Cost Estimate Development Sequence
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Transcript of Cost Estimate Development Sequence
COST ESTIMATE DEVELOPMENT
SEQUENCEImplement A System
Adjust For Better Performance
Your biggest challenges as a cost estimator:
Your biggest challenges as a cost estimator:
■ Accurate and complete project information
Your biggest challenges as a cost estimator:
■ Accurate and complete project information■ Access to cost data
Your biggest challenges as a cost estimator:
■ Accurate and complete project information■ Access to cost data ■ Produce a cost estimate that meets the expectations of the review
team
Your biggest challenges as a cost estimator:
■ Accurate and complete project information■ Access to cost data ■ Produce a cost estimate that meets the expectations of the review
team ■ Meet the deadline for cost estimate completion
Your biggest challenges as a cost estimator:
■ Accurate and complete project information■ Access to cost data ■ Produce a cost estimate that meets the expectations of the review
team ■ Meet the deadline for cost estimate completion■ Validate the cost estimate
You can overcome those challenges by…
You can overcome those challenges by…■ Planning your cost estimating development activities
You can overcome those challenges by…■ Planning your cost estimating development activities■ Measure your performance
You can overcome those challenges by…■ Planning your cost estimating development activities■ Measure your performance■ Ask for feedback from the review team
You can overcome those challenges by…■ Planning your cost estimating development activities■ Measure your performance■ Ask for feedback from the review team■ Adjust your plan for the next cost estimate
You can overcome those challenges by…■ Planning your cost estimating development activities■ Measure your performance■ Ask for feedback from the review team■ Adjust your plan for the next cost estimate■ Rinse and repeat!
So, here is my step-by-step strategy:Step 1
Step 11. Review all available documents
Step 11. Review all available documents
– Ask for clarifications
Step 11. Review all available documents
– Ask for clarifications– Take notes on all missing/incomplete information
Step 11. Review all available documents
– Ask for clarifications– Take notes on all missing/incomplete information– Set-up a request for clarification registry
Step 11. Review all available documents
– Ask for clarifications– Take notes on all missing/incomplete information– Set-up a request for clarification registry – Set-up a risk/opportunity registry and add all relevant information
Step 11. Review all available documents
– Ask for clarifications– Take notes on all missing/incomplete information– Set-up a request for clarification registry – Set-up a risk/opportunity registry and add all relevant information – Make a habit to review documents for all specifications which
might have an impact on cost
Step 11. Review all available documents
– Ask for clarifications– Take notes on all missing/incomplete information– Set-up a request for clarification registry – Set-up a risk/opportunity registry and add all relevant information – Make a habit to review documents for all specifications which
might have an impact on cost– Build-up the project in your mind theatre and take the time to see
the big picture
Step 2
Step 22. Define the purpose of the cost estimate:
Step 22. Define the purpose of the cost estimate:
– Is it a cost estimate for a tender submission?
Step 22. Define the purpose of the cost estimate:
– Is it a cost estimate for a tender submission?– Or, is it a budget cost estimate for a client/owner/engineering
firm? If so, what is the expected accuracy?
Step 3
Step 33. Set-up the cost estimate development kick-off meeting
Step 33. Set-up the cost estimate development kick-off meeting
– Invite all cost estimate review team members
Step 33. Set-up the cost estimate development kick-off meeting
– Invite all cost estimate review team members– Feel free to invite construction professionals within the company
who might have a valuable input
Step 33. Set-up the cost estimate development kick-off meeting
– Invite all cost estimate review team members– Feel free to invite construction professionals within the company
who might have a valuable input– Discuss:
Step 33. Set-up the cost estimate development kick-off meeting
– Invite all cost estimate review team members– Feel free to invite construction professionals within the company
who might have a valuable input– Discuss:
■ Constructability methods
Step 33. Set-up the cost estimate development kick-off meeting
– Invite all cost estimate review team members– Feel free to invite construction professionals within the company
who might have a valuable input– Discuss:
■ Constructability methods■ Price sourcing strategy
Step 33. Set-up the cost estimate development kick-off meeting
– Invite all cost estimate review team members– Feel free to invite construction professionals within the company
who might have a valuable input– Discuss:
■ Constructability methods■ Price sourcing strategy
– What scope will be subcontracted?
Step 33. Set-up the cost estimate development kick-off meeting
– Invite all cost estimate review team members– Feel free to invite construction professionals within the company
who might have a valuable input– Discuss:
■ Constructability methods■ Price sourcing strategy
– What scope will be subcontracted?– What scope will be self-performed?
Step 33. Set-up the cost estimate development kick-off meeting
– Invite all cost estimate review team members– Feel free to invite construction professionals within the company
who might have a valuable input– Discuss:
■ Constructability methods■ Price sourcing strategy
– What scope will be subcontracted?– What scope will be self-performed?– How many quotations will be required to validate a price?
Step 4
Step 44. Develop the cost estimate schedule:
Step 44. Develop the cost estimate schedule:
– List all activities needed to be performed to complete the cost estimate
Step 44. Develop the cost estimate schedule:
– List all activities needed to be performed to complete the cost estimate
– Estimate the time required for each activity
Step 44. Develop the cost estimate schedule:
– List all activities needed to be performed to complete the cost estimate
– Estimate the time required for each activity– Build the schedule logic and determine the milestones
Step 44. Develop the cost estimate schedule:
– List all activities needed to be performed to complete the cost estimate
– Estimate the time required for each activity– Build the schedule logic and determine the milestones– Determine the resource required for cost estimate completion
Step 44. Develop the cost estimate schedule:
– List all activities needed to be performed to complete the cost estimate
– Estimate the time required for each activity– Build the schedule logic and determine the milestones– Determine the resource required for cost estimate completion– Communicate with management regarding the resource
requirements
Step 44. Develop the cost estimate schedule:
– List all activities needed to be performed to complete the cost estimate
– Estimate the time required for each activity– Build the schedule logic and determine the milestones– Determine the resource required for cost estimate completion– Communicate with management regarding the resource
requirements– Build-in time for unexpected activities: last minute take-off for
subcontractor price review and validation, changes to the project documents, etc.
