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ENGINEERING
May/June 2012
THE JOURNAL OF AACE INTERNATIONAL -
THE AUTHORITY FOR TOTAL COST MANAGEMENT
TM
COST COST
COST ESTIMATION
CHALLENGES & UNCERTAINTIES
CONFRONTING OIL AND GAS COMPANIES
COST ESTIMATION
CHALLENGES & UNCERTAINTIES
CONFRONTING OIL AND GAS COMPANIES
COST ESTIMATING
PROCESS & QUALITY
ASSURANCE
COST ESTIMATING
PROCESS & QUALITY
ASSURANCE
DACE LABOR PRODUCTIVITY NORMS
THE NEW GULF COAST?
DACE LABOR PRODUCTIVITY NORMS
THE NEW GULF COAST?
MR. OWNERS
ESTIMATE IS NOT
SATISFACTORY
WHY NOT?
MR. OWNERS
ESTIMATEIS NOT
SATISFACTORY
WHY NOT?
1 COST ENGINEERING MAY9JUNE ?=>?
4 M)5 O0&e)6* E*+!%a+e I* N'+ Sa+!*fac+')2 ;
W2 N'+3
W!$$!a% E5 K)a.*4 PE CCE FRICS
14 C'*+ E*+!%a+!'& Ca$$e&ge* < U&ce)+a!&+!e*
C'&f)'&+!&g O!$ a&d Ga* C'%(a&!e*
N!c'$a* A$e1a&de) Ha$$ a&d Sa)a De$!$$e4 PE
27 C'*+ E*+!%a+!&g P)'ce** < Q.a$!+2 A**.)a&ce
S.*a&&a Beda)!da a&d S+efa&!a C'&+!
32 DACE Lab') P)'d.c+!/!+2 N')%* ;
Te Ne0 7G.$f C'a*+83
Ma)+!& S5J5 /a& V$!e+
CONTENTS
TECHNICAL ARTICLES
COST ENGINEERING
THE AACE INTERNATIONAL ONLINE BUTTON : T!* ed!,'&
'f +e Cost Engineering "'.)&a$ a* acce** +' add!,'&a$ %a:
+e)!a$ '& +e AACE I&+e)&a,'&a$ 0eb*!+e4 www.aacei.org5
A&2,%e 2'. *ee +e *2%b'$ a+ ce&+e)4 +e)e !* add!,'&a$
c'&+e&+ '&$!&e a**'c!a+ed 0!+ +a+ a),c$e ') fea+.)e5 D!)ec+
2'.) b)'0*e) +' www.aacei.org a&d $''# f') +e '&$!&e b.+:
+'& +' acce** add!,'&a$ )e*'.)ce*5 If 2'. a)e a$)ead2 )ead!&g
+e e$ec+)'&!c /e)*!'&4 ".*+ c$!c# +e '&$!&e b.-'& d!)ec+$25
2 AACE I&+e)&a+!'&a$ B'a)d 'f D!)ec+')*
2 C'*+ E&g!&ee)!&g J'.)&a$ I&f')%a+!'&
13 AACE Ne0 B'a)d Me%be)*
24 A&&.a$ Mee+!&g Re%!&de)*
49 P)'fe**!'&a$ Se)/!ce* D!)ec+')2
49 I&de1 +' Ad/e)+!*e)*
50 AACE6* ?=>? A&&.a$ Mee+!&g
52 Ca$e&da) 'f E/e&+*
ALSO FEATURED
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2 COST ENGINEERING MA?/!unL 2012
HEADQUARTERS
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800.838.CCS1 fax - 304.291.3728
CONTENTS
AACE INTERNATIONAL
BOARD OF DIRECTORS
PRESIDENT
Mlchael 8. nosblsch, CCC S
362.733.2472 / presldenL[aacel.org
PRESIDENT2ELECT
Marlene Pyde, CCL Lv
303.940.3200 / preselecL[aacel.org
PAST PRESIDENT
SLephen C. 8evay, CCC ClCC
403.777.4900 / pasLpres[aacel.org
VICE PRESIDENT2ADMINISTRATION
MarLln uarley, CCC l8lCS
713.372.2426 / vpadmln[aacel.org
VICE PRESIDENT2FINANCE
!ohn !. Clccarelll, L CCL S
609.497.2283 / vpflnance[aacel.org
VICE PRESIDENT2TEC
Ceorge WhyLe, CCC CL Lv
301.937.7434 /vpLec[aacel.org
VICE PRESIDENT2REGIONS
!ulle Cwen, CCC S
213.922.7313 / vpreglons[aacel.org
DIRECTOR2REGION 8
ClneLLe 8asak, .Lng. lAACL
403.708.7674 / dlrreglon1[aacel.org
DIRECTOR2REGION 9
!ohn C. Llvengood, ClCC S
202.669.1360 / dlrreglon2[aacel.org
DIRECTOR2REGION :
!ames P. Carson, CCC CL
770.444.9799 / dlrreglon3[aacel.org
DIRECTOR2REGION ;
uuane 8. Meyer, L CCL
313.241.1230 x 620 / dlrreglon4[aacel.org
DIRECTOR2REGION <
Larl !. Seabrook, lll, CCC
713.372.0321 / dlrreglon3[aacel.org
DIRECTOR2REGION =
nlcholas kellar, CCC Lv S
dlrreglon6[aacel.org
DIRECTOR2REGION >
hlllps 1harakan Mulackal, CCL Lv
+971.30.631.4830 / dlrreglon7[aacel.org
DIRECTOR2REGION ?
kelLh Webb
+61.8.93483043 / dlrreglon8[aacel.org
EXECUTIVE DIRECTOR
uennls C. SLork
304.296.8444 / dsLork[aacel.org
vlewpolnLs expressed ln columns, feaLures, and arLlcles publlshed ln CosL Lnglneerlng [ournal are solely Lhose
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Se$d add&e'' cha$ge' (% AACE I$(e&$a(%$a"/ 89=< S)$c&e'( T%+$e Ce$(&e D&. M%&ga$(%+$. WV 9=<7<28?>= USA1 C)'(%#e&
6>789:<@ 3APC4. P)b"ca(%$' Ma" Ag&ee#e$( N% ;7=9;7>;. Re()&$ )$de"*e&ab"e Ca$ada$ add&e''e' (% PO B%, <7:. RPO
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Policy Concerning Published Columns, Features, and Articles
LsLabllshed 1938
Ma$ag$g Ed(%& Marvln Celhausen
mgelhausen[aacel.org
A&( D&ec(%& noah klnderknechL
nklnderknechL[aacel.org
Ad*e&('$g Sa"e' Mark SLouL
neLwork Medla arLners lnc.
410.384.1966 fax - 410.384.8339
msLouL[neLworkmedlaparLners.com
vol. 34, no.3/May/!une 2012
AACE5 I$(e&$a(%$a" 2 The A)(h%&(- f%& T%(a" C%'( Ma$age#e$(
TM
Cu8 vlSlCn - 1o be Lhe recognlzed Lechnlcal auLhorlLy ln cosL and schedule managemenL
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Cu8 MlSSlCn - 1he members of AACL

