The following abstracts have been submitted for consideration for the 2014 Annual Meeting in New Orleans, LA. The final program will consist of approximately 100 tracks.
(EST-1489) Sources of Disparity between Military and Commercial Cost Estimates
Primary Author: Mr Michael Omane-Achamfuor PMP MRICS CCP Mason & Hanger
Co-author(s): Mr Theodore Scripps Mason & Hanger Group, Inc.
Abstract: The military leads in everything it does. Tasked with the impossible, they are expected to defend America from all threats. They require facilities and equipment to do so, most of which are unique and/or have above-average requirements, not encountered in the private or commercial construction sector.
The project in focus, an Air Support Operations Center (ASOC), has similar function as an office building/warehouse in the private sector therefore the design and construction practices should be consistent and provide a basis for comparison. For this study, we attempt to provide an explanation to the question, Why are Government costs so much higher than the private sector? and provide supporting cost data to support our findings.
Sources of disparity include:
(EST-1497) Factors Affecting Labor Productivity in Saudi Arabia
Primary Author: Dr Ali A. Shash King Fahd University of Petroleum and Minerals
Co-author(s): Mr Abdulah A. Alsagoub King Fahd Univeristy of Petroleum and Minerals
Abstract: Productivity is an important key component in estimating the cost and the duration of any construction project. The accuracy of these estimates depends heavily on the reliability and precision of productivity estimates. For these reasons, estimators usually manipulate and modify productivity values, which are available as averages in their company historical records and/or commercial databases, to account for possible effects of anticipated factors. This study was conducted to determine the factors that affect labor productivity in Saudi Arabia. The required data was collected through a closed ended structured questionnaire from construction contractors in the Eastern Province, Saudi Arabia. The results indicated that poor labor supervision, labor motivation, labor skills, and unclear technical requirements are the most severe factors affecting labor productivity in Saudi Arabia. Researchers from different countries have reported in the literature similar factors affecting labor productivity in their construction industries but with different severity levels. It is anticipated that contractors will appreciate the outcomes of this study and consider the reported factors in the preparation of cost and time estimates for future projects.
(EST-1538) Estimating Pre-Construction Costs for Capital Development Projects: A Case Study
Primary Author: Dr Carla Lopez del Puerto CCP Colorado State University
Co-author(s): Dr Douglas D Gransberg PE FRICS CCP Iowa State University
Abstract: AACE Recommended Practice 34R-05: Basis of Estimate (2010) states the components of a well-prepared estimate. While there are many papers that focus on developing well-prepared construction cost estimates, there is a need to increase understanding among cost engineers about developing well-prepared pre-construction cost estimates. Pre-construction costs can be defined as the costs from project conception to the point where the construction documents can be advertised for bids. The preconstruction cost estimate includes the costs required to prepare the design, obtain the necessary permits and prepare the construction cost estimate. This paper discusses a public agencys approach to calculating preconstruction costs for capital development projects through an example of a capital development project that was recently completed. It also provides recommendations to cost engineers on how to estimate pre-construction costs for construction projects.
(EST-1546) Cost Curves
Primary Author: Mr Allen C Hamilton CCP Project Management Assoc LLC
Abstract: If you estimate something many times it is useful to consider cost curves. Cost curves are a useful method to facilitate rapid development of early to semi-detailed estimates. The author will present a system of analysis to summaries projects into curves. The techniques can be applied strategically to entire units, sub units or to components. Everything from delayed coker units to cast in place concrete can be summarized into curves for future use. The author will also explain a methodology to convert costs from different time periods and locations including other countries.
(EST-1559) Software cost estimation based on Quick Function Point method
Primary Author: Dr Ji Cao Beijing SJ Co. Ltd
Co-author(s): Mr Cao Guangyi Wu Han University; Mr Wen Li Beijing Sui Ji Co. Ltd.
Abstract: It is usually difficult to make an accurate cost estimation for software project, not to mention the software project cost in an bidding stage. The main reason lies in that there is no widely accepted definite unit to measure the size of software project scope.
Software Function Point analysis is such a unique analysis method that can measure the size of software project scope from the viewpoint of customer requirement. For example, one software project size is 500 FPs, while another is 1000 FPs, then the software project cost information can be derived from the function point number for the software project.
It is important to obtain the software project size information during the project bidding stage to support the project cost estimation. However, software projects early requirement is usually too rough to count on function point, so this paper suggests a Quick Function Point method to replace the standard Function Point method. Finally, The Quick Function Point example and calibration result are presented.
