estimating2. Cost Based Estimating3. Bid Analysis

  4. Where does the TEA fit in:Chapters for review within the weekReturn comments within four weeksCommittee RevisionsPresentation to SCOD

  5. A GUIDE FOR COST ESTIMATINGDraftChapter for Review Historical Bid-Based EstimatingTechnical Committee on Cost Estimating

  6. I GENERAL OVERVIEWII. PROS & CONS OF USING HISTORICAL BID BASED ESTIMATINGIII. ESTABLISHING, MAINTAINING, AND UTILIZING A BID HISTORY DATABASEIV. USING SPREADSHEETS FOR DATA ANALYSIS IN ESTIMATING COSTSV. ESTIMATING LUMP SUM ITEMSVI. ESTIMATING PROJECT SPECIFIC OR UNIQUE ITEMSVII. BIDDING CLIMATEVIII. REFERENCE MATERIALIX. TOOLSX. SKILL SETS REQUIRED

  7. Cost-Based Estimates • Elements of a Cost Based Estimates • Time • Material • Labor • Time • Overhead & Profit

  8. Cost-Based Estimates • Example Carried Through Chapter • Culvert Pipe Replacement • Earthwork Sample • More to be added

  9. Cost-Based Estimates • Other Topics Discussed • Subcontract Items • Lump Sum Items • Software Applications

  10. Cost-Based Estimates • Information Sources • RS Means Cost Guide • Rental Rate Blue Book • Rental Rate Green Book • TEA

  11. Cost-Based Estimates • Information Sources – IN YOUR DOT! • Construction Division • Production Rates • Equipment • Labor Staffing Levels • Materials Division • Sources • Supplier Contacts

  12. Cost-Based Estimates • Value Added • More information to make Award/Reject Decisions • Knowledge of details for Contractor dialogue • Generally more accurate estimates than bid-based

  13. Cost-Based Estimates • Conclusion • May take more resources • Need some expertise in the area of construction • Extra effort is worth it! • DOT can make more informed decisions

  14. BID REVIEW • Document current bid review practices • Identify definitions and processes currently in practice • Provide recommendations to the bid review process

  15. STATES REVIEW PROCESSES ARE VARIED • Contract types vary • Low bid • A+b • Design build • State laws vary • A common decision process is needed • Fhwa guidelines apply to many projects

  16. FHWA CURRENTLY HAS GUIDANCE IN PLACE • Provides a general guideline • Includes evaluation elements • Provides criteria for awarding high cost projects

  17. FHWA GUIDANCE DOCUMENTS http://www.fhwa.dot.gov/programadmin/contracts/ta508046.htm#6

  18. TCCE RECOMMENDATIONS: • Provide a standard process for bid evaluation • Organize the review methods • Make the review process efficient • Identify roles and eliminate conflicts

  19. INITIAL CONTRACT REVIEW • Bid document sufficiency review • Completed bid form • Subcontractor disclosures • Minority requirements • Bid data processing and summary • Bid line item data processing

  20. FAIR MARKET COST ANALYSIS • Fair market economic analysis • Total price comparison • Line item comparison • Collusion review • Bid document quality review • Bad quantities • Missing bid items • General bid document quality • Constructability review • Bid schedule • Site location and access

  21. COST/ECONOMICANALYSIS • Which bidders provide qualified bids • Compare total prices to the ee • Compare line items to ee and each other • Document quality (quantities/items missed) • Recommendation based on fair value and document quality

  22. PROJECT SPONSOR REVIEW • Project budget • Available funding • Reduction in work scope • Project redesign (bridges) • Document quality – design corrections • Quantity errors • Missing items • Risk transfer to contractor • Project need • Emergency work • Closing gaps in facility construction

  23. PROJECT SPONSOR DECISION • Evaluate the content of the cost review • Determine document improvements • Compare risk costs to available budget • Decision point • Cancel project • Redesign and rebid • Delay and rebid • Recommend award with justification to higher authority

  24. DOT FINAL RECOMMENDATION OF AWARD BY HIGHEST AGENCY DELEGATED AUTHORITY • Delegated final authority • Weights all review information • Represents the entire organization • Direct report to federal and legislative decision oversite • Make independent final decisions – not participate in development of bid review

  25. OVERVIEW OF REVIEW PROCESSFINAL AUTHORITY – AWARD RECOMMENDATION • Considers economic review • Considers project sponsor information • Evaluates federal guidance • Carries agency authority in making final decision • Is responsibility for agency program delivery

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