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Understanding and Managing Project Costs Session 2

Understanding and Managing Project Costs Session 2 Review of Session 1 Construction Phases Pre-design Design Bid/award Construction Post-construction The Sure-Fresh Project The Conceptual Estimate Estimated early in project development Limited accuracy Large contingency

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Understanding and Managing Project Costs Session 2

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  1. Understanding and Managing Project CostsSession 2

  2. Review of Session 1 • Construction Phases • Pre-design • Design • Bid/award • Construction • Post-construction • The Sure-Fresh Project An AGC Construction Learning Tool

  3. The Conceptual Estimate • Estimated early in project development • Limited accuracy • Large contingency • Usually based on gross area multiplied by the unit price cost for similar projects • Helps the owner make basic decisions about the project An AGC Construction Learning Tool

  4. Item Type Area SF Cost Total Cost Building A Office Building 20,000 $ 100.00 $2,000,000.00 Building B Warehouse 65,000 $ 65.00 $4,225,000.00 Site Development 225,000 $ 2.00 $ 450,000.00 Site Utilities 225,000 $ 1.50 $ 337,500.00 Parking lots 50,000 $ 2.20 $ 110,000.00 Landscaping 90,000 $ 1.30 $ 117,000.00 $7,239,500.00 Contingency 20% $1,447,900.00 Total Construction Costs $8,687,400.00 A Simple Conceptual Estimate An AGC Construction Learning Tool

  5. Item Description Area Unit Unit Price Cost Site Development Entire site, west of river 3,525,000 SF $ .20 $ 705,000. Bridges 2 each 7,200 SF $100.00 $ 720,000. Site Utilities Entire site, west of river 3,525,000 SF $ .10 $ 352,500. Truck Access Paving 624,483 SF $ 2.72 $1,698,594. Parking Lots +90,000 SF north site 141,750 SF $ 2.09 $ 296,258. Landscaping 75,474 SY $ .81 $ 61,134. Gatehouse 1 200 SF $ 150.00 $ 30,000. Gatehouse 1 200 SF $ 150.00 $ 30,000. Building A Receiving Bldg 35,000 SF $ 33.51 $1,172,850. Building B Warehouse 250,000 SF $ 33.51 $8,377,500. Building C Warehouse 250,000 SF $ 33.51 $8,377,500. Building D Warehouse 250,000 SF $ 33.51 $8,377,500. Office Building 25,000 SF $ 103.43 $2,585,750. Total Cost $32,784,585. 20% Contingency $ 5,556,917. Total Budget $39,341,502. SureFresh Conceptual Estimate An AGC Construction Learning Tool

  6. Creation of the SureFresh Budget • Project spread into three years for financing arrangements • Phase I: • Site work, gatehouses, bridges, Building A for offices, slabs of Buildings B, C, and D • Phase II: • Complete three warehouse buildings • Phase III: • Construction of new office building, remodel Building A An AGC Construction Learning Tool

  7. Phase 1 Item Description Area Unit Unit price Cost Site Development Entire Site Area west of River 2,400,000 SF $ 0.20 $ 480,000 Bridges 2 each @ 3600 SF ea 7200 SF $ 100.00 $ 720,000 Site Utilities Entire Site Area west of River 2,400,000 SF $ 0.10 $ 240,000 Truck access pvg 624483 SF $ 2.72 $ 1,698,594 Parking lots 51750 SF $ 2.09 $ 108,158 Landscaping 65474 SY $ 0.81 $ 53,034 Gatehouse 1 200 SF $ 150.00 $ 30,000 Gatehouse 2 200 SF $ 150.00 $ 30,000 Building A Receiving Building 35,000 SF $ 38.16 $ 1,335,565 Building B Warehouse, Foundations/slab 250,000 SF $ 12.00 $ 3,000,000 Building C Warehouse, Foundations/slab 250,000 SF $ 12.00 $ 3,000,000 Building D Warehouse, Foundations/slab 250,000 SF $ 12.00 $ 3,000,000 $13,695,350 20% Contingency $ 2,739,070 Total budget, Phase 1 $16,434,42 Phase I Budget An AGC Construction Learning Tool

  8. Item Description Area Unit Unit price Cost Building B Warehouse Building Completion 250,000 $ 21.51 $ 5,377,500 Building C Warehouse Building Completion 250,000 $ 21.51 $ 5,377,500 Building D Warehouse Building Completion 250,000 $ 21.51 $ 5,377,500 $16,132,500 20% Contingency $ 3,226,500 Total Budget, Phase II $19,359,00 Phase II Budget An AGC Construction Learning Tool