Step 44. Develop the cost estimate schedule:
– List all activities needed to be performed to complete the cost estimate
– Estimate the time required for each activity– Build the schedule logic and determine the milestones– Determine the resource required for cost estimate completion– Communicate with management regarding the resource requirements– Build-in time for unexpected activities: last minute take-off for
subcontractor price review and validation, changes to the project documents, etc.
– Build-in time for cost estimate reviews
Step 5
Step 55. Develop Work Breakdown Structure to meet the following
requirements:
Step 55. Develop Work Breakdown Structure to meet the following
requirements:– Tender closing and submission
Step 55. Develop Work Breakdown Structure to meet the following
requirements:– Tender closing and submission– Cost estimate review
Step 55. Develop Work Breakdown Structure to meet the following
requirements:– Tender closing and submission– Cost estimate review– Price sourcing strategy
Step 55. Develop Work Breakdown Structure to meet the following
requirements:– Tender closing and submission– Cost estimate review– Price sourcing strategy– Construction methodology
Step 55. Develop Work Breakdown Structure to meet the following
requirements:– Tender closing and submission– Cost estimate review– Price sourcing strategy– Construction methodology– Estimate validation and benchmarking
Step 55. Develop Work Breakdown Structure to meet the following
requirements:– Tender closing and submission– Cost estimate review– Price sourcing strategy– Construction methodology– Estimate validation and benchmarking– Internal database update
Step 6
Step 66. Develop the cost estimate:
Step 66. Develop the cost estimate:
– Quantity take-offs based on WBS and price sourcing strategy
Step 66. Develop the cost estimate:
– Quantity take-offs based on WBS and price sourcing strategy– Develop direct costs
Step 66. Develop the cost estimate:
– Quantity take-offs based on WBS and price sourcing strategy– Develop direct costs– Develop indirect costs based on preliminary construction schedule
Step 66. Develop the cost estimate:
– Quantity take-offs based on WBS and price sourcing strategy– Develop direct costs– Develop indirect costs based on preliminary construction schedule– Optimize resources
Step 66. Develop the cost estimate:
– Quantity take-offs based on WBS and price sourcing strategy– Develop direct costs– Develop indirect costs based on preliminary construction schedule– Optimize resources– Update costs as they become available from
subcontractors/suppliers
Step 66. Develop the cost estimate:
– Quantity take-offs based on WBS and price sourcing strategy– Develop direct costs– Develop indirect costs based on preliminary construction schedule– Optimize resources– Update costs as they become available from
subcontractors/suppliers– Incorporate all additional information if applicable (changes to the
project documents, clarifications, etc.)
Step 66. Develop the cost estimate:
– Quantity take-offs based on WBS and price sourcing strategy– Develop direct costs– Develop indirect costs based on preliminary construction schedule– Optimize resources– Update costs as they become available from
subcontractors/suppliers– Incorporate all additional information if applicable (changes to the
project documents, clarifications, etc.)– Price and incorporate risk registry items as applicable
Step 66. Develop the cost estimate:
– Quantity take-offs based on WBS and price sourcing strategy– Develop direct costs– Develop indirect costs based on preliminary construction schedule– Optimize resources– Update costs as they become available from
subcontractors/suppliers– Incorporate all additional information if applicable (changes to the
project documents, clarifications, etc.)– Price and incorporate risk registry items as applicable– Review cost estimate draft with the review team
Step 66. Develop the cost estimate:
– Quantity take-offs based on WBS and price sourcing strategy– Develop direct costs– Develop indirect costs based on preliminary construction schedule– Optimize resources– Update costs as they become available from
subcontractors/suppliers– Incorporate all additional information if applicable (changes to the
project documents, clarifications, etc.)– Price and incorporate risk registry items as applicable– Review cost estimate draft with the review team– Update the cost estimate as per review notes
Step 66. Develop the cost estimate:
– Quantity take-offs based on WBS and price sourcing strategy– Develop direct costs– Develop indirect costs based on preliminary construction schedule– Optimize resources– Update costs as they become available from
subcontractors/suppliers– Incorporate all additional information if applicable (changes to the
project documents, clarifications, etc.)– Price and incorporate risk registry items as applicable– Review cost estimate draft with the review team– Update the cost estimate as per review notes– Update costs as more information becomes available from
subcontractors/suppliers
Step 66. Develop the cost estimate:
– Quantity take-offs based on WBS and price sourcing strategy– Develop direct costs– Develop indirect costs based on preliminary construction schedule– Optimize resources– Update costs as they become available from subcontractors/suppliers– Incorporate all additional information if applicable (changes to the
project documents, clarifications, etc.)– Price and incorporate risk registry items as applicable– Review cost estimate draft with the review team– Update the cost estimate as per review notes– Update costs as more information becomes available from
subcontractors/suppliers– Final cost estimate and tender submission review.
Your turn now! What is your best strategy?Please leave your comments and share what works best for you. How do you manage to finish your cost estimates on time and have them pass the final review? Do you want to see what others are saying about the challenges they face as cost estimators? Take the survey, it is anonymous:https://goo.gl/forms/udLFq83q5Su7j5uY2
Thank you for clicking through the full slide deck!
Want to read more about cost estimating? You can find me blogging at www.LearnCostEstimating.comOr, send me an email at [email protected]