(EST-1567) COST ESTIMATE IN IMPLEMENTATION PROJECTS OF ERP SYSTEMS: AN APPROACH BASED ON FUZZY DELPHI METHOD
Primary Author: Mr Marcio Barros Souza
Abstract: In this paper, we present a combined model between the Fuzzy Delphi Method (FDM) and simulation by the Stratified Latin Hypercube Sampling Technique (SLHST) for estimating cost in implementation projects of ERP systems. Based on mathematical modeling, it uses the FDM approach to obtain the three points estimative - which are the input variables and the SLHST simulation to obtain average results of probabilistic iterations. Finally, it presents a case study applying the model. By the case study, it was observed that the model creates conditions so that managers can make more consistent forecasts of project costs, and fosters the identification of the risk level of each activity. As main contributions, it has been the development of a more sophisticated model to estimate costs in project the incorporation of stochastic simulation to estimate the costs volatility due to variance in implementation timing the possibility that the application of the model generates reflections on new parameters and variables that can be entered.
(EST-1568) CONCEPTUAL COST CONTINGENCY CALCULATOR FOR INDUSTRIAL PROJECTS
Primary Author: Mr Igor Matos Dow Chemical
Abstract: Establishing the appropriate amount of contingency in Conceptual Cost Estimates is always a hard task. At this stage of the project the team has not yet been formed. The risk assessment is very preliminary or most of the time nonexistent, reducing the source of information that cost estimators may use to define the appropriated cost contingency amount.
With that said, cost estimators tend to rely on subjective methods, like Expert Judment or use of recommended practices. These methods are commonly used but have the disadvantage of not clearly addressing specific project risks which makes difficult for upper management buy-in. With conceptual cost estimates being one of the most important items for decision making and the contingency applied strongly impacting the feasibility of the project, the objective of this article is to review the applications of the above listed methods, presenting a customizable tool to calculate reliable contingency for cost estimates at early stages of industrial projects.
(EST-1570) Value Engineering: History, Evolution, and Todays Principles
Primary Author: Mr Chad Christian Dobbins CCP Crawford Consulting Services
Abstract: The objective of this technical paper is to introduce the concept of value engineering. We will describe a few techniques used in the process and their application in life and business. It is a thought process that evolved out of a time of economic hardship, when people sought more creative ways to produce goods and survive in tougher times. By analyzing the function of something, the purpose of value engineering is to increase the value of a product by making it better or more efficiently through an exploratory process of information gathering, function analysis, brainstorming, idea evaluation, and implementation. Through a series of these planned stages, a small multi-disciplinary group of 5-7 people can find unimaginable solutions to problems that were once thought to be accepted practice. Design specifications and product functions are explored in regard to all costs and revenues involved in productions. The process can be applied to an entire manufacturing process, or for smaller items involved in the process of manufacturing something larger. We will explore the history and evolution of Value Engineering and its use in todays economy and government functions.
(EST-1579) A DIY (Do It Yourself) Unit Cost Database
Primary Author: Mr William E Kraus PE FRICS CCP International Aviation Consultants
Abstract: This paper addresses an aspect of Asset Historical Database Management described in 6.3 of the TCM Framework. Actual benchmark data is stored in a database in order to provide historical project information (10.4). Unit costs bid on projects nationwide over a 20-year timeframe reside in the database and are available for comparison with estimated values.
Unit costs from projects in the database provide a gut check for estimates under review. The database provides a means to store, catalog, analyze, and present historical unit costs to make the process of reviewing these as-bid costs more efficient as the historical bid costs were stored in a variety of meanshard copies filed in individual project files, historical cost files, and electronic copies stored in a variety of places. The process of searching out this information as well as normalizing the unit costs to the timeframe and location of a project for which an estimate was being prepared was both inefficient and time-consuming. Output for average, minimum, and maximum unit costs bid on the projects is provided.
(EST-1605) Development of a new Cost Index for Transit Projects
Primary Author: Mr Ye Zhang
Co-author(s): Dr Ali Touran PE Northeastern University
Abstract: The use of cost indices is common to account for the effect of escalation in estimating the cost of long-duration capital projects. Indices published by Engineering News Record (ENR) or RS Means have been widely accepted in the industry. These indices are general construction indices and might not be a suitable choice for a specific type of project. This paper is proposing an Integrated Transit Index (ITI) for transit projects, which usually have long durations and large capital investments. Based on the Standard Cost Categories (SCC) for Capital Projects published by the U.S. Federal Transit Administration (FTA), the project cost is broken down into 5 subcategories: Construction, Systems, Right of Way (ROW), Vehicle and Professional Services. For each category, a suitable and specific index has been selected to model the cost trend. As an example, ENRs Building Cost Index is used for subcategory Construction, and Bureau of Labor Statistics Electric Power Distribution Index is used for the subcategory Systems. By analyzing these subcategories separately, and combining them to obtain the ITI, a more accurate composite index is expected. Using this index, an average escalation rate of 3.35% per year is observed from 2004 to 2010. For forecasting the value of index in future years, two approaches have been used: Neural Networks and Time-Series analysis. These approaches were applied to the ENR index values and the results were compared by using statistic Mean Absolute Percentage Error (MAPE). It was found that both methods have its own advantages when the input data changes, and as a result, both methods have been retained and applied to forecast the index values. A methodology is presented for forecasting future values of the proposed ITI.
