HC-Lecture43-The-Estimating-Process

HC-Lecture43-The-Estimating-Process - Heavy Construction...

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Heavy Construction Heavy Construction Lecture #43 Lecture #43 The Estimating Process During Planning - A Magnitude or “guesstimate”; - The Conceptual Estimate; - The Preliminary Estimate; - The Definitive Estimate; - The Engineer’s Estimate, and - The Contractor’s Bid Estimate. L. Prieto-Portar 2008
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The estimating process.
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And a bit more complex…
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Project Managers constantly estimate the costs associated with the design, procurement and construction of capital facilities. If the estimate is unrealistic or contains basic errors, the contractor will lose money. Therefore, all estimates are by necessity based on judgment and experience, from the simplest " guesstimates " to the commitment stage of bids. These are the various levels of accuracy of cost estimates: 1. The Magnitude Estimate (± 30% error), performed before the design phase starts; 2. The Conceptual Estimate (± 15% error), performed when design concepts are defined; 3. The Preliminary Estimate (± 10% error), performed at 30% of the design phase; 4. The Definitive Estimate (± 5% error), performed at Control Point #3 of design; 5. The Engineer’s Estimate (± 3% error), performed when the design is 100% complete; 6. The Contractor’s Bid Estimate (± 1%), performed by the contractor to bid the job. The Bid Estimate typically costs the contractor 0.25% of the cost of the project (for example, a $ 100 million building may cost the contractor $ 250,000 to bid). Obviously, if the contractor does not win that job, that cost has to be carried by his general
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HC-Lecture43-The-Estimating-Process - Heavy Construction...

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