enable organlzaLlons around Lhe world Lo achleve


Lhler lnvesLmenL expecLaLlons by managlng and conLrolllng pro[ecLs, programs, and porL-
follos, we creaLe value by advanclng Lechnlcal knowledge and professlonal developmenL.
We invite you to apply on our website
bechtel.com/careers
a world of opportunity
4 COST ENGINEERING MAY6JUNE ><=>
TECHNICAL ARTICLE
R
a!ked !(be% "!e i! 'he
*"%ld i! #a&&e!ge% '%affic i!
><<D 8CC/<?>/<CB '"'al
#a&&e!ge%& #e% Ai%#"%'&
C"(!cil I!'e%!a'i"!al9 :=;/ 'he Ha%'&field7
Jack&"! A'la!'a I!'e%!a'i"!al Ai%#"%' 8H7
JAIA9 i& a b(&, #lace1 Tha'3& '%(e i! 'e%&
"f c"!&'%(c'i"! a!d "de%!i-a'i"! a&
*ell/ f"% '" kee# (# *i'h 'he #ace i!
#a&&e!ge%& a!d 'hei% e+#ec'a'i"!&/
facili'ie& (&' c"!'i!(all, be (#da'ed/
e+#a!ded/ a!d !e* "!e& c"!&'%(c'ed1
The &ce!e de#ic'ed i! fig(%e = i&
c""!/ '" "!e deg%ee "% a!"'he%/
'h%"(gh"(' 'he ai%#"%'1
I! ><<B/ a fif'h #a%allel %(!*a,
*a& c"i&&i"!ed/ Ta+i*a, 4V/5 'he fi%&'
e!d7a%"(!d 'a+i*a, i! 'he US/ *a&
c"#le'ed &h"%'l, 'he%eaf'e%/ a!
e+#a!ded i!'e%!a'i"!al 'e%i!al i& (!de%
c"!&'%(c'i"!/ a!d a!, "'he% #%"jec'&
ha)e bee! c"#le'ed a!d a%e i! #%"g%e&&
i! "%de% '" #%")ide e'%"#"li'a! A'la!'a3&
#a&&e!ge% a!d f%eigh' ai% '%a!&#"%'
!eed&1 A! e&'ia'i!g g%"(# "f fe*e% 'ha!
a half7d"-e! e&'ia'"%& ha& 'he
%e&#"!&ibili', "f kee#i!g (# *i'h 'he fl"*
"f #%"jec'&/ #%e#a%i!g a!d )alida'i!g
e&'ia'e&/ a&&i&'i!g #%"jec' 'ea& i!
e)al(a'i!g #%"#"&al& a!d e&'abli&hi!g
b(dge'&/ a!d 'he "'he% ,%iad "f d('ie&
*hich befall e&'ia'"%&1 Cl"&e i!&#ec'i"!
"f fig(%e > %e)eal& &"e "f 'he a!,
c"!&'%(c'i"! &i'e&/ &'agi!g a%ea&/ a!d
ba'ch #la!'& *hich ha)e i!fil'%a'ed 'he
ai%#"%'1
A !ece&&a%, &'e# i! "%de% f"% 'hi&
&all &'aff '" deal *i'h 'he )"l(e "f
#%"jec'& i& *ell7c"!&ide%ed #%"ce&&e& a!d
#%"ced(%e& 'ha' &(##"%' #%"g%a
"bjec'i)e&1 Fi%&'/ 'he%e a%e &"e gi)e!&0
'he e&'ia'e (&' c"#l, *i'h
Ha%'&field7Jack&"! De)el"#e!' P%"g%a
8H7JDP9 &'a!da%d& i! 'ha' i' i& #%e#a%ed
(&i!g 'he e&'ia'i!g &"f'*a%e ad"#'ed b,
'he #%"g%a/ (&i!g 'he da'aba&e a!d
'e#la'e #%")ided/ e'c1 Fail(%e "f a!
e&'ia'e '" #a&& 'hi& i!i'ial 'e&' *ill
#%"babl, %e&(l' i! i'& "('%igh' %ejec'i"!1
Af'e% 'ha'/ a !(be% "f c%i'e%ia a%e (&ed
'" )alida'e a!d acce#' a! e&'ia'e1
WHAT MAKES AN ESTIMATE
%SATISFACTORY&#
I! a !('&hell/ H7JDP (&' be
c"!)i!ced "f 'he )alidi', "f 'he e&'ia'e
a& a #%edic'"% "f (l'ia'e c"&' *he! 'he
#%"jec' i& e)e!'(all, c"!&'%(c'ed1 M(ch
"f 'he abili', '" ake 'ha' j(dge!' i& i!
'he #%e&e!'a'i"! "f 'he e&'ia'e a!d i'3&
back(#1 The e&'ia'i!g &'aff %e)ie*& 'he
e&'ia'e a!d/ (#"! &'aff acce#'a!ce/ &'aff
(&' be #%e#a%ed '" defe!d 'he e&'ia'e
a!d a!&*e% a!, $(e&'i"!& (##e% ai%#"%'
a!agee!' a, ha)e c"!ce%!i!g 'he
c"&'&1 A checkli&' "f 'he 2e&&e!'ial&3 f"% a!
e&'ia'e ha& bee! de)el"#ed a!d i& (&ed
'" )alida'e a!, e&'ia'e/ *he'he%
#%e#a%ed b, a! E&'ia'i!g Se%)ice
P%")ide% 8ESP9 "% H7JDP &'aff1
2Sa'i&fac'"%,3 a!&*e%& '" 'he $(e&'i"!& i!
'he checkli&' a&&(%e H7JDP "f bei!g able
'" a!&*e% 'h"&e $(e&'i"!& 2&a'i&fac'"%il,13
ESSENTIAL ESTIMATE CRITERIA
Program'Adoped Esimaing Sof!are
The H7JDP ha& ad"#'ed ce%'ai!
&'a!da%d& f"% "#e%a'i"!& "f all
c"!&(l'a!'& c"!'%ac'i!g *i'h 'he ai%#"%'
MR. OWNERS ESTIMATE
IS NOT SATISFACTORY WHY NOT?
William E. Kraus, PE CCE FRICS
Absrac$ P%"jec'& a%e bei!g #%"#"&ed a!d e&'ia'e& #%e#a%ed f"% a!, #%"jec'&
i! l"ca'i"!& a%"(!d 'he *"%ld a!d i! a!, i!d(&'%ie&1 Of'e! 'he&e e&'ia'e&/ Cla&&
=/ Cla&& A/ a!d e)e%, &'age i! be'*ee!/ a%e #%e#a%ed b, "*!e%&3 e&'ia'i!g &'aff&/
de&ig! 'ea&/ "% "'he% &e%)ice #%")ide%& a!d 'he, fail '" ee' 'he e+#ec'a'i"!&
"f 'he "*!e%1 Wha' ca! be d"!e '" b%i!g 'he eff"%'& "f 'he&e #a%'ie& cl"&e% '"
ee'i!g 'he !eed& "f 'he "*!e%. Thi& a%'icle *ill di&c(&& c""! &h"%'c"i!g&
"f 'he&e e&'ia'e& a!d 'he %ea&"!& f"% 'h"&e &h"%'c"i!g& "! 'he #a%'& "f e&'i7
a'i!g a!d de&ig! 'ea&/ a& *ell a& "*!e%&/ a!d *ill &(gge&' &"l('i"!&1 Thi& a%'icle
*a& fi%&' #%e&e!'ed a' 'he ><== AACE I!'e%!a'i"!al A!!(al Mee'i!g a& EST1@C=1
Ke" Words$ Biddi!g/ de&ig! 'ea&/ e&'ia'e&/ "*!e%&/ #%"jec'&/ a!d &c"#e
5 COST ENGINEERING MAY/JUNE 8678
and %he* a#e e)!ec%ed % cm!l*- Thi$ i$
n% &n&$&al f# a la#ge in$%i%&%in a$ i%
all($ $%anda#di+a%in f !#ce$$e$,
!#d&c%$, and %l$- Cn$&l%an%$ a#e
e)!ec%ed % familia#i+e %hem$el'e$ (i%h
%he $%anda#d$ !#i# % !#!$ing n an
H0JDP !#jec%- H0JDP e$%ima%#$ ha'e
!#e!a#ed a g&ide % a$$i$% ESP$ in %hei#
eff#%$ % &nde#$%and e$%ima%ing
!#ced&#e$ and $%anda#d$ % be &$ed 384
H0JAIA ha$ li%e#all* h&nd#ed$ f
e$%ima%e$ n0file !#e!a#ed $ince
ince!%in f %he !#g#am in 7;;;, in %he
e$%ima%ing $f%(a#e ad!%ed b* %he
!#g#am- P#g#am $%aff a#e %#ained %
&$e %he $f%(a#e and %hi$ all($ %he
ai#!#% % ha'e cn$&l%an%$ !#e!a#e
!#jec% e$%ima%e$ in a $%anda#d f#ma%,
&$ing $f%(a#e familia# % H0JDP $%aff,
(i%h&% %he ai#!#% ha'ing % !#c&#e
and add $%aff % be cm!e%en% in
m&l%i!le e$%ima%ing !#d&c%$-
E$%ima%ing $e#'ice !#'ide#$ 1ESP$2
gene#all* !#efe# % !#e!a#e %hei#
e$%ima%e$ in e$%ima%ing $f%(a#e &$ed
and f%en $%anda#di+ed b* %hei#
#gani+a%in$- Thi$ i$ &nde#$%andable a$
%hei# e$%ima%#$ a#e %#ained in and
acc&$%med % e$%ima%ing &$ing ce#%ain
%l$- H(e'e#, (i%h fe( e)ce!%in$,
e$%ima%e$ m&$% be !#e!a#ed &$ing %he
!#g#am0ad!%ed e$%ima%ing $f%(a#e-
Estimating b Spreadsheet
Pe#ha!$ f m#e cnce#n % ESP$, H0
JDP e$%ima%#$ can #eadil* anal*+e %he
hidden de%ail$ f e$%ima%e$ in %he
!#g#am0ad!%ed e$%ima%ing $f%(a#e %
find deficiencie$ and %he#
$h#%cming$-
Man* ESP$ !#efe# % !#e!a#e %hei#
e$%ima%e$ &$ing Mic#$f% E)cel5 #
an%he# $!#ead$hee% !#g#am- One
ad'an%age f a $!#ead$hee% i$ i%$
fle)ibili%*- H(e'e#, &nle$$ %he !a#%*
!#e!a#ing %he $!#ead$hee% ei%he#
cn%#l$ f#m&la$ # check$ each and
e'e#* ne, i% i$ &# e)!e#ience %ha% a
ce#%ain !e#cen%age f f#m&la$ (ill
cn%ain e###$ beca&$e f a 'a#ie%* f
#ea$n$ and %he e$%ima%e (ill n% be
ma%hema%icall* c##ec%- U$ing %he
!#g#am0$%anda#d e$%ima%ing $f%(a#e
a'id$ %hi$ diffic&l%*- An%he# d#a(back
f a $!#ead$hee% !#g#am i$ %he lack f
#eadil*0a'ailable &ni% c$% da%aba$e$
all(ing %he #ead* %#an$fe# f line i%em
cha#ac%e#i$%ic$ incl&ding de$c#i!%in$,
&ni%$ f mea$&#e, lab# and e"&i!men%
!#d&c%i'i%ie$, ma%e#ial &ni% c$%$,
$%anda#d c#e($, and lab# and
e"&i!men% h&#l* #a%e$ in% %he
e$%ima%e- If an ESP !$$e$$e$ $&ch a
da%aba$e, i% i$ likel* a !#!#ie%a#*
dc&men% n% #eadil* checked-
Indeed, H0JDP &$e$ $!#ead$hee%$
e)%en$i'el* a$ anal*$i$ %l$, %hank$ %
%hei# fle)ibili%* and &%ili%*- H0JDP c#ea%e$
'a#iance #e!#%$ (i%h %hem, de'el!$ all
$#%$ f im!#m!%& anal*$i$ %l$ &$ing
$!#ead$hee%$, and e'en mi$&$e$ E)cel5
a$ an a'ia%in &ni% c$% da%aba$e 394- H0
JDP ha$ mac#$ f# &# !#g#am
e$%ima%ing $f%(a#e %ha% d&m! da%a
f#m e$%ima%e$ in% $!#ead$hee%$ f#
f&#%he# anal*$i$- B&% H0JDP de$ n% &$e
$!#ead$hee%$ f# &# #&%ine e$%ima%e$-
The#e a#e e)ce!%in$ % %he #&le,
(hen an e$%ima%e i$ a% a !#e0cnce!%&al
$%age, (hen a &ni% c$% da%aba$e i$ f
li%%le ad'an%age % &$, and (hen %he f&$e
i$ e)%#emel* $h#% and %he e$%ima%# i$
n% familia# (i%h %he !#g#am e$%ima%ing
$f%(a#e- The$e deci$in$ a#e made n a
ca$e0b*0ca$e ba$i$, (i%h e)ce!%in$
being made nl* (hen %he $i%&a%in
dic%a%e$-
Work Breakdown Structure"
Estimate Organi!ation
H0JDP.$ !#ce$$e$ in'l'e
de'el!men% f a !lanning !ha$e
1cnce!%&al2 e$%ima%e in a !#e0a!!#'ed
(#k b#eakd(n $%#&c%&#e 1WBS2 and in
a $*$%em$0#gani+ed f#ma% ba$ed n %he
ind&$%#*0acce!%ed Unif#ma% 3:4- The
Figure % $ Construction at the Hartsfield#Jackson Atlanta International Airport
gee$al f$ame)!$k !f &he WBS i% %h!)
i fig'$e 8.
The a""$!(ed "laig "ha%e
e%&ima&e f!$m% &he ba%i% f!$ &he fi$%&
de%ig3"ha%e e%&ima&e ad &hi% f!$ma& i%
ca$$ied &h$!'gh &! &he fial e%&ima&e
ba%ed ! 0f!$3bid1 d$a)ig% ad
%"ecifica&i!%- a% %h!) i fig'$e 9.
The %+%&em% ba%i% !f Uif!$ma& i%
"a$&ic'la$l+ "$ac&ical f!$ &he "$!g$am
beca'%e !f &he eed &! de(el!"
c!ce"&'al e%&ima&e% f!$ "$!jec& ad
!"&i! %elec&i! "'$"!%e% )he %"ecific
b'ildig ma&e$ial%- e#'i"me&- ad
%+%&em% ha(e +e& &! be de(el!"ed )hich
all!)% c!%i%&ec+ i f!$ma& a% de%ig%
de(el!" &! ide&if+ &h!%e ma&e$ial%-
e#'i"me&- ad %+%&em%.
Database and Template
The $e#'i$eme& f!$ '%e !f &he
da&aba%e "$!(ided b+ &he "$!g$am i%
!f&e mi%'de$%&!!d b+ ESP%. The
da&aba%e i% &he m!%&3$eliable idica&!$ !f
'i& c!%&% &ha& H3HDP ha% a% i& i% ba%ed
! l!cal )age ad e#'i"me& $e&al
$a&e% ad hi%&!$ical 'i& c!%&% f$!m &he
"$!g$am. H!)e(e$- "$!g$am %&ada$d%-
)hile $e#'i$ig &he '%e !f &he da&aba%e
a% a %&a$&ig "!i&- al%! $e#'i$e ESP% &!
$e(ie) each ad e(e$+ lie i&em i a
e%&ima&e ad m!dif+ lab!$ !$ e#'i"me&
$a&e%- ma&e$ial 'i& c!%&%- ad lab!$ ad
e#'i"me& "$!d'c&i(i&ie% a% &he+ j'dge
a""$!"$ia&e.
N!e&hele%%- ESP% !f&e a""l+ &he%e
i&em% f$!m &he da&aba%e )i&h!'&
m!difica&i! !$ c!%ide$a&i! !f &he
%"ecific c!di&i!% "$e%e&ed b+ &he
)!$k )hich ma+ ca'%e ac&'al c!%&% &!
(a$+ f$!m &h!%e i &he da&aba%e.
The e%&ima&e m'%& be ba%ed ! &he
"$e3a""$!(ed WBS. The gee$al WBS- a%
%h!) i fig'$e 8- i% c'%&!mi,ed f!$ each
idi(id'al "$!jec&. ESP% )a& &! !$gai,e
&he e%&ima&e i &hei$ !) fa%hi! ad d!
!& &hik &he H3JDP $e#'i$eme& &!
c!m"l+ )i&h a ce$&ai !$gai,a&i! i%
im"!$&a&. B'& H3JDP ha% i e*ce%% !f 65
+ea$% )!$&h !f e%&ima&e% !$gai,ed %!
&ha& %&aff ca d! #'ick c!m"a$i%!%.
Whe a e%&ima&e d!e% !& c!m"l+ )i&h
&he a""$!(ed WBS- i& make% i& diffic'l& if
!& im"!%%ible- &! c!m"a$e ea%il+ )i&h
!&he$ e%&ima&e% a% %im"li%&icall+ %h!)
i &able 6.
Estimate Scope
The e&i$e %c!"e !f )!$k m'%& be
icl'ded i &he e%&ima&e- icl'dig
al&e$a&e%- !"&i!%- e&c. ESP% !f&e d!
!& 'de$%&ad &ha& &he e%&ima&e %h!'ld
icl'de !&he$ c!%&% %'ch a% '&ili&+
c!m"a+ c!%&%- FAA3 !$ ai$lie3
$eimb'$%able c!%&%- e&c. &ha& lie !'&%ide
!f &he c!&$ac&!$/% %c!"e !f )!$k- b'&
)hich m'%& be acc!'&ed f!$ i &he
e%&ima&e !e&hele%%. Of&e- &he%e
i&em% a$e e*cl'ded !$ m!$e !f&e
!mi&&ed f$!m &he e%&ima&e.
Of&e ESP% mi%&akel+ a%%'me &ha&
&hei$ e%&ima&e d!e% !& eed &! c!%ide$
al&e$a&e%- !"&i!%- e&c.- ad &he+ a$e
!mi&&ed f$!m &he e%&ima&e. The e%&ima&e
ca!& acc'$a&el+ "$edic& &he 'l&ima&e
"$!jec& c!%& if &he%e a$e !mi&&ed.
Estimate Detail
The le(el !f de&ail !f &he e%&ima&e
m'%& c!$$e%"!d )i&h &he le(el !f de&ail
!f &he %c!"e d!c'me&%. The le(el !f
de&ail !f a e%&ima&e %h!'ld be
c!%i%&e& )i&h AACE International RP
''R%+*$ Cost Estimate Classification
S"stem. I !&he$ )!$d%- a e%&ima&e
ba%ed ! "$!jec& defii&i! a& 5 4 7
"e$ce& %h!'ld be a Cla%% : e%&ima&e ad
a e%&ima&e "$e"a$ed )he "$!jec&
defii&i! i% ;: "e$ce& %h!'ld be a Cla%%
6 e%&ima&e.
6 COST ENGINEERING MAY2JUNE 7567
Fig!re )&General Esmate Organi#a%
on
Fig!re ( & Hartsfield%Jackson Atlanta International Airport
7 COST ENGINEERING MAY/JUNE 3123
ESP#, e"#onnel of$en a"e no$
e(e"ienced in $he "ea"a$ion of
conce$%al e#$ima$e# and "ea"e
needle##l) and badl)0de$ailed e#$ima$e#
ba#ed on of$en fa%l$) a##%m$ion# fo"
e#$ima$e# a$ $he conce$%al #$age+
P"ea"a$ion and "e&ie' of $he#e
e#$ima$e# i# labo"io%# and of$en a 'a#$e
of $ime and effo"$ a# $he de$ail in $he
e#$ima$e i# ba#ed on an -a##%med. le&el
of de$ail in $he e#$ima$e #coe of 'o"k+
Con$"a#$ing $ha$* H0JDP "ecei&e# #ome
e#$ima$e# ba#ed on -fo"0bid.
con#$"%c$ion doc%men$# 'hich incl%de
#)#$em0le&el de$ail co#$ i$em# and %ni$
co#$#+
Bo$h e($"eme# a"e %nacce$able a#
$he end0"od%c$ "a"el) j%#$ifie# $he
mean# on $he a"$ of $he ESP* a# 'ell a#
H0JDP e#$ima$ing #$aff+
Cost Documentation
All de$ail i$em# in $he e#$ima$e m%#$
be co#$ed ba#ed on "eali#$ic e&al%a$ion#
of labo" c"e'# and e!%imen$ "e!%i"ed
$o accomli#h $he 'o"k+ H0JDP doe# no$
allo' an) -l%g#*. %n#%b#$an$ia$ed co#$#*
in $he e#$ima$e#+ Fig%"e 4 ha# go$$en $o
be a o%la"* am%#ing #)mbol a$ $he
ai"o"$+
Pl%g# a"e imo##ible $o e&al%a$e in
$e"m# of $hei" "ea#onablene##* "e#o%"ce
a$$"ib%$e#* and fi$ne## fo" $he %"o#e a$
hand+ Once an e#$ima$e "ea"ed b) an
ESP ha# been "e&ie'ed and acce$ed* H0
JDP e#$ima$o"# $ake f%ll "e#on#ibili$) fo"
i$ and $"ea$ i$ a# if i$ i# an H0JDP e#$ima$e+
H0JDP canno$ f%ll) e(lain o" defend an
e#$ima$e 'hen i$ con$ain# l%g# and 'ill
no$ allo' %#e of $he#e %ndoc%men$ed
co#$# in "og"am e#$ima$e#+
Project Resources, Labor,
Equipment, Crews
Uni$ co#$# m%#$ be -b%il$0%. a#
ill%#$"a$ed in $able 3 f"om f%ll)0
doc%men$ed labo" and e!%imen$ %ni$
"a$e# and "od%c$i&i$ie#* ma$e"ial co#$#*
and $he#e co#$# m%#$ be "oe"l)
b%"dened and ma"ked %+
Labo" c"e'# and e!%imen$ %#ed in
co#$ing $he e#$ima$e m%#$ be
a"o"ia$e $o $he 'o"k and $he job#i$e
condi$ion# and labo" and e!%imen$
"od%c$i&i$) fac$o"# m%#$ be "ea#onable
fo" $he job#i$e and o$he" 'o"king
Table 1 Estimate Flow From Phase to Phase
Figure 4 Estimate Progression
cndi%in$ and %he #e$!ec%i'e "&an%i%ie$
f (#k f %he de%ail i%em$/
M&ch f %he (#k a% H4JAIA cc&#$
in %he Sec&#i%* Iden%ifica%in Di$!la*
A#ea 6SIDA7 and #e"&i#e$ (#ke#$ % be
badged af%e# !a$$ing $ec&#i%* check$ and
%aking a $ec&#i%* c&#$e and !a$$ing %he
e)am/ The* m&$% %hen !a$$ %h#&gh a
$ec&#e ai#!#% en%#*, ei%he# a
cn%#ac%#0$ ga%e # a $ec&#i%*
check!in%, in #de# % ge% % %hei# (#k
$i%e e'e#* (#kda*/ The* (ill ha'e
#e!#%ed ini%iall* % a #em%e $%aging
a#ea/ The* #ide a cm!an* 'ehicle #
$h&%%le % %he $ec&#i%* en%#* and %hen
a##i'ed a% %he (#k $i%e/ A $imila#
!#ce$$ cc&#$ &!n lea'ing %he (#k
$i%e af%e# %he (#kda*/
Thi$ !#ce$$ gene#all* #e$&l%$ in a
l$$ f !#d&c%i'i%* a$ a cn%#ac%# ma*
ge% a% be$% ;493: % < h&#$ f !#d&c%i'e
(#k &% f an =4h&# $hif%/ Thi$ lack f
efficienc* need$ % be acc&n%ed f# in
e$%ima%e$- f%en, i% i$ ign#ed/
The need % !e#f#m in a (#king
ai#!#% al$ a% %ime$ $e#i&$l* affec%$
(#ke# !#d&c%i'i%*/ Gene#all*, lab#
and e"&i!men% i$ % #emain in'i$ible %
!a$$enge#$ and %he# ai#!#% !a%#n$
d&#ing h&#$ f #eg&la# ai#!#%
!e#a%in$/ Sme%ime$, (#k can %ake
!lace behind %em!#a#* !a#%i%in$ # n
%a)i4 # #&n(a*$ %ha% a#e cl$ed/ B&%
m#e f#e"&en%l*, (#k m&$% %ake !lace
af%e# %he la$% fligh% !e#a%in a% nigh%
and bef#e %he fi#$% fligh% !e#a%in in
%he m#ning/ If %ha% la$% fligh% ha$ been
dela*ed beca&$e f (ea%he# # an
e"&i!men% !#blem, cmmencemen% f
cn$%#&c%in (#k i$ $imila#l* dela*ed/
P#d&c%i'i%* i$ affec%ed, again/
Safe%*, $ec&#i%*, and "&ali%*
#e"&i#emen%$ n H4JAIA !#jec%$ a#e
f%en a% a highe# le'el %han cn%#ac%#$
a% all le'el$ a#e acc&$%med %, &$&all*
#e!#e$en%ed in highe# c$%$ f# ai#!#%
(#k %han in %he# g'e#nmen% #
!#i'a%el*4f&nded !#jec%$/
C&##en% lab# and e"&i!men% #a%e
%able$ m&$% be &$ed in %he e$%ima%e/
Al%h&gh H4JDP !#e!a#e$ and di$%#ib&%e$
c&##en% %em!la%e$ and da%aba$e$, f%en
ESP$ d n% &$e ca#e in !#e!a#a%in f
%hei# e$%ima%e$/ E$!eciall* (hen %he*
c!* de%ail i%em$ f#m ld e$%ima%e$,
%he* fail % &!da%e %hei# e$%ima%e$ (i%h
c&##en% #a%e$/
Unresourced Costs
H4JDP de$ all( c$%$ % be
1!l&gged2 &nde# $!ecial cndi%in$/ If a
de%ail i%em i$ n% #e$&#ced and in$%ead
i$ ba$ed n a $&bcn%#ac%#0$ # 'end#0$
"&%e # ac%&al e)!e#ience f#m a
!#e'i&$ !#jec%, a c!* f %he "&%e
de%ailing %he "&%ed # e)!e#ienced &ni%
c$% # lab# #a%e$ and !#d&c%i'i%ie$ i$
incl&ded a$ !a#% f %he ba$i$ f e$%ima%e
6BOE7/
Calculating for Taxes and Fees
E$%ima%e$ m&$% incl&de !#!e# $ale$
%a)e$ and fee$/ Manda%#* all(ance$
$&ch a$ e$cala%in, bidding cn%ingenc*,
change #de# all(ance, e%c/, m&$% al$
be acc&n%ed f#/ A $ched&le m&$% be a
!a#% f %he !ackage and incl&de an
an%ici!a%ed N%ice % P#ceed 6NTP7 da%e
and a S&b$%an%ial Cm!le%in da%e/ A
!la&$ible #a%inale behind %he
calc&la%in f e$cala%in m&$% be
incl&ded/
Al%h&gh %he Ha#%$field4Jack$n
A%lan%a In%e#na%inal Ai#!#% i$ legall*
e)em!% f#m lcal and $%a%e $ale$ %a)e$,
!#ced&#e$ in !lace make i% 'i#%&all*
im!$$ible f# cn%#ac%#$ % a'id
!a*ing $ale$ %a)e$/ E$%ima%e$ m&$%
incl&de a!!#!#ia%e $ale$ %a)e$ n
ma%e#ial$ and #en%ed cn$%#&c%in
e"&i!men%/
In %he !a$%, m$% cn%#ac%#$ (ned
%hei# (n e"&i!men%, a% lea$% in %he H4
JDP e)!e#ience/ H(e'e#, c&##en%l*, i% i$
m#e cmmn f# m$% cn%#ac%#$ %
#en% m$%, if n% all, f %hei# cn$%#&c%in
e"&i!men%/ Sale$ %a)e$ m&$% be !aid n
#en%ed cn$%#&c%in e"&i!men%/
Contractors! Markups $Fees
Overhead and Profit%
Ma#k&!$ f# !#ime cn%#ac%#$ and
$&bcn%#ac%#$ m&$% be #eali$%ic, gi'en
an%ici!a%ed ma#ke% cndi%in$, !#!$ed
cn%#ac%ing $%#a%eg*, and $i+e and na%&#e
f %he !#jec%/ ESP$ de'el! ma#k&!$ f#
!#ime cn%#ac%#$ and $&bcn%#ac%#$
n% f&ll* &nde#$%anding %he !#c&#emen%
$%#a%egie$ in &$e b* %he H4JAIA, (hich
ma* incl&de an* f %he fll(ing, !l&$
%he#$.
5 O!enl* cm!e%i%i'e4bid gene#al
cn%#ac%$ (i%h !enl*4cm!e%ed
%#ade cn%#ac%$/
5 O!enl* cm!e%i%i'e4bid gene#al
cn%#ac%$ (i%h !#e"&alified
$&bcn%#ac%#$/
5 P#e"&alified gene#al cn%#ac%$ (i%h
ei%he# f %he %( %#ade cn%#ac%#$0
$%#a%egie$ de$c#ibed ab'e/
5 P#e4cn%#ac%ed gene#al cn%#ac%$
(i%h !#ede%e#mined ma#k&! #a%e$
(i%h !enl*4cm!e%ed %#ade
cn%#ac%$/ And,
5 O%he#, !#jec%4$!ecific $%#a%egie$/
8 COST ENGINEERING MAY3JUNE :89:
Figure ' # No Plugs Allowed
Table & # Built"Up Unit Costs
9 COST ENGINEERING MAY0JUNE 8678
Quantity Takeoff, Documentation
A cm!le%e de%ailed "&an%i%*
%akeff m&$% be incl&ded. H1JDP e)!ec%$
f# e'e#* "&an%i%* in an e$%ima%e % be
backed &! in %he "&an%i%* %akeff. I% i$
&nde#$%d %ha% min# "&an%i%ie$ ma*
be added d&#ing %he e$%ima%ing !#ce$$
and H1JDP i$ !#e!a#ed % 'e#lk %h$e
limi%ed de'ia%in$ f#m %hi$
#e"&i#emen%. M#e f%en, a %ab&la%in
f "&an%i%ie$, a$ $h(n in %able 9, i$
!#'ided, (i%h n de%ail a$ % h( %he*
(e#e de#i'ed, making i% diffic&l%3if n%
im!$$ible3% 'e#if* %hem, (i%h&%
d&!lica%ing %he %akeff.
In cn%#a$% % a "&an%i%* %ab&la%in,
a %#&e "&an%i%* %akeff, a$ $h(n in
fig&#e :, #eflec%$ n% nl* %he "&an%i%ie$
b&% al$ $h($ h( %he* (e#e %aken ff.
Thi$ enable$ an efficien% checking f %he
%akeff.
F#m %ime % %ime, H1JDP #e'ie($
e$%ima%e$, (i%h "&an%i%ie$ in %he
e$%ima%e (hich diffe# f#m %h$e in %he
"&an%i%* %akeff, (i%h n e)!lana%in,
and cca$inall* #e'ie($ e$%ima%e$ (i%h
diffe#ing "&an%i%ie$ f# %he $ame i%em
%aken ff b* diffe#en% membe#$ f %he
e$%ima%ing %eam, (i%h n #ecncilia%in
f %he diffe#ence$. T!!ing %ha% ff
(&ld be %he in$%ance (he#e %he#e a#e
%( cnflic%ing "&an%i%ie$ in %he %akeff
and a %hi#d "&an%i%* in %he e$%ima%e. H1
JDP %ake$ %hi$ a$ an admi$$in b* %he
e$%ima%ing %eam %ha% a %h#&gh #e'ie(
f %he e$%ima%e (a$ n% !e#f#med.
Basis of Estimate
A Ba$i$ f E$%ima%e 4BOE5 m&$% be
!#'ided in gene#al cnf#mance (i%h H1
JAIA $%anda#d$, l$el* ba$ed n AACE
International RP #$R"%, Basis of
Estimate, % incl&de-
Narrative 2 %hi$ !#'ide$
gene#al inf#ma%in cnce#ning
%he !#ce$$ f %he e$%ima%e
!#e!a#a%in and incl&de$ a
de$c#i!%in f %he $c!e
dc&men%$ &!n (hich %he
e$%ima%e i$ ba$ed, iden%ifie$ %he
e$%ima%ing %eam and %he ba$ic
cha#ac%e#i$%ic$ and inf#ma%in
&!n (hich %he e$%ima%e i$
ba$ed.
Estimate Criteria 2 %hi$ incl&de$
%he WBS iden%ifica%in, %he
name f %he e$%ima%# and
#e'ie(e#$, 'e#$in$ f
e$%ima%ing $f%(a#e, da%aba$e,
and %em!la%e &$ed, %he da%e f
%he e$%ima%e, and inf#ma%in
cnce#ning an* all(ance$ $&ch
a$ ann&al e$cala%in #a%e &$ed,
cn%ingenc* #a%e$ incl&ded and
j&$%ifica%in f# %hei# &$e.
Design Criteria 2 %hi$ de$c#ibe$
an* a$$&m!%in$ &$ed in
!#e!a#a%in f %he e$%ima%e and
!#'ide$ %he e$%ima%#/$ in$igh%
in% %he $%a%&$ and "&ali%* f
%he de$ign and %he #a%inale
&$ed in de%e#mining de$ign
e'l&%in all(ance, a de$ign
de'el!men% cn%ingenc* f#
c$%$ %he e$%ima%# #ecgni+e$
(ill e'en%&all* be incl&ded in
%he e$%ima%e, b&% (hich a#e n%
$h(n in %he i%e#a%in f de$ign
Table # ! A Quantity Tabulation, NOT a Quantity Takeoff
10 COST ENGINEERING MAY/JUNE 6456
$pon &hich #he c$!!en#
e"#ima#e i" ba"ed+
Costing Criteria 1 de"c!ibe"
ba"i" fo! e"#abli"hing co"#"*
incl$ding "o$!ce" fo! an(
$o#a#ion"+
Schedule 1 &hile H0JDP doe"
no# !e$i!e a comple#e de"ign
and con"#!$c#ion "ched$le #o
accompan( an e"#ima#e 2a#
lea"# a" a pa!# of #he e"#ima#ing
p!oce""3* H0JDP doe" !e$i!e
#ha# ade$a#e info!ma#ion
conce!ning #he an#icipa#ed
no#ice #o p!oceed da#e and
con"#!$c#ion d$!a#ion be
incl$ded* "$ch #ha# e"cala#ion
can be calc$la#ed+
P!og!am "#anda!d" call fo!
calc$la#ion of e"cala#ion on co"#" f!om
#he da#e of #he e"#ima#e #o #he p!ojec#ed
mid0poin# of con"#!$c#ion* con"ide!ing
#ha# mo"# if no# all of #he b$(0o$# on a
p!ojec# "ho$ld be comple#ed b( #he #ime
con"#!$c#ion i" 84 pe!cen# comple#e+ A
p!ojec#ed con"#!$c#ion "ched$le i"
nece""a!( in o!de! #o be able #o
de#e!mine #he an#icipa#ed "#a!# of
con"#!$c#ion and con"#!$c#ion d$!a#ion
in o!de! #o calc$la#e e"cala#ion+
In gene!al* AACE International RP
!"R-# "#a#e" #ha#* -A &ell0&!i##en BOE
achie%e", goal" b( clea!l( and conci"el(
"#a#ing #he p$!po"e of #he e"#ima#e
being p!epa!ed 2i+e+* co"# "#$d(* p!ojec#
op#ion"* f$nding* e#c+3* #he p!ojec#
"cope* co"#ing ba"i"* allo&ance"*
a""$mp#ion"* e'cl$"ion"* co"# !i"k" and
oppo!#$ni#ie"* and an( de%ia#ion" f!om
"#anda!d p!ac#ice"+ In addi#ion* #he BOE
i" a doc$men#ed !eco!d of pe!#inen#
comm$nica#ion" #ha# ha%e occ$!!ed and
ag!eemen#" #ha# ha%e been made
be#&een #he e"#ima#o! and o#he! p!ojec#
"#akeholde!"+. A" "$ch* H0JDP con"ide!"
a &ell0&!i##en BOE* gene!all( mee#ing
#he g$ideline" of RP !"R-#, an e""en#ial
pa!# of #he e"#ima#e+
Bidding Philosophy
Bidding Philo"oph( co%e!" a !ange of
"$bjec#"+ Of p!ima!( in#e!e"# i" #he
con#!ac#ing "#!a#eg( $pon &hich #he
e"#ima#e i" ba"ed+ I# i" !ecogni)ed #ha#
co"#" &ill be diffe!en# if #he p!ojec# i"
p!oc$!ed $nde! a compe#i#i%e0bid
a!!angemen# compa!ed &i#h a
nego#ia#ed "#!a#eg(* $nde!"#anding f$ll0
&ell #ha# #he con"#!$c#ion con#ingenc(
ma( be diffe!en# $nde! #he #&o
"#!a#egie" a" &ell+ The BOE al"o incl$de"
#(pical &o!k ho$!" and &o!k&eek
a""$med in p!epa!a#ion of #he e"#ima#e*
ho& i# &a" a""$med fo! e"#ima#ing
p$!po"e" #ha# "afe#( !e$i!emen#"
&o$ld be me# 2f$ll0#ime "afe#( office! o!
OSHA 740ho$! ce!#ifica#e holde!3* &ha#
a""$mp#ion" &e!e made conce!ning
o#he! p!ojec# "#aff* and &he#he! a
"epa!a#e "#aging a!ea &a" a""$med o!
#ha# #empo!a!( office facili#ie" &o$ld be
"e# $p in e'i"#ing facili#ie" nea!b(+
Figure $ - A Quantity Takeoff
11 COST ENGINEERING MAY1JUNE 8678
Estimate Migration"Variance Report
The &a"iance "e!"$+ an e(am!le f
'hich i# #h'n in $able 9+ $ab%la$e# line
i$em " #%bdi&i#in c#$# f each
e#$ima$e #ide2b)2#ide and cn$ain#
an$he" cl%mn #h'ing calc%la$ed
&a"iance#.
H2JDP e#$ima$"# %#e $he &a"iance
"e!"$ a# $he fi"#$ $l in anal)*ing a ne'
e#$ima$e+ m%ch a# S$. L%i# !"&ided a
#afe !in$ f"m 'hich $ emba"k f"
man) f $he e(!l"a$in# f $he
Ame"ican We#$+ # de# a !"e&i%#l)2
acce!$ed e#$ima$e !"&ide "e&ie'e"# a
!in$ f kn'n cndi$in# in $he "e&ie'
f a ne' e#$ima$e n a !"jec$. On a
!"jec$ 'he"e an e#$ima$e ha# been
a!!"&ed !"e&i%#l)+ H2JDP i# ba#icall)
/benchma"king0 $he ne' e#$ima$e
again#$ $he !"e&i%# ne, %#ing a
!#i$in f cnfidence and kn'ledge
f%nd in $he !"e&i%#l)2a!!"&ed
e#$ima$e $ e(amine and anal)*e a la$e"
&e"#in. The &a"iance "e!"$ all'# %# $
&i#%ali*e $he #ignifican$ change# in $he
e#$ima$e #ince 'e la#$ #a' and acce!$ed
i$ and f"m# a beginning !in$ f" %"
anal)#i#.
Estimate Migration ! Historical
Summary
The hi#$"ical #%mma") i# a
#%mma") f e#$ima$e# !"e!a"ed n a
!a"$ic%la" e#$ima$e. Q%i$e f"ankl)+ $hi#
#e"&e# $he fll'ing $' !%"!#e#-
3 a cn&enience $ all 'h 'ill "e&ie'
" "efe" $ $he e#$ima$e+ !"&iding a
ne2glance hi#$") f e#$ima$ing n
$he !"jec$, and+
3 #me a##%"ance $ha$ $he $eam
!"e!a"ing $he e#$ima$e ha#
cn#ide"ed i$ in $he cn$e($ f
!"e&i%# e#$ima$e#.
A #am!le i# #h'n in $able :.
Estimate Comparisons ! Unit Costs
for Similar Projects
E#$ima$e cm!a"i#n#+ a# #h'n in
$able ;+ ill%#$"a$e c#$# f" #imila"
!"jec$# and di#c%## "ea#n# f"
&a"iance#+ e##en$iall) !"&iding $he ba#i#
f" a benchma"king e(e"ci#e a# $ $he
c#$ f $he !"jec$.
The Role of the Owner
The !"ima") "le f $he 'ne" "+ in
$he ca#e f H2JAIA+ f $he !"g"am
managemen$ cn#%l$an$+ i# $ en#%"e $he
'ne" f "ecei&ing "eliable e#$ima$e#
$ha$ a"e acc%"a$e !"edic$"# f e&en$%al
ac$%al bid c#$#. H'e&e"+ i$ i# al# $he
"e#!n#ibili$) f $he 'ne" $ en#%"e
$ha$ $he e#$ima$ing c"i$e"ia a"e
#%!!"$i&e f $he end gal f e#$ima$ing.
S+ f" in#$ance+ in $he e&en$ f a
!"e2cnce!$%al e#$ima$e 'he"e man)+ if
n$ m#$+ f $he de$ail i$em# in $he
e#$ima$e a"e likel) $ be ne2line i$em#
4#%ch a# fl"# ab&e g"ade5 'he"e+ #ince
n de#ign ha# )e$ been !e"f"med+ i$ i#
Table # Sample Variance Report
Table $ Sample Historical Summary
12 COST ENGINEERING MAY4JUNE ?=>?
!& k!) !f )ha& ma&e$ial% &he%e
fl!!$% ma+ be c!%&$'c&ed. i& ma+ be &ha&
a de&ail i&em da&aba%e )ill be !f limi&ed
(al'e i "$e"a$ig &he e%&ima&e
8"$!(ided a da&aba%e %'""!$&ig &ha&
le(el !f de&ail i% !& a(ailable9 ad &he
"$!g$am5ad!"&ed e%&ima&ig %!f&)a$e
i&%elf ma+ be !f limi&ed '&ili&+0
S! &he $!le !f &he !)e$. i a ca%e
%'ch a% &hi%. i% &! m!dif+ &he e%&ima&e
$e#'i$eme&% a% ece%%a$+ &! e%'$e
&ha& &he ESP%1 deli(e$able )ill be
$e"$e%e&a&i(e !f &he "$!jec& a& deli(e$+
!f &he e%&ima&e0
Conclusion
The Ha$&%field5Jack%! A&la&a
I&e$a&i!al Ai$"!$& ha% ad!"&ed.
"'blici,ed. ad adhe$ed &! a fi$m %e& !f
%&ada$d% f!$ e%&ima&e% "$e"a$ed b+
ESP%. a% )ell a% i5h!'%e %&aff0 Thi% ha%
$e%'l&ed i highe$ #'ali&+ e%&ima&e%.
fe)e$ e*ce"&i!% ad &h'%. fe)e$
$e(i%i!%. ad m!$e &imel+ $ec!cilia&i!
ad acce"&ace !f e%&ima&e% b+ &he
ai$"!$&0
Adhe$ece &! &he %&ada$d% )i&h
dem!%&$a&ed fle*ibili&+. a% )a$$a&ed.
e%'$e% fi&e%% &! "'$"!%e !f &he
e%&ima&e%. a(!id% 'd'e $e)!$k ! &he
"a$& !f &he e%&ima&!$. ad all!)% a %mall
cad$e !f e%&ima&!$% &! $e(ie) ad acce"&
e%&ima&e% i a &imel+ fa%hi!0
The (i&al %&ada$d% &! be
mai&aied. i !$de$ &! $e%'l& i a
acc'$a&e. defe%ible. ad $eliable
e%&ima&e. icl'de &he f!ll!)ig/
7 S&ada$d% m'%& be c!mm'ica&ed
&! a""$!"$ia&e "a$&ie% "$i!$ &!
begiig a+ e%&ima&ig eff!$& ad
di%c'%%i! %h!'ld &ake "lace &!
e%'$e m'&'al 'de$%&adig !f
a""$!"$ia&e mea% ad me&h!d% !f
e%&ima&e "$e"a$a&i!. a% )ell a%
ed5$e%'l&0
7 Plaig !f &he e%&ima&e %h!'ld be
'de$&ake &! icl'de e%&ima&e
!$gai,a&i! 8WBS9. &!!l% %'ch a%
%!f&)a$e &! be '%ed. %!'$ce !f da&a0
7 Q'a&i&ie% m'%& be acc'$a&el+ &ake
!ff ad (i%'al d!c'me&a&i! !f &he
&ake!ff %h!'ld acc!m"a+ &he
e%&ima&e &! gee$a&e m'&'al
'de$%&adig !f )ha& )a% &ake
!ff0 T! $e"ea& a %a+ig icl'ded i
ad(e$&i%eme&% f!$ a )ell5k!)
b$ad !f &ake!ff %!f&)a$e. 2If i&1%
c!l!$ed. i&1% c!'&ed3 :@;0
7 Q'a&i&ie% %h!'ld be c!%i%&e&l+
&$a%fe$$ed f$!m %c!"e d!c'me&%
&! &he #'a&i&+ &ake!ff &! &he
e%&ima&e )i&h a""$!"$ia&e
d!c'me&a&i! !f a+ chage%
made d'$ig &he e%&ima&ig "$!ce%%0
7 C!%&% '%ed i &he e%&ima&e m'%& be
d!c'me&ed a% &! %!'$ce ad
make'". "$efe$abl+ idica&ig
$e%!'$ce% 8lab!$ ad e#'i"me&9
'%ed. $a&e% '%ed i a""l+ig &h!%e
$e%!'$ce%. ad a+ ma&e$ial !$ !&he$
'i& c!%&% a""licable &! &he i&em !f
)!$k0
7 Whe$e c!%&% a$e !& able &! be
d!c'me&ed a% de%c$ibed ab!(e.
!&he$ %!'$ce% !f c!%&% %'ch a%
#'!&a&i!%. c!%&% !b&aied f$!m
al&e$a&e da&aba%e%. !$ ac&'al c!%&%
f$!m "$e(i!'% "$!jec&% %h!'ld be
f'll+ d!c'me&ed a% &! %!'$ce.
"$!jec&. (ed!$ !$ %'bc!&$ac&!$.
ad da&e $e"!$&ed0 Ad.
7 Re(ie) !f a e%&ima&e b+ #'alified
"e$%!el !&he$ &ha &h!%e )h!
"$e"a$ed &he e%&ima&e i% e%%e&ial &!
&he #'ali&+ !f &he ed "$!d'c&0
REFERENCES
>0 Passenger Traffic 2009 Final.
Ai$"!$&% C!'cil I&e$a&i!al. ?==E.
$e&$ie(ed f$!m/
h&&"/44)))0aci0ae$!4cda4aci6c!mm
!4di%"la+4mai4aci6c!&e&=D6c0j%
"-,Faci<c"F>5B5BA5BB6CCC6?0
?0 Desktop Procedures Handbook.
Ci&+ !f A&la&a De"a$&me& !f
A(ia&i! Plaig < De(el!"me&
B'$ea'. Ja'a$+ ?==D0
@0 66666. On-Center Software. ?=>>.
$e&$ie(ed f$!m/
Table 6 - Estimate Comparison Summary
13 COST ENGINEERING MAY7JUNE @>?@
++'5770006&%ce%+e)6c&$7')&d.c+*
7&*+76
B6 K)a.*4 PE CCE FRICS4 W!##!a$ E64
Development of a Historical Unit
Cost Database for Use in Reviewing
Cost Estimates4 P)e*e%+ed +& +e
S&.+e)% Ca#!f&)%!a Sec+!&%
S2$'&*!.$4 AACE I%+e)%a+!&%a#4
M&)ga%+&0%4 WV4 Feb).a)2 @E4
@>>F6
C6 Ca)e++e4 R&be)+ P6 a%d Ha)&#d E6
Ma)*a##4 UNIFORMAT II Ee!e"(a
Ca''ifica(i#" f#& B+idi"g
S$ecifica(i#"'0 C#'( E'(i!a(i"g0 a"d
A"a.'i'4 Na+!&%a# I%*+!+.+e &f
S+a%da)d* a%d Tec%&#&g24 Oc+&be)4
?FFF6
ABOUT THE AUTHOR
W!##!a$ E6 K)a.*4 PE
CCE FRICS4 !* 0!+
I%+e)%a+!&%a# A/!a+!&%
C&%*.#+a%+*6 He ca%
be c&%+ac+ed b2
*e%d!%g e8$a!# +&
b"A>@CA8aace=2a&&6c&$
Now: If schedules needed analysis, Primavera would have included it. See more at http://ScheduleAnalyzer.com What is the difference between reviewing your P6 schedule and reviewing your P6 XER file? Everything Interfaces Directly with Database Hundreds of Reports & Analyses Advanced Longest Path Analysis Built-in Report & Editing Facility Drill-down from Dashboard to P6


