Cost Estimate Development Sequence
- 1. COST ESTIMATE DEVELOPMENT SEQUENCE ImplementA System Adjust For Better Performance
- 2. Your biggest challenges as a cost estimator:
- 3. Your biggest challenges as a cost estimator: ■ Accurate and complete project information
- 4. Your biggest challenges as a cost estimator: ■ Accurate and complete project information ■ Access to cost data
- 5. 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
- 6. 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
- 7. 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
- 8. You can overcome those challenges by…
- 9. You can overcome those challenges by… ■ Planning your cost estimating development activities
- 10. You can overcome those challenges by… ■ Planning your cost estimating development activities ■ Measure your performance
- 11. You can overcome those challenges by… ■ Planning your cost estimating development activities ■ Measure your performance ■ Ask for feedback from the review team
- 12. 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
- 13. 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!
- 14. So, here is my step-by-step strategy: Step 1
- 15. Step 1 1. Review all available documents
- 16. Step 1 1. Review all available documents – Ask for clarifications
- 17. Step 1 1. Review all available documents – Ask for clarifications – Take notes on all missing/incomplete information
- 18. Step 1 1. Review all available documents – Ask for clarifications – Take notes on all missing/incomplete information – Set-up a request for clarification registry
- 19. Step 1 1. 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
- 20. Step 1 1. 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
- 21. Step 1 1. 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
- 22. Step 2
- 23. Step 2 2. Define the purpose of the cost estimate:
- 24. Step 2 2. Define the purpose of the cost estimate: – Is it a cost estimate for a tender submission?
- 25. Step 2 2. 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?
- 26. Step 3
- 27. Step 3 3. Set-up the cost estimate development kick-off meeting
- 28. Step 3 3. Set-up the cost estimate development kick-off meeting – Invite all cost estimate review team members
- 29. Step 3 3. 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
- 30. Step 3 3. 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:
- 31. Step 3 3. 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
- 32. Step 3 3. 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
- 33. Step 3 3. 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?
- 34. Step 3 3. 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?
- 35. Step 3 3. 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?
- 36. Step 4
- 37. Step 4 4. Develop the cost estimate schedule:
- 38. Step 4 4. Develop the cost estimate schedule: – List all activities needed to be performed to complete the cost estimate
- 39. Step 4 4. Develop the cost estimate schedule: – List all activities needed to be performed to complete the cost estimate – Estimate the time required for each activity
- 40. Step 4 4. 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
- 41. Step 4 4. 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
- 42. Step 4 4. 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
- 43. Step 4 4. 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.
- 44. Step 4 4. 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
- 45. Step 5
- 46. Step 5 5. DevelopWork Breakdown Structure to meet the following requirements:
- 47. Step 5 5. DevelopWork Breakdown Structure to meet the following requirements: – Tender closing and submission
- 48. Step 5 5. DevelopWork Breakdown Structure to meet the following requirements: – Tender closing and submission – Cost estimate review
- 49. Step 5 5. DevelopWork Breakdown Structure to meet the following requirements: – Tender closing and submission – Cost estimate review – Price sourcing strategy
- 50. Step 5 5. DevelopWork Breakdown Structure to meet the following requirements: – Tender closing and submission – Cost estimate review – Price sourcing strategy – Construction methodology
- 51. Step 5 5. DevelopWork Breakdown Structure to meet the following requirements: – Tender closing and submission – Cost estimate review – Price sourcing strategy – Construction methodology – Estimate validation and benchmarking
- 52. Step 5 5. DevelopWork 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
- 53. Step 6
- 54. Step 6 6. Develop the cost estimate:
- 55. Step 6 6. Develop the cost estimate: – Quantity take-offs based onWBS and price sourcing strategy
- 56. Step 6 6. Develop the cost estimate: – Quantity take-offs based onWBS and price sourcing strategy – Develop direct costs
- 57. Step 6 6. Develop the cost estimate: – Quantity take-offs based onWBS and price sourcing strategy – Develop direct costs – Develop indirect costs based on preliminary construction schedule
- 58. Step 6 6. Develop the cost estimate: – Quantity take-offs based onWBS and price sourcing strategy – Develop direct costs – Develop indirect costs based on preliminary construction schedule – Optimize resources
- 59. Step 6 6. Develop the cost estimate: – Quantity take-offs based onWBS 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
- 60. Step 6 6. Develop the cost estimate: – Quantity take-offs based onWBS 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.)
- 61. Step 6 6. Develop the cost estimate: – Quantity take-offs based onWBS 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
- 62. Step 6 6. Develop the cost estimate: – Quantity take-offs based onWBS 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
- 63. Step 6 6. Develop the cost estimate: – Quantity take-offs based onWBS 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
- 64. Step 6 6. Develop the cost estimate: – Quantity take-offs based onWBS 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
- 65. Step 6 6. Develop the cost estimate: – Quantity take-offs based onWBS 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.
- 66. 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.com Or, send me an email at Doina.Dobre@EmeraldGroup.ca