1. ENGINEERING n MANAGEMENT n ENVIRONMENTAL
COST ESTIMATING
APWA COMPLETE STREETS AND TECHNOLOGY CONFERENCE
April 19, 2017
Wayne Richardson, PE, LEED AP
ENGINEERING n MANAGEMENT n ENVIRONMENTAL

2. Fun Trivia
Big Dig, Boston (ballooned from 2.6 B in 1985 to __?__ in 2005)
A: $3.6 B
B: $5.2 B
C: $8.6 B
D: $14.6 B
E: $18.2 B

3. Answer: Big Dig, Boston (ballooned from $2. 6 B in 1985 to $14
Answer: Big Dig, Boston (ballooned from $2.6 B in 1985 to $14.6 B in 2005)
Objectives
Understanding Cost Estimates
Definitions
Types/Levels
Working
Sources
Methodology
Documentation

4. Avoiding Cost Overruns
Without financial feasibility, there is no Project!
Difficulties
Cost overruns occur because original estimates are inaccurate
Misrepresentation
Pressure/Bias toward Underestimating
Unrealistic schedules (time value of money)
Intangibles and Unforseens (ex. Outreach)
Costing is for Accounting, not Engineering Dept.
Lack of experience, knowledge in cost management
Requires Significant Effort for large complex (Public) projects
Pinning Down General and Special Conditions
Frequent changes in technology? Not usually a cause of cost difficulties

5. Key Things to Take Away Begin with End in Mind Use Judgement
Be Inclusive
Document Item Data Sources
Include Assumptions QC
PDF your POPCC

6. Definitions Cost Estimate Project Cost Management Cost Control
Soft Costs
Direct Costs
Indirect Costs
Distributable Costs
Field Costs
Allowance
Alternates
Prevailing Wage
Factored
Parametric
Cost Index
Mark-up

7. INDIRECT COSTS

8. Construction Estimating Type Classes
Class C – Study Level (Order of Magnitude)
Based On: Studies, Alternatives, Investment Types, Program
Accuracy: +50% to -30%
Contingency: % (Realistically, 20-40%)
Class B – Budgetary Level
Based On: Plans from 20%-30% Completion
Accuracy: +30% to -15%
Contingency: %
Class A – Engineer’s Estimate
Based On: Plans from 30%-100% Completion
Accuracy: +15% to -5%
Contingency: %
Breakdown of labor and materials
Change Order Estimates

9. Quantity Takeoff Prepare Hard copies Verify scale
A quantity take-off is a precise count of the material within the project.
A detailed quantity take-off is the only accurate method of determining, within a high degree of precision, the project costs. Other methods are mere guesses.

10. Quantity Takeoff - Prepare
CSI Master Format Specification
Review of Documents
Summarize Cost Elements and Division of Responsibility
Outreach to subcontractors and vendors
Site Visit and/or Pre-Bid Meeting

11. Quantity Takeoff - Perform
Documents
Measure
“Take It All Off”
Specs as “Shopping list”
Itemize
Waste

12. Quantity Takeoff – Things to Look For:
Dimensions, Scaling
On-Site Storage
Work Space and Staging Areas
Abnormal Conditions
Discrepancies
Proprietary, Sole or Limited Source Products
Special Labor Provisions
Special Equipment
Special Commissioning (LEED, BIM, Recycling, Made in USA, “Green”)
Extended Warranties
Specification Back-Check
Completeness, Coordination & Contradictions

13. Quantity Takeoff - Documentation
Things to Document:
Specification Section Number and Listing, ie, “Section Motorized Roller Shades”
Item Description or Scope of Work
RS Means Line Item
Be as Specific as Possible
Keep Items Separated
Quantity – Mark on Plans and in Estimate Table

14. Quantity Takeoff - Documentation
Things to Document:
Sketch-up
Unit of Measurement: Each, Square Footage, Cubic Footage, Linear Footage
Vendor Quotes (Add Mark-Up of 10% to 25%)
Percent Waste
Variable Mark-Up

15. From Quantity Takeoff to Cost Estimate
Job Conditions
Economic Conditions
Hoisting Conditions
Contractor Management Experience
Labor Availability
Subcontractor Availability
No matter how accurate the estimators are, each one will determine a different estimate amount because each evaluation will be completed differently. Each estimator may have used different steps for estimating quantities, using different waste factors, and different labor rates.

16. Cost Estimate - Sources
Recent Bids
Project Historical Estimates
Engineering News Record
Richardson Engineering Services, Inc. (Process Plants)
Dodge Digest
National Construction Estimator
RS Means

17. Current Means & Methods
Estimating software such as Timberline Precision, MC2, On-screen take-off, Adobe measuring tools…
Microsoft Excel for creating custom cost spreadsheets
Cost data books and Web based applications such as RS Means & Saylor Publications
Productivity data books such as NECA (for electrical trades) & MCAA (for mechanical trades)

18. RS Means
RS Means publications compiles construction cost data throughout the US & Canada
Costs published in the various categories are national average costs and may need to be adjusted for specific locations
Costs are organized in the CSI 50 division MasterFormat 2010 system

19. CSI MasterFormat 2010 system
General Requirements Subgroup – Division 1
Facility Construction Subgroup – Divisions 2 – 19
Facility Services Subgroup – Divisions 20 – 29
Site and Infrastructure Subgroup – Divisions 30 – 39
Process Equipment Subgroup – Divisions

20. Cost Estimate: RS Means Methodology
Primary Components
Labor + Materials
Extend
Subs and Vendors
General Conditions

21. Cost Types There are two types of costs found in the RS Means texts:
Unit Price – Cost data is divided into the 50 divisions according to the MasterFormat system of classification and numbering
Assembly Costs – Cost data is organized per assembly, which is a functional element of construction
E.g., Footing including excavation, installation of steel & concrete, waterproofing and backfill

22. Reference Section This section contains information on:
Equipment Rental Costs
Crew listings
Historical Cost Indexes
City Cost Indexes
Location Factors
Reference Tables
Change Orders
Square Foot Costs
Listing of Abbreviations

23. Basis for Cost Information
The material prices in Means data cost books are “Contractor” prices. They are prices that an average Contractor with an annual sales volume of at least $ 4,000, and up would pay to his suppliers.
While computing estimates, it is important to note the economy of scale factors such as size of Contracting company, small orders, type of materials, etc…

24. Cost Estimate – Factoring Items
Project Size Multiplier
Site Constraints
City Costs Index
Freight and Taxes
Inflation or Escalation Factor
Contingency Factor
Check: Ask yourself, “What’s not included?” Check your work against previous budget estimates, bids for similar work, Owners expectations, etc...

25. Key Things to Take Away Begin with End in Mind Use Judgement
Be Inclusive (what’s not included?
Document Item Data Sources
Include Assumptions QC
PDF your POPCC
Estimating is only partially technical science, the rest is artful judgment.