Now: If schedules needed analysis,
Primavera would have included it.









See more at
http://ScheduleAnalyzer.com


What is the difference between
reviewing your P6 schedule and
reviewing your P6 XER file?

Everything

Interfaces Directly with Database
Hundreds of Reports & Analyses
Advanced Longest Path Analysis
Built-in Report & Editing Facility
Drill-down from Dashboard to P6
AACE INTERNATIONAL ANNOUNCES NEW BOARD MEMBERS
T&*e e#ec+ed f&) +e @>?@8@>?A AACE I%+e)%a,&%a# e#ec,&%* a)e5
: J#h" J1 Cicca&ei0 PE CCE PSP 9 P)e*!de%+8E#ec+ ;a A82ea) +e)$<
: J#h" C1 Li,e"g##d0 CFCC PSP 9 V!ce P)e*!de%+8F!%a%ce
: J+ie K1 O-e"0 CCC PSP 9 V!ce P)e*!de%+8Reg!&%*
: Ma*he- Nich#a'0 PSP 9 D!)ec+&) 9 Reg!&% ?
: Ma&ia C&i')"a Ba(a/a&0 PSP 9 D!)ec+&)8Reg!&% @
: L#ga" A"ja"e.++0 CCC CEP PSP 9 D!)ec+&)8Reg!&% B
: G+a! Fa&##% Q+adi&0 CCE 9 D!)ec+&)8Reg!&% D
: Ji! Pe&&. 9 D!)ec+&)8Reg!&% F
CONSTITUTION AMENDMENT
A% a$e%d$e%+ )e(.!)!%g a +0&8+!)d* a)$a,/e /&+e +& a$e%d e!+e) &)
b&+ +e AACE C&%*,+.,&% a%d +e AACE B2#a0* 'a**ed 0!+ a FB 'e)ce%+ a'8
')&/a# /&+e &f +&*e AACE $e$be)* 0& ca*+ /&+e* f&) &) aga!%*+ +e a$e%d8
$e%+6
V&,%g !% +e a%%.a# &%#!%e e#ec,&% &'e%ed Feb6 ? a%d c#&*ed Ma)c ?C6
V&+e%e+4 a Wa*!%g+&%4 DC )$4 ')&/!de* +e !%de'e%de%+ /&,%g *&t0a)e6 Te
AACE I%+e)%a,&%a# B&a)d &f D!)ec+&)* f&)$a##2 acce'+ed +e +e##e)* )e'&)+ a%d
ce),ed +e e#ec,&% )e*.#+* a+ +e!) A')!# *')!%g b&a)d $ee,%g !% Wa*!%g+&%4
DC6 A* !* +)ad!,&%a#4 +e %e0#2 e#ec+ed b&a)d $e$be)* 0e)e !%/!+ed a* g.e*+*
+& a-e%d +e *')!%g b&a)d $ee,%g6 Te %e0 b&a)d $e$be)* 0!## +a"e +e!) &a+*
&f &ce a+ +e AACE A%%.a# Mee,%g !% J.#2 !% Sa% A%+&%!&4 Te1a*6
Te b&a)d *ea+* a)e &)ga%!3ed &% *+agge)ed +e)$* 0!+ a#f +e '&*!,&%* .'
f&) e#ec,&% eac 2ea) a%d +&*e %e0#2 e#ec+ed *e)/!%g +0& 2ea) +e)$*6 Te P)e*8
!de%+8E#ec+ ad/a%ce* +e *ec&%d 2ea) +& +e &ce &f P)e*!de%+4 a%d +e% *e)/e*
a +!)d 2ea) a* Pa*+ P)e*!de%+ bef&)e #ea/!%g +e b&a)d6
14 COST ENGINEERING MAY-JUNE 2012
C
o"# e"#ima#ion i" an in#eg!a#ed
ac#i%i#( in all de%elopmen#
p!ojec#"+ in fac# i#/" an
impo!#an# fac#o! in all p!ojec#
pha"e" $p #o "anc#ion, In ea!l( pha"e
concep# "elec#ion fo! e'ample* i#
con#!ib$#e" #o deciding if a Spa! "ho$ld
be cho"en in"#ead of a TLP o! a Semi,
Then fo! each ne'# pha"e of #he
p!ojec#* a co"# e"#ima#e i" de%eloped o!
$pda#ed #o en"$!e #ha# #he p!ojec# i" "#ill
economicall( %iable #o #hen gi%e #he
g!een ligh# #o managemen# #o con#in$e #o
#he ne'# pha"e of #he p!ojec#, Fo! #hi"
p$!po"e and fo! man( (ea!"* companie"
ha%e de%eloped po&e!f$l co"# e"#ima#ion
#ool" and b!eakdo&n "#!$c#$!e" #o en"$!e
good co"# p!edic#abili#(,
In addi#ion* companie" ha%e been
acc$m$la#ing e'pe!ience da#a f!om
diffe!en# o&n.ope!a#ed and pa!#ne!.
ope!a#ed p!ojec#" &o!ld&ide, Thi"
combina#ion of #ool" and da#aba"e
en"$!e" #he de%elopmen# of acc$!a#e
co"# e"#ima#e" in ea!l( "#age" of a p!ojec#*
$"ing limi#ed da#a,
Ho&e%e! #he!e ha" been an
e"cala#ion in co"# d$!ing #he la"# decade
fo! man( !ea"on"* in pa!#ic$la! #he
in"#abili#( of oil p!ice", Co"# i" al"o
"#!ongl( co!!ela#ed &i#h #he loca#ion
"ince #echnical !e$i!emen#"* legi"la#ion*
and be"# p!ac#ice" depend" on &he!e #he
off"ho!e pla#fo!m i" enginee!ed and
in"#alled,
All #he"e fac#o!" make co"#
e"#ima#ion a challenging #a"k, Se%e!al
in#e!nal and e'#e!nal "#$die" ha%e
#he!efo!e been ini#ia#ed and #he !e"$l#"
f!om #he"e "#$die" &e!e implemen#ed in
co"# e"#ima#ion and benchma!king #ool",
The challenge #ha# mo"# ope!a#o!" face
#oda( i" co"# efficienc( and #he !ed$c#ion
of capi#al e'pendi#$!e &i#ho$#
comp!omi"ing on p!edic#abili#(,
Thi" a!#icle i" o!gani)ed in #h!ee
"ec#ion"+ #he fi!"# one de"c!ibe" co"#
e"#ima#ion $nce!#ain#ie" #ha# mo"# oil
companie" a!e dealing &i#h, The "econd
"ec#ion e'plain" ho& a co"# e"#ima#o! can
con#!ib$#e #o a p!edic#able o$#come of a
p!ojec#+ and #he la"# "ec#ion p!e"en#" #he
me#hod" #ha# can be $"ed b( a co"#
e"#ima#o! #o con#!ib$#e #o "e##ing mo!e
agg!e""i%e #a!ge# co"# e"#ima#e",
The Problem
E"#ima#ing co"# agg!e""i%e Cape'
&hile main#aining high p!edic#abili#( ha"
p!o%en #o be a challenging #a"k beca$"e
of man( !ea"on"* "$ch a" ma!ke#
in"#abili#( and p!ojec# $nce!#ain#ie"
e"peciall( a# #he ea!l( pha"e of #he
p!ojec#, I# i" #he!efo!e impo!#an# #o
$nde!"#and #he ke( co"# d!i%e!" and
e"#abli"h #ool" and me#hod" #ha# help #he
TECHNICAL ARTICLE
COST ESTIMATION
CHALLENGES & UNCERTAINTIES
CONFRONTING OIL AND GAS
COMPANIES
Nicolas Alexander Hall and Sarah Delille, PE
Abstract: U"$all(* &hen a compan( ha" a hi"#o!( of "$cce""f$ll( planning and e'.
ec$#ing p!ojec# de%elopmen#"* #he( make "$!e #ha# de#ailed co"# da#a fo! #he"e
p!ojec#" a!e ob#ained, The"e co"#" a!e gene!all( b!oken do&n in#o a common co"#
coding "#!$c#$!e* #h$" gi%ing #he co"# e"#ima#o! a $ni$e da#aba"e fo! $"e in co"#
e"#ima#e modeling and enabling #he compan( #o de%elop acc$!a#e co"# e"#ima#e",
Ho&e%e!* beca$"e of "e%e!al fac#o!" d$!ing #he la"# decade* incl$ding e"cala#ion
in p!ice" !ela#ed #o off"ho!e de%elopmen#"* co"# e"#ima#ing ha" become mo!e
challenging, Companie" ha%e #he!efo!e ini#ia#ed "e%e!al "#$die"* bo#h in#e!nall(
and e'#e!nall( and implemen#ed #he !e"$l#" f!om #he"e "#$die" in#o #he co"# e"#i.
ma#ion model"* !e"$l#ing in mo!e acc$!a#e and co"# agg!e""i%e me#hod", Thi" a!.
#icle de"c!ibe" co"# e"#ima#ion challenge" and $nce!#ain#ie" #ha# mo"# oil and ga"
companie" a!e conf!on#ed &i#h+ i# e'plain" ho& a co"# e"#ima#o! can achie%e an
acc$!a#e co"# e"#ima#e and finall( p!e"en#" #he me#hod" a co"# e"#ima#o! can $"e
#o con#!ib$#e #o mo!e agg!e""i%e #a!ge# co"# e"#ima#e", Thi" a!#icle &a" fi!"# p!e.
"en#ed a" EST,341 a# #he 2011 AACE In#e!na#ional Ann$al Mee#ing,
Key Words: Co"# e"#ima#ion* e"cala#ion* modeling* oil and ga"* and planning
c!%& e%&ima&!$ "$!(ide a acc'$a&e ad
agg$e%%i(e Ca"e* e%&ima&e/
Uncertainties of Cost Estimation
Uce$&ai&+ $efe$% &! &he lack !f
ce$&ai&+ ad k!)ledge )hile
"$edic&abili&+ mea% &he abili&+ &!
f!$eca%& %!me&hig &ha& )ill ha""e i
&he f'&'$e/ F!$ a c!%& e%&ima&!$, beig
"$edic&able d!e% !& mea f!$eca%&ig
&he e*ac& c!%& !f &he "$!jec&, b'& $a&he$
achie(ig a fial c!%& &ha& i% )i&hi &he
acc'$ac+ le(el &ha& i% defied b+ &he cla%%
e%&ima&e f!$ each %&age !f &he "$!jec&
7;8. DG:, DG;, DG< ad DG=, a% li%&ed i
&able ;, $efe$ &! diffe$e& "$!jec&
ma&'$i&+ %&age%/
Ma&hema&icall+, acc'$ac+ ca be
defied a%.
e#'a&i! ;
e#'a&i! <
Whe$e .
The P90 value !f a "$!babili&+
di%&$ib'&i!, i% a "e%%imi%&ic
(al'e )hich i% >: "e$ce&
ce$&ai !& &! be e*ceeded, i
!&he$ )!$d% > !'& !f ;: ca%e%
)ill ha(e a l!)e$ c!%&/
Ad
The P10 value !f a "$!babili&+
di%&$ib'&i! i% a !"&imi%&ic
(al'e )i&h a "$!babili&+ !f le%%
&ha ;: "e$ce& &! g! l!)e$,
&ha& i% !l+ ; !'& !f ;: ca%e% )ill
ha(e a l!)e$ c!%&/
T! e%&abli%h &he acc'$ac+, a
1C!%& Ri%k Aal+%i%2 %e%%i! i%
"e$f!$med 7<8- &hi% aal+%i%
'%e% a M!&e Ca$l! %im'la&i!
ad &he 9Ri%k %!f&)a$e/
The acc'$ac+ chage% a& each "ha%e
!$ deci%i! ga&e !f &he "$!jec&, &he m!$e
ma&'$e &he "$!jec& bec!me%, &he m!$e
acc'$a&e da&a &he c!%& e%&ima&!$ ge&%
ad &he m!$e acc'$a&e &he c!%& e%&ima&e
%h!'ld be/
B+ defii&i!, a Ca"e* e%&ima&e i%
&he %'m !f %e(e$al c!%& eleme&%, ad
each c!%& eleme& ca be defied )i&h a
m!%& likel+ c!%&, a l!) c!%& ad a high
c!%&/ Ba%ed ! e*"e$iece, b'il& c!%&%
f$!m e*ec'&ed "$!jec&% ha(e a la$ge$
"$!babili&+ !f beig highe$ $a&he$ &ha
l!)e$, c!m"a$ed &! &he !$igial
e%&ima&e/ Hece, a c!%& "$!babili&+
di%&$ib'&i! ba%ed ! e*"e$iece )ill be
%ke)ed &! &he $igh&, %ee fig'$e ;/
The e*"ec&ed (al'e f!$ &he e&i$e
c!%& e%&ima&e )ill !& be &he %'m !f each
m!%& likel+ (al'e/ C!&igec+ i% added
&! !b&ai &he e*"ec&ed c!%&, )hich i% &he
a(e$age !$ mea (al'e/ I !&he$ )!$d%
&he c!&igec+ i% &he 1&echical2
c!$$ec&i! &! c!m"e%a&e f!$ &he effec&%
!f %ke)ed 5!4%+mme&$ic6 di%&$ib'&i!%
f!$ each !f &he c!m"!e&% i &he
e%&ima&e ad &! c!(e$ f!$ '%"ecified
c!%& eleme&%/ A c!%& $i%k aal+%i% 5CRA6
i% '%ed &! calc'la&e &he c!&igec+/
Sice 'ce$&ai&+ ad "$edic&abili&+
g! i !""!%i&e di$ec&i!%, &he be%& )a+
f!$ a c!%& e%&ima&!$ &! ic$ea%e
"$edic&abili&+ i% &! $ed'ce &he
'ce$&ai&ie% ad acc!'& f!$ &he
'k!)% )he "$e"a$ig a c!%&
e%&ima&e/ The$e a$e &)! &+"e% !f
'k!), &h!%e )e ca "$edic& ad
&h!%e )e ca0& "$edic&/
The%e &)! ca&eg!$ie% !f 'k!)%
)e$e (e$+ )ell de%c$ibed b+ D!ald
R'm%feld, &he f!$me$ US Sec$e&a$+ !f
Defe%e i <::<, )he he %aid. 1The$e
a$e k!) k!)%- &he$e a$e &hig% )e
k!) &ha& )e k!)/ The$e a$e k!)
'k!)%- &ha& i% &! %a+, &he$e a$e &hig%
&ha& )e !) k!) )e d!0& k!)/ B'&
&he$e a$e al%! 'k!) 'k!)%-
&he$e a$e &hig% )e d! !& k!) )e
d!0& k!)/2
F!$ a c!%& e%&ima&!$, &he fi$%& %&e" i
!$de$ &! $ed'ce 'ce$&ai&ie% i% &!
'de$%&ad &he %ec!d ca&eg!$+ ad
m!(e i& &!)a$d &he fi$%& !e/ T! d! %!,
&he c!%& e%&ima&!$ %h!'ld &ake "a$& i
"$e"a$ig &he "$!jec& $i%k $egi%&e$ al!g
)i&h hi% c!lleag'e% f$!m !&he$
di%ci"lie%/ D'$ig &he $i%k )!$k%h!", &he
"$!jec& &eam f$!m diffe$e& di%ci"lie%
ide&ifie% &he $i%k% ad 'ce$&ai&ie% ad
"$!"!%e% ac&i!% &! mi&iga&e &he%e
'ce$&ai&ie%/ The+ al%! d$a) "ic&'$e% !f
be%& ad )!$%& %cea$i!% ad e%&ima&e
&hei$ c!%& c!%e#'ece%/
I &he Ri%k Regi%&e$, $i%k% a$e
ide&ified ad %!$&ed ba%ed !
"$!babili&+ ad c!%e#'ece, &he &he
15 COST ENGINEERING MAY3JUNE <:;<
Table 1 - Cost Estimate Class Accuracy
Figure 1 - Probability Cost Curve
16 COST ENGINEERING MAY*JUNE 0./0
risks from the Risk Register& see figre 1&
"ith possible effects on Cape# are
inclded in the cost risk anal$sis if the$
are significant( i)e)& the$ are located in
the red or $ello" regions of the risk
matri#)
E#ample of kno"n nkno"ns cold
be risk related to project si%e and
comple#it$& ne" technolog$& and
operating in a ne" en!ironment)
Therefore& contingenc$ "ill t$picall$
co!er the follo"ing items)
+ design de!elopment "ithin the
agreed design basis'
+ estimate adjstments'
+ bias& omissions& and errors'
+ minor adjstments to e#ection
schedles*milestones'
+ normal market price !ariations'
and&
+ other risks "ithin the control of the
project team)
Allo"ance is also part of the kno"n
nkno"ns and allo"ance co!ers
additions that& based on e#perience& are
reqired to reach an e#pected le!el for
qantities and costs) The allo"ance is
based on e#perience onl$ and is not
based on a cost risk anal$sis)
Ho"e!er& it is more difficlt for a
cost estimator to mo!e the 1rd categor$
,the nkno"n nkno"ns- into the 0nd or
the /st& bt he or she needs to
nderstand that there are ncertainties
Figure 2 - The Difference Known and Unknown Categories to a Cost Estimator
Figure 3 - Risk Register Matrix
'ha' *e a%e !"' a*a%e "f a!d ac' i!
c"!&e$(e!ce *he! e&'abli&hi!g 'he
#%"jec' %e&e%)e&0
Lea%!i!g f%" #a&' e+#e%ie!ce i& 'he
be&' *a, '" %ed(ce 'he !(be% "f 'he
(!k!"*! (!k!"*!&0 The e&'ia'e "f
'hi& la&' ca'eg"%, i& ca%%ied "(' b, a c"&'
e&'ia'"% a& a #%"jec' %e&e%)e c"&'. !"'
a& a c"!'i!ge!c,. 'hi& e&'ia'e i& added
'" c")e% (!ce%'ai!'ie& "('&ide 'he
e+#ec'ed c"&'. '" i!c%ea&e 'he e&'ia'e
c"!fide!ce le)el a!d %ed(ce 'he %i&k "f
")e%%(!0
The #%"jec' %e&e%)e i& al&"
e&'abli&hed d(%i!g 'he CRA0 The
#%"babili&'ic defi!i'i"! "f 'he #%"jec'
%e&e%)e& de#e!d& "! each c"#a!, a!d
'he le)el "f %e&e%)e& 'he, *a!' '" ca%%, if
&"e'hi!g e+ce#'i"!al &h"(ld ha##e! i!
'he #%"jec'0
Factors Influencing Predictability
C"&' e&'ia'"%& (&e c"&' e&'ia'i!g
'""l& '" #%e#a%e c"&' e&'ia'e&0 The&e
'""l& i!c"%#"%a'e e+#e%ie!ce f%"
&e)e%al #%"jec'&. a& *ell a& l"ca'i"!
fac'"%& f"% 'he diffe%e!' #lace& i! 'he
*"%ld *he%e 'he c"#a!, i& "#e%a'i!g0
Whe! a c"#a!, ha& a! (#da'ed
da'aba&e f%" #%"jec'& *"%ld*ide. a!d
i& able '" i!c"%#"%a'e 'hi& da'a al"!g
*i'h a%ke' adj(&'e!' i!'" c"&'
e&'ia'i"! '""l&. i' *ill &'%e!g'he! 'hei%
c"&' #%edic'abili', a!d hel# a!agee!'
ake 'he %igh' deci&i"! %ega%di!g 'he
le)el "f #%"fi'abili', "f 'he #%"jec'0
A! ea%l, #ha&e c"&' e&'ia'i"! '""l
ha& lii'ed i!#(' da'a. &(ch a&/ ca#aci',.
!(be% "f *ell&. *a'e% de#'h. ',#e "f
#la'f"%. e'c0 Thi& i& (&ed '" %"le i!
%a!ki!g 'he diffe%e!' c"!ce#'& i! 'e%&
"f c"&' efficie!c,0 Of c"(%&e 'ech!ical
#%"& a!d c"!& &h"(ld be 'ake! i!'"
c"!&ide%a'i"! al"!g 'he *a, '" i!ii-e
'he HSE 3Heal'h. Safe', a!d
E!)i%"!e!'4 ha-a%d& a!d "#'ii-e
#%"d(c'i)i',0
A' a "%e ad)a!ced &'age "f a
#%"jec'. 'he c"&' e&'ia'i"! '""l& !eed
'" be "%e de'ailed '" gi)e 'he %igh' c"&'
e&'ia'e0
Market Adjustment
Ma%ke' adj(&'e!'& a%e al&" )e%,
i#"%'a!' '" "b'ai!. calc(la'e 'he %igh'
c"&' e&'ia'e. 'hi& ha& bee! e&#eciall,
challe!gi!g d(%i!g 'he la'e&' a%ke'
de)el"#e!'0 The a%ke' adj(&'e!' i&
added '" 'he c"&' e&'ia'e. a& i!dica'ed
i! fig(%e :0
T" calc(la'e 'he a%ke' adj(&'e!'.
'he%e a%e 'he f"ll"*i!g '*" e'h"d&/
2 C"&' Ri&k A!al,&i&. b(' 'hi& ea!&
'ha' a%ke' da'a i& !eeded f"% all
di&ci#li!e&0 A!d.
2 Addi!g a%ke' adj(&'e!' a& &h"*!
i! 'he f"ll"*i!g e$(a'i"!/
MA = 3>3IC < All < C"!'44 + F"%*a%d
i!de+ 5 C"&' Mid P"i!'
e$(a'i"! 9
MA = Ma%ke' Adj(&'e!'
IC = Ide!'ified $(a!'i'ie&1c"&'&
All = All"*a!ce
C"!' = C"!'i!ge!c,
F"%*a%d i!de+ = a (l'i#lica'i"! fac'"%
ba&ed "! f('(%e a%ke' de)el"#e!'
If *e *e%e '" a&&(e 'ha' 'he
#%"jec' had a Ca#e+ id #"i!' i! 867;.
i0e0. 'he ,ea% *e e+#ec' "&' "f "(% c"&'&
'" "cc(% a!d 'ha' 'he i!'e%!al f('(%e
a%ke' e)al(a'i"! g%"(# a&&(ed a!
i!c%ea&e i! '"#&ide c"&'& "f ; #e%ce!'.
'he f"%*a%d i!de+ *"(ld be 706;0
A! e+a#le i& &h"*! '" i!dica'e
h"* 'hi& i& d"!e a!d #%e&e!'ed i! 'able
80 A& ca! be &ee! f%" 'able 8. 'he
a%ke' adj(&'e!' !eed& '" be
calc(la'ed "!l, af'e% addi!g 'he ba&e
e&'ia'e. c"!'i!ge!c, a!d all"*a!ce
'"ge'he%0
Ge''i!g 'he a%ke' adj(&'e!'
c"%%ec' ca! be a challe!ge. b(' i' i& )i'al
'" (&e 'he la'e&' a%ke' i!f"%a'i"!
*he! a##l,i!g 'he adj(&'e!'0 Ma%ke'
adj(&'e!' "f O#e+ i& al&" i#"%'a!' i!
"%de% '" %eflec' 'he l"cal "#e%a'i"!& a!d
c"!'i!("(& de)el"#e!' "f O#e+ c"&'
elee!'&0
17 COST ENGINEERING MAY1JUNE 8678
Figure 4 - Market Adjustment
Table 2 - Calculating the Market Adjustment
Cos Dri"ers Infl!encing Cos
Unde#$%anding ke* c$% d#i'e#$ i$
c#i%ical % $e%%ing m#e agg#e$$i'e c$%
e$%ima%e$ and main%aining !#edic%abili%*.
Fi'e ke* c$% d#i'e#$ a#e iden%ified and
!#e$en%ed bel(
Dri"er One&Maerial Mi$
Ma%e#ial $elec%in !hil$!h* c&ld
change f#m ne lca%in % an%he#. F#
e)am!le, in Lca%in A, m$% il
cm!anie$ ch$e % g (i%h %he lea$%
e)!en$i'e ma%e#ial, e$!eciall* f# !i!ing
and fi%%ing$ f %he ff$h#e !la%f#m
%!$ide$. M#e %han @9 !e#cen% f %he
!i!ing &$ed in %hi$ lca%in i$ ca#bn
$%eel, 75cf6, $ee %able <8, 'e#$&$ nea#l* 9
!e#cen% in %he m$% #ecen% ff$h#e
!la%f#m$ in lca%in B. 75cf Lca%in B6,
$ee %able =8.
U$ing m#e 0$!hi$%ica%ed1
ma%e#ial$ $&ch a$ $%ainle$$ $%eel and
$&!e# d&!le) ma* #ed&ce %he
main%enance c$%$ #ela%ed % %he (ea#
and c##$in f %he !i!ing, b&% a check
need$ % be dne % make $&#e %ha% %he
O!e) $a'ing$ a#e (#%h %he Ca!e)
in'e$%men%$, %hi$ i$ al$ infl&enced b*
lcal %a) #egime$.
Ma%e#ial mi) de!end$ n %he (ell
$%#eam da%a and (ea%he# #e"&i#emen%$,
b&% each cm!an* $h&ld d i%$ (n life
c*cle c$% 5LCC6 anal*$i$ f# each #egin,
and $me%ime$ f# each !#jec%, %
de%e#mine %he cm!an*/$ ma%e#ial
$elec%in $%#a%eg*.
Dri"er T#o&Li"ing Q!arers
Lcal #eg&la%in$ (i%h #e$!ec% %
n&mbe# f bed$ in each #m f a LQ
d#i'e$ %he $i+e and %h&$ %he (eigh% f %he
LQ, $ee fig&#e >. Al$, %he n&mbe# f
bed$ in a !la%f#m change$ f#m ne
!#jec% % an%he# de!ending n
ca!aci%*, d#illing facili%ie$, e%c.
Fig&#e > $h($ %he de'el!men% f
a#ea2bed f# $e'e#al !#jec%$ in Lca%in
A and B !#jec%. I% can be $een %ha% %he
a#ea2bed ha$ inc#ea$ed f# Lca%in B
$ince :AA?, %h&$ gi'ing a #i$e in c$%
cm!a#ed % Lca%in A.
Dri"er Three&Design Life
M$% Lca%in A !#jec%$ ha'e a
de$ign life f ;9 % ;> *ea#$. In Lca%in
B, %he ff$h#e il !la%f#m$ a#e
de$igned f# <93=9 *ea#$, (hich ha$ an
infl&ence n %he enginee#ing de$ign, %he
ma%e#ial$ &$ed and e'en %he $i+e f %he
!la%f#m. An a#ea $l&%in ma* #e$&l% in
a la#ge !la%f#m (i%h $!a#e (eigh%
ca!aci%* f# f&%&#e %ie3back$.
Dri"er Fo!r&Sandards
M$% f %he #e"&i#emen%$ f#
ff$h#e !la%f#m$ in Lca%in B a#e
ba$ed n %he N#$k $%anda#d$, (hile
API i$ dminan% in Lca%in A. Thi$ ha$
im!lica%in$ n %he (a* !la%f#m$ a#e
b&il% in b%h lca%in$.
Dri"er Fi"e&Projec E$ec!ion and
Conracing Sraegies
The cn%#ac%ing $%#&c%&#e i$ a la#ge
d#i'e# f# !#jec% $i+e and #gani+a%in.
A la#ge n&mbe# f $malle# cn%#ac%$ (ill
mean la#ge# !#jec% %eam$ (i%h m#e
fc&$ n in%e#face managemen%. Mega
!#jec%$ c&ld al$ #e"&i#e la#ge lcal
#gani+a%in$ e'en (hen an EPC $%#a%eg*
i$ $elec%ed.
Hi$%#icall*, !#jec% e)ec&%in in
Lca%in A ha$ been diffe#en% %han in
Lca%in B in man* (a*$. In Lca%in A,
%he fll(ing i%em$ ha'e been e'iden%-
4 The#e a#e %*!icall* EP B FC cn%#ac%$,
a$ !!$ed % a fe( EPC %*!e
cn%#ac%$.
4 Cn%#ac%#$ a#e n% cmf#%able
%aking la#ge# EPC cn%#ac%$ (i%h
in%e#face #i$k.
4 Cm!anie$ f%en &$e f#ame(#k
ag#eemen%$ a$ !!$ed %
cm!e%i%i'e bidding % $a'e %ime
and ch$e amng 0kn(n1
'end#$ %ha% a#e familia# (i%h %he
cm!an*/$ #e"&i#emen%$. And,
18 COST ENGINEERING MAY2JUNE ;9:;
Table ' % Maerial Piping Weigh Disrib!ion for Locaion A Projecs
Table ( % Maerial Piping Weigh Disrib!ion for Locaion B Projecs
7 The'e a'e !$,e' d$c*"e#)a)i$#
