Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Cost Estimating
Manual for
WSDOT Projects
M 3034.02
July 2009
Phone: 360-705-7430
Fax: 360-705-6861
E-mail: engrpubs@wsdot.wa.gov
Internet: www.wsdot.wa.gov/publications/manuals/
Foreword
Each project is unique. To accurately develop an estimate of the construction
costs for a project, an Estimator must be capable of mentally constructing
the project and then accounting for all the activities necessary to completeit.
Many of the best cost estimators are knowledgeable in both transportation
design and construction.
Estimators should be shielded from pressures to keep estimates within
programmed or desired amounts based on funding availability. Estimators
should be free to establish what they consider to be a reasonable estimate
based on the scope and schedule of the project and the bidding conditions
(i.e.,local and global market conditions) that are anticipated.
This guidance has been developed by the Strategic Assessment and Estimating
Office (SAEO) in alignment with the goals of the Statewide Program
Management Group (SPMG).
We would like to thank the dozens of key Washington State Department of
Transportation (WSDOT) people who participated in the review process for
these guidelines.
Foreword iii
Purpose 1
Definitions 2
Documentation/Basis of Estimate 19
Techniques 19
Basis of Estimate (BOE) 19
Level of Detail in the Basis of Estimate 25
Specialty Groups 28
Bridges, Nonstandard Retaining Walls, and Structures 28
Right of Way 28
Environmental 29
Utilities 29
Important Factors 32
Geographic Considerations 32
Quantity Considerations 33
Item Availability 33
Scheduling/Lead Time 33
Difficult Construction/Site Constraints 34
Estimating Lump Sum Items 34
Force Account 35
Timing of Advertisement 36
Expected Competition/Contractor Availability 36
Other Contracts 36
Specialty Work 37
Standard Items vs. Nonstandard Items 38
First Time Used 38
Soil Conditions 38
Permit Conditions 39
Allowances 39
Construction Contingencies 39
Other Funding Sources/Agreement Work for Others 39
Resources 44
List of Assumptions 49
Required Process
(project managers can use a
Project Size ($) higher level process if desired)
Less than $10 M Qualitative Spreadsheet in the Project Management
Online Guide
$10 M to $25 M Self-Modeling Spreadsheet
$25 M to $100 M Cost Risk Assessment (CRA) Workshop
Greater than $100 M Cost Estimate Validation Process (CEVP) Workshop
Planning
The planning level estimate is used to estimate funding needs for long range
planning and to prioritize needs for the Highway System Plan. These estimates
are typically prepared with little detail to the project definition.
Techniques
Parametric estimating techniques are often used for planning estimates.
Lane mile and square foot are two types of parametric estimating techniques.
Historical bid prices and historical percentages can be used to generate
costs for these parameters. Analogous project estimating is another approach
that can be used. Commercial estimating programs are available to assist in
parametric estimating, especially for projects that have little or no historical
data available in WSDOT databases.
WSDOT has developed two tools that employ parametric methods to prepare
planning level estimates:
Mobility Project Prioritization Process (MP3), which is an Excel
workbook. This program evaluates both costs and benefits to arrive
atabenefit/cost ration for use in planning level analysis and selection.
www.wsdot.wa.gov/mapsdata/tdo/mobility.htm
Scoping
A scoping level estimate is used to set the baseline cost for the project and
to program the project. A project is programmed when it is entered into the
Capital Improvement and Preservation Program (CIPP) and the Biennial
Transportation Program. The scoping estimate is important because it is the
baseline used by the Legislature to set the budget and all future estimates will
be compared against it. Clearly document assumptions and scope definitions
in the Basis of Estimate document so that all future changes can be accurately
compared to this estimate.
Techniques
Historical Bid-Based, Cost-Based, Parametric, and Risk-Based:
Theestimator will be able to determine approximate quantities for items
such as asphalt, concrete pavement, structures, and roadway excavation.
For such quantifiable items, Historical Bid-Based or Cost-Based estimating
methodologies should be used for pricing. Other items not yet quantified
Design
Estimates prepared at the various design levels, including Geometric Review,
General Plans Review and Preliminary Contract Review are used to track
changes in the estimated cost to complete the project in relation to the current
budget (CIPP or Book amount). Each time the estimate is updated the
Cost Estimate Process detailed in Figure 1 should be followed. The current
project cost budget and schedule should be compared to the new estimate.