(EST-1608) CUSTOMIZATION OF UNIT COSTS FOR THE CIRCUMSTANCES OF THE PROJECT: CONTRACT, DESIGN, SITE CONDITIONS
Primary Author: Mr Luiz Raymundo Freire De Carvalho Consultoria Especializada E Planejamento LTDA
Co-author(s): Mr Mario Sergio Pini PINI Servios de Engenharia
Abstract: Several contractors and many Owners usually prepare construction cost estimates relying on databases of unit costs for the services to be performed. These unit costs however are based on fixed production rates of the crews. Considering that many factors affect productivity, the authors developed a methodology of cost modeling that takes into account parameters such as contract type, design and the conditions of the area where the construction works take place. The model uses a curve of sensitivity of performance. The resulting adjusted cost estimate is more representative of the actual circumstances and has the advantage of replacing the simplistic procedure fixed production rates adopted by many Owners when judging the reasonability of bids and the admissibility of unit prices proposed by contractors.
(EST-1619) Benchmarking Mining and Mineral Processing Projects
Primary Author: Mr Frederick P. Biery Independent Project Analysis
Co-author(s): Ms Maggie Stewart Independent Project Analysis
Abstract: The performance on the mining and mineral processing sector has lagged other industries in terms of meeting cost and schedule objectives as well as in other project dimensions (e.g., safety). This paper examines the level of cost and schedule estimate development in the industry to identify areas for improvement.
(EST-1622) SC/Combined module estimation basis for NPP schedule reduction
Primary Author: Mr Jae Hang Lee KEPCO E&C
Co-author(s): Mr Jun Hee Lee Korea Power Engineering Company; Mr Donghoon Chung KEPCO E&C; Mr Ki Ouk Kim KEPCO E&C; Mr Sung Jin Kim KEPCO E&C
Abstract: Steel Plate & Concrete (SC)/Combined module is a new construction method being developed construction industry in pursuit of reducing construction period and cost. Especially, it can reduce substantial amount of times for structural and bulk-related activities.
However, it is difficult to find a proper methodology, schedule or any background to estimate SC/Combined module schedule. Therefore we need a standard or basis to refer.
For this report, detailed numerical data of SC/Combined module construction is obtained through a mock up manufacture and installation, constructors cumulated welding data and module design works. By using above collected data, welding methods and durations and a module construction sequence are analyzed to estimate a proper schedule.
As a result we have found that the overall schedule reduction is expected to be 3040% compared to RC structure and prerequisites for design, procurement and construction are required.
We expect this report to be a suggestion of an estimation basis for a Nuclear Power Plant(NPP) schedule when SC module is applied.
(EST-1648) Cost Estimating for Offshore Oil & Gas Facility Decommissioning
Primary Author: Dr Robert C Byrd PE TSB Offshore, Inc.
Co-author(s): Mr Jerel C. Gilmore PE TSB Offshore, Inc.; Mr Steven M. Wiese TSB Offshore, Inc.
Abstract: Based on a number of real-world project examples, this paper will review the decommissioning process for a conventional offshore facility and examine common uncertainties that challenge the ability to accurately estimate decommissioning costs. This will include well plugging and abandonment (P&A), deck and jacket removal, as well as site clearance. Estimates from several projects will be reviewed and compared to final costs to illustrate variances and their causes. The advantages and challenges of using probabilistic cost estimates will be discussed, as will the impact of hurricane damage with respect to decommissioning or salvage costs. In conclusion, recommendations for improving the quality of decommissioning cost estimates will be provided.
(EST-1651) Framework for Integrating detailed estimating and resource scheduling
Primary Author: Dr Ming Lu University of Alberta
Abstract: Current practices for detailed cost estimating are to (1)determine a unit cost in terms of dollars per labor-hour and (2) conduct quantity takeoff in terms of labor-hours for each work package, which is defined for a crew to carry out a specific job on project. The dollars per labor-hour remains relatively steady. The use of labor hours provides a common unit of measure to unify quantity takeoff process and simplify cost estimating for large amounts of work packages on a real-world construction project. Yet, the labor-hour based estimating approach does not address estimating activity time requirement explicitly which is critical to integrating cost estimating, scheduling, and control. This paper proposes a cost estimating framework to determine a unit cost in terms of dollars per hour while the quantity takeoff is measured in hours, thus for each activity the resource use requirement, the time requirement, plus the cost requirement are determined explicitly as end results of estimating. As a followup, critical path scheduling, resource-constrained scheduling, earned value analysis can be readily conducted for project planning and control. A case study of building a garage will demonstrate the proposed framework and integrate the use of Autodesk Revit, CSI Masterformat, RSMeans CostBooks, and MS Project.