'e&*i'e"e#)( f'$" c$#)'ac)$'( )$
c$"%a#ie(2
The e()i"a)$' (h$*!d be ab!e )$
e()ab!i(h c$() diffe'e#ce( be),ee# )he
diffe'e#) c$#)'ac) ()'a)egie(0 a#d )he'eb.
c$#)'ib*)e )$ a# $%)i"i/ed e-ec*)i$#
()'a)eg. f$' )he ).%e $f %'$jec) a#d
!$ca)i$#2
Methods a Cost Estimator Can Use
to Set Cost Aggressive Target
Estimates
The c$() e()i"a)$'3( '$!e g$e(
be.$#d e()i"a)i#g )he c$() $f )he
%'$jec) ,i)h a de)ai!ed acc*'ac.1 he $'
(he #eed( )$ he!% )he %'$jec) "a#age'
(e) agg'e((i+e c$() )a'ge)( a#d he!% )he
%'$jec) )ea" ,$' )$,a'd 'eachi#g )he
)a'ge)(2 I# fac)0 b. (e))i#g a c$() !e+e!
)ha) i( ea(i!. achie+ed0 #$ eff$') ,$*!d
be #eeded )$ i"%'$+e )he %'$jec)
%'$fi)abi!i). b. 'ed*ci#g c$()2 Thi( ca# be
achie+ed )h'$*gh fi#di#g c'ea)i+e ,a.(
$f e#gi#ee'i#g )he %!a)f$'" $' ha+i#g
(*cce((f*! #eg$)ia)i$#( ,i)h )he
c$#)'ac)$'( 8=92
O# )he $)he' ha#d0 (e))i#g )a'ge)(
)ha) a'e i"%$((ib!e )$ achie+e ca# c'ea)e
"$'e %'$b!e"( )ha# i) ($!+e(2 I# fac)0
(e))i#g *#achie+ab!e )a'ge)( ca#
ge#e'a)e i((*e( ,i)hi# )he %'$jec) )ea"
a#d 'ed*ce ,$' "$)i+a)i$#2
T$ be ab!e )$ %'$d*ce c$() )a'ge)
agg'e((i+e e()i"a)e( a#d achie+e
c$"%e)i)i+e#e((0 )he e()i"a)$' #eed( )$
de+e!$% a c$""e'cia! "i#d(e)2 The
,$'d 4Mi#d(e)5 ca# be defi#ed a( a ,a.
$f )hi#i#g0 $' a di(%$(i)i$# )ha)
%'ede)e'"i#e( a %e'($#3( 'e(%$#(e )$
diffe'e#) (i)*a)i$#(2 The f$!!$,i#g
"e)h$d( ca# he!% )he c$() e()i"a)$'
de+e!$% a c$""e'cia! "i#d(e)2
7 *(e $f be#ch"a'(1
7 cha!!e#ge )he e()i"a)e )h'$*gh )he
*(e $f a )a'ge) e()i"a)e1
7 da'e )$ cha!!e#ge .e()e'da.(
)h$*gh)( a#d idea(1 a#d0
7 be e#)h*(ia()ic2
The(e "e)h$d( (ha!! #$) 'e%!ace
HSE "a#da)e( $' i# a#. ,a. i#c'ea(e )he
ha'" )$ )he e#+i'$#"e#) $' )$ %e$%!e2
Use of Benchmarks
Be#ch"a'( a'e +e'. +a!*ab!e ,he#
i) c$"e( )$ +e'if.i#g c$() e()i"a)e( a#d
(h$,i#g *#ce')ai#)ie( i# )he c$()(0 a(
,e!! a( (h$,i#g %$)e#)ia! )a'ge)
e()i"a)e(2 The *(e $f be#ch"a'( i( a
'e&*i'e"e#) f$' a!! e()i"a)e c!a((e(2
Whe# a# e()i"a)e i( %'e%a'ed0 )he
e-%ec)ed c$() (h$*!d be be#ch"a'ed
agai#() i#)e'#a! a#d e-)e'#a! %'$jec)(0
b$)h $# $+e'a!! %'$jec) c$()0 b. faci!i).
a#d di(ci%!i#e2 Le+e! ; be#ch"a'( c$*!d
i#c!*de )he f$!!$,i#g2
7 Faci!i). > We!!( Ca%e- +(2
Rec$+e'ab!e Re(e'+e(1 a#d0
7 Faci!i). > We!!( Ca%e- +(2 De(ig#
Ca%aci).2
Le+e! < be#ch"a'( c$*!d i#c!*de
)he f$!!$,i#g2
7 E&*i%"e#) Weigh) +(2 De(ig#
Ca%aci).1
7 T$%(ide Weigh) +(2 De(ig# Ca%aci).1
7 T$%(ide C$() +(2 T$%(ide Weigh)1
7 P!a)f$'" C$() +(2 De(ig# Ca%aci).1
a#d0
7 T$)a! T$%(ide U#i) C$() +(2 P!a)f$'"
Na"e2
K#$,i#g h$, )$ *(e )he(e
be#ch"a'i#g )$$!( i( +e'. i"%$')a#)2 I#
fac)0 ,he# *(ed %'$%e'!.0 be#ch"a'i#g
19 COST ENGINEERING MAY6JUNE <:;<
Figure ! LQ Weight and Area Comparison Between Location A and B
20 COST ENGINEERING MAY/JUNE 9789
i! a po%ef#l "ool "o challenge "he co!"
and concep" !ol#"ion, The benchmaking
da"a need! "o be e!cala"ed "o "he la"e!"
co!" 'ea) making i" po!!ible "o compae
old -a! b#il". pojec"! %i"h ne% pojec"!,
The #!e of benchmak! i! a $al#able
$i!#al "ool "ha" %ill help iden"if' aea!
%hee "he e!"ima"e ma' be "oo high o
e$en "oo lo%, A! "he follo%ing e&ample
%ill !ho%) in"enal and e&"enal
benchmak c#$e! co#ld be #!ed "o
$eif' q#ali"' of iden"ified co!"
ed#c"ion!) !ee fig#e ;,
Fig#e ; !ho%! "ha" i! %a! po!!ible
"o ed#ce "he co!" fo a pla"fom "ho#gh
an op"imi(a"ion of ca!e A) %hile a" "he
!ame "ime no"ing "ha" "he pojec" i! %ell
%i"hin %ha" one %o#ld e&pec" a pla"fom
%i"h a !imila pod#c"ion capaci"' "o
co!") 2i,e,) "he pojec" i! pedic"able3, The
geen do""ed c#$e i! ba!ed on e&"enal
benchmak da"a and !ho%! "ha" fo a
gi$en concep") a f#"he decea!e in co!"
co#ld be achie$ed,
Ano"he e&ample !ho%! ho% "he
"op!ide %eigh" 26 :7 777 "3 !eem! "o be
$e' high compaed "o o"he da"a) 42cf3
!ee fig#e <5) and "he q#e!"ion ai!e! if
"hi! high %eigh" co#ld be coec"l' co!"
e!"ima"ed, The high "op!ide %eigh" can
be beca#!e of !e$eal fac"o!+ hea$' oil)
high liq#id capaci"') o o"he ea!on!, To
follo% #p on "hi! benchmak) "op!ide
co!" i! benchmaked in fig#e =) %hich
!ho%! a coec" "op!ide co!" fo "hi!
%eigh",
Challenge the Estimate Through the
Use of Target Estimates
A deci!ion doc#men" #!#all' onl'
incl#de! "he e&pec"ed co!"!, Ho%e$e) "o
achie$e co!" agge!!i$ene!! an
addi"ional co!" e!"ima"e !ho#ld be
pepaed, Thi! e!"ima"e i! efeed "o a!
"age" e!"ima"e,
A "age" e!"ima"e i! an e!"ima"e %i"h
a !"e"ched "age") b#" !hall be fea!ible
and ba!ed on a li!" of oppo"#ni"ie!)
incl#ding "he follo%ing,
1 op"imi(a"ion of "he e&ec#"ion
!"a"eg'*
1 i!k ba!ed manning*
1 incea!ed "eam alignmen" and
in"ega"ion*
1 e$al#a"ion of ke' co!" di$e! 2cf,
Chap"e 93*
1 #!e of benchmak c#$e! "o !#ppo"
di!c#!!ion on "age"!*
1 i!k ed#cing mea!#e!* and)
1 oppo"#ni"' egi!"e 0 piced,
Thi! addi"ional e!"ima"e m#!" be a
pa" of "he co!" epo", The !a$ing
po"en"ial! iden"ified !ho#ld be cleal'
defined in "he pojec" WBS 2Wok
Beakdo%n S"#c"#e3 %hen e!"abli!hing
"he ma!"e con"ol e!"ima"e) 2i,e,) "he
fi!" e!"ima"e fo #!e d#ing "he
e&ec#"ion pha!e3, The "age"! ae "o be
follo%ed #p mon"hl',
Dare to Challenge Yesterday"s
Thoughts and Ideas
Ye!"eda'.! "ho#gh"! and idea! need
"o be challenged) b#" "he pojec" "eam
need! "o make !#e "he challenged
Figure % # Use of Level $ Benchmark Production Capacity vs! Platform Cost
21 COST ENGINEERING MAY/JUNE 2012
Figure ! - Use of Level Benchmark; Design Capacity vs. Topside Weight
Figure " - Use of Level Benchmark; Total Weight vs. Topside Cost
22 COST ENGINEERING MAY/JUNE 2012
conce$, co#$, o" e(ec%$ion #$"a$eg) i#
'i$hin $he coman).# goal# and co"e
&al%e#- Oil and ga# comanie# a"e
e#eciall) ca"ef%l 'hen i$ come# $o
in$"od%cing ne' $echnologie# o" 'a)# of
doing $hing#-
In ne' "ojec$#, $he "ojec$ $eam
need# $o foc%# mo"e on inno&a$ion
'i$hin $he bo%nda"ie# #e$ fo" a "ojec$-
The e#$ima$o" 'ill la) an imo"$an$ "ole
in #%o"$ing o$imi*a$ion of $he "ojec$
and #$"a$egie#-
A# $he ma"ke$ la)e"# become
come$i$i&e, inno&a$ion i# #een a# a ke)
fac$o" be$'een $he diffe"en$ oe"a$o"#-
Be En"h#!ia!"ic
The a%$ho"#. of $hi# a"$icle belie&e
$ha$ en$h%#ia#m i# a ke) a##e$ fo" a co#$
e#$ima$o"- He o" #he 'o%ld e"fo"m a
be$$e" job if $he) co%ld #ee $he 'hole
co#$ ic$%"e of $he "ojec$ 'hen
"ea"ing a co#$ e#$ima$e, and
%nde"#$and $he imlica$ion# of $hei"
e#$ima$e on $he "ojec$ economic# and
i$# fea#ibili$) and "ofi$abili$) a# a 'hole-
Pa##ion in co#$ e#$ima$ing can come
f"om diffe"en$ #o%"ce#, b%$ $he mo#$
common one i# coma"ing co#$
e#$ima$e# $o a# b%il$ da$a- Being able $o
"edic$ $he final co#$ of a "ojec$ 'i$hin
$he "e!%i"ed acc%"ac) le&el i# &e")
g"a$if)ing $o a co#$ e#$ima$o"- I$ can $ake
#e&e"al )ea"# befo"e i$ i# o##ible $o
&alida$e a co#$ e#$ima$e, e#eciall) fo"
long $e"m "ojec$#, b%$ doing #o 'i$h
de$ail# i# &e") imo"$an$-
Anal)*ing hi#$o"ical da$a of
comle$ed "ojec$# i# c"%cial $o
%nde"#$anding ho' co#$ ha# de&eloed,
b%$ al#o a ke) fo" de&eloing coma"able
da$a a# a ba#i# fo" anal)#i# and
benchma"king- A lo$ of 'o"k and
a$ience i# needed $o go $h"o%gh $hi#
e(e"ci#e, b%$ 'i$h en$h%#ia#m e&e")$hing
become# ea#ie"+
Concl#!ion
Thi# a"$icle ha# #ho'n $ha$ an
e(e"ienced e#$ima$o", 'i$h $he "igh$
$ool# and mind#e$, ha# a ke) "ole 'hen
#ec%"ing $he "igh$ balance be$'een co#$
agg"e##i&ene## and "edic$abili$)- The
me$hod# of "ea"ing bo$h e(ec$ed and
$a"ge$ co#$ e#$ima$e#, a# "e#en$ed in
$hi# a"$icle, #ho%ld in mo#$ ca#e#
con$"ib%$e $o lo'e" co#$# and highe"
"ofi$abili$) fo" "ojec$#-
REFERENCES
1- Theodo"#en, Ola& T-M-,
Req#iemen"! "o Co!" E!"ima"e! fo
In$e!"men" Pojec"!, WR0057,
Chapter 3, Requirements to Cost
Estimates, S$a$oil ASA, 2011-
2- Theodo"#en, Ola& T-M-, G#ideline
fo Co!" Ri!k Anal%!i!, GL0431,
S$a$oil ASA, 2010-
3- Cooe", Robin and Regine
Slagm%lde", Tage" Co!"ing and
Val#e Engineeing, P"od%c$i&i$)
P"e##, 1554-
Fig#e * ( U!e of Le$el ) Benchmak& Pod#c"ion Capaci"% $!' Pla"fom Co!"
23 COST ENGINEERING MAY/JUNE 2012
Figure ! - Use of Level Benchmark; Design Capacity vs. Topside Weight
Figure " - Use of Level Benchmark; Total Weight Topside vs. Topside Cost
24 COST ENGINEERING MAY4JUNE :89:
ABOUT THE AUTHORS
Nic$!a' A!e.a#de& Ha!!
i' e"%!$/ed -i(h
S(a($i!2 He ca# be
c$#(ac(ed b/ 'e#di#g
e5"ai! ($1
#iah6'(a($i!2c$"
Sa&ah De!i!!e0 PE0 i'
e"%!$/ed -i(h S(a($i!2
She ca# be c$#(ac(ed
b/ 'e#di#g e5"ai! ($1
'a&de6'(a($i!2c$"
CERTIFICATION RECEPTION
O#e $f (he #e- e,e#(' a( (he Sa# A#($#i$ A##+a! Mee(5
i#g0 J+!/ >5990 -i!! be a# i#,i(a)$#5$#!/ Ce&)ca)$# Rece%5
)$# ($ h$#$& a*e#dee' -h$ h$!d $#e $f AACE
I#(e&#a)$#a!3' '%ecia!(/ ce&)ca)$#'2 The i#,i(a)$# $#!/
&ece%)$# -i!! be f&$" <5= %2"2 $# M$#da/0 J+!/ ?2 The &e5
ce%)$# -i!! fea(+&e hea,/ h$&'d3$e+,&e' a#d a h$'(ed ba&2
FIRST TIMER2S LUNCHEON IS SUNDAY
If /$+ a&e a*e#di#g (he :89: A##+a! Mee)#g a#d (hi'
i' (he &'( AACE A##+a! Mee)#g (ha( /$+ ha,e a*e#ded0
(he&e -i!! be a Fi&'( Ti"e&3' L+#che$# f&$" #$$# ($ 9 %2"2
$# S+#da/0 J+!/ >2 Beca+'e (hi' -i!! be a )ce(ed e,e#(0 if
/$+ a&e a &'( )"e a*e#dee a#d /$+ -a#( ($ %a&)ci%a(e0
/$+ #eed ($ i#dica(e $# /$+& &egi'(&a)$# f$&" (ha( (hi' -i!!
be /$+& &'( "ee)#g2 Tha( -i!! i#i)a(e (he %&$ce'' -he&e
/$+& &egi'(&a)$# -i!! be agged a#d checed0 '$ (ha( a !+#ch
)ce( -i!! be %&e%a&ed2
ANNUAL MEETING REMINDERS
A*e#dee' a&e &e"i#ded $f cha#ge' 'ched+!ed a( (he :89: A##+a! Mee)#g0 i#c!+di#g (ha( (he (ech#ica! %&$g&a" -i!!
'(a&( a( 91;8 %2"2 $# S+#da/0 J+!/ >2 Thi' i' a cha#ge f&$" (he (&adi)$#a! M$#da/ "$&#i#g '(a&(2
The J+!/ >599 A##+a! Mee)#g -i!! a!'$ e#d a( #$$# $# Wed#e'da/0 J+!/ 992 P!ea'e ee% (he'e )"e cha#ge' i# "i#d a'
/$+ a&e "ai#g /$+& A##+a! Mee)#g &e'e&,a)$#' a#d (&a,e! a&&a#ge"e#('2
I#di,id+a!' -h$ a*e#d (he &'( (-$ 'e''i$#' -i!! &ecei,e acce'' ($ d$-#!$ad 98 c$"%!i"e#(a&/ !e' f&$" (he AACE
O#!i#e Lea&#i#g Ce#(e& (ha( -i!! be !a+#ched i# Se%(e"be&2 The'e d$-#!$ad' ca&&/ a ,a!+e $f 7:882
AACE I!&e$!a'"!al2% !e+e%& "!li!e aga4
.i!e/ S")$ce/ i% !"+ a*ailable f"$ "!li!e *ie+4
i!g1
De%ig!ed a% a! a%%"cia'"! e4aga.i!e/ &he !e+ bi4
"!&hl- i% a*ailable &" a!-"!e b- l"ggi!g "!&" &he
AACE +eb%i&e a& +++1aacei1"$g1 Each i%%)e fea&)$e%
%"e !e+ a!d e,ci'!g c"!&e!& f"$a&% !"& #$e*i")%l-
a*ailable i! a #$i!& i%%)e/ a% +ell a% %"e failia$ c"!4
&e!& #$e*i")%l- i!cl)ded i! &he Cost Engineering j")$4
!al%1
T" check i& all ")&/ #lea%e *i%i&0
h(#033+++1aacei1"$g3$e%")$ce%3
AACE I!&e$!a'"!al2% Ne+ O!li!e Maga.i!e
27 COST ENGINEERING MAY1JUNE 6456
TECHNICAL ARTICLE
T
he !#jec% c$% e$%ima%e i$ a ke*
elemen% % $&!!#% !#jec%
ac%i'i%ie$/ I% !#'ide$ $&!!#% %
%he deci$in making !#ce$$,
and in!&% f# ecnmic anal*$i$, b&dge%
e'al&a%in and cn%#l/
The c$% e$%ima%e f a !#!$ed
!#jec% i$ ne f %he ke* de%e#minan%$ in
e'al&a%ing %he ecnmic 'iabili%* and
b&$ine$$ ca$e f %he ne( in'e$%men%/ The
&nde#$%anding f f&%&#e h*!%he%ical
de'el!men% cnfig&#a%in and #ele'an%
c$%$ a#e !a#% f %he deci$in making
!#ce$$ and $&!!#% an !%imal &$e f
limi%ed ca!i%al b&dge%/ If %he c$%
e$%ima%e i$ n% acc&#a%e, %he financial
#e%&#n f#m %he ca!i%al in'e$%men% ma*
n% be #eali+ed/ A$ a cn$e"&ence, %he#
de$e#'ing !#jec%$ ma* l$e %he
!!#%&ni%* % be f&nded/
The e$%ima%e n% nl* e$%abli$he$ a
!#jec% b&dge%, b&% !la*$ an e"&all*
im!#%an% #le in %he cn%#l !ha$e f a
!#jec%/ An effec%i'e e$%ima%e m&$%
!#'ide acc&#a%e inf#ma%in f# c$%
mni%#ing and !#g#e$$ mea$&#emen% f
a !#jec% d&#ing e)ec&%in/
De$!i%e %he c#i%ical im!#%ance f %he
e$%ima%e % a !#jec%0$ $&cce$$, %he c$%
e$%ima%e i$ n% al(a*$ a!!#!#ia%el*
!#e!a#ed/ P$$ible nega%i'e fea%&#e$ f a
c$% e$%ima%e incl&de %he fll(ing/
3 lack f alignmen% (i%h $%akehlde#
#e"&i#emen%$-
3 incn$i$%enc* (i%h !#jec%
a$$&m!%in$-
3 incm!le%ene$$- and,
3 !# %#an$!a#enc* and %#aceabili%*/
The gal f a c$% e$%ima%e i$ %
!#edic% %he !#bable c$% f a !#jec%,
en$&#ing %ha% all $%akehlde#$ ag#ee and
&nde#$%and %he e$%ima%e ba$i$, cn%en%,
and &%cme, in #de# % all(
managemen% % make %he be$% deci$in$/
The#e a#e a n&mbe# f #ea$n$ (h*
%eam$ d n% !#e!a#e a "&ali%* c$%
e$%ima%e/ Limi%ed #e$&#ce$ and %ime
!#e$$&#e$ a#e %he main ca&$e$/ Re'ie(
ac%i'i%ie$ !e#f#med b* %hi#d !a#%ie$ a#e
n% effec%i'e # e'en n% $ched&led/
Team$ f%en &nde#e$%ima%e %he
im!#%ance f gd !lanning and ea#l*
alignmen% n #e"&i#emen%$1e)!ec%a%in$
and %he im!#%ance f e$%ima%e
$&!!#%ing dc&men%a%in/
Thi$ a#%icle di$c&$$e$ h( % im!#'e
c$% e$%ima%e "&ali%*, !#!$ing a
$%#&c%&#ed c$% e$%ima%ing !#ce$$/ Ke*
elemen%$ f %he !#ce$$ incl&de (ell
defined $%e!$ f# c$% e$%ima%e
!#e!a#a%in, iden%ifica%in f main #le$,
%*!ical e$%ima%e dc&men%$, and check
!in%1#e'ie( e'en%$/
The a!!#ach i$ a!!licable % all
!#jec%$ in e'e#* !ha$e and can be ea$il*
ada!%ed n a fi%2f#2&$e ba$i$/ The le'el f
de%ail and diligence % be &$ed d&#ing %he
c$% e$%ima%ing !#ce$$ ma* 'a#* b%h
COST ESTIMATING
PROCESS & QUALITY
ASSURANCE
Susanna Bedarida and Stefania Conti
Abstract: The !#jec% c$% e$%ima%e i$ a ke* elemen% % $&!!#% !#jec% ac%i'i%ie$.
i% !#'ide$ $&!!#% % %he deci$in making !#ce$$, in!&% f# ecnmic anal*$i$
and b&dge% e'al&a%in- ne'e#%hele$$ i% i$ f%en !#l* !#e!a#ed/ Thi$ a#%icle di$2
c&$$e$ h( % im!#'e c$% e$%ima%e "&ali%*, ba$ed n %he idea %ha% c$% e$%ima%e
"&ali%* can be im!#'ed if gd e$%ima%ing !#ac%ice$ a#e b&il%2in f#m %he $%a#% f
%he c$% e$%ima%e de'el!men% !#ce$$ and if !#inci!le$ like %#aceabili%*, %#an$2
!a#enc* and cn$i$%enc* a#e a!!lied/ The#ef#e, %hi$ a#%icle !#!$e$ a c$% e$%i2
ma%ing !#ce$$ ba$ed n a "&ali%* a!!#ach (hich f#e$ee$ !lanning, e)ec&%in,
'e#ifica%in and im!#'emen% $%age$/ Ke* elemen%$ f %he !#!$ed !#ce$$ %ha%
enhance c$% e$%ima%e !#edic%abili%* incl&de (ell defined $%e!$ f# c$% e$%ima%e
!#e!a#a%in, %*!ical e$%ima%e dc&men%$ and check !in%1#e'ie( e'en%$/ Thi$ a#2
%icle (a$ fi#$% !#e$en%ed a$ EST/756 a% %he 6455 AACE Ann&al Mee%ing/
Key Words: B&dge%$, c$% e$%ima%e, ecnmic anal*$i$, !lanning and 'e#ifica%in
%i"h "he !"a"egic impo"ance) pojec"
pha!e) "o"al $al#e) and p#po!e of "he
pa"ic#la e!"ima"e, Thi! a"icle i!
foc#!ed on capi"al pojec"! and i! gi$en
fom "he pe!pec"i$e of "he pojec"
o%ne compan',
Steps
The main objec"i$e of "he co!"
e!"ima"ing poce!! i! "o po$ide a
eliable e!"ima"e) in line %i"h pojec"
pha!e ma"#i"' and !"akeholde!-
e&pec"a"ion!, The q#ali"' of "he e!"ima"e
can be achie$ed follo%ing a !eie! of
!"ep! ba!ed on a q#ali"' a!!#ance
appoach, The!e !"ep! incl#de "he
follo%ing,
Planning+ aimed a" aligning "he
en"ie "eam on pojec" co!" e!"ima"e
ac"i$i"ie!, Co!" e!"ima"e p#po!e) inp#"!)
!cope) deli$eable!) foma"! and o"he
eq#iemen"! ae defined, Planning
ac"i$i"ie! help "he alignmen" of "he
e!"ima"e %i"h pojec" objec"i$e!)
impo$ing "he pojec" "eam
#nde!"anding of pojec" "age"! and
!cope) pojec" defini"ion) con"ac"
!"a"eg') loca"ion impac"!) i!k
managemen" and e&"enal infl#ence!,
Ke' !"akeholde! ae engaged)
defining %ha" infoma"ion i! eq#ied b'
%hom and %hen) and claif'ing
eq#iemen"! and e!pon!ibili"ie!, The
engagemen" of "he !"akeholde! in "he
e!"ima"e planning poce!!) pio "o "he
!"a" of e!"ima"e de$elopmen") impo$e!
"he likelihood of mee"ing e!"ima"e
objec"i$e!,
Comm#nica"ion and clo!e liai!on
be"%een all pojec" "eam membe! in
"he co!" e!"ima"e planning !"age i!
ecommended "o en!#e !#cce!!f#l
e!"ima"e comple"ion in an effec"i$e and
"imel' manne, The defini"ion and
ageemen" of e!"ima"e eq#iemen"! in
"em! of co!" e!"ima"e !"#c"#e and
foma" help! "o ogani(e "he %ok and
!"andadi(e ho% "he infoma"ion i!
go#ped and pe!en"ed) ma&imi(ing "he
compehen!ion of "he e!"ima"e o#"p#"!,
The e!#l" of an eal' foc#! on
planning i!) .q#ali"' fom "he beginning
of "he e!"ima"ing poce!!)/ a"he "han
ad1hoc e$ie%! and coec"i$e ac"ion!)
%hich lead "o "he need fo e!"ima"e
ec'cling and e1a#"hoi(a"ion, Thi!
appoach keep! "he foc#! con!"an"l' on
co!" e!"ima"e ac"i$i"ie!) in"ega"ing "hem
in"o "he pojec" ac"i$i"ie! fo "he pha!e
and con"ib#"ing "o impo$e "hei
in"eface! %i"h and #nde!"anding b' "he
o"he di!cipline!,
Thee ae fo# main pojec"
poce!!e! %hich in"eac" %i"h "he co!"
e!"ima"ing poce!!, The!e incl#de "he
follo%ing,
3 Design, Engineering and
Execution2The de!ign engineeing
and e&ec#"ion planning %hich
po$ide "echnical and e&ec#"ion
inp#" da"a0a!!#mp"ion! "o co!"
e!"ima"e*
3 Procurement2The poc#emen"
poce!! %hich po$ide! con"ac"
!"a"eg' a!!#mp"ion! fo co!"
e!"ima"e and !pecific infoma"ion on
make" da"a0ecen" bid!*
3 Risk Management2The i!k
managemen" poce!! %hich
!#ppo"! "he iden"ifica"ion of co!"
i"em! and inp#"! !#bjec" "o
#nce"ain"' o $aiabili"') "he
calc#la"ion of pojec" con"ingenc'
and "he e$al#a"ion of co!" e!"ima"e
confidence le$el* and)
3 Economic Evaluation2The poce!!
of pojec" economic e$al#a"ion and
b#dge" pepaa"ion) %hich eq#ie!
a !e" of da"a genea"ed b' "he
e!"ima"ing poce!!,
Af"e "he planning !"age) "he !econd
!"ep of "he e!"ima"ing poce!! i!+
Execution i! aimed a" pepaing "he
e!"ima"e and "he !#ppo"ing
doc#men"a"ion, Once e!"ima"e
eq#iemen"! ae e!"abli!hed and "hee
i! alignmen" on co!" e!"ima"e ac"i$i"ie!)
"he e!"ima"e i! de$eloped) ba!ed on
inp#" deli$eable! po$ided b' "he
pojec" "eam,
The pojec" !cope i! compo!ed b'
componen"!) each of %hich i! q#an"ified