  9. Item Description Area unit Unit price Cost Building A Remodel for Receiving 15,200 SF $ 10.00 $ 152,000 Office Building: Building 25000 SF $ 103.43 $ 2,585,750 (north site) Site Development 1125000 SF $ 0.20 $ 225,000 Site Utilities 1125000 SF $ 0.10 $ 112,500 Asphalt paved parking lots 90000 SF $ 2.09 $ 188,100 Landscaping 10000 SY $ 0.81 $ 8,100 $ 3,271,450 20% Contingency $ 654,290 Total Budget, Phase III $ 3,925,740 Phase III Budget An AGC Construction Learning Tool

  10. The Detailed Estimate • Identifies activity elements • Quantifies activity elements • The more detailed the estimate, the more accurate the estimate • As the documents increase in detail, the estimate increases in detail, and the necessary contingency decreases An AGC Construction Learning Tool

  11. Unit Abbrev Use Formula Cubic Yards CY Concrete Soil Materials (Length ‘ X Width’ X Depth ‘ ) / 27 Square Yards SY Paving Surface Area ( Length ‘ X Width ‘) / 9 Square Yds. Of Contact Area SFCA Formwork (Length ‘ X Height ‘ of formed area) X 2 sides Square Feet SF Area (Length ‘ x Width ‘) Lineal Feet LF Measured Length Ton Ton Rock Material Weight for material (tons/CY = (Weight of Material/Cy)/2,000) Ton Ton Reinforcing Steel #4 = .668 lbs/lf; # 5 = 1.043 lbs/ lf; #6 = 1.502 lbs/lf Unit abbreviations and formulas An AGC Construction Learning Tool

  12. Item Cost Item Quantity Unit Grade Beams Form Beam Sides 30,000 SFCA Reinforcing Steel 23.7 Tons Place Concrete 611 CY Chamfer Strips 2500 LF Float Top 2500 SF Embeds 1250 Ea Slab on Grade Fine Grade 250,000 SF CompactedBase course 3,361 CY Vapor Barrier 282,500 SF Reinforcing Steel 183.7 Tons Edge Form 2500 LF Screeds 5000 LF Expansion Joint 4861 LF Finish 250,000 SF Cure 250,000 SF Box-out Columns 108 SF Solution: The Detailed Estimate An AGC Construction Learning Tool

  13. Solution: Concrete Recap An AGC Construction Learning Tool

  14. Selecting Subcontract Bids • Bid analysis is necessary to determine: • Lowest prices including full scope • No duplications • No “holes” • Responsible subcontractors An AGC Construction Learning Tool

  15. Bidder 09200 09250 09300 09500 09680 09200/ 09250 09200/ 09250/ 09500 09300 09680 Galloy Plaster $13450 Jim’s Plaster $12400 GB, Inc. $35000 Bamberger Walls & Clgs $32000 Gary’s Tile $10000 Gary’s Ceilings $35000 Carpet Univ $14500 Fred’s Walls $45000 Ed’s Walls $44900 Big Stuff, Inc. $82000 Carpet Galaxy $23500 Low Bids $12400 $32000 $10000 $35000 $14600 $44900 $82000 $23500 9200,09250 $44400 $44900 09200, 09250, 09500 $79400 $82000 09300,09680 $24600 $23500 Combination Bid Analysis An AGC Construction Learning Tool

  16. Section Description Bidder Price 02350 Piles/Caissons Northwest Caisson $1,220,990 02500 Asphalt Paving Statewide Paving $1,730,000 02900 Landscaping Mulchers LGL Sprinkler $ 42,000 $ 35,000 03450 P/C Deck Panels PC Precast $ 85,000 05100 Structural Steel Steel Struct, Inc. $ 175,000 05200 Metal Joists Steel Struct, Inc. 05300 Metal Deck Steel Struct, Inc. 06400 Arch. Woodwork Chris’s Cabinets $ 7,200 07200 Insulation Quick Insulation $ 35,000 07500 Membrane Roofing Local Roofing $ 89,916 07600 Flashing Local Roofing 08310 Overhead Doors Door & Window Co $ 18,000 08800 Glazing/Windows Door & Window Co 09250 Gypsum Drywall Universal Finishes $ 7,300 09650 Floor Covering Universal Finishes 09900 Painting Universal Finishes 15000 Mechanical Charlie’s Plumbing $ 249,000 16000 Electrical Ellen’s Electrical $ 309,000 Total Subcontracts $4,003,406 Solution:Subcontractor Selection Activity An AGC Construction Learning Tool

  17. Using on the Job What You Have Learned Today • Jobsite Assignment • Look at the original estimate for your project • How is it organized? • How was the data generated? • How were subcontractors selected? • Is there a correlation between subcontractor selection and subcontractor problems on the job? • Is the estimate organized into crew activities? An AGC Construction Learning Tool

  18. Using on the Job What You Have Learned Today • To Get Ready for Session 3 • Read Session 3, Participant’s Manual • Become familiar with your firm’s cost control system. An AGC Construction Learning Tool

  19. An AGC Construction Learning Tool

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