F ACTORS THAT D ETERMINE V ARIATION IN E STIMATIES
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Prof Awad S. Hanna
Prof Awad S. Hanna
To know in advance the expected cost in varying degree of accuracy, at different phases of the project.
Prof Awad S. Hanna
1. Making investment decision in the conceptual stage.
2. Negotiate and finalize the contract at the implementation phase.
3. To implement cost control measures.
Prof Awad S. Hanna
1. Determine project cost and profit.
2. To Implement cost control measure.
3. To develop data base for that can be used for future project.
Prof Awad S. Hanna
1. Provide the owner with probable estimate.
2. Evaluate alternatives.
Prof Awad S. Hanna
Contractor’s Estimator Determines actual cost
of project for bidding purposes.
Has detailed company cost data for labor and equipment.
Knows which construction methods are to be used.
Has knowledge of actual materials suppliers to be used and quantity discount prices.
Engineer’s Estimator Determines expected
cost. Does not know who will
receive award, therefore does not know contractor’s exact resource costs. Does not know actual labor rates.
Must assume probable construction methods to be used.
Does not know who project supplier will be. Must use local list prices.
Prof Awad S. Hanna
1. Preliminary
2. Unit price
3. Assembly or Conceptual Cost
4. Detailed estimate
Each phase of a project life cycle requires a different type of estimate--each estimate requires different types of information.
20%
15%
10%
5%
Accuracywithin
Preliminary
Unit Price
Assembly
Detailed
5min 1hour 1day 3 weeks
Time
2 Million dollars building
Prof Awad S. Hanna
“”“”
A cost prediction based solely on size and/or capacity of a proposed project.
Before any engineering or design is completed.
Rely on broad data from already executed similar projectrelate cost in dollar to the main
capacity/size parameternumber of beds in hospitalsquare feet of office spacenumber of students in school
Prof Awad S. Hanna
AdvantageousAllows a quick determination of the
feasibility of a project
A quick screening on alternatives, etc. (e.g., should it be a concrete building or a steel building !).
Purpose:
1. Ranking alternatives
2. Evaluate economics and financial feasibility
3. As a check on more detailed estimates
Prof Awad S. Hanna
Parking Garage$15.0/sq. ft or $4500/parking space
High School$80 to 110/sq. ft or $40,000/ student
seat Medical Centers
$90 to 130/sq. ft
Prof Awad S. Hanna
Unit prices are obtained from data on projects already performed.Cost of labor, material, and equipment for
all units of work are added together and divided by the number of units involved.
Prof Awad S. Hanna
____________________________________________________________
Work Item Estimated Quantity Unit Price Total___________________________________________________________
_Site Preparation 50,000 sq. yd $ 7
$ 350,000Earth Excavation 100,000 cu.yd. $ 12
$ 1,200,000Paving 50,000 sq.yd. $ 8
$ 400,000 Total bid price
$ 1,950,000___________________________________________________________
_
Prof Awad S. Hanna
Performed when conceptual design decisions are being made.
Work package concept can be used to determine the element or assembly to be studied
We need a breakdown of cost of a completed project into its functional elements to:1. Find the relationship between element cost and project
cost
2. Distribution of cost between constituent elements (sq. feet of _____)
Prof Awad S. Hanna
Elemental Estimate AnalysisGross floor Area = 250,000 ft2
Prof Awad S. Hanna
Prepared after drawings and
specification are completed. Requires a complete quantity takeoff
based on drawing and the complete set of contract documents
Need information on labor rate "productivity", material cost, cost of renting or purchasing equipment
Prof Awad S. Hanna
1. Time
We base our estimate on the cost of existing projects that were built in the past
Price-level changes over time We need to project costs of future projects
Many organizations publish construction cost data on regular basis: US Department of Commerce US Department of Labor ENR Turner Construction Company Handy-Whitman Utilities
Prof Awad S. Hanna
Cost Indices Published by R.S. Means and ENR Used to update old cost information
Uses1. To update known historical costs for new
estimates2. To estimate replacement cost for specific assets3. To provide for contract escalation
Limitations
1. They represent composite data, average of many projects.
2. They fail to recognize technological changes.3. There is a reporting time log.
Prof Awad S. Hanna
To update old cost information to current date
cost of new facility = cost of old facility x
To predict future cost
F = P (1 + i)
F = future cost P = present cost i = predicted rate of cost escalation per periodn = number of periods (years)
new cost indexold cost index
n
Prof Awad S. Hanna
Some factors affecting cost in
different locations are:
1. Transport cost
2. Taxes
3. Labor supply and local productivity
4. Codes and local inspection
Construction costs also vary in different regions of the USA.