and de$eloped in"o a co!") #!ing
!#ppo"ing co!" a"e infoma"ion fom
in"enal !o#ce!) $endo!- da"a and
hi!"oical infoma"ion,
All di!cipline co!" e!"ima"o! ae
in$ol$ed in "he e!"ima"e pepaa"ion
accoding "o "he plan, Co!" e!"ima"e! ae
pepaed in line %i"h e!"ima"e
eq#iemen"!) #!ing "he ageed
me"hodologie! and foma"!) co$eing
"he a!!igned !cope of %ok and i!!#ed in
"he e!"abli!hed "ime,
Di!cipline e!"ima"e o#"p#"! ae "hen
"'picall' con!olida"ed) checking fo
omi!!ion! o d#plica"ion!) "aking in"o
acco#n" infla"ion0e!cala"ion and
incl#ding con"ingenc' "o ai$e a" "he
de!ied le$el of confidence "ha" "he "o"al
pojec" co!" %ill no" o$e#n "he
e!"ima"e,
Accoding "o pojec" need!)
!peciali!" ac"i$i"ie! in !#ppo" of co!"
e!"ima"e ma' be pefomed "o po$ide
addi"ional infoma"ion fo co!"
e!"ima"ing "a!k! 4e,g,) a make" !#$e')
co!" benchmaking !"#d') .check
e!"ima"e)/ e"c,5, The!e ac"i$i"ie! ma'
alead' be en$i!ioned a" "he planning
!"ep) o ma' be eq#e!"ed b' co!"
e!"ima"o! o pojec" "eam membe! "o
impo$e clai"' on e!"ima"e inp#")
eq#iemen"! and o#"p#",
D#ing "he e&ec#"ion !"ep) "he co!"
e!"ima"e !ho#ld al%a'! be !#ppo"ed b'
appopia"e) compehen!i$e
doc#men"a"ion %hich i! pod#ced "o
g#aan"ee e!"ima"e epea"abili"')
"aceabili"' and "an!paenc') making
"he final e!"ima"e o#"p#"
#nde!"andable fo managemen" and
e$ie%e!,
Verification and Improvement+
aimed a" a!!#ing "he q#ali"' of "he
pefomed ac"i$i"ie! and co!" e!"ima"e
o#"p#"!, The $eifica"ion !"ep i! a good
pac"ice pio "o "he pe!en"a"ion of
o#"p#"!,
The in"enal $eifica"ion ma' be
einfoced b' an Independen" co!"
e!"ima"e e$ie%, The in"enal $eifica"ion
i! pefomed b' "he pojec" "eam) %hile
"he independen" co!" e!"ima"e e$ie% i!
pefomed b' e&"enal co!" e!"ima"e
e&pe"! %ho challenge "he pojec"
"eam-! %ok) iden"if'ing po!!ible aea!
of %eakne!! and ecommenda"ion! fo
po"en"ial impo$emen",
Co!" e!"ima"e $alida"ion fom "hid
pa"ie! incea!e! confidence on "he
e!"ima"e e!#l"+ deci!ion make! gain
a!!#ance fom pee! o#"!ide "he "eam
"ha" "he pojec" i! mee"ing b#!ine!!
objec"i$e! fom an e!"ima"ing
pe!pec"i$e, In"enal and e&"enal e$ie%
ac"i$i"ie! gi$e $i!ibili"' and confidence "o
managemen"0!"akeholde! "ha" "he co!"
28 COST ENGINEERING MAY0JUNE 8678
e"#ima#e ha" been de%eloped in a
con"i"#en# &a(-
The %e!ifica#ion "#ep incl$de"
n$me!o$" check" incl$ding #he
follo&ing-
Re%ie& #he e"#ima#e plan and final
!epo!# #o "ee ho& &ell #he plan &a"
follo&ed 2 in%e"#iga#ion on an(
majo! di"c!epancie"+
Check #ha# #he final "cope of &o!k i"
p!ope!l( inco!po!a#ed in #he
e"#ima#e and #ha# all #he "cope
change" ha%e been con"ide!ed+
Confi!m #ha# #he e"#ima#e acc$!ac(
!ange mee#" e'pec#a#ion" and
de#e!mine ho& #he !ange &a"
de!i%ed+
Ve!if( ho& #he main co"#" &e!e
de%eloped and &ha# #he"e co"#"
incl$de+ and*
De#e!mine #he "o$!ce and !efe!ence
da#e of #he co"# da#a-
All finding"* commen#" and
!ecommenda#ion" f!om #he %e!ifica#ion
ac#i%i#ie" imp!o%e co"# e"#ima#e $ali#(-
All feedback i" implemen#ed in#o ac#ion"
and inco!po!a#ed in#o #he compan(
kno&ledge "("#em* c!ea#ing
o!gani)a#ional lea!ning oppo!#$ni#ie"-
Af#e! #he !e%ie&* #he co"# e"#ima#e
"ho$ld be in line &i#h e'pec#a#ion" and
capable of "$ppo!#ing #he !e$i!ed
deci"ion making p!oce"" fo! #he p!ojec#-
Roles
A" men#ioned ea!lie! in #he planning
"#ep* !ole" and !e"pon"ibili#ie" of all
con#!ib$#o!" #o #he co"# e"#ima#e a!e
defined in o!de! #o e"#abli"h and
comm$nica#e clea!l( &ha# i" e'pec#ed
f!om each of #hem in #e!m" of
deli%e!able" !e$i!emen#" and #iming-
E"peciall( in comple' con#e'#"* #he
p!ojec# e"#ima#e i" #he !e"$l# of #he
in#eg!a#ion of diffe!en# di"cipline
e"#ima#e" &hich !e$i!e "pecific
compe#ence"-
In #he oil and ga" ind$"#!(* f!om #he
o&ne!/" pe!"pec#i%e* co"# e"#ima#e" a!e
pe!fo!med &i#h #he con#!ib$#ion of
man( #echnical and f$nc#ional
compe#ence", facili#ie"* d!illing and
comple#ion* logi"#ic* ope!a#ion"* e#c-
M$l#iple con#!ac#o!" ma( be in%ol%ed #o
"$ppo!# co"# e"#ima#e ac#i%i#ie"- The
o&ne! i" #he !e"pon"ible pa!#( #o en"$!e
#ha# all o!gani)a#ion" in%ol%ed a!e
p!ope!l( coo!dina#ed in #e!m" of "cope
delinea#ion* e"#ima#e deli%e!( #iming and
con"olida#ion- Thi" "$ppo!#" "#!ongl( #he
need #o appoin# a coo!dina#o! &ho
ac#i%el( in%ol%e" all of #he !ele%an# #eam
membe!" d$!ing e"#ima#ing ac#i%i#ie"- In
"$ch comple' ca"e"* a &ell1#imed
a""ignmen# of !ole" and !e"pon"ibili#ie"
i" ke( #o en"$!e #ha# co"# e"#ima#e i"
comple#e and p!od$ced on #ime-
Since #he in#eg!a#ion of #he
di"cipline o$#p$#" i" a c!i#ical ac#i%i#( #o
en"$!e co"# e"#ima#e comple#ene"" and
con"i"#enc(* a !e"pon"ible pa!#( "ho$ld
be clea!l( iden#ified and con"ide!ed #he
!efe!ence poin# fo! co"# e"#ima#e f!om all
#eam membe!" and e'#e!nal
"#akeholde!"- Thi" i" #he !ole of a co"#
e"#ima#e coo!dina#o!-
Di"cipline co"# e"#ima#o!" p!epa!e a
di"cipline e"#ima#e o$#p$# #ha# i" !ela#ed
#o a p!ojec# compe#ence a!ea- The(
$"$all( foc$" on a #echnical "#$d( %ie&-
Thi" g$a!an#ee" #he be"# "ol$#ion f!om a
#echnical poin# of %ie&* b$# i# i" no# a"
b!oad a" #he o%e!all p!ojec# %ie&- The
con"olida#ion of di"cipline e"#ima#e
o$#p$# i" ca!!ied o$# b( #he co"# e"#ima#e
coo!dina#o! &ho en"$!e" #ha# #he o%e!all
p!ojec# e"#ima#e i" in line &i#h #he
p!ojec# need" and e'pec#a#ion" 5p!ojec#
%ie&6-
In "$mma!(* #he co"# e"#ima#e
coo!dina#o! i" #he p!ojec# #eam membe!
&ho en"$!e" #he $ali#( and #imel(
deli%e!( of #he p!ojec# #o#al co"#* b(
accompli"hing #he follo&ing-
4 planning pha"e e"#ima#ing ac#i%i#ie"+
4 a""embling di"cipline e"#ima#e"+
4 en"$!ing #hei! con"i"#enc( &i#h
p!ojec# objec#i%e" and "cope+
4 en"$!ing all p!ojec# !e$i!emen#"
a!e inco!po!a#ed+ and finall(*
4 deli%e!ing all #he !e$i!ed e"#ima#e
doc$men#a#ion-
Each co"#1e"#ima#ing "#ep b$ild"
#o&a!d #he i""$ing of e"#ima#e
doc$men#"* &hich help" #o manage and
!epo!# on &ha# &o!k ha" been
accompli"hed* and #o "$ppo!# #he
deci"ion making p!oce""-
The p!epa!a#ion of "$ppo!#ing
doc$men#" #o #he e"#ima#e "ho$ld no#
be con"ide!ed a" a &a"#e of #ime* b$#
"ho$ld be #!ea#ed a" a %al$e adding
ac#i%i#(- S$ppo!#ing doc$men#" help #he
deci"ion make!" and #he p!ojec# #eam #o
$nde!"#and and .b$(/ in#o e"#ima#e
o$#p$#-
The co"# e"#ima#e "$ppo!#ing
na!!a#i%e "ho$ld be p!epa!ed in a
con"i"#en# and $nde!"#andable manne!-
I# "ho$ld mee# #!an"pa!enc( and
#!aceabili#( need" &hich !e$i!e #ha#
e"#ima#e c$!!enc(* da#e* da#a "o$!ce"
and inp$# a""$mp#ion" a!e clea!l( "#a#ed*
and #he e"#ima#e o$#come i" &ell
doc$men#ed- In addi#ion* e"#ima#e
!e"pon"ibili#ie" "ho$ld be !epo!#ed in
o!de! #o #!ack con#!ib$#o!" #o #he co"#
e"#ima#e and #o ha%e a !efe!ence poin# in
ca"e of a need fo! cla!ifica#ion- I# i" %e!(
impo!#an# #ha# #he p!ojec# #eam and all
#he "#akeholde!"* incl$ding managemen#
and e'#e!nal pa!#ie"* $nde!"#and #he
en#i!e e"#ima#e package 5con#en# and
fo!ma#6 "ince i# inc!ea"e" #he le%el of
confidence in #he e"#ima#e !e"$l#-
Co"# e"#ima#e deli%e!able" ma( be
g!o$ped in#o #he follo&ing #&o
ca#ego!ie"* acco!ding #o #hei! p$!po"e-
4 Planning deli%e!able" 5co"# e"#ima#e
plan* co"# e"#ima#e in"#!$c#ion #o
con#!ac#o!6+ and*
4 Repo!# deli%e!able 5co"# e"#ima#e
!epo!#6-
The aim of #he planning deli%e!able"
i" #o "$ppo!# planning ac#i%i#ie" and
p!ojec# #eam alignmen# on e"#ima#e
e'pec#a#ion"* p!oce""e"* #ool"* e#c-
Cost Estimate Plan3A co"# e"#ima#e
plan i" add!e""ed #o p!ojec# #eam
membe!" #o align #he en#i!e #eam on
p!ojec# co"# e"#ima#e ac#i%i#ie"- The
doc$men# cla!ifie" e"#ima#e p$!po"e*
"cope* fo!ma#"* ag!eed me#hodolog(*
!ole and !e"pon"ibili#ie"* ke( mile"#one"*
and o#he! !e$i!emen#"- All inp$#" #o #he
e"#ima#e and !e$i!ed o$#p$#" "ho$ld be
iden#ified and incl$ded in #he doc$men#-
Cost Estimate Instruction to
Contractor3Thi" i" add!e""ed #o #he
con#!ac#o!* in ca"e" &he!e an e'#e!nal
con#!ac#o! i" in cha!ge of #he e"#ima#e
p!epa!a#ion- Thi" allo&" defini#ion of an
ac#i%i#( plan and align" e'pec#a#ion"- The
doc$men# p!e"en#" #he manda#o!(
!e$i!emen#" #he con#!ac#o! "hall follo&
in p!epa!ing i#" e"#ima#e "cope of &o!k
and !epo!#ing #he &o!k done 5e-g-*
29 COST ENGINEERING MAY0JUNE 9789
monetar$ basis reqirements& format to
se in presentation of the estimate&
batter$ limits& etc(.(
Cost Estimate Report,This sho"s
the main reslts of the phase estimate
acti!ities& smmari%ing basis of estimate
and main assmptions( It is the complete
report of the total project estimate&
"hich incldes the description of
estimate inpt& methodolog$& tools and
the qalification of an$ rates*factors
referenced in the cost estimate(
The cost estimate report
consolidates the "ork done b$ each
discipline& presents the total project cost
and pro!ides e#planations on the reslts
of specialist acti!ities performed to
spport the estimate( The cost estimate
report shold be based on the cost
estimate plan& changing the perspecti!e
from "hat "as planned to "hat actall$
occrred dring the de!elopment of the
estimate& highlighting departres and
reasons(
Figre 0 sho"s the cost estimating
process( For each step& the relati!e
estimate deli!erables are reported(
Quality Assurance
The proposed cost estimating
process relies on continal application of
good estimating practices from the
earliest phases of de!elopment&
inclding bt not limited to the
follo"ing(
- estimate reqirements gathering
and commnication'
- estimate planning'
- preparation of spporting
docments' and&
- performance of final re!ie" e!ents(
The objecti!e is to bild qalit$ from
the start of estimate preparation and not
jst inspect the estimate)s final
deli!erables "hen changes cold in!ol!e
re+"ork( This is likel$ to be difficlt and
costl$ to implement(
This article has established that an
estimate is of critical importance to a
project)s sccess& the application of the
cost estimate best practices dring the
process shold be monitored&
performing some checks of compliance
in correspondence of the main critical
steps of the cost estimating process(
Critical steps are the stages "hich
ha!e major impact on the cost estimate
otpt( These stages occr at the end of
the planning step& "hen discipline cost
estimates are prepared& once all the
discipline estimate otpts are
30 COST ENGINEERING MAY*JUNE 1/01
Figure 1 Cost Estimating Process: Steps and Deliverables
agg'ega)ed1 bef$'e 'e,ie- ac)i,i)ie( a#d
af)e' (%ecia!i() ac)i,i)ie( $' e,e#)(4
The c$#)'$! %'$ce(( c!$(e!/ %a'a!!e!(
)he c$() e()i"a)i#g $#e4 C$"%!ia#ce
chec( a'e #$) i#)e#ded a( )he 'e,ie- $f
)he fi#a! c$() e()i"a)e de!i,e'ab!e1 b+)
)he %e'i$dic c$#)'$! $f c$() e()i"a)e
$+)%+)( 9defi#i)i,e $' %'e!i"i#a'/: ac'$((
%'$jec) %ha(e( )ha) e#ha#ce )he
%'$babi!i)/ $f de,e!$%i#g a &+a!i)/ c$()
e()i"a)e4
The e,a!+a)i$# i#c!+de( )he
f$!!$-i#g i)e"( a#d6$' chec(4
8 a# a((e(("e#) $f )he e.i()e#ce $f
"ai# c$() e()i"a)e de!i,e'ab!e(2
8 )he c$"%!ia#ce $f )he(e d$c+"e#)(
-i)h be() %'ac)ice(2
8 )he adhe'e#ce $f )he %e'f$'"ed
c$() e()i"a)e ac)i,i)ie( -i)h )he
%!a# a#d 'ea($#( f$' a#/
di(c'e%a#cie(2
8 )he c$"%!ia#ce $f )he c$() e()i"a)e
-i)h %'$jec) 'e&+i'e"e#)(2 a#d1
8 )he !e,e! $f ag'ee"e#) a#d (ha'e $f
)he c$() e()i"a)e a"$#g %'$jec)
)ea" "e"be'(1 e)c4
The highe' )he %'$jec) i"%$')a#ce1
b$)h i# )e'"( $f c$"%a#/ fi#a#cia!
e.%$(+'e a#d i# )e'"( $f ()'a)egic
'e!e,a#ce a#d 'i(1 )he "$'e )he %'$jec)
i( (+bjec) )$ c$#)'$! ac)i,i)ie( a#d fi#a!
'e,ie- e,e#)(4
Re,ie- e,e#)( a'e ()'+c)+'ed a#d
i#de%e#de#) c$() e()i"a)e a((e(("e#)(
-hich a'e 'e&+i'ed a) )he e#d $f )he c$()
e()i"a)i#g %'$ce((1 -he# )he e()i"a)e i(
c$"%!e)ed a#d 'ead/ )$ be %'e(e#)ed4
The %+'%$(e $f 'e,ie- e,e#)( i( )he
,a!ida)i$# $f )he c$() e()i"a)e $+)%+)1
)h'$+gh )he a((e(("e#) $f )he
'$b+()#e(( $f )he %'$jec) e/ e!e"e#)(4
A!($1 )he'e #eed( )$ be a cha!!e#ge $f
)he "ai# %'$jec) )ea" a((+"%)i$#( a#d
e()i"a)e ba(i(1 (+ch a( ($+'ce( $f
i#f$'"a)i$# +(ed defi#i#g )he -$'
(c$%e a#d da)a (+%%$')i#g )he e()i"a)e
de!i,e'ab!e4
The 'e,ie- e,e#)( 'e%'e(e#) )he
fi#a! ,a!ida)i$# $f )he e()i"a)e1 a
c$#fi'"a)i$# f'$" )hi'd %a')ie( )ha) )he
%'$jec) i( c$#(i()e#)!/ e()i"a)ed )$
(+%%$') )he #eed $f deci(i$# "ae'( f$'
c$#fide#ce i# )he c$() e()i"a)e4 The
(+cce(( $f )he(e e,e#)( i( ()'ic)!/
de%e#da#) $# %'$jec) "a#age"e#) a#d
)ea" c$""i)"e#)1 -e!!7)i"ed e,e#)
%!a##i#g 6(ched+!i#g1 )he a,ai!abi!i)/ $f
%'e7'eadi#g d$c+"e#)a)i$# a#d )he
i((+e $f a feedbac 'e%$')4
B$)h c$#)'$! ac)i,i)ie( a#d 'e,ie-
e,e#)( c$#)'ib+)e )$ )he i"%'$,e"e#) $f
)he &+a!i)/ $f )he c$() e()i"a)e )h'$+gh
)he ide#)ifica)i$# $f a'ea( $f -ea#e((
a#d 'ec$""e#da)i$#( -hich (h$+!d be
i"%!e"e#)ed b/ )he %'$jec) )ea" i# )he
c$() e()i"a)e4
Concl"ion
The +(e $f a ()'+c)+'ed c$()
e()i"a)i#g %'$ce(( he!%( )$ e#(+'e )ha)
&+a!i)/ e()i"a)e( a'e c$#(i()e#)!/
%'e%a'ed4 Thi( effec)i,e!/ (+%%$')( )he
deci(i$#7"ai#g %'$ce(( b/
"a#age"e#)4 The c$() e()i"a)i#g
%'$ce(( c$"%'i(e( a (e'ie( $f ()e%( )ha)
e#(+'e )ha) )he c$() e()i"a)e( a'e -e!!
d$c+"e#)ed1 c$#(i()e#)1 )'a#(%a'e#)1
'e!iab!e a#d a%%'$%'ia)e f$' )hei'
i#)e#ded +(e4
If (e'i$+( eff$')( )$-a'd f$!!$-i#g
)he ()e%( $f )he %'$ce(( -e'e
+#de')ae# a#d %a')ic+!a' a))e#)i$# -a(
%aid )$ )he %!a##i#g ()age1 "a#/
%'$b!e"( )ha) affec) c$() e()i"a)e
&+a!i)/ -$+!d be ($!,ed4
Ti"e %'e((+'e %'$b!e"( "a/ be
cha!!e#ged b/ a%%!/i#g )he defi#ed
()e%(4 I) a!($ he!%( )$ %!a# e()i"a)e
ac)i,i)ie( -i)h a %'$"%) a!ig#"e#) $#
'e&+i'e"e#)(6e.%ec)a)i$#( )ha) 'ed+ce
'e7-$'( a#d ad,a#ce i((+e(4 G$$d
e()i"a)e de,e!$%"e#) %!a##i#g "ae(
)he e()i"a)i#g %'$ce(( "$'e efficie#)4
Re,ie- ac)i,i)ie(1 if a%%'$%'ia)e!/
%!a##ed a#d "a#aged b/ e.%e')(1 a'e
a!($ i"%$')a#) )$ e#ha#ce e()i"a)e
&+a!i)/4
A c!ea' defi#i)i$# $f e()i"a)e '$!e(
a#d 'e(%$#(ibi!i)ie( he!%( )$ $'ga#i0e )he
-$' a#d )$ e#(+'e )ha) )he c$()
e()i"a)e i( c$"%!e)e1 c$#(i()e#)1 a#d
)i"e!/ de!i,e'ed4
Fi#a!!/1 )he %'e%a'a)i$# $f e()i"a)e
d$c+"e#)( c$#)'ib+)e( )$ )he
"a#age"e#) $f e()i"a)e ac)i,i)ie( a#d
(+%%$')( )he deci(i$# "ai#g %'$ce((1
i#c'ea(i#g )he )'a#(%a'e#c/ $f )he
e()i"a)e ba(i( a#d a((+"%)i$#(1 )he
)'aceabi!i)/ $f )he $+)%+)1 a#d )he'ef$'e1
)he c$#fide#ce )$ "a#age"e#) 6
()aeh$!de'( )ha) %'$jec) i( fi) f$' i)(
%+'%$(e4
REFERENCES
=4 Recommended Prac!ice No# &'R$
%(3 Basis of Estimate1 AACE
I#)e'#a)i$#a!1 M$'ga#)$-#1 WV1
><<A4
>4 Recommended Prac!ice No# &)R$
%*3 Development of Cost Estimate
Plans As Applied in Engineering,
Procurement, and Construction for
the Process Industries1 AACE
I#)e'#a)i$#a!1 M$'ga#)$-#1 WV1
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?4 D/(e')1 L4 a#d B4G4 E!!i$))1 The
Estimate Review and Validation
Process1 Co! Engineering j$+'#a!1
V$!+"e @@1 N$4 =1 AACE
I#)e'#a)i$#a!1 M$'ga#)$-#1 WV1
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ABOUT THE AUTHORS
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31 COST ENGINEERING MAY6JUNE ><=>
COST ENGINEERING JOURNAL
IS PUBLISHED BI$MONTHLY
The Co! Engineering j$+'#a! ha(
bec$"e a bi7"$#)h!/ %'i#) a#d digi)a!
%ee' 'e,ie-ed j$+'#a!4 I((+e( a'e a,ai!7
ab!e f$'3 Ja#+a'/6Feb'+a'/2 Ma'ch6A%'i!2
Ma/6J+#e2 J+!/6A+g+()2 Se%)e"be'6Oc7
)$be' a#d N$,e"be'6Dece"be'4 I((+e(
a'e "ai!ed a#d6$' %$()ed b/ )he '() $f
)he "$#)h i# )he $dd #+"be'ed i((+e
"$#)h(4
I# )he e,e# #+"be'ed "$#)h(1
-e5'e %+b!i(hi#g a #e- digi)a! AACE
"aga0i#e1 So"rce4 Chec i) $+) $#!i#e
a)3 h*%366---4aacei4$'g6'e($+'ce(64
32 COST ENGINEERING MAY/JUNE 5345
D
%"ing 5338* a Secial In$e"e#$
G"o% 1SIG2 'a# fo"med o%$
of co#$ enginee"ing "oce##
ind%#$") "e"e#en$a$i&e# $o
ick0% $he challenge $o e#$abli#h a
globall) acce$ed #$anda"d fo" labo"
"od%c$i&i$) no"m# fo" $he ind%#$"), In
Feb"%a") 5339* $he D%$ch A##ocia$ion of
Co#$ Enginee"# 1DACE2* %bli#hed a CD0
ROM $ha$ "o&ide# g%idance in $he %#e of
labo" "od%c$i&i$) no"m# fo" man) of $he
di#ciline# 'hich a"e in&ol&ed in $he
con#$"%c$ion and main$enance of
ind%#$"ial "od%c$ion facili$ie#,
Fo" $he %"o#e# of $hi# a"$icle* a
labo" "od%c$i&i$) no"m i# $he n%mbe" of
labo" ho%"# 1'o"k effo"$2 "e!%i"ed $o
comle$e a defined con#$"%c$ion ac$i&i$)*
gi&en $he #ecific !%alifica$ion#
a##ocia$ed 'i$h each indi&id%al labo"
"od%c$i&i$) no"m, B) defini$ion* each
labo" "od%c$i&i$) no"m i# a $)ical o"
a&e"age n%mbe" of labo" ho%"# "e!%i"ed
b) $he collec$ion of all indi&id%al# 1i,e,*
c"e'2 a##ocia$ed 'i$h $he con#$"%c$ion
ac$i&i$), Fo" #imlici$)* 'e define a labo"
"od%c$i&i$) no"m a#* -a n%mbe" of ho%"#
fo" an ac$i&i$) e" %ni$ of mea#%"emen$,.
The %bli#hed DACE labo"
"od%c$i&i$) no"m# "o&ide con#ide"a$ion
$o ac$i&i$) de#c"i$ion#* !%alifica$ion#*
loca$ion fac$o"#* indi"ec$ co#$#*
o&e"head#* "ofi$ and "i#k* condi$ion and
efficienc) fac$o"# a##ocia$ed 'i$h each of
$he $ho%#and# of indi&id%al labo"
"od%c$i&i$) no"m# 'i$h $he in$en$ of
"o&iding cla"i$) $o each one,
Thi# a"$icle 'ill "o&ide info"ma$ion
on $he le&el $ha$ #ho%ld be "o&ided fo" in
$he de&elomen$ of an) labo"
"od%c$i&i$) no"m #$anda"d#+ and
"oo#e# $ha$ $he DACE labo"
"od%c$i&i$) no"m#* a# an a&ailable*
%bli#hed and com"ehen#i&e g%ideline*
ma) become $he ne' labo" "od%c$i&i$)
no"m #$anda"d# fo" $he con#$"%c$ion
ind%#$"ie# #%o"$ing ind%#$"ial
"od%c$ion facili$ie#,
Thi# a"$icle con$ain# e(amle# and
