5 Steps to a Successful Construction Cost Estimate

1.Collaboration – To paraphrase, “no successful cost estimator is an island”.  It is critical to understand the full scope of any project.   Collaboration spans discussions with Owners, Contractors, Subs/Trade, site visits, sharing estimates and jointly reviewing/refining and negotiating estimates, and more!

2. Transparency – Despite what you may hear, there is no “secret sauce” involved in cost estimating, and no “black magic” either.  It’s all about experience and the application of robust business process and appropriate use/re-use of available cost data, including so called “reference cost data” such as RSMeans.  All stakeholders must be able to understand the cost estimate thus transparency is a requirement.

3. Technology – Collaboration, transparency, accuracy, productivity and other factors are directly impacted by technology.  Using the appropriate tools for the job is just as important for cost estimating as it is for a  construction project.  The exclusive use of spreadsheets for multiple concurrent projects and/or larger projects is typically unproductive and error prone.  Don’t fall into the “spreadsheets can do anything” trap.  That said, there is no cost estimating software application that can do everything (residential, commercial, government, …) well.  So look for ‘best of breed’ applications that are built for your needs!

4. Information – Extensive  detailed line time cost databases, such as those from RSMeans, as well as historical costs and other third party sources are extremely important relative to productivity and accuracy.  They enable information re-use, data validation, and more.   That said, proper attention must be paid to the data architecture (how information is categorized, updated, and stored).

5. Localization – Every construction job, while sharing many similarities, is different.  Each cost estimate must be localized for physical site conditions, physical location, as well as local labor and material availability.

4. Granularity – A big word, I know… but understanding the inter-relationships and variability associated with material, equipment, and labor for each activity or task is critical.   Are you using union, open shop, Davis-Bacon…  what is the source of your information, what sample size are you using,  what could affect productivity, ….
5.  Parallel Approach – Top down or bottom up?  The answer is both!   Clearly one must understand the overall value associated with a certain project.  That said, detailed line items with associated labor, materials, and equipment, and an associated bill of materials (BOM) are requirements for transparency and to mitigate errors and omissions.

via http://www.4Clicks.com – Premier cost estimating and project management software for efficient project delivery – JOC, SABER, IDIQ, SATOC, MATOC, MACC, POCA, BOA, ….

Collaboration, Transparency, Accuracy, Process, and supporting Technology – The Keys to Improved Productivity for Building Construction, Renovation, Repair, and Sustainability

Interoperability is a common “buzzword” used whenever you here a discussion about improving productivity with the AECOO (Architecture, Engineering, Construction, Owners, Operations) industry sector.  Unfortunately, it is a term associated with primarily with technology, and its usage implies that interoperability from a technology perspective is a major, if not THE major stumbling block to construction sector productivity improvement.  This “assumption” would be blatantly false.  Drastic culture and process are the requirements for mitigating waste within the AECOO sector.

The primary issue that dictates the tone and efficiency of any facility construction, renovation, repair, or sustainability project is process related… and is “the construction project delivery method”.  Assuming capable parties in each “knowledge domain” the delivery method must provide for, support, and monitor collaboration, transparency, and accuracy.   Common taxonomies, cost data bases, etc. play a role, as does supporting technology that embeds and distributes consistent processes.   While its true that cloud computing is an enabler, with its role to support the cost effective integration of various knowledge domains and technology silos; the underlies processes linked to a collaborative project delivery method focused upon life-cycle management is the critical aspect.

Integrated project delivery (IPD) and job order contracting (JOC) – the latter also referred to as IPD-lite as it target renovation, repair, and sustainability vs. new construction – are current examples of proven efficient construction approaches that dramatically alter the “status quo”.

Common taxonomy plays a key role and is also generally overlooked.   For example, cost estimators, even today, primarily rely upon spreadsheets and customized cost databases vs. integrating powerful software packages and standardized cost databases (ie RSMeans).   “Doing it my way” and exclusively using spreadsheets prohibits efficient information reuse, is prone to data and formula errors, and create largely unsupportable databases.   How can multiple cost estimators share information on a project, or communicate with Owners, Contractors, AE’s, Subs, etc… if they aren’t speaking the same language?  They can’t… and they don’t.  And this is just one example of many…across multiple knowledge domains whether it be capital planning and management, maintenance and repair management, building automation systems, procurement, bidding, project delivery, …..

(Figure Source – White Paper on IDDS “Integrated Design and Delivery Solutions”, CIB Publication 328.)

The AECOO sector can’t even begin a discussion about achieving higher levels of interoperability, exchanging BIM models and data, etc., until it shifts its focus exclusively to culture and process change.  We don’t even have a common understanding of BIM, let alone sharing BIM models.  Even today, many view BIM as 3D visualization, vs. life-cycle building management supported by technology!  We need to recognize that design-bid-build (DBB) and even design-build (DB) and the associated “accepted” practices of change orders and lawsuits are contrary to the basic tenants of productivity, collaboration, transparency, and accuracy.

Certainly it is true that our industry is fragmented and relatively slow at adoption of new technology, however, this is due to our culture, and our lack of efficient processes.

via http://www.4Clicks.com – premier software for cost estimating and efficient project delivery – JOC, SABER, IPD, SATOC, MATOC, MACC, POCA, BOA, IDIQ