ENR and Means publishes periodically the indices of local construction costs in the major cities.
Prof Awad S. Hanna
ENR Regional Index
City Cost Index
Boston1120Chicago 1400New York 1700
Prof Awad S. Hanna
As the quantity built increases, the unit cost decreases,
Size Factor =
UCM = Unit Cost Multiplier
UCM = SF
Proposed SizeComparison Size
E - 1
Prof Awad S. Hanna
BuildingsComplex Projects
Project Size
Factor BuildingsComplex Projects
1.175 1.904 0.2 0.235 0.3811.128 1.619 0.3 0.338 0.4861.096 1.443 0.4 0.438 0.5771.072 1.320 0.5 0.536 0.6601.052 1.227 0.6 0.631 0.7361.036 1.153 0.7 0.725 0.8071.023 1.093 0.8 0.881 0.8751.011 1.043 0.9 0.910 0.9391.000 1.000 1.0 1.000 1.0000.991 0.963 1.1 1.090 1.0590.982 0.930 1.2 1.178 1.1160.974 0.900 1.3 1.266 1.1700.967 0.874 1.4 1.354 1.2240.960 0.850 1.5 1.440 1.2750.954 0.829 1.6 1.527 1.3260.948 0.809 1.7 1.612 1.3750.943 0.780 1.8 1.697 1.4230.938 0.774 1.9 1.782 1.4700.933 0.758 2.0 1.866 1.5160.928 0.743 2.1 1.950 1.5610.924 0.730 2.2 2.033 1.6050.920 0.717 2.3 2.116 1.6480.916 0.705 2.4 2.199 1.6910.912 0.693 2.5 2.281 1.7330.909 0.682 2.6 2.363 1.7740.905 0.872 2.7 2.445 1.8150.902 0.662 2.8 2.526 1.8550.899 0.653 2.9 2.607 1.8940.896 0.644 3.0 2.688 1.9330.893 0.636 3.1 2.768 1.9720.890 0.628 3.2 2.849 2.0100.887 0.620 3.3 2.929 2.0470.885 0.613 3.4 3.008 2.0840.882 0.606 3.5 3.088 2.1210.880 0.599 3.6 3.167 2.1570.877 0.593 3.7 3.246 2.1920.875 0.586 3.8 3.325 2.2280.873 0.580 3.9 3.404 2.2630.871 0.574 4.0 3.482 2.297
Use This Side for Unit Cost Multipliers
(UCM Method)
Use This Side for Total Cost Multipliers
(TCM Method)
Prof Awad S. Hanna
0.000
0.500
1.000
1.500
2.000
0.1 1.0 10.0
Size Factor
Un
it P
rice
Co
st M
ult
ipli
er
(UC
M)
Buildings Complex Projects
Prof Awad S. Hanna
0.000
0.5001.000
1.5002.000
2.500
3.0003.500
4.000
0.1 1.0 10.0
Size Factor
To
tal
Pro
ject
Co
st M
ult
ipli
er
(TC
M)
Buildings Complex Projects
Prof Awad S. Hanna
Wall height = $10 x 160 x 10 = $16,000= $10.00 of floor area
Bldg. AWall cost = $10 x 160 x 10 = $16,000
= $10.00 of floor areaBldg BWall cost = $10 x 180 x 10 = $18,000
= $11.25 of floor area
Bldg AArea = 15ooft2
Perimeter = 160ft
30’
50’
Bldg BArea =1500ft2
Perimeter=
150ft
40’
40’
10’
15’ 15’
Prof Awad S. Hanna
Increased productivity by doing repeated work.Detailed analysis will be discussed
later.
Prof Awad S. Hanna
Hard to quantify but should be evaluatedQualitySoil conditionWeather ConditionCompetitionProductivity
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