Clearly document each of these updates in relation to the previous estimate
and include the documentation in the estimate file. If the budget or scope of
the project needs to be updated, fill out and submit a Project Change Request
Form. The final Engineers Estimate, along with supporting documents, is
required to be filed in the Design Documentation Summary (DDS).
Design approval is an important stage of design for estimating purposes.
Atdesign approval the configuration of the project is known. This will
solidify many items in the scope such as Right of Way needs, likely permit
conditions, environmental mitigation, quantities of major items and outside
stakeholders. As scope definition improves, the accuracy of the estimate will
likewise improve. The work effort required to prepare, document and review
the estimate also increases.
PS&E
The Engineers Estimate is prepared for the Final Contract Review in
preparation for advertisement and is used to obligate construction funds
andtoevaluate contractors bids.
Techniques
Historical bid-based, Cost-based, and Risk-based. The project has matured
to a point that design engineers and estimators are able to specify all items of
work that will be required for the project and accurately estimate quantities
and unit prices. This level of project estimate has the advantage of detailed
understanding of project scope and conditions. If the estimators are from
outside the project team, they should take special care to understand the
details of the project, including performing a detailed review of the plans
Screening or
Feasibility Risk-based or Judgment
-50% to +200%
WTP/HSP Historical %
Planning (20 Year Plan) Similar Projects
0% to 2%
WTP Washington Parametric
Washington Transportation Plan MP3
Transportation HSP Highway PLCE
Plan Systems Plan
Highway System
Parametric
Plan
MP3, PLCE
-40% to 100%
Design Studies Concept Study or Analogous Projects
Feasibility Historical %
Route Dev. Plans 1% to 15%
Implementation Plan Risk-based
(10 Yr. Plan) CEVP
CRA
Self-Modeling
Parametric
Budget Authorization MP3, PLCE
-30% to +50%
Scoping or Control Analogous Projects
Capital Improvement Historical bid-based
Project Summary 10% to 30%
& Preservation Plan (UBA, BidTabs Pro)
(PD, DDS, ERS) (CIPP) Risk-based
CEVP, CRA
Self-Modeling
Historical bid-based
Design (UBA, BidTabs Pro,
-10% to +25%
Design Design Estimates EBASE)
Documentation (Project Control of Cost-based
30% to 90%
I/S Plans for Scope Schedule Risk-based
Approval Budget) CEVP
Design Approval CRA
Self-Modeling
Techniques
Several techniques can be employed to ensure clear documentation. Itis
recommended that estimating be specifically scheduled in the project
management plan for each phase of the project. This ensures that adequate
time and resources are allotted for performing the estimate. A specific
schedule should be developed for each estimate that includes the steps in
Figure 1. As part of the estimate review process, someone external to the
project team should perform a review of the estimate file. This external review
will help ensure that the estimator has clearly recorded the assumptions and
decisions made in the estimating process.
Identification of Work Items > $50,000 > $10,000 All Items All Items
Notes:
1. Round final cost estimate to the nearest appropriate significant
digit, usually third or fourth from left for scoping through design.
Forexample, $196,526,918.00 could be rounded to $197 million.
2. Report cost estimates in current dollars to program management.
TheConstruction Cost Index (CCI) will be used to inflate the estimate
tomidpoint of construction by program management.
3. Miscellaneous Item Allowance in Design accounts for lack of scope
definition and those items too small to be identified at that stage of the
project. This allowance is eliminated entirely in PS&E estimates as the
scope will then be fixed and all estimate items should be identified.
Right of Way
Right of Way (ROW) costs vary widely throughout Washington State. Region
Real Estate Services or the HQ Real Estate group should be involved early
to help determine appropriate costs for the project. It is important that all
specialty groups detail what is included and what is not included in their
estimate. Factors that should be considered in the ROW estimate include
administration, relocation, clean up costs and allowances for condemnation.
Real estate markets are best characterized by those familiar with the
geographic area. In consideration of this fact, subject matter experts (SMEs)
such as region Real Estate Services and region right of way staff should be
asked to provide this estimate. These SMEs can provide input regarding
Environmental
Project environmental staff needs to be involved in the process early. The
costs of complying with environmental impact analysis, mitigation, permit,
and public involvement requirements in environmental laws and regulations
and interagency agreements need to be included in the project estimate.
