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The Construction Estimate and Cost Controls

The Construction Estimate and Cost Controls. From Formulation to Project Closeout – A Help or Hindrance in Litigation. Common Issue in Construction Litigation. Communication Who is listening? Who is the Audience? Perception Boring Logs are clear, but jury disagrees. Perception = Reality

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The Construction Estimate and Cost Controls

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  1. The Construction Estimate and Cost Controls From Formulation to Project Closeout – A Help or Hindrance in Litigation

  2. Common Issue in Construction Litigation • Communication • Who is listening? • Who is the Audience? • Perception • Boring Logs are clear, but jury disagrees. • Perception = Reality So what does this have to do with Estimating?

  3. Communication and Perception Estimating and Bidding

  4. What is Estimating? • A guarantee? • A promise? • Simply a guess?

  5. ASPE Canon #1 Professional estimators shall perform services in areas of their disciple and competence.

  6. ASPE Canon #6 Professional estimators shall utilize their education, years of experience and acquired skills in the preparation of each estimate or assignment with full commitment to make each estimate or assignment as detailed and accurate as their talents and abilities allow.

  7. ASPE Canon #4 Professional estimators shall safeguard and keep in confidence all knowledge of business affairs and technical procedures of an employer and client.

  8. Martin’s Corollary Professional estimators shall use best efforts to understand the project, bid documents and site conditions and shall reconcile or raise questions about apparent conflicts.

  9. The Extreme When the Estimate is under a microscope – The Claim.

  10. 5 Basic Methods of Damage Calculation • Total Cost or Modified Total Cost • Direct Cost • Measured Mile • % Factor • Estimated Each implicate the Estimate – either directly or indirectly.

  11. Total Cost Method or Modified TCM • What is it? • What about a Line Item actual to budget comparison? • Estimate is Front and Center! What is the reasonableness? • When is reasonableness tested? Right after the bid is submitted? Or, years later?

  12. Total Cost Method or Modified TCM • Canon #6 – Detailed and accurate • Martin’s Corollary – Was project understood? Were conflicts reconciled? • Case Example

  13. Remaining Methods • Direct Costs, Measured Mile, % Factor and Estimated • What are each? • How does each implicate the estimate? • Case Example

  14. So what are the Lessons Learned? Lesson #1 – Be organized and maintain organization. Lesson #2 – Make notes – describe your thought process. Lesson #3 – Make sure you understand the Bid Docs. If you don’t know, ask. Lesson #4 – Understand and evaluate the risk. Lesson #5 – Communicate

  15. Questions Gregory S. Martin, Esq www.gsmartinlaw.com

  16. The Construction Estimate and Cost Controls From Formulation to Project Closeout – A Help or Hindrance in Litigation

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