CE 3372 WATER SYSTEMS DESIGN PROJECT SUPPLEMENT 4

CE 3372 WATER SYSTEMS DESIGN PROJECT SUPPLEMENT #4: COST ESTIMATING AND BIDS

COST ESTIMATING n. Is the approximation of the cost of a program, project, or operation, estimated by the engineer. Includes: n. Planning and feasibility studies n. Engineering services (Design/Meetings/Reports etc. ) n. Surveying n. Construction, including materials, equipment, and labor n. Field inspection n. To manage liability: n. Some firms avoid “estimate” and use “Opinion of Probable Cost” n. Recommend adding “Preliminary” to all estimates before final cost n. A contingency is usually included in an estimate to provide for unknown costs which are indicated as likely to occur by experience, but are not identifiable. n. Cost Estimate also pre-determines how much time and

COST ESTIMATION • A cost estimate is usually prepared to submit a bid or tender to compete for a contract award. • How to build a cost estimate? • • • Educated guessing RS Means Practice and research! (Previous awarded bids, manufacturers) • NOTE* • Preliminary cost estimates are usually rounded to the nearest thousand. Gives developers a number to secure financing. • Final cost estimates for bids are exact.

BIDS n. What is a Bid? – A bid is an offer. n. Engineers design and produce bid documents (lawyer jargon), including construction drawings and technical specifications, more commonly called “bid and specs” n. Engineering firms are required to place an advertisement in the local paper two weeks before bid day n. Upon receiving info, general contractors (if interested) will bid to construct the project. n. Bidding Facts: n Bidding can be open or closed (selected contractors). n All bids must be turned in by time selected. n Bids are opened with contractors in the selected room by a PE only AFTER selected time. n Bids MUST be read aloud. n Required Documentation and any discrepancy must be noted. n Usually lowest bid is chosen or contractor based on history/preference n Developer has the right to refuse all bids.

PRIVATE PROJECT COST ESTIMATES • Feasibility – Determines no/go decision • • Preliminary • • • Prepared prior to development Based on general scope of project (items/work hours/etc) Includes significant contingency (30%) Prepared after plan has evolved but before any construction drawings Used by developer to secure funding/ assist in developing alternatives before final decision on product details Accuracy +/- 10 -15% Contingency (15 -20%) Construction/Detailed • • Prepared after plans have been approved Accuracy +/- 5%

FEASIBILI TY ESTIMAT E

PRELIMINARY ESTIMATE • Developed from plans that have not yet reached sufficient detail • Purpose is to: • • • Acquire approvals from permitting jurisdiction Determine problems that will affect project Determine cost to construct Help developer to obtain developer loan applications Water Supply • • Pipes - dollars per linear foot Valves, hydrants, fire lines, pumps

CONSTRUCTION ESTIMATE • Generally developed after construction plans have been approved • Quantity takeoffs to be determined • Double check estimates with a PE (more experience)