Utilities
The Utilities Office should also be involved early in the process. Sub-surface
and overhead utilities are located on a majority of projects sites and conflicts
with these utilities can increase a projects cost dramatically. When a utility
is located on an easement and WSDOT acquires the property through ROW
acquisitions, WSDOT must pay all relocation costs in addition to providing
the affected utility with a new easement. Also note that city owned utilities
that are impacted within the citys limits can cause similar costs to a project.
Another risk that may affect project costs is triggered when utilities that
are note identified during the design phase (due to insufficient engineering
investigation or inaccuracy in utility as-builts) are discovered while the project
is under construction. Utility conflicts not identified until the construction
phase can result in costly change orders and project delays.
July 2009
IA IB IC IQ ID IE IF IG IH II IK IL
Urban Bike Storm Fish
Subprogram HOV Collision Collision All Weather Trunk System New Safety Bridge
Urban Rural Connec- water Barrier
Lane Reduction Prevention Highway Completion Rest Area Restriction
tion Runoff Removal
$0 $250,000 ND ND ND ND 40% 20% ND ND ND ND 40% 40%
$250,000 $500,000 ND ND 15% ND 30% 20% ND ND ND ND 25% 30%
$500,000 $1,000,000 ND ND ND ND 22% 20% ND ND ND ND 20% 20%
$1,000,000 $2,000,000 15% 20% 12% ND 20% 20% ND ND ND ND 20% 15%
$2,000,000 $5,000,000 15% 20% 12% ND 20% 15% 10% ND ND ND ND 15%
$5,000,000 $10,000,000 15% ND ND 10% 12% 15% 10% ND ND ND ND ND
$10,000,000 + 15% 10% ND 10% 12% 15% 10% 14% ND ND ND ND
Preservation Program P1 P2 P3
PE as % of CN Roadway Structures Other Facilities
PA PB PC PD PE PF PG PH
Notes:
1. The percentages in this table are based on actual WSDOT project costs state wide from July 2001 through March 2007.
2. ND indicates that there is no data for this cell.
3. Yellow highlighted cells indicate that there is limited data for that cell.
4. For project type definitions see below and Plans Preparation Manual section 830.03.
5. A factor must be applied to the PE amount for consultant work. Typical factors for the consultant portion of the work range between 1.8 and 2.8,
depending on the type and scope of consultant involvement.
Page 31
Important Factors
Many factors influence a project estimate. Several key factors are described in
the sections below. More information is available at:
www.wsdot.wa.gov/Projects/ProjectMgmt/RiskAssessment/Process/
Geographic Considerations
Geographic considerations can have a profound affect on the selection of unit
bid prices. The projects location, whether it is in an urban, suburban, or rural
setting should be considered in establishing bid prices. Dependent on the
restrictions of Standard Specification 1-90.7, some of the cost considerations
relating to a projects location may be accounted for in the mobilization
biditem.
A project in an urban setting generally has to contend with construction
operations occurring in more confined work spaces, with greater volumes of
traffic, and limited hours of operations, night time work, etc. Some of these
factors may be offset by availability of local contractors, materials, equipment
and personnel.
Projects located in rural settings have factors that affect the establishment
of unit bid prices contrary to projects located in urban settings. Construction
operations may have less restricted work areas, less traffic to contend
with, and additional hours to complete the work; all factors that increase
productivity. On the other hand, materials, equipment and personnel may
have to be brought in from out of the area which may increase costs related
totransportation, support, wages, per diem, etc.
On projects that utilize large quantities of aggregate, whether for base,
surfacing, or earthwork, the location of material sources and disposal sites
may have a large impact on costs. Nearby material sources or disposal sites
reduce hauling costs. On rural projects, the cost of bringing in a concrete batch
plant, hot mix asphalt plant, or similar facility, may increase unit bid prices.
Again, dependent on the restriction of Standard Specification 1-09.7, those
costs may be directly attributed to and reflected in the mobilization bid item.
Terrain may also be a consideration in establishing an items cost. Mountainous
terrain and steep grades cause production rates to fall, whereas level terrain
and straight roadways generally have the opposite effect.