e($"ac$# f"om $he comle$e %blica$ion b)
$he DACE* and 'ill "o&ide #%fficien$
info"ma$ion $o allo' )o% $o ob$ain a
gene"al im"e##ion and $he added &al%e
of $hi# ini$ia$i&e,
THE USABILITY OF LABOR PRODUCTIVITY
NORMS AND UNIT(RATES
Defini#in f a lab! P!d$c#i%i#& N!m
A labo" "od%c$i&i$) no"m i# $he
n%mbe" of labo" ho%"# 1'o"k effo"$2
"e!%i"ed $o comle$e a defined
con#$"%c$ion ac$i&i$)* gi&en $he #ecific
!%alifica$ion# a##ocia$ed 'i$h each
indi&id%al labo" "od%c$i&i$) no"m,
B) defini$ion* each labo" "od%c$i&i$)
no"m i# a $)ical o" a&e"age n%mbe" of
labo" ho%"# "e!%i"ed b) $he collec$ion of
all indi&id%al# 1i,e,* c"e'2 a##ocia$ed 'i$h
$he con#$"%c$ion ac$i&i$), Fo" #imlici$)*
'e define a labo" "od%c$i&i$) no"m a# -a
n%mbe" of ho%"# fo" an ac$i&i$) e" %ni$ of
mea#%"emen$,.
DACE LABOR PRODUCTIVITY NORMS
THE NEW GULF COAST?
Martin S.J. van Vliet
Ab"#!ac#' D%"ing 5338* a Secial In$e"e#$ G"o% 'a# fo"med o%$ of co#$ enginee"#
f"om $he "oce## ind%#$") "e"e#en$a$i&e# $o ick0% $he challenge $o e#$abli#h a
globall) acce$ed #$anda"d fo" labo" "od%c$i&i$) no"m# fo" $he ind%#$"), In Feb0
"%a") 5339* $he D%$ch A##ocia$ion of Co#$ Enginee"# 1DACE2 %bli#hed a CD0ROM
$ha$ "o&ide# g%idance in $he %#e of labo" "od%c$i&i$) no"m# fo" man) of $he di#0
ciline# 'hich a"e in&ol&ed in $he con#$"%c$ion and main$enance of ind%#$"ial "o0
d%c$ion facili$ie#, Thi# a"$icle 'ill "o&ide info"ma$ion on $he le&el of info"ma$ion
$ha$ #ho%ld be "o&ided fo" in $he de&elomen$ of an) labo" "od%c$i&i$) no"m
#$anda"d#+ and "oo#e# $ha$ $he DACE labo" "od%c$i&i$) no"m#* a# an a&ailable
%bli#hed g%ideline* ma) become $he ne' -G%lf Coa#$. labo" "od%c$i&i$) no"m
#$anda"d# fo" $he con#$"%c$ion ind%#$"ie#, Thi# a"$icle 'a# fi"#$ "e#en$ed a#
EST,647 a$ $he 5344 Ann%al Mee$ing,
Ke& W!d"' Co#$ enginee"#* labo" "od%c$i&i$)* "oce## ind%#$")* and #$anda"d#
TECHNICAL ARTICLE
33 COST ENGINEERING MAY3JUNE ;9:;
Definition of a Unit#Rate
A "$ice &! be "aid ad ag$eed '"!
f!$ %e$(ice% "e$f!$med0 F!$ e*am"le-
&echical )!$k4h!'$% )ill be "aid f!$ a&
&he 'i&4$a&e ag$eed '"!0 Of&e field
)!$k i% a%%iged &! a %'bc!&$ac&!$ b+
&he "$ime c!&$ac&!$ ! a 'i&4$a&e ba%i%0
F!$ %im"lici&+- )e defie a 'i&4$a&e a%- 1a
"$ice "e$ 'i& !f mea%'$eme&02
The diffe$ece be&)ee a lab!$
"$!d'c&i(i&+ !$m ad a 'i&4$a&e i% &ha&
&he$e a$e ! c!%&% i(!l(ed i a lab!$
"$!d'c&i(i&+ !$m- !l+ h!'$%0 Thi%
make% i& m!$e '%able f!$ diffe$e&
id'%&$ie% ad "$ac&ice% beca'%e c!%&%
a$e (e$+ m'ch $ela&ed &! (!l'me%-
ec!!mic ci$c'm%&ace%- a(ailabili&+-
&a*e%- e&c0 lab!$ "$!d'c&i(i&+ !$m% ca
ea%il+ be calib$a&ed &! &he l!cal
ci$c'm%&ace% b+ a""l+ig l!ca&i!
fac&!$%0
Lab!$ "$!d'c&i(i&+ !$m% a$e '%ed
f!$ &he f!ll!)ig0
5 c!%& e%&ima&ig- "laig ad c!%&
c!&$!l.
5 &ede$ig ad c!&$ac&ig.
5 %&ada$di,a&i! ad )!$ld4)ide '%e.
5 c!$$ec& defii&i!% '%ig
#'alifica&i!% ad "$eamble%.
5 a""l+ig l!ca&i! fac&!$%.
5 mea%'$eme& !f "$!d'c&i(i&+.
5 efficiec+ e(al'a&i!. ad-
5 bechma$kig0
A g!!d defii&i! !f a lab!$
"$!d'c&i(i&+ !$m m'%& icl'de all !f &he
f!ll!)ig/
5 gee$al #'alifica&i!%.
5 di$ec& h!'$% defii&i!.
5 ac&i(i&+ de%c$i"&i!% 6"$eamble%7.
5 lab!$ $a&e% defii&i!.
5 "$!d'c&i(i&+ defii&i!. ad-
5 idi$ec& c!%&% defii&i!0
Page and Nations %!Gulf Coast"&
Page ad Na&i!% i% a c!mme$ciall+
a(ailable lab!$ "$!d'c&i(i&+ !$m%
%&ada$d- c!%ide$ed b+ ma+ &! be
$eflec&i(e !f 1G'lf C!a%&2 lab!$
"$!d'c&i(i&+0
Al%! k!) a% &he- 1Estimator's
Piping Man#Hour Manual-2 b+ J!h S0
Page- &hi% %&ada$d i% ba%ed !
'me$!'% &ime ad me&h!d %&'die%-
b!&h i &he %h!" ad i &he field- !
ma+ "i"ig j!b% l!ca&ed ! "$!jec&% i
&he US- $agig i c!%& f$!m 8:-999-999
&! 8<-999-9990
Thi% %&ada$d ca be '%ed &!
de&e$mie m!$e acc'$a&el+ &he ac&'al
di$ec& lab!$ c!%& f!$ &he c!m"le&e
fab$ica&i! ad i%&alla&i! !f "$!ce%%
"i"ig f!$ a gi(e id'%&$ial !$ chemical
"la&- ad i% %&$ic&l+ f!$ e%&ima&ig di$ec&
lab!$ i lab!$ h!'$% !l+0
Y!' )ill !& fid a+ c!%&% f!$
ma&e$ial%- e#'i"me& '%age-
)a$eh!'%ig ad %&!$ig- fab$ica&ig-
%h!" %e&'" !$ !(e$head0 The%e c!%&% ca
be $eadil+ !b&aied b+ a g!!d e%&ima&!$
)h! ca (i%'ali,e ad c!%ide$ j!b
%ched'le- %i,e- ad l!ca&i!0 If a ma&e$ial
&ake4!ff i% a(ailable- &hi% c!%& ca be
!b&aied f$!m &he (ed!$% )h! )ill
f'$i%h &he ma&e$ial%0 The%e i&em% m'%&
be c!%ide$ed f!$ each idi(id'al j!b0
Acc!$dig &! J!h S0 Page- &he m!%&
im"!$&a& a$ea &! be c!%ide$ed bef!$e
calc'la&ig lab!$ c!%&% i% "$!d'c&i(i&+
efficiec+0 Thi% i% a m'%& if &he ma+
lab!$ h!'$ &able% a$e &! be c!$$ec&l+
a""lied0 P$!d'c&i(i&+ efficiec+ i
c!j'c&i! )i&h &he "$!d'c&i!
eleme&% m'%& be c!%ide$ed f!$ each
idi(id'al "$!jec&0
B+ ca$ef'll+ aal+,ig ma+ $e"!$&%-
he ha% e%&abli%hed a a(e$age
"$!d'c&i(i&+ $a&e !f =9 "e$ce&0 All &he
lab!$ h!'$% !$ "e$ce&age% i &he
ma'al a$e ba%ed ! &hi% "e$ce&age0
He ha% f!'d &ha& "$!d'c&i!
"e$ce&age% ca be cla%%ified i&! fi(e
ca&eg!$ie% ad &he "$!d'c&i! eleme&%
ca be g$!'"ed i&! %i* diffe$e&
cla%%ifica&i!%0
The %i* diffe$e& cla%%e% !f
"$!d'c&i! eleme&% icl'de &he
f!ll!)ig0
Figure ( $Build#Up of a Labor Productivit Norm
3 ge"e&a ec#"#!-/
3 $&#jec( ')$e&*i'i#"/
3 ab#& &ea(i#"'/
3 j#b c#"di(i#"'/
3 c#"'(&)c(i#" e%)i$!e"( a"d (##'/
a"d.
3 +ea(he&0
The fi*e &a"ge' #f $&#d)c(i*i(-
efficie"c- $e&ce"(age' i"c)de (he
f##+i"g0
Percen!age Range
3 Ve&- L#+ 872:7
3 L#+ :82;7
3 A*e&age ;82<7
3 Ve&- G##d <8 2=7
3 E,cee"( =82877
Page and Na!ion and DACE Labor
Prod"c!i#i!$ Norm
I" c#!$a&i'#" +i(h DACE. (he Page
a"d Na(i#"' $)bica(i#" ack' !a"- #f
(he ee!e"(' &e%)i&ed f#& a
c#!$&ehe"'i*e )"de&'(a"di"g #f each
i"di*id)a ab#& $&#d)c(i*i(- "#&!0
O"e #f (he bigge'( di'ad*a"(age' #f
(he Page a"d Na(i#"' '-'(e! i' (ha( i(
i"c)de' (he $&#d)c(i*i(- fac(#&' i" (he
ab#& &a(e'. ea*i"g (he ab#&
$&#d)c(i*i(- "#&! i('ef )"affec(ed b-
a"- #f (he c#"di(i#"'0 S# (hi' !ea"'. f#&
e,a!$e. -#) +i "#( be abe (# !ea')&e
a"d a$$- diffe&e"( #ca(i#" a"d #(he&
adj)'(!e"( fac(#&' (# (he ab#&
$&#d)c(i*i(- "#&!' (he!'e*e'0
Tabe 8 'h#+' a c#!$a&i'#" (abe
be(+ee" (he $&i"ci$e' a"d
cha&ac(e&i'(ic' #f (he Page a"d Na(i#"'
a"d DACE Lab#& P&#d)c(i*i(- N#&!'
'-'(e!'0 Tabe 9 e,$ai"' (he &a(i"g
'-!b#' )'ed i" (abe 80
DACE Labor Prod"c!i#i!$ Norm
I" #&de& (# i"(&#d)ce a "e+
c#!!#" ab#& $&#d)c(i*i(- "#&!'
'(a"da&d f#& (he i"d)'(&-. a
c#!$&ehe"'i*e %)ai(- f&a!e+#&k
c#"(ai"i"g defi"i(i#"'. b#)"da&ie'.
$&ac(ica )'e. e(c0. ha' (# be defi"ed0 T#
!ee( (hi' g#a. DACE ha' e'(abi'hed
%)aifica(i#"' a"d $&ea!be'. +hich
de'c&ibe (he #*e&a c#"di(i#"' a"d (he
'c#$e de'c&i$(i#"' #f (he ab#&
$&#d)c(i*i(- "#&!' ac(i*i(ie'0
Q"alifica!ion and Preamble
The $)&$#'e #f (he %)aifica(i#"' i'
(# $&#*ide g)ida"ce i" (he de*e#$!e"(
a"d a$$ica(i#" #f ab#& $&#d)c(i*i(-
"#&!' f#& e'(i!a(i"g0 I" $a&ae (# (he
de*e#$!e"( #f (he'e ab#& $&#d)c(i*i(-
"#&!'. c#"'ide&a(i#" ha' bee" gi*e" (#
(he a$$ica(i#" #f #ca(i#" 4$&#d)c(i*i(-5
fac(#&'. i"di&ec( c#'('. #*e&head'. $&#fi(
a"d &i'k. c#"di(i#" fac(#&' a"d1#&
efficie"c- fac(#&'0
The&ef#&e. (he )'e& 'h#)d ha*e a
c#!!#" )"de&'(a"di"g #f (he
(e&!i"##g- )'ed i" (hi' $&#ce'' (#
e"')&e ca&i(- +i(h &ega&d (# +ha( i'
i"c)ded i" ab#& $&#d)c(i*i(- "#&!'.
ab#& &a(e'. a"d (h#'e i(e!' (ha( 'h#)d
be ca$()&ed a' de&i*ed c#'(' 4a$$-i"g
fac(#&' a"d #(he& adj)'(!e"('50
The $&ea!be' a"d %)aifica(i#"' (#
(he ab#& $&#d)c(i*i(- "#&!' a&e
i"(e"ded (# $&#*ide (he ba'i' f#&
c#!$e(e"e'' a"d c#"'i'(e"c- i"
e'(i!a(e'0 The $&ea!be' a"d
%)aifica(i#"' a&e a$$icabe f#& a (-$e'
#f i"'(aa(i#" +#&k0
QUALIFICATIONS
M"l!iplier 'Correc!ion Fac!or(
The DACE ab#& $&#d)c(i*i(- "#&!'
e*e' a&e ba'ed #" N#&(h We'( E)&#$e
4fac(#& > 807 #ca(i#" 1 efficie"c- 1
$&#d)c(i*i(-50 Fac(#&' ca" be a$$ied (#
adj)'( (he ab#& $&#d)c(i*i(- "#&!' f#&
#(he& #ca(i#"'0 The ab#& $&#d)c(i*i(-
"#&!' a&e dee!ed (# be a2i"c)'i*e0
Refe&e"ce i' !ade (# (he $&ea!be'
#f (he &ee*a"( di'ci$i"e' +he&e (he
'c#$e #f each i"di*id)a "#&! i'
e,$ai"ed0 I" e,ce$(i#"a ci&c)!'(a"ce'
#& '$ecia +#&ki"g c#"di(i#"'. a
!)(i$ie& 4c#&&ec(i#" fac(#&5 !a- be
a$$ied (# (he ab#& $&#d)c(i*i(- "#&!0
The ab#& $&#d)c(i*i(- "#&!' ca" a'# be
adj)'(ed b- a" efficie"c- fac(#& &ea(ed
(# (he *#)!e #f +#&k (ha( i' e,$ec(ed0
Prod"c!i#i!$
Lab#& $&#d)c(i*i(- i' (he a!#)"( #f
'e&*ice' (ha( a c&af('!e" $&#d)ce' i" a
gi*e" a!#)"( #f (i!e 4ab#& $&#d)c(i*i(-
"#&!5. a'# &efe&&ed (# a' (he !ea')&ed
(i!e &e%)i&ed (# e,ec)(e a '$ecified
a!#)"( #f +#&k0
P&#d)c(i*i(- i' defi"ed a' 6(he &a(i#
#f a *#)!e !ea')&e #f #)($)( (# a
*#)!e !ea')&e #f i"$)(06
34 COST ENGINEERING MAY1JUNE 9789
Table * & Page ) Na!ion #% DACE Labor Prod"c!i#i!$ Norm
Table + & Ra!ing Me!hod
35 COST ENGINEERING MAY2JUNE :89:
P#d&c%i'i%* i$ de!enden% n a n&mbe#
f fac%#$.
4 %*!e f (#k-
4 di$ci!line- and,
4 lca%in/
Of%en %he$e fac%#$ a#e incl&ded in
%he lab# !#d&c%i'i%* n#m and %h&$
becme a lcal lab# !#d&c%i'i%* n#m,
and %he ba$i$ f# e)ec&%in/ F#
e$%ima%ing !&#!$ed i% i$ a$$&med %ha%
%he 0!#d&c%i'i%* fac%#1 i$ 9/8/
Efficienc!
W#ke# efficienc* i$ mea$&#ed in
!h*$ical %e#m$/ Efficienc* i$ mea$&#ed a$,
7%he #a%i f !lanned 'l&me f &%!&%
% %he ac%&al 'l&me f &%!&%/7 The
lab# !#d&c%i'i%* n#m$ can al$ be
adj&$%ed b* an efficienc* fac%# #ela%ed
% %he 'l&me f (#k %ha% i$ e)!ec%ed/
Scheduled Overtime and Effect on
Labor Productivit! Norms
The lab# !#d&c%i'i%* n#m$ a#e
ba$ed n n#mal (#king h&#$/ When
'e#%ime !e#a%in$ a#e deemed
nece$$a#*, %hi$ can #e$&l% in dec#ea$ed
!#d&c%i'i%* # l$$ f efficienc*/
When 'e#%ime i$ $ched&led f# a
lnge# !e#id f %ime 5f# e)am!le %
mee% $!ecific !lanning #e"&i#emen%$6,
%he lab# !#d&c%i'i%* n#m$ #e"&i#e a
!#d&c%i'i%* fac%# c##ec%in f# %he
inefficienc* ca&$ed b* lng (#king
h&#$ 5inefficienc* ; (#ked h&#$ 2
calc&la%ed lab# !#d&c%i'i%* n#m$ f# a
$!ecific ac%i'i%*6/
Direct vs" Indirect
Di#ec% c$%$ a#e c$%$ f# ma%e#ial$,
lab# 5incl&ding (#king f#eman6 and
all(ance$ %ha% can be a$$igned %
$!ecific ac%i'i%ie$, incl&ding %he $e% f
%l$ and e"&i!men% #e"&i#ed % e)ec&%e
%he (#k/
Indi#ec% c$%$ a#e c$%$ cc&##ing
d&#ing %he e)ec&%in f %he (#k %ha%
cann% be a$$igned di#ec%l* % $!ecific
ac%i'i%ie$ 5f# e)am!le $&!e#'i$in6/
Indi#ec% c$%$ ma* incl&de %he fll(ing/
Site Facilities
C$%$ f# $i%e facili%ie$ a#e c$%$ %
!#e!a#e %he cn$%#&c%in $i%e, %he
la* d(n a#ea$, cn$%#&c%in ffice$
and (a#eh&$e/ Thi$ incl&de$ all
nece$$a#* $&!!lie$, incl&ding b&%
n% limi%ed %. mbile $caffld$,
(a#eh&$e in%e#i#, in%e#nal
%#an$!#%, and !$$ible clima%e
#eg&la%in/ Al$ incl&ded a#e %he
c$%$ f# e)!li%a%in, hi#ing,
main%enance, cleaning, hea%ing,
elec%#ici%*, ga$ (a%e# and %ele!hne
c$%$ e%c/
Overhead
O'e#head c$%$ a#e c$%$ in %he
indi#ec% $!he#e %ha% a#e #ele'an% %
%he im!lemen%a%in f %he (#k/
Thi$ incl&de$ c$%$ cnnec%ed %
&$ing $&!e#'i$#*, e)ec&%i'e and
c#dina%ing $%aff/ In addi%in,
'e#head can incl&de c$%$ linked %
b%aining #e"&i#ed a!!#'al$,
d#a(ing and calc&la%ing (#k f# %he
im!lemen%a%in, a$3b&il%,
managemen%, (#k !#e!a#a%in,
!e#mi%$, #e!#%$, ma%e#ial
managemen%, "&ali%* cn%#l and
!#jec% cn%#l$/ Ini%ial $afe%*
in%#d&c%in f# mbili+ing di#ec%
lab# i$ al$ incl&ded in 'e#head
c$%$/
Profit and Risk
P#fi% i$ %he cm!en$a%in a
cn%#ac%# #ecei'e$ a$ a cm!nen%
f %he cn%#ac% !#ice/ Ri$k i$ %he
cm!en$a%in %ha% a cn%#ac%#
#ecei'e$ a$ a cm!nen% f %he
cn%#ac% !#ice f# %he #i$k %ha% %he
cn%#ac%# %ake$ (i%h #ega#d % %he
im!lemen%a%in f %he (#k/
Overvie of Direct and Indirect
Fig&#e : gi'e$ an 'e#'ie( f h(
%he di#ec% h&#$, di#ec% lab# c$%$ and
indi#ec% c$%$ a#e a!!lied and %he %%al
c$%$ a#e de#i'ed/
Measurement
The &ni%$ f mea$&#emen% % be
&$ed $hall be a$ $%a%ed (i%hin %he lab#
!#d&c%i'i%* n#m$ and a$ defined
(i%hin %he !#eamble$/
F# e)am!le, f# a (#k i%em f#
(hich %he &ni% f mea$&#e i$ defined in
me%e#$ 5m6 leng%h, %he mea$&#emen%
$hall be %he leng%h mea$&#ed alng %he
cen%#al a)i$ f %he i%em$/
All i%em$ f (#k a#e mea$&#ed
nea%, a$ fi)ed in !$i%in, (i%h n
all(ance made in %he "&an%i%ie$ f# c&%
and (a$%e/
Validit!
The lab# !#d&c%i'i%* n#m$
a$$&me %ha% %he ac%i'i%ie$ can be ca##ied
&% &nde# n#mal cndi%in$/ The$e
0n#mal cndi%in$1 a#e de$c#ibed ging
f#(a#d in %hi$ a#%icle/ F# ac%i'i%ie$ %ha%
a#e ca##ied &% &nde# &n&$&al
cndi%in$, cndi%in fac%#$ ma* be
a!!lied/ 5i/e/, % cndi%in %he ac%i'i%* %
#eflec% %he 0abn#mal cndi%in16/
Conditions
The lab# !#d&c%i'i%* n#m$ can
nl* be #eali+ed if %he fll(ing
cndi%in$ a#e me%/
4 gd !#fe$$inali$m-
4 gd (#k !#e!a#a%in-
4 gd !#jec% #gani+a%in-
4 gd in$%#&c%in and $&!e#'i$in f
a$$embl* !e#$nnel-
4 %imel* acce$$ % (#k!lace, %
$&fficien% gd "&ali%* ma%e#ial$,
%l$, d#a(ing$, e%c/- and,
4 n#mal (ea%he# cndi%in$/
Labor Productivit! Norms
The lab# !#d&c%i'i%* n#m$
cm!#i$e %he fll(ing/ The mea$&#ed
lab# !#d&c%i'i%* n#m$ a#e !#ima#il*
de%e#mined n %he ba$i$ f %he (#king
me%hd$ and $afe%*2en'i#nmen%al
#e"&i#emen%$, a$ (ell a$ n na%inal
lab# $%&die$/ The a'e#age lab#
!#d&c%i'i%* n#m$ a#e b%ained f#m
%he fll(ing.
4 The lab# !#d&c%i'i%* n#m$ a#e
ba$ed n %he m$% efficien% e)ec&%in f
%he (#k %a$k/ Thi$ mean$ a!!l*ing %he
be$% (#k !#ac%ice$, &$ing %he c##ec%
%l$, and ha'ing a minimal di$%&#bance
d&#ing %he e)ec&%in/ The#ef#e %he
lab# !#d&c%i'i%* n#m$ a#e nl*
a!!licable f# all (#k %ha% i$ e)ec&%ed
&nde# n#mal cndi%in$, (i%h
e)!e#ienced lab#e#$, ha'ing a n#mal
!e#f#mance, &$ing %he c##ec% %l$ and
a!!l*ing %he be$% (#king me%hd/
4 Lab# !#d&c%i'i%* n#m$ a#e
e)!#e$$ed in %he lab# h&#$,
#e"&i#ed f# %he di#ec% !e#$nnel %
cm!le%e a (#k %a$k/ A lab#
!#d&c%i'i%* n#m i$ an indica%in f
%he le'el f eff#% #e"&i#ed %
cm!le%e a gi'en (#k %a$k/ I% i$ n%
36 COST ENGINEERING MAY%JUNE )'()
duration$ The duration time is the
period bet!een the start of the
implementation and the end of a
task or more tasks$ To calculate the
duration time# the number of
laborers required !ill need to be
taken into account$
Preambles
The follo!ing sections proide
e"amples of the discipline&specific
preambles$ The preambles proide
information required to understand each
specific !ork task included in the DACE
Labor Norms$
Figure ! An Overview of How the Direct Hours, Direct Labor Costs and Indirect Costs are Applied and the Total Costs are
Derived
37 COST ENGINEERING MAY2JUNE 9789
N%e %ha% all %he e)am!le$ &$e %he
E&#!ean nmencla%&#e 4%he cmma
$e!a#a%e$ %he decimal5.
Piping
Thi$ $ec%in incl&de$ Lab# N#m$
and all(ance$ 4c##ec%in fac%#$5 f#
!i!ing ac%i'i%ie$ acc#ding % ASA and
DIN. Pi!e $i+e$ incl&ded in %he lab#
!#d&c%i'i%* n#m$ #ange f#m >1 &! %
and incl&ding ;=,1 and incl&de$ ma%e#ial
fac%#$ f# (elding.
The mea$&#ing $*$%em i$ in%ended %
$&!!#% %he $e%%lemen% and %he
a$$e$$men% f %he !#g#e$$ f !i!ing
in$%alla%in.
The DACE %able$ $!ecif* lab#
!#d&c%i'i%* n#m$ f# %he diffe#en%
nminal b#e$ and (all %hickne$$e$ f#
each mea$&#ed i%em. Plea$e n%e %ha%
%he &ni% f "&an%i%* 4/80, 'i+. !e# 8 m, !e#
8 !iece, !e# 8 kg e%c.5 i$ al(a*$
a!!licable % %hi$ lab# !#d&c%i'i%*
n#m.
In e$%abli$hing %he linea# me%e#$,
all(ance$ a#e incl&ded in %he lab#
!#d&c%i'i%* n#m % acc&n% f# %he
mea$&#emen% % be %aken f#m !i!e
cen%e# % !i!e cen%e# # % flange f#n%.
Example of an Estimate Using Labor
Productivity Norms
Wi%h %he inf#ma%in in fig&#e :,
%able$ ; and <, *& (ill be able % $ee a
!#ac%ical e)am!le h( lab# !#d&c%i'i%*
n#m$ can be a!!lied in a c$% e$%ima%e
&$ing a d#a(ing and $c!e f (#k.
Insulation
Ne)%, le%0$ lk a% de$c#i!%in$ f#
%he#mal in$&la%in and $!ecific
#e"&i#emen%$ and #ecmmenda%in$ f#
e)%e#nal %he#mal in$&la%in f ab'e
g#&nd $&#face$ f e"&i!men% and
!i!ing.
Thi$ $ec%in i$ ba$ed n %he
Cmmi%%ee In$&la%in Ne%he#land$
Ind&$%#* 4CINI5 man&al, 6Insulation for
Industries.6 DACE fll($ %he CINI
$%anda#d a$ m&ch a$ !$$ible #ega#ding
%echnical #ecmmenda%in$ and
cmmn !#ac%ice$. H(e'e#, DACE &$e$
a diffe#en% in%e#!#e%a%in f# %he me%hd
f mea$&#emen% %han de$c#ibed,
acc#ding % CINI, in #de# % be m#e in
line (i%h %he %he# di$ci!line$.
The CINI F&nda%in i$ an in$%i%&%in
in (hich b%h !#inci!al$ and cn%#ac%#$
c!e#a%e. The CINI Manual i$ mean% %
$e#'e a$ a %l f# de$igne#$, !&#cha$e#$,
in$%alle#$ and in$!ec%#$ in de%e#mining
%he !%imal in$&la%in f# all cmmn
$i%&a%in$. F# %hi$ !&#!$e, %he
e)!e#ience f $!eciali$%$ f#m d+en$ f
cm!anie$ (e#e ga%he#ed and
dc&men%ed in in%eg#a%ed $!ecifica%in$.
In$&la%in i$ defined a$ %h$e
ma%e#ial$ # cmbina%in$ f ma%e#ial$,
(hich #e%a#d %he fl( f hea% ene#g* b*
!e#f#ming ne # m#e f %he fll(ing
f&nc%in$.
3 cn$e#'e ene#g* b* #ed&cing hea%
l$$ # gain-
3 cn%#l $&#face %em!e#a%&#e$ f#
!e#$nnel !#%ec%in and cmf#%-
3 facili%a%e %em!e#a%&#e cn%#l f
!#ce$$-
3 !#e'en% 'a!# fl( and (a%e#
cnden$a%in n cld $&#face$-
3 inc#ea$e !e#a%ing efficienc* f
hea% i ng 2 'en% i l a% i ng 2cl i ng,
!l&mbing, $%eam, !#ce$$ and
!(e# $*$%em$ f&nd in cmme#cial
and ind&$%#ial in$%alla%in$-
3 !#e'en% # #ed&ce damage %
e"&i!men% f#m e)!$&#e % fi#e #
c##$i'e a%m$!he#e$-
3 a$$i$% mechanical $*$%em$ in
mee%ing c#i%e#ia in fd and
c$me%ic !lan%$- and,
3 #ed&ce emi$$in$ f !ll&%an%$ %
%he a%m$!he#e.
Layers of Insulation
In$&la%in $hall be a!!lied in a
minim&m n&mbe# f la*e#$ f
cmme#ciall* a'ailable %hickne$$e$. The
%%al %hickne$$ $hall be a$ cl$e a$
!$$ible % %he m$% ecnmic in$&la%in
%hickne$$ #e"&i#ed, and $hall be #&nded