(EST-1654) Challenges of Cost Estimate for New Nuclear Power Plant Projects
Primary Author: Mr Norman Boyter Berkeley Research Group
Co-author(s): Mr Richard D. Fultineer Berkeley Research Group; Mr John William Dillon PSP Berkeley Research Group; Mr Lawrence A Bastianelli CCP Berkeley Research Group LLC
Abstract: For new technology nuclear power plants to compete for orders, upfront capital costs per MWe must compete with fossil plant costs. While designers pursue cost reductions in standard plant design and builders pursue best available construction sequences, equipment, tools, and craft training to reduce costs per MW, cost engineers skills and experience are equally important in achieving optimum costs.
The cost engineers skills and experience are challenged by the lack of contemporary historical estimating data on new plants extra quality, procedural, and documentation requirements compared to other technologies. In addition, there is little experience or historical data for new nuclear plant technologies, such as replacing reinforced concrete with prefabricated structural modules.
Cost engineers will be required to develop optimum cost estimates for the second wave of nuclear projects with little benefit of lessons learned on the first wave. They need to leverage their cost estimating skills and experience with best available 4- to 6-D design, procure, and schedule cost algorithms and data systems to produce cost estimates with improved accuracy and confidence levels.
(EST-1681) (Panel Discussion) Construction Cost Estimating-Challenges and Opportunities
Primary Author: Mr Michael R Morrison CCP Value Management Consulting
(EST-1702) The Use of Parametric Estimation in Public Projects
Primary Author: Dr Mohamed K El-Choum Stevens Institute Of Technology
Abstract: This paper presents a parametric estimating model that provides an accurate and reliable cost estimates. It is intended to identify the factors that influence construction estimates with particular interest in public infrastructure projects. A major hurdle in urban infrastructure rehabilitation projects is that each project is unique with respect to its environment. Accordingly, the shortage of federal funds for capital projects, and the demand for capital spending on the aging infrastructure reflect the need for such models. Furthermore, the modeling technique involves the use of multivariate statistical methods. The developed models were evaluated to determine their ability to represent actual conditions, and to explain the variability of the construction estimates on the basis of predefined parameter using data-splitting method. The derived models also provide a conceptual outline for understanding the public construction industry as a whole.
The main factors affecting the cost estimating process were design and cardinal changes, different site conditions, management inexperience, deficient hierarchic chain and inadequate supervision. The results of the statistical models indicate that these procedures and methodologies are valid, although refinement will undoubtedly be made. The learning curve derived from this research effort will assist decision-makers to ultimately manage situations subject to uncertainty, and subsequently providing early estimates that are accurate and reliable.
(EST-1704) Factors affecting cost performance of public sector projects in Ghana
Primary Author: Mr Nana Kwaku Osei-Wusu Akyempim Currie & Brown UK Ltd
Abstract: Early stage building project cost forecast often forms the bases upon which many important decisions by the project sponsor are taken. Over the years the performance of such forecast in the developing world especially Ghana have been questioned making it imperative to explore the reasons for this.
The paper reports an empirical survey carried out among the 64 quantity surveying consultancy firms registered with the Institution of Surveyors in Ghana. The factors affecting the early stage cost forecast performance were identified and ranked by the firms using a likert scale of 1-5. The overall rank of each factor were then determined using the Kendell's concordance co-efficient method. Payment modalities for public sector projects, restriction imposed by legislation, type of contract used and experience of forecasters were identified as the most significant factors affects the cost performance of projects. These and other issues affecting the project cost performance are discussed in this paper.
(EST-1754) Forecasting Price Indices and Modeling Correlations with R
Primary Author: Dr Xiuzhan Guo
Abstract: To quantify escalation uncertainty using Monte Carlo simulating, cost estimators need to provide forecast distributions (density forecasts) for certain model variables and model correlations/dependencies between the model variables as discussed in AACE International Recommended Practices 58R-10 and 68R-11. Price indices are strongly related to forecasting escalations and their forecast distributions are essential for obtaining probability distributions of escalations. It was recommended in 58R-10 and 68R-11 that cost estimators might need the input from economists for price indices forecast distributions, which may be very costly and time consuming. R is a free software environment for statistical computing and visualization and is easy to use. R has become widely in a wide variety of industries. In this paper, we shall introduce R to cost estimators and show how price indices can be forecast at any given confidence level automatically and correlations can be modeled using R and its packages easily.
(EST-1756) Dynamic Estimate for Oil Sands Major Projects
Primary Author: Mr Tong Tony Zhou CCP 1596733 Alberta Ltd.