Groundwater conditions can vary greatly and need to be investigated to
determine the extent of dewatering required for foundations and other
structures such as storm water retention ponds. Varying geotechnical
conditions are covered under soil conditions.
Item Availability
Materials that are readily available, or ones that are commonly used, are
generally less expensive to purchase and install/construct. Materials that are
inshort supply are more expensive. This should be considered in establishing
the unit price.
Large quantities of materials required in a short period of time may result in
atemporary shortfall in product availability and potential cost increase or
delay to a project.
Scheduling/Lead Time
To be efficient, a contractor needs to optimize the scheduling of his resources
including labor, equipment and materials. When a contractor can plan for
and maximize his resources, he can become more competitive in his bidding.
However, the lead time needs to be considered in the estimating process by
estimating the project based upon when it is expected to be built. For example
a project that is two seasons long may have the majority of its paving in either
the first or the second year.
Force Account
Force account is a method of payment that pays the contractor his actual
expenses for all labor, materials and equipment to complete the work.
Markups for material costs, labor surcharges, overhead and profit may be
added to this figure. The force account method of payment is used primarily
for extra work (i.e., work that is unforeseen at the time a project is let or
advertised and is discovered during construction) or for items of work that
are poorly defined and may or may not be used during construction. This
second case is the one most frequently encountered by the estimator. Since
the contractor does not usually bid on this work, there is little incentive for
him to reduce costs or prosecute the work diligently. Because of this, the
forceaccount method of payment should only be used when necessary.
When a reasonable cost estimate for a force account item is required, the
estimator should try to establish the scope of work to be accomplished. Once
the scope is developed, it can be compared to historical bid price data for
similar items of work. If no comparable history exists, the force account item
should be broken out into its anticipated core components. The estimator
can then rely on historical bid data for those items and the given limitations
to come up with a reasonable force account estimate. If no such data exists
for even thesmaller core items of work, the estimator may need to estimate
the amountand costs of labor, materials and equipment to execute the work
(i.e.,use the cost based method of estimating).
Force account may also be considered a tool for transferring risk from
the contractor to the owner. If the work is properly directed by the project
inspector, force account may actually cost less than an equivalent lump
sumitem.
Timing of Advertisement
When a project is advertised and subsequently bid has a major influence on
the bid prices. Contractors typically have a time of year that is busier than
others. This is typically when contractors prefer to do the majority of their
work. This is normally directly correlated with the weather and occurs when
the conditions are the most conducive for construction activities (such as
asphalt paving). Appropriate timing of advertisement can also be affected by
other items like fish and HMA paving windows or other outside constraints.
Peak season for most highway projects is from April through October.
Peak season for marine work is November through March. The best time to
advertise a project is several months before the work season for that type of
work to allow time for contract execution and for the contractor to mobilize
their resources in time to take full advantage of the work season.
If a contractor has fully allocated his resources for the season then they are
less likely to bid on a project and, if they do bid, it is in a less competitive
environment. For this reason there is a benefit to WSDOT to advertise a
project as soon as possible prior to the peak season, to allow the contractor
time to plan, schedule and seek as many opportunities as possible to find
efficiencies in their work plan. This also creates a more competitive bid
climate and lower bid prices.
The estimator preparing the final engineers estimate needs to be aware of
the timing of the advertisement and account for any expected fluctuations
in bid prices due to the season such as lower production during temperature
extremes, additional protections for weather sensitive materials, and so forth.
Other Contracts
Multiple projects being advertised at the same time can influence bid prices
in much the same way as lack of competition and availability. The contractors
only have so many resources available to develop bids for projects. In the
case of large projects, a contractor may not have the resources to develop
bids for more than one project at a time. The most prudent course of action
Specialty Work
Specialty items are not necessarily new items or new construction methods,
but are items that are somehow different than the majority of the work on a
given project. For example, on a pavement rehabilitation project the signal
work may be classified as specialty work, although it would not be classified
as such on a project that was predominately signal and lighting work. Projects
that include specialty work or are comprised totally of specialty work items
need to be characterized correctly when estimating. Estimating the cost of
specialty work requires a thorough understanding of the work involved and
the resources required to accomplish the work.