ff % %he ne)% la#ge$% cmme#ciall*
a'ailable %hickne$$.
T #ed&ce hea% l$$e$, in$&la%in
a!!lied in %( # m#e la*e#$ $hall ha'e
$%agge#ed jin%$. Ci#c&mfe#en%ial jin%$
be%(een $egmen%$ in adjacen% leng%h$ f
Table 3 Piping Labor Productivity Norms Table
38 COST ENGINEERING MAY/JUNE 2012
Figure 3 Piping Isometric
39 COST ENGINEERING MAY/JUNE 2012
Table 4 Piping Isometric Scope of Work
40 COST ENGINEERING MAY/JUNE 2012
Table 5 Piping Estimate Example
41 COST ENGINEERING MAY*JUNE 2012
pre+formed rigid ins!laion shall also be
saggered) If economicall% araci"e& a
combinaion of no more han #o
differen ins!laing maerials ma% be
!sed)
Insulation Thickness
Crieria for "ie#ing and
!ndersanding able 4 incl!des he
follo#ing)
, ambien empera!re( 23/C' and&
, #ind "eloci%( 1 m * s
Jacketing
All ins!laed eq!ipmen -e$cep for
Pol%!rehane -PUR. * Pol%isoc%an!raa
-PIR. on ank shells. and piping shall be
proeced #ih a jackeing s%sem& s!ch
as meal& reinforced masic& apes or
glass reinforced epo$% * glass reinforced
plasic finishing)
The jackeing shall pro"ide
proecion agains #aer and #eaher&
fire& oil spillage& mechanical #ear or
oher damage) Consideraion shall be
gi"en o he choice of #eaherproofing
in erms of safe%& life c%cle cos&
en"ironmenal*climae condiions&
"!lnerabili% o corrosion& effeci"eness
and mainainabili%)
If meal jackeing is !sed& s!fficien
space and drainage shall be pro"ided o
a"oid inernal acc!m!laion of #aer
ca!sed b% condensaion& #aer "apor
diff!sion& capillar% acion and #aer
ingress)
Activities Codes
All ins!laion #ork req!ired for he
e$ec!ion of aci"iies are classified in
he follo#ing gro!ps(
Code 1: Remo"al of e$ising ins!laion)
Aci"i% comprises he remo"al
of ins!laion maerial)
Code 2: Remo"al of e$ising sheeing)
Aci"i% comprises he remo"al
of meal sheeing)
Code 3: Insallaion of e$ising
ins!laion) Aci"i% comprises
he insallaion and marking of
old& "is!al inspeced and
appro"ed ins!laion maerial
#ih preser"aion of he
original ins!laion "al!e&
incl!ding marking)
Code 4: Insallaion of e$ising sheeing)
Aci"i% comprises he
Table 6 Minimum Insulation Thickness
Table Minimum Sheeting Thickness
42 COST ENGINEERING MAY&JUNE )'()
installation$ marking and
conditioning of old$ qualitatie
in good shape$ isual inspected
and approed metal sheeting%
Code 5: Installation of ne! insulation%
Actiit# comprises the
installation of ne! insulation
material%
Code P:Prefabrication of ne! sheeting%
Actiit# comprises the
prefabrication of ne! metal
sheeting%
Code : Installation of ne! sheeting%
Actiit# comprises the
installation of ne! metal
sheeting%
Scaffolding
This section describes the points of
attention and the actiities for
scaffolding% Furthermore$ it gies
e"amples for ho! to measure the most
common t#pes of scaffolding using
sketches and calculation methods%
Table ! Insulation Labor Productivity Norms Table
Table " Independent Scaffolding Checklist
43 COST ENGINEERING MAY1JUNE ;9:;
Tge%he# (i%h a gene#al checkli$% f
%he !in%$ f a%%en%in+ $cafflding ha$
been cla$$ified in %*!e$. F# each %*!e f
$cafflding+ a checkli$% f# a$$embling
%he $cafflding %*!e$ i$ incl&ded. Thi$
c'e#$ a!!#)ima%el* A9 !e#cen% f all
$cafflding. A$ an aid+ %he m$% cmmn
$elec%in ha$ been indica%ed.
Inf#ma%in #ega#ding $cafflding
cn$%#&c%in can be b%ained a% %he
a$$cia%in f $cafflding cm!anie$ in
%he Ne%he#land$ called+ /Ve#eniging 'an
S%eige#2+ Hg(e#k2 en
Be%nbeki$%ingbed#ij'en0 6VSB7+ $ec%in
/S%eige#bed#ij'en.0
Independent Standing Scaffolding
Definition
See fig&#e = (hich $h($ a $caffld
(he#e %he fl# i$ $&!!#%ed b* b#acing$
4e)am!le :5+ # $&$!en$in$ % an
e)i$%ing cn$%#&c%in # e)i$%ing
$cafflding 4e)am!le ;5. Al$ #e'ie(
e)am!le$ <2? in fig&#e =. T calc&la%e %he
me%hd f mea$&#emen%+ #&nd ff
&!(a#d$ % 9.> m. In #e'ie(ing and
&nde#$%anding fig&#e =+ %ake in%
cn$ide#a%in %he fll(ing.
3 h B heigh%- 'e#%ical di$%ance
be%(een f% !la%e and %he %! f
&!!e# #ailing,
3 b B (id%h- mea$&#ed cen%e# %
cen%e# di$%ance be%(een &%e# !$%$
in %he %#an$'e#$e !lane, and+
3 l B leng%h- mea$&#ed cen%#e %
cen%#e di$%ance be%(een &%e# !$%$
in %he f#n% 'ie(.
Painting
Thi$ $ec%in de$c#ibe$ !e#f#mance2
ba$ed ca%ing a!!licable f# !ain%ing and
ca%ing. I% i$ in%ended f# all !ain%ing and
ca%ing cn%#ac%$+ incl&ding b%h ne(
cn$%#&c%in and main%enance f
n$h#e facili%ie$. I% incl&de$ lab#
!#d&c%i'i%* n#m$ f# !#%ec%in
again$% e)%e#nal c##$in f b%h
fe##&$ and nn2fe##&$ me%al$.
Thi$ $ec%in incl&de$ de$c#i!%in$
f# ca%ing a!!lica%in and $&#face
!#e!a#a%in and gi'e$ lab# !#d&c%i'i%*
n#m$ f# !#efab#ica%in and field (#k
in %he $ame manne# a$ !i!ing.
H(e'e#+ i% de$ n% a!!l* f#
in%e#nal ca%ing$+ ca%ing f b&ilding$
and %he# ci'il in$%alla%in$+ e"&i!men%
and cm!nen%$ (i%h a $e#'ice
%em!e#a%&#e bel( min&$ ;98C # 'e#
=>98C # e"&i!men% (he#e %he#mal
$hck ma* a!!ea# (hen in !e#a%in.
Surface Preparation
General
All edge$ $hall be g#&nd % a
minim&m #adi&$ f ; mm and flame c&%
a#ea$ ma* ha'e been g#&nd fl&$h. Bla$%
cleaning f $&#face$ $hall+ a$ a gene#al
#&le+ be !e#f#med b* bla$% cleaning a$
&%lined in ISO @>9=2;. Fab#ica%in ma*
be cm!le%e bef#e $&#face !#e!a#a%in
begin$.
Pre-Cleaning of Surfaces
P#i# % %he bla$% cleaning and1#
!#i# % an* !ain%ing !e#a%in+ %he
$&#face $hall be f#ee f an*
cn%amina%in and an* e)ce$$i'e #&$%
$cale $hall be #em'ed.
All bl%2hle$ $hall be $l'en%
cleaned !#i# % %he cmmencemen% f
bla$% cleaning. Sl'en% cleaning $hall be
ca##ied &% in acc#dance (i%h SSPC
4Scie%* f# P#%ec%i'e Ca%ing$5+ SP:
4S&#face P#e!a#a%in5 /Sl'en% Cleaning.0
Cleaning of Surfaces
Bla$% cleaning $hall cn%in&e f# a
minim&m f ;> mm 'e# an* adjacen%
Figure 4 Independent Scaffolding Examples
coa#ed a!ea" #o fea#he! #he edge" of #he
e'i"#ing coa#ing "("#em+ Fo! local bla"#
cleaning #he edge" of #he e'i"#ing coa#ing
"("#em "hall be angle-bla"#ed #o p!o%ide
a fea#he!ed o%e!lap+
Whe!e pi##ing co!!o"ion ha" been
loca#ed d$!ing cleaning of "$!face"*
a##en#ion "hall be gi%en #o #he !emo%al of
!e"id$al "al#"+
Ab!ading &i#h "andpape! o! ligh#
g!inding &i#h a "$i#able .fle'ible/ di"c
ma( be $"ed fo! "$!face p!epa!a#ion
&he!e "&eep bla"#ing i" no# po""ible+
Ne$ Con!r"c!ion and Main!enance
The "$!face of ca!bon o! lo& allo(
"#eel&o!k fo! ne& con"#!$c#ion and
main#enance #o e'i"#ing in"#alla#ion"
"hall be bla"#-cleaned #o #he %i"$al
"#anda!d in acco!dance &i#h ISO 4301-1
a# #he #ime of coa#ing+
Hand Tool Cleaning )S! -*
Remo%al of all !$"# "cale* mill "cale*
loo"e !$"# and loo"e pain# #ha# can be
accompli"hed b( hand &i!e b!$"hing*
hand "anding* hand "c!aping* hand
chipping o! o#he! hand impac# #ool"* o!
b( a combina#ion of #he"e me#hod"+ The
"$b"#!a#e ma( ha%e a fain# me#allic
"heen and al"o be f!ee of oil* g!ea"e*
d$"#* "oil* "al#" and o#he! con#aminan#"+
Po$er Tool Cleaning )S! .*
Remo%al of all !$"# "cale* mill "cale*
loo"e pain#* and loo"e !$"# #ha# can be
accompli"hed b( po&e! &i!e b!$"he"*
po&e! impac# #ool"* po&e! g!inde!"*
po&e! "ande!" o! b( a combina#ion of
#he"e me#hod"+ The "$b"#!a#e ma( ha%e
a p!ono$nced me#allic "heen and al"o be
f!ee of oil* g!ea"e* di!#* "oil* "al#" and
o#he! con#aminan#"+ S$!face ma( no# be
b$ffed o! poli"hed "moo#h+
Br"h'Off Bla! Cleaning )SA ,*
Remo%al of loo"e mill "cale* loo"e
!$"#* and loo"e pain# #ha# can be
accompli"hed b( #he impac# of ab!a"i%e"
p!opelled #h!o$gh no))le" o! b(
cen#!if$gal &heel"+ I# i" no# in#ended #ha#
#he "$!face "hall be comple#el( f!ee of all
mill "cale* !$"#* and pain#+ The !emaining
mill "cale* !$"#* and pain# ma( be #igh#
and #he "$!face ma( be "$fficien#l(
ab!aded #o p!o%ide good adhe"ion and
bonding of pain#+
A B!$"h-Off Bla"# Cleaned S$!face
Fini"h i" defined a" one f!om &hich all
oil* g!ea"e* di!#* !$"# "cale* loo"e mill
"cale* loo"e !$"# and loo"e pain# o!
coa#ing" a!e !emo%ed comple#el(* b$#
#igh# mill "cale and #igh#l( adhe!ed !$"#*
pain# and coa#ing" ma( !emain p!o%ided
#ha# all mill "cale and !$"# ha%e been
"$fficien#l( e'po"ed #o #he ab!a"i%e bla"#
pa##e!n "o #ha# n$me!o$" fleck" of #he
$nde!l(ing me#al a!e $nifo!ml(
di"#!ib$#ed o%e! #he en#i!e "$!face+
Commercial Bla! Cleaning )SA -*
Remo%al of mill "cale* !$"#* !$"#
"cale* pain# o! fo!eign ma##e! b( #he $"e
of ab!a"i%e" p!opelled #h!o$gh no))le" o!
b( cen#!if$gal &heel"* #o #he deg!ee
"pecified+
A comme!cial bla"# cleaned "$!face
fini"h i" defined a" one f!om &hich all oil*
g!ea"e* di!#* !$"# "cale and fo!eign
ma##e! ha%e been comple#el( !emo%ed
f!om #he "$!face+ In addi#ion* all !$"#*
mill "cale and old pain# ha%e been
comple#el( !emo%ed e'cep# fo! "ligh#
"hado&"* "#!eak"* o! di"colo!a#ion"
ca$"ed b( !$"# "#ain* mill "cale o'ide" o!
"ligh#* #igh# !e"id$e" of pain# o! coa#ing
#ha# ma( !emain+
If #he "$!face i" pi##ed* "ligh#
!e"id$e" of !$"# o! pain# ma( be fo$nd in
#he bo##om of pi#"+ A# lea"# #&o-#hi!d" of
each "$a!e inch of "$!face a!ea "hall be
f!ee of all %i"ible !e"id$e" and #he
!emainde! "hall be limi#ed #o #he ligh#
di"colo!a#ion* "ligh# "#aining o! #igh#
!e"id$e" men#ioned abo%e+
Near'Whi!e Bla! Cleaning )SA -', & -*
Remo%al of nea!l( all mill "cale* !$"#*
!$"# "cale* pain#* o! fo!eign ma##e! b( #he
$"e of ab!a"i%e" p!opelled #h!o$gh
no))le" o! b( cen#!if$gal &heel"* #o #he
deg!ee he!eaf#e! "pecified+
A nea!-&hi#e bla"# cleaned "$!face
fini"h i" defined a" one f!om &hich all oil*
g!ea"e* di!#* mill "cale* !$"#* co!!o"ion
p!od$c#"* o'ide"* pain# o! o#he! fo!eign
ma##e! ha%e been comple#el( !emo%ed
f!om #he "$!face e'cep# fo! %e!( ligh#
"hado&"* %e!( "ligh# "#!eak" o! "ligh#
di"colo!a#ion" ca$"ed b( !$"# "#ain* mill
"cale o'ide"* o! ligh#* #igh# !e"id$e" of
pain# o! coa#ing #ha# ma( !emain+ A#
lea"# 53 pe!cen# of each "$a!e inch of
"$!face a!ea "hall be f!ee of all %i"ible
!e"id$e"* and #he !emainde! "hall be
limi#ed #o #he ligh# di"colo!a#ion
men#ioned abo%e+
Coa!ing Applica!ion
General
In gene!al* #he !e$i!emen#" fo! #he
coa#ing "("#em" in #hi" "ec#ion a!e
!ela#ed #o #he coa#ing applica#ion and #o
"$!face p!epa!a#ion+
44 COST ENGINEERING MAY,JUNE 2012
Table ,+ ( Independen! Scaffolding E%ample
Table ,, ( Coa!ing Ser#ice SS Req"iremen!
45 COST ENGINEERING MAY(JUNE ,*+,
Before commencing an% paining
#ork& he compaibili% #ih e$ising
coaing s%sems or la%ers m!s be
checked' E$ising coaing la%ers ma% be
o"er coaed onl% #ih prod!cs made b%
he same man!fac!rer'
To ens!re ha onl% correcl% blased
s!rfaces are coaed& a minim!m of +**
mm aro!nd he edges of prepared areas
shall be lef !ncoaed& !nless adjoining a
coaed s!rface' When adjoining a coaed
s!rface& a connecion o he e$ising
pain film shall be made' No coaing shall
be applied #ihin -* mm o areas ha
#ill be #elded a a laer ime'
Ne! Construction
General
Minim!m coaing req!iremens for
ne# consr!cion are specified for each
field of ser"ice' S!rface preparaion shall
be in accordance #ih lised insr!cions'
The coaings ma% be epo$% based'
Coating Surfaces and S"stem
Requirements
An e$ample of Carbon and lo# allo%
seels ) e$ernal is sho#n in able +*' An
e$ample of sainless seel ) e$ernal is
sho#n in able ++' An e$ample of a labor
prod!ci"i% norms able is sho#n in
able +,'
Table &' $ Painting Labor Productiit" Norms Table
Figure ( $ E%I T"pical Hook#ups
46 COST ENGINEERING MAY)JUNE 0./0
Electrical and Instrumentation
DACE has based is labor
prod!ci"i% norms on sandard
elecrical and insr!menaion #ork
common o he ind!sr%( Beside labor
prod!ci"i% norms& DACE incl!des
skeches #ih heir calc!laions for
%pical hook*!ps& as sho#n in fig!re 3(
Cable and Bundles
Installing and securing cables
Insall and sec!re cables ,!sing cable
fi$ings- on cable ra%s& in cable d!cs or
in cable cellars& incl!ding bringing he
cable o and from he place #here he
#ork is carried o!& as sho#n in able /1(
P!lling cable in cond!i #ih open bends&
as sho#n in able /2( Undergro!nd
cable insallaion& as sho#n in able /3(
Future Development
A his poin in ime& DACE has
iniiaed phase #o of he DACE labor
prod!ci"i% norms Special Ineres
Gro!p #ih he goal o re"ie#& enhance&
and !pdae he conen on he follo#ing
secions(
+ Ne# secion for sr!c!ral seel
consr!cion'
Table 1 E&I Install Cable Labor Productivity Norms Table
Table 1! E&I Pulling Cable Labor Productivity Norms Table
47 COST ENGINEERING MAY4JUNE ;9:;
6 Ne- )ec*i%$ f%( e'+i&#e$*
i$)*a""a*i%$1
% S*a*ic
% R%*a*i$g
6 Ne- )ec*i%$ f%( #ai$*e$a$ce %f
e'+i&#e$*1
6 I#&(%,e a$d e.*e$d *he I$)+"a*i%$
)ec*i%$ -i*h c%"d a$d ac%+)*ic
I$)+"a*i%$1
6 I#&(%,e *he ge$e(a" )ec*i%$ -i*h
be**e( defi$i*i%$) %f &(%d+c*i,i*/
a$d efficie$c/1
6 I#&(%,e *he &ai$*i$g )ec*i%$ b/
addi$g fi**i$g) *% be c%$)i)*e$* -i*h
%*he( )ec*i%$)1
6 I#&(%,e a$d e.&a$d *he e"ec*(ica"
a$d i$)*(+#e$*a*i%$ )ec*i%$)1
6 I#&(%,e *he )caff%"di$g )ec*i%$1
a$d0
6 E.&a$d *he ca"c+"a*i%$ e.a#&"e
-i*h i$)+"a*i%$ a$d &ai$*i$g3
DACE &+b"i)hed a $e- i))+e %f *he
CD5ROM i$ *he )&(i$g %f ;9::3 I$ %(de(
*% achie,e *hi)0 DACE (e'+i(ed addi*i%$a"
i$&+* f(%# *he %(igi$a" &(%ec* *ea#3
I$&+* f(%# #e#be() %f *he DACE c%)*
e$gi$ee(i$g $e*-%(!0 c%$*(ac*%() a$d
%-$e() -a) a")% be (e'+i(ed3
Conclusion
DACE )+cceeded i$ i*) &(i#a(/ g%a"
*% (ed+ce #i)+$de()*a$di$g a$d di)&+*e
be*-ee$ c"ie$*) a$d )+&&"ie() b/
c(ea*i$g a c%##%$ +$de()*a$di$g %f
+)ed &(ac*ice) a$d )*a$da(d)3 Ma$/
i$*e($a*i%$a" c%#&a$ie) ha,e a"(ead/
e#b(aced *he DACE "ab%( &(%d+c*i,i*/
$%(#) a) a )*a$da(d1 a$d a(e +)i$g i* *%
)+&&%(* *hei( *e$de(i$g0 c%$*(ac*i$g a$d
e)*i#a*i$g &(%ce))e)3 The DACE SIG i)
$%- c%$*i$+i$g i*) eff%(*)0 a$d i)
&(e&a(i$g addi*i%$a" &+b"ica*i%$) -hich
i$c"+de $e- di)ci&"i$e) i$ %(de( *% #ee*
*he c%#&(ehe$)i,e $eed) %f *he
i$d+)*(/3
The +"*i#a*e g%a" (e#ai$) *%
bec%#e *he $e- "ab%( &(%d+c*i,i*/ $%(#
)*a$da(d f%( *he c%$)*(+c*i%$ i$d+)*(/
a$d c(ea*e a g"%ba""/ acce&*ed )*a$da(d
a$d g+ide"i$e f%( %-$e() a$d
c%$*(ac*%()3
REFERENCES
:3 DACE Labo! P!od$c#i%i#' No!m"
-++30 D+*ch A))%cia*i%$ %f C%)*
E$gi$ee()0 ;99@0 (e*(ie,ed f(%#2
h**&244---3dace3$"3
;3 Page0 J%h$ S30 Estimator"s Piping
Man#hour Manual0 >*h Edi*i%$ &3
c#0 G%"f P+b"i)hi$g C%#&a$/0
H%+)*%$0 TX0 (e*(ie,ed f(%#2
h**&244---3bh3c%#
<3 In"$la#ion fo! Ind$"#!ie"( La#e"#
Edi#ion0 C%##i**ee I$)+"a*i%$
Ne*he("a$d) I$d+)*(/ 7CINI80
(e*(ie,ed f(%#2 h**&244---3ci$i3$"3
=3 Ve(e$igi$g ,a$ S*eige(50 Hoog&e!k *
en Be#onbeki"#ingbed!ij%en 7VSB80
(e*(ie,ed f(%#2
h**&244---3,)b3i$f%3$"3
>3 ASTM Standards0 La*e)* Edi*i%$2
6 ASTM A .2+( S#anda!d P!ac#ice fo!
Cleaning( De"caling( and Pa""i%a#ion
of S#ainle"" S#eel Pa!#"( E$ipmen#
and S'"#em"1 a$d0
6 ASTM D)0,+( S#anda!d #e"# Me#hod
fo! E%al$a#ing Deg!ee of Re"#ing on
pain#ed "#eel "$!face")SSPC)VIS)-0
ASTM S*a$da(d)0 A#e(ica$ S%cie*/
f%( Te)*i$g a$d Ma*e(ia")0 :99 Ba(
Ha(b%+( D(i,e0 We)* C%$)h%h%c!e$0
PA3
?3 ISO Standards
6 ISO 11124 ) P!epa!a#ion of "#eel
"$b"#!a#e" befo!e applica#ion of
pain#" and !ela#ed p!od$c#" *
"pecifica#ion" fo! me#allic bla"#)
cleaning ab!a"i%e" * Pa!# , #o /1
6 ISO 11126 ) P!epa!a#ion of "#eel
"$b"#!a#e" befo!e applica#ion of
pain#" and !ela#ed p!od$c#" *
"pecifica#ion" fo! non)me#allic bla"#)
cleaning ab!a"i%e" * Pa!# , #o ,+1
6 ISO 11127 ) P!epa!a#ion of S#eel
S$b"#!a#e" Befo!e Applica#ion of
Pain#" and Rela#ed P!od$c#" ) Te"#
Me#hod" fo! Non) Me#allic Bla"#)
Cleaning Ab!a"i%e")Pa!# , #o 11
6 ISO 12944 ) Pain#" and Va!ni"he")
Co!!o"ion p!o#ec#ion of "#eel
"#!$c#$!e" b' p!o#ec#i%e pain#
"'"#em")Pa!#), #o 21 a$d0
6 ISO 8501-4 ) P!epa!a#ion of "#eel
"$b"#!a#e" befo!e applica#ion of
Table &' $ E%I Underground Install Cable Labor Productiit! Norms Table
48 COST ENGINEERING MAY1JUNE 6456
paints and related products - Visual
assessment of surface cleanliness-
ISO Standards- La%e$% Edi%i!-
I%e#a%i!al O#gai$a%i! f!#
S%ada#di$a%i!- Ca$e P!$%ale 78-
CH25655 Gee(a 64- S)i%,e#lad
ABOUT THE AUTHOR
Ma#%i (a Vlie% i$ )i%h
%he C!$% Egiee#ig
C!$'l%ac+ B/V/ He
ca be c!%ac%ed b+
$edig e2mail %!.
m/(a/(lie%3c!$%egiee#ig/e'
I%0$ al)a+$ chagig/ Vi$i% %he AACE I%e#a&!al )eb$i%e a% www.aacei.org
ad e*"l!#e %he )eal%h !f if!#ma&! %ha% i$ !l+ a click a)a+/
Refe# "#!$"ec&(e membe#$ %! check !'% %he )eb$i%e a$ i% i$ a g#ea% $!'#ce
!f if!#ma&! ad #e$!'#ce$ "#!m!&g %he bee%$ !f membe#$hi" i AACE I2
%e#a&!al/
CHECK OUT OUR WEBSITE - WWW.AACEI.ORG
49 COST ENGINEERING MAY2JUNE :89:
PROFESSIONAL SERVICES DIRECTORY
INDEX TO ADVERTISERS
F#% addi'i#"a i"f#%!a'i#" ab#*' 'he i&'ed ad+e%'i&e%& #% ab#*' ad+e%3
'i&i"g ,i'h *&/ $ea&e $h#"e Ma%k S'#*' a' Ne',#%k Media Pa%'"e%&/
5<986 =?<39@>>/ #% e3!ai hi! a' !&'#*'7"e',#%k!edia$a%'"e%&1c#!
ADVERTISE
IN THE
COST ENGINEERING
JOURNAL
OR GO ONLINE AT ***.aacei.#%g
4 REACH'he e"'i%e AACE I"'e%"a'i#"a !e!3
be%&hi$ e+e%- !#"'h b- $aci"g a" ad i" 'he
C#&' E"gi"ee%i"g j#*%"a1
4 PLACE -#*% $%#d*c'&2&e%+ice& i" f%#"' #f
#+e% =8/888 *&e%& each !#"'h ,i'h a ba""e%
ad a' #*% ,eb&i'e/ ,,,1aacei1#%g1
4 EXHIBIT a' 'he :89: AACE I"'e%"a'i#"a
A""*a Mee'i"g i" Sa" A"'#"i#/ TX/ a"d
AACE I"'e%"a'i#"a !e!be%& face '# face1
CONTACT
Ma%k S'#)' a' Ne'*#%k Media Pa%'"e%& I"c.
$h#"e 532/685/3977 fa+ 532/685/8469
e/!ai !&'#)'1"e'*#%k!edia$a%'"e%&.c#!
YOUR
VISIBILITY

