One of the biggest challenges we face as cost estimators is tight deadlines for cost estimate development. Implementing a strategy for our cost estimating development process might be the difference between a high-quality cost estimate and failure.
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
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!
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
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?
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?
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
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