When estimating specialty work seek the advice of experts in the area of
concern. When estimating specialty items utilizing historical bid data, the
similarities and differences between the historical project(s) and the project
athand must be fully accounted for in the development of the estimate.
Another factor to consider is the number of qualified contractors capable of
doing the project or elements of work. Other examples of specialty work may
be landscaping, guideposts, fencing or mechanical rehabilitation of moveable
bridge components. Specialty work should be reviewed by staff that is familiar
with that particular type of work.
Soil Conditions
General assumptions about soil conditions may be made early in the
estimating process, but they may turn out to be wrong. As the estimate
progresses, geotechnical data may help improve the information and prevent
costly change orders and claims. In the early estimates the assumptions
regarding soil conditions and the potential effects of unknown soil conditions
should be clearly documented. A common estimate omission is an improper
allowance for shrink and swell of material. The region materials engineer
should be consulted to determine the appropriate shrink or swell factor to
use. Soil conditions can be a significant cost risk to a project. Risk based
Permit Conditions
Throughout the stages of planning, scoping, and design, various projections
of permit conditions for construction can be obtained from region or HQ
Environmental Offices. Engaging these groups early may help identify
specific permits or conditions that can drive up construction costs and identify
opportunities to avoid costly environmental conflicts. Considerable costs may
be required due to storm water collection and treatment, wetland protection
and mitigation, hazardous material testing, containment and treatment,
and removal and disposal of underground fuel tanks, creosote timbers, and
contaminated soils.
Allowances
Please refer to the definition of contingency provided in the Definitions section
of this document. Allowances are typically meant to cover a variety of possible
events and problems that are not specifically identified or quantified. They
are also used to account for a lack of project definition during the preparation
of planning estimates. Misuse and failure to define what specific allowances
amounts cover can lead to estimate problems. It is a mistake to use allowances
or contingency funds to cover added scope as the contingency is then not
available to cover the risk item(s) for which it was originally intended.
In WSDOT estimates, allowances should be shown separate from the base
cost. Allowance amounts should be identified with specific unknowns so they
can be managed appropriately as the design progresses. This will assist in
review of the estimate and help designers and project managers manage the
risk. Contingency amount guidance during construction can be found in the
Plans Preparation Manual 830.03.
Construction Contingencies
Construction contingencies are typically meant to cover a variety of
possible risks or events that are not specifically identified or quantified such
as uncertainties in quantities and minor risk events related to quantities,
work elements, or other project requirements during construction. See
Plans Preparation Manual 830.03 for guidance on estimating construction
contingencies.
Peer Review
This type of review is similar to the internal project team review but uses
another project team or office to conduct the review. Offices can often perform
reviews for each other in this way. The advantage to this type of review over
the internal review is that the project gets a review with a fresh perspective on
the estimate. This can provide an increased level of confidence in the estimate.
This is also a good way to share lessons learned and information between
project offices and serves to efficiently utilize fixed engineering resources
within the department.
External
In this type of review external experts are brought in to review either
specific pieces of the estimate or the entire estimate. This type of review
can be combined with any of the other types of reviews to supplement
knowledge of a specific item of work or to provide an outside perspective.
This type of review has a wide range of costs but can provide significant
confidence in the estimate that might not be otherwise attainable from
internalWSDOTresources.
Table 4 is a matrix that identifies which position has responsibility for
reviewing and endorsing each type of WSDOT estimate.
Note:
The Region Project Engineer, Project Manager, Project Development
Engineer, and Engineering Manager should be informed of changes and
updates to project scope, schedule, and cost estimates. This table is based on
the Project Control and Reporting Manual (M 3026) January 2006 revision.
Purpose
Describe the project, its purpose, timing and location.
Scope
Risks
Describe all threats and opportunities that surface during the preparation of
the cost estimate. This can become the basis for a risk management plan,
asrequired on all WSDOT projects.
Estimate Quality Assurance
Describe the quality assurance plan for the estimate. What reviews or
benchmarking has been done on this estimate?
Attachments
Attachment A: Estimate Deliverables Checklist
Attachment B: Reference Drawings
Attachment C: Schedule Documents
Attachment D: Additional Attachments (as necessary)
Civil
Structural
Environmental
Other