Ac)!e" PM/ i"&ide back c#+e%


ARES C#%$#%a'i#"/ back c#+e%
Bech'e C#%$#%a'i#"/ $age ;
D.R. McNa'', a"d A&&#cia'e&/ 'hi& $age
Ec#S,&/ i"&ide f%#"' c#+e%
I"fi"i'%ac/ 'hi& $age
Ma"age!e"' Tech"##gie&/ 'hi& $age
PETRONAS/ $age :=
R#" Wi"'e% C#"&)'i"g/ $age 9;
Ski%e- I"c./ $age 9;
AACE ,i be %ef#%!a)"g each #f i'& $%i"' $%#d*c'& 5i1e1/ 'he
Ski& a"d K"#,edge #f C#&' E"gi"ee%i"g0 CCC2CCE Ce%(3
ca(#" S'*d- G*ide0 EVP S'*d- G*ide0 PSP S'*d- G*ide0 a"d
'he TCM F%a!e,#%k6 '# be $%#d*ced b- a &*b&idia%- #f
A!a.#"1c#!1 O*% g#a i& '# ha+e each #f 'he&e AACE $*b3
ica(#"& a+aiabe #"i"e f%#! A!a.#"1c#! i" :89:1 We
,i !ai"'ai" a i"k f%#! 'he AACE ,eb&i'e '# A!a.#"1c#!
a"d %ec#!!e"d addi(#"a $%#d*c'& a& ,e1
A AACE I"'e%"a(#"a B##k& '# be
0P%i"'/#"/De!a"d0 P%#d)c'&
51 COST ENGINEERING MAY0JUNE 8678
ARTICLE REPRINTS AND PERMISSIONS
COSTENGINEERING
V!l. ;:, N!.80Ma+0J'e 8678
Membe$% !f AACE I&e$a&i!al ha(e acce%% &! f$ee d!)l!ad% !f %elec&ed a$&icle%
&ha& a$e "'bli%hed )i&h a AACE I&e$a&i!al $efe$ece 'mbe$. The%e a$&icle% a$e
a(ailable a& &he !lie Vi$&'al Lib$a$+ a& ))).aacei.!$g. Elec&$!ic file% !f each
m!&h/% &echical a$&icle% a$e "!%&ed ad membe$% ca d!)l!ad a Ad!be Ac$!ba&
2PDF3 (e$%i! !f a+ !f &he &echical a$&icle% f!$ f$ee. Y!' ca %ea$ch f!$ a$&icle%
'%ig &he $efe$ece 'mbe$% li%&ed i &he Co#$ Enginee"ing j!'$al. N!1membe$%
ca %'b%c$ibe &! &he AACE Vi$&'al Lib$a$+ a& a a'al c!%& !f US 5766.66. AACE I1
&e$a&i!al ! l!ge$ !ffe$% $e"$i&% !f idi(id'al a$&icle%.
TO ORDER
C!&ac&- AACE I&e$a&i!al P'blica&i!% Sale%
a& "'b%ale%4aacei.!$g
Pho$oco(ing P"ice#-
F!$ "e$mi%%i! &! "h!&!c!"+ idi(id'al a$&icle%
f!$ "e$%!al '%e, !$ &! $e#'e%& "e$mi%%i! f!$
b'lk "h!&!c!"+ig, "lea%e c!&ac& &he C!"+1
$igh& Clea$ace Ce&e$ a& ?=>.=;6.>:66, ad
"a+ &he $e#'i$ed "h!&!c!"+ig fee%. F!$ a+
!&he$ '%e !$ $e"$i& $e#'e%&%, "lea%e e1mail-
edi&!$4aacei.!$g.
Con$ac$ U#
AACE I&e$a&i!al
78<; S'c$e%& T!)e Ce&$e D$
M!$ga&!), WV 8<;6;17>=<
USA
Ph!e- 96:.8?<.>:::
Fa*- 96:.8?7.;=8>
Fo" Info"ma$ion Conce"ning
O$he" Re%#e Re!%e#$#
If +!' a$e %eekig "e$mi%%i! &! #'!&e !$
&$a%la&e i&! a!&he$ lag'age a+ ma&e$ial
f$!m a+ i%%'e !f &he Co#$ Enginee"ing j!'$al,
"lea%e c!&ac& !'$ Maagig Edi&!$, Ma$(i
Gelha'%e a& mgelha'%e4aacei.!$g
Page% :179
M"* O'ne"+# E#$ima$e I# No$ Sa$i#fac$o"( / Wh( No$)
William E$ Kras# PE CCE FRICS
Thi% a$&icle )a% fi$%& "$e%e&ed a& &he 8677 AACE I&e$a&i!al A'al Mee&ig a%
EST.:>7.
A"$icle Refe"ence N%mbe" . 21651
Page% 7:18:
Co#$ E#$ima$ion Challenge# 0 Unce"$ain$ie#
Conf"on$ing Oil and Ga# Comanie#
Nicolas Ale"ander Hall and Sarah Delille# PE
Thi% a$&icle )a% fi$%& "$e%e&ed a% EST.:?7 a& &he 8677 AACE I&e$a&i!al A'al Mee&1
ig.
A"$icle Refe"ence N%mbe" . 21652
Page% 8=197
Co#$ E#$ima$ing P"oce## 0 Q%ali$( A##%"ance
Ssanna Bedarida and Stefania Conti
Thi% a$&icle )a% fi$%& "$e%e&ed a% EST.<78 a& &he 8677 AACE A'al Mee&ig.
A"$icle Refe"ence N%mbe" . 21653
Page% 981:>
DACE Labo" P"od%c$i&i$( No"m# /
The Ne' ,G%lf Coa#$-)
Martin S$J$ !an Vliet
Thi% a$&icle )a% fi$%& "$e%e&ed a% EST.;7= a& &he 8677 A'al Mee&ig.
A"$icle Refe"ence N%mbe" . 21654
52 COST ENGINEERING MAY/JUNE 6456
CALENDAR OF EVENTS
MAY 4234
6 CMAA Breakfast of Champions,
The Southern California Chapter of
the Construction Management
Association of America #CMAA$
She%a'#" Fai%$e* H#'e
P#!#"a, CA
C#"'ac'- 19:62 8780<84=
fa* 19:62 6=:0=;4:
&cc!aa3c!aa&c.#%g
))).c!aa&c.#%g
9.33 Comprehensive Five"da!
Training Program for Energ! Man"
agers,
The Association of Energ! Engineers
#AEE$
Radi&&#" Mi)a(kee N#%'h Sh#%e
Mi)a(kee, WI
C#"'ac'- 1;;42 =690=:77
fa* 1;;42 7<50=<:9
))).aeece"'e%.#%g
39 CMAA Breakfast of Champions,
The Southern California Chapter of
the Construction Management
Association of America #CMAA$
The G%a"d C#"fe%e"ce Ce"'e%
L#"g Beach, CA
C#"'ac'- ))).a&!ec#"fe%e"ce&.#%g
JUNE 4234
33 ASME Turbo Epo '%&',
ASME International Gas Turbine
Institute
Bea Ce"'e%
C#$e"hage", De"!a%k
C#"'ac'- 19:62 8780<84=
fa* 19:62 6=:0=;4:
&cc!aa3c!aa&c.#%g
))).c!aa&c.#%g
3:.42 Comprehensive Five"da!
Training Program for Energ! Man"
agers,
The Association of Energ! Engineers
#AEE$
E!ba&&+ S(i'e& L#ga" Ai%$#%'
B#&'#", MA
C#"'ac'- 1;;42 =690=:77
fa* 1;;42 7<50=<:9
))).aeece"'e%.#%g
JULY 4234
7.: AACE International
Education Seminars+
AACE International
Ma##i!%% Ri'e#ce%e# H!%el
Sa A%!i!+ TX
C!%ac%, "h!e 3.:22.:7:.COST
fa) /5260 4;3.794:
if!1aacei-!#g
(((-aacei-!#g
:.33 AACE Internationals
2012 Annual Meeting+
AACE International
Ma##i!%% Ri'e#ce%e# H!%el
Sa A%!i!+ TX
C!%ac%, "h!e 3.:22.:7:.COST
fa) /5260 4;3.794:
if!1aacei-!#g
(((-aacei-!#g
34.35 AACE International
Education Seminars+
AACE International
Ma##i!%% Ri'e#ce%e# H!%el
Sa A%!i!+ TX
C!%ac%, "h!e 3.:22.:7:.COST
fa) /5260 4;3.794:
if!1aacei-!#g
(((-aacei-!#g
NOVEMBER 4234
36.37 AACE Internationals
International Total Cost Manage-
ment Conference+
AACE International
H*a%% Regec* D&bai ad Galle#ia
D&bai+ Ui%ed A#ab Emi#a%e$
C!%ac%, "h!e 3.:22.:7:.COST
fa) /5260 4;3.794:
if!1aacei-!#g
(((-aacei-!#g
AACE I"'e%"a'i#"a,
56:9 S("c%e&' T#)"e Ce"'%e D%,
M#%ga"'#)", WV 6:94905<;:
USA
$h#"e- 74806=:0<888
fa*- 74806=509;6<
e0!ai- edi'#%3aacei.#%g
)eb&i'e- ))).aacei.#%g
Plea$e $&bmi% i%em$ f!# f&%&#e
caleda# li$%ig$ a% lea$% 82
da*$ i ad'ace !f de$i#ed
"&blica%i!-
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project schedules.
and execution performance, and the ability to automatically generate faster
Acumen Fuse

project schedules.
and execution performance, and the ability to automatically generate faster
, combined with 360, provides unprecedented insight into planning quality

Acumen Fuse

and execution performance, and the ability to automatically generate faster
, combined with 360, provides unprecedented insight into planning quality

and execution performance, and the ability to automatically generate faster
, combined with 360, provides unprecedented insight into planning quality

, less risky and execution performance, and the ability to automatically generate faster
, combined with 360, provides unprecedented insight into planning quality

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.projectacumen.com www

.projectacumen.com

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