LADOTD CONSTRUCTION COST ESTIMATING

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LADOTD CONSTRUCTIONCOST ESTIMATING
Charles Nickel, P.E. Cost Estimate Value
Engineering Director
Office [phone] E-mail
Charles.Nickel_at_la.gov
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Cost Estimating Process

• GOAL
• To provide guidance in developing and
  maintaining accurate, consistent, and reliable
  project cost estimates.

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Project Management Body of Knowledge (PMBOK)

• Cost Management Involves 3 Processes
• Cost Estimating
• Cost Budgeting
• Cost Control

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Project Management Body of Knowledge (PMBOK)

• Cost Management Involves 3 Processes
• Cost Estimating
• Cost Budgeting
• Cost Control

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Cost Estimating Process

• Types of Project Cost Estimates
• 1.) Engineering
• 2.) Construction
• 3.) Right-of-Way
• 4.) Utilities
• 5.) Mitigation (Permits, Approvals, etc.)

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Cost Estimating Process

• Types of Project Cost Estimates
• 1.) Engineering
• 2.) Construction
• 3.) Right-of-Way
• 4.) Utilities
• 5.) Mitigation (Permits, Approvals, etc.)

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Cost Estimating Process

• Some common methods of Cost Estimating
• Historical Bid Based
• Cost Based
• Parametric
• Risk Based

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Cost Estimating Process

• Some common methods of Cost Estimating
• Historical Bid Based
• Cost Based
• Parametric
• Risk Based

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Historical Bid Based Estimating

• Uses previous bid data as a basis for cost
  estimating.
• Items with little or no bid history are much more
  difficult to estimate with this method, if not
  impossible.

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Historical Bid Based Estimating

• Long Range Estimates
• Detailed Estimates

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Historical Bid BasedLong Range Estimating

Estimating UsingMajor Item Cost Groups
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Historical Bid BasedLong Range Estimating
Cost groups are based on line items classified
into major item categories such as

• Asphalt
• Base
• Concrete
• Drainage
• Earthwork
• Erosion Control

• Gates Fences
• Guiderail
• Landscaping
• Mobilization
• Pavement marking
• etc.

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Historical Bid BasedLong Range Estimating
Item Group Cost XX Project Cost Project Cost
Item Group Cost / XX
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Historical Bid BasedLong Range Estimating
For example, for a particular type of roadway
project, historically Asphalt Items 58 of
Project Cost Base Items 12 of Project
Cost Mobilization 10 of Project Cost Other
Items 20 of Project Cost
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Historical Bid BasedLong Range Estimating
Item Group Cost Quantity Unit Price
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Historical Bid BasedLong Range Estimating

• Quantities for cost groups can be estimated based
  on early project measurements such as
• Length of roadway
• Width of roadway
• Depth of pavement
• Number of intersections
• Etc.

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Historical Bid BasedLong Range Estimating
Once the quantities are estimated, Unit Prices
can be determined based on historical bid data.
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Historical Bid BasedLong Range Estimating
Estimate of Asphalt Group 1.5 M Estimate of
Base Group 1.2 M 2.7 M 2.7 M / (58
12) 3.8 M Construction Cost 3.8 M
contingencies
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Detailed Estimates
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Historical Bid BasedDetail Estimating
Involves past item level relationships between
the unit price and other measurable parameters of
the item such as

• Quantity
• Letting Date
• Number of Bidders

• Location
• Size
• Type of Work

• Etc., Etc., Etc.,

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Historical Bid BasedDetail Estimating

• Modeling Unit Price relationships
• Simple Linear Regressions
• Not so Simple Linear Regressions

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Historical Bid BasedDetail Estimating

• Simple Linear Regression Models
• For example
• Unit Price b0 b1 (Bid Date)
• Log(Unit Price) b0 b1 Log(Quantity)

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Historical Bid BasedDetail Estimating

• More Complex Linear Regression Models
• For example
• Log(Unit Price)
• b0 b1 Log(Quantity) b2 (Bid Date)

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Historical Bid BasedDetail Estimating
Adjust the bid points to reflect only one
relationship at a time.
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Historical Bid BasedDetail Estimating

• The more relationships that can be identified and
  modeled, the closer the adjusted bid points will
  be to the trend lines.
• The amount of time and resources spent
  identifying and modeling these relationships will
  determine the level of accuracy achievable.

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Estimating Tools

• Excel Spreadsheets
• Access Database Applications
• Trnsport CES
• All these tools rely on the EXPERIENCE of the
  ESTIMATOR to use them wisely to develop the
  Construction Cost Estimate.

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QUESTIONS?
Charles Nickel, P.E. Cost Estimate Value
Engineering Director Office (225)
379-1078 E-mail charles.nickel_at_la.gov