COST ESTIMATING APWA COMPLETE STREETS AND TECHNOLOGY CONFERENCE

COST ESTIMATING APWA COMPLETE STREETS AND TECHNOLOGY CONFERENCE April 19, 2017 Wayne Richardson, PE, LEED AP ENGINEERING n MANAGEMENT n ENVIRONMENTAL 1

Fun Trivia Big Dig, Boston (ballooned from 2. 6 B in 1985 to __? __ in 2005) A: $3. 6 B B: $5. 2 B C: $8. 6 B D: $14. 6 B E: $18. 2 B 2

Answer: Big Dig, Boston (ballooned from $2. 6 B in 1985 to $14. 6 B in 2005) Objectives Understanding Cost Estimates Definitions Types/Levels Working Sources Methodology Documentation 3

Avoiding Cost Overruns Without financial feasibility, there is no Project! Difficulties Cost overruns occur because original estimates are inaccurate Misrepresentation Pressure/Bias toward Underestimating Unrealistic schedules (time value of money) Intangibles and Unforseens (ex. Outreach) Costing is for Accounting, not Engineering Dept. Lack of experience, knowledge in cost management Requires Significant Effort for large complex (Public) projects Pinning Down General and Special Conditions Frequent changes in technology? Not usually a cause of cost difficulties 4

Key Things to Take Away Begin with End in Mind Use Judgement Be Inclusive Document Item Data Sources Include Assumptions QC PDF your POPCC 5

Definitions Cost Estimate Project Cost Management Cost Control Soft Costs Direct Costs Indirect Costs Distributable Costs Field Costs Allowance Alternates Prevailing Wage Factored Parametric Cost Index Mark-up 6

INDIRECT COSTS 7

Construction Estimating Type Classes �Class C – Study Level (Order of Magnitude) � Based On: Studies, Alternatives, Investment Types, Program � Accuracy: +50% to -30% � Contingency: 20 - 50% (Realistically, 20 -40%) �Class B – Budgetary Level � Based On: Plans from 20%-30% Completion � Accuracy: +30% to -15% � Contingency: 10 - 25% �Class A – Engineer’s Estimate � Based On: Plans from 30%-100% Completion � Accuracy: +15% to -5% � Contingency: 5 - 10% � Breakdown of labor and materials �Change Order Estimates 8

Quantity Takeoff Prepare Hard copies Verify scale A quantity take-off is a precise count of the material within the project. A detailed quantity take-off is the only accurate method of determining, within a high degree of precision, the project costs. Other methods are mere guesses. 9

Quantity Takeoff - Prepare CSI Master Format Specification Review of Documents Summarize Cost Elements and Division of Responsibility Outreach to subcontractors and vendors Site Visit and/or Pre-Bid Meeting 10

Quantity Takeoff - Perform Documents Measure “Take It All Off” Specs as “Shopping list” Itemize Waste 11

Quantity Takeoff – Things to Look For: Dimensions, Scaling Special Equipment On-Site Storage Work Space and Staging Areas Special Commissioning (LEED, BIM, Recycling, Made in USA, “Green”) Abnormal Conditions Extended Warranties Discrepancies Specification Back-Check Proprietary, Sole or Limited Completeness, Coordination & Source Products Contradictions Special Labor Provisions

Quantity Takeoff - Documentation Things to Document: Specification Section Number and Listing, ie, “Section 12 24 00 -Motorized Roller Shades” Item Description or Scope of Work RS Means Line Item Be as Specific as Possible Keep Items Separated Quantity – Mark on Plans and in Estimate Table 13

Quantity Takeoff - Documentation Things to Document: Sketch-up Unit of Measurement: Each, Square Footage, Cubic Footage, Linear Footage Vendor Quotes (Add Mark-Up of 10% to 25%) Percent Waste Variable Mark-Up 14

From Quantity Takeoff to Cost Estimate Job Conditions Economic Conditions Hoisting Conditions Contractor Management Experience Labor Availability Subcontractor Availability No matter how accurate the estimators are, each one will determine a different estimate amount because each evaluation will be completed differently. Each estimator may have used different steps for estimating quantities, using different waste factors, and different labor rates. 15

Cost Estimate - Sources Recent Bids Project Historical Estimates Engineering News Record Richardson Engineering Services, Inc. (Process Plants) Dodge Digest National Construction Estimator RS Means 16

Current Means & Methods Estimating software such as Timberline Precision, MC 2, On-screen take-off, Adobe measuring tools… Microsoft Excel for creating custom cost spreadsheets Cost data books and Web based applications such as RS Means & Saylor Publications Productivity data books such as NECA (for electrical trades) & MCAA (for mechanical trades) 17

RS Means • RS Means publications compiles construction cost data throughout the US & Canada • Costs published in the various categories are national average costs and may need to be adjusted for specific locations • Costs are organized in the CSI 50 division Master. Format 2010 system 18

CSI Master. Format 2010 system General Requirements Subgroup – Division 1 Facility Construction Subgroup – Divisions 2 – 19 Facility Services Subgroup – Divisions 20 – 29 Site and Infrastructure Subgroup – Divisions 30 – 39 Process Equipment Subgroup – Divisions 40 - 49 19

Cost Estimate: RS Means Methodology Primary Components Labor + Materials Extend Subs and Vendors General Conditions 20

Cost Types There are two types of costs found in the RS Means texts: • Unit Price – Cost data is divided into the 50 divisions according to the Master. Format system of classification and numbering • Assembly Costs – Cost data is organized per assembly, which is a functional element of construction E. g. , Footing including excavation, installation of steel & concrete, waterproofing and backfill 21

Reference Section This section contains information on: § Equipment Rental Costs § Reference Tables § Crew listings § Change Orders § Historical Cost Indexes § Square Foot Costs § City Cost Indexes § Listing of Abbreviations § Location Factors 22

Basis for Cost Information The material prices in Means data cost books are “Contractor” prices. They are prices that an average Contractor with an annual sales volume of at least $ 4, 000. 00 and up would pay to his suppliers. While computing estimates, it is important to note the economy of scale factors such as size of Contracting company, small orders, type of materials, etc… 23

Cost Estimate – Factoring Items Project Size Multiplier Site Constraints City Costs Index Freight and Taxes Inflation or Escalation Factor Contingency Factor Check: Ask yourself, “What’s not included? ” Check your work against previous budget estimates, bids for similar work, Owners expectations, etc. . . 24

Key Things to Take Away Begin with End in Mind Use Judgement Be Inclusive (what’s not included? Document Item Data Sources Include Assumptions QC PDF your POPCC Estimating is only partially technical science, the rest is artful judgment. 25