CEE 404 Winter 2011 1 Cost Estimating WSDOT Unit Bid Analysis.
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Transcript of CEE 404 Winter 2011 1 Cost Estimating WSDOT Unit Bid Analysis.
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CEE 404 Winter 2011
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Cost Estimating
WSDOT Unit Bid Analysis
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Outline
• Construction organizations (review)• Construction contracts (review)• Contract documents
– Standard specifications– Standard specifications for DOTs
• Unit prices– Unit bid items– WSDOT Unit bid items– Short in-class exercise
• Quality control/acceptance• Price adjustments
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Construction Organizations
Construction UsingOwner Forces
Owner-ManagedConstruction
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Construction Organizations
General Contractor Design/Build
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Construction Organizations
Construction Management
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Construction Contracts
• Method of award– Formally advertised contracts– Negotiated contracts
• Method of pricing– Fixed-price
• Lump sum contract• Unit price contract
– Cost-plus• Cost plus percentage of cost• Cost plus fixed fee• Cost plus fixed fee with a guaranteed maximum cost• Cost plus incentive fee
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Contract Documents
• General conditions– Defines responsibilities and rights
• Supplementary conditions– Types:
• Modification of general conditions• Additional information beyond general conditions
• Technical Specifications• Drawings
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Contract Documents : What You Might See
• Standard Specifications– General conditions– Technical specifications
• Contract Provisions– Bid proposal forms and regulations– Required contract provisions (bond, DBE, etc.)– Amendments to the standard specifications– Special provisions– Wage rate documentation
• Plans– Project drawings– Standard plans
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Standard Specifications
• Construction Specifications Institute– MasterFormat 2004 Edition
• 50 Divisions of construction information• Specifications-writing standard for most
construction
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MasterFormat 2004
Example
32 12 16.13 Plant-Mix Asphalt Paving
32 = Level 1
= Division 32: Exterior Improvements
12 = Level 2
= Flexible Paving
16 = Level 3
= Asphalt Paving
13 = Level 4
= Plant-Mix Asphalt Paving
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Standard Specifications for DOTs
• Typically do not use MasterFormat 2004• Generally use 9 Divisions:
– General Requirements– Earthwork– Production from Quarry and Pit Sites and
Stockpiling– Bases– Surface Treatments and Pavements– Structures– Drainage Structures, Storm Sewers, Water
Mains, and Conduits– Miscellaneous Construction– Materials
http://www.wsdot.wa.gov/Design/ProjectDev
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Unit Prices
• Standard Units– Defined in Standard Specifications
From 2010 WSDOT Standard Specifications
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Cost Estimating Guidance – Key Principles
• Integrity• Contents• Year of expenditure dollars• Do not rely on historic records alone• Risk and uncertainty• Validation
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Cost Estimating Guidance – Key Principles
• Integrity– Open and transparent– Explain uncertainty in laymen’s terms– Avoid false precision
• Contents• Year of expenditure dollars• Do not rely on historic records alone• Risk and uncertainty• Validation
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Cost Estimating Guidance – Key Principles
• Integrity• Contents
– Account for what the public perceives the cost estimate to be
– Not just construction costs– Do not include the cost of acquiring revenue
• Year of expenditure dollars• Do not rely on historic records alone• Risk and uncertainty• Validation
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Cost Estimating Guidance – Key Principles
• Integrity• Contents• Year of expenditure dollars
– This is what people expect – state it explicitly– Assign an inflation rate to midpoint in project
• Do not rely on historic records alone• Risk and uncertainty• Validation
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Cost Estimating Guidance – Key Principles
• Integrity• Contents• Year of expenditure dollars• Do not rely on historic records alone
– Best information available– Consider construction cost trends
• Risk and uncertainty• Validation
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Cost Estimating Guidance – Key Principles
• Integrity• Contents• Year of expenditure dollars• Do not rely on historic records alone• Risk and uncertainty
– There are uncertainties related to cost– Contingency amounts reflect expected risk– Do not be overly optimistic (low early contingency
amounts)• Validation
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Cost Estimating Guidance – Key Principles
• Integrity• Contents• Year of expenditure dollars• Do not rely on historic records alone• Risk and uncertainty• Validation
– Unbiased team should validate estimates– Periodic reviews of estimates
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Cost Estimating Guidance – Estimate Elements
• Preliminary engineering• Right-of-way• External 3rd party• Miscellaneous design• Transportation demand/system management• Construction estimate• Construction contingencies• Construction administration
– Estimated as a percentage
• Public outreach• Management reserve
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Cost Estimating – Preliminary Engineering
• Definition– The cost to prepare the construction documents
• Guidance– Includes field investigation, testing, admin,
environmental work, preparing plans/specs, ad/bid/award process, etc.
– Can be estimated as a percentage of construction costs• WSDOT average for all types of projects = 15%
• Help– Cost Estimating Manual for WSDOT Projects (July 2009)
• http://www.wsdot.wa.gov/Publications/Manuals/M3034.htm • Table 3 and related text
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Cost Estimating – Right-of-Way
• Definition– Cost to research and acquire ROW for the project
• Guidance– Covers ROW for road, stormwater, wetland mitigation,
etc.– Costs vary widely depending upon location– Partial vs. complete takes– Urban Seattle: $20-50/ft2
• Help– Real estate experts– Zillow (http://www.zillow.com)
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Cost Estimating – External 3rd Party
• Definition– Costs associated with 3rd parties (e.g., utilities, railroads)
• Guidance– High potential for risk and change– Utility adjustments
• Located in WSDOT ROW by franchise or permit = utility pays costs• Located in WSDOT ROW by easement or outside ROW = WSDOT
pays
– Railroads• Take a LONG time to negotiate• Railroads were generally there first, roads cross by easement
• Help– WSDOT Utilities Manual
• http://www.wsdot.wa.gov/Publications/Manuals/M22-87.htm • Who pays for utility relocation? Section 200.02(2) • Railroads: Section 300.02
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Cost Estimating– TDM/TSM
• Definition– Costs for TDM/TSM strategies along construction corridor
and in neighboring communities• Guidance
– Can include items like signal retiming, ITS deployment, staffing at command centers, etc.
• Help– ITS Big I optional reading– FHWA’s Developing and Implementing Transportation
Management Plans for Work Zones (chapter 4)• http://ops.fhwa.dot.gov/wz/resources/publications/trans_mg
mt_plans/trans_mgmt_plans.pdf
• Laundry list of TDM/TSM items
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Cost Estimating– Construction Estimate
• Definition– Cost of physically constructing the project in the time
required• Guidance
– Includes profit, costs of labor/materials/equipment, mobilization
– Estimates are usually:• Bid-based (we will use this one)• Cost-based
• Help– Historical bid prices: WSDOT Unit Bid Analysis
• http://www.wsdot.wa.gov/Design/ProjectDev/EngineeringApplications/UnitBidHistory.htm
– Mobilization: WSDOT Plans Preparation Manual (Dec 2009)
• http://www.wsdot.wa.gov/Publications/Manuals/M22-31.htm • Section 800.03(1)
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Cost Estimating– Construction Contingencies
• Definition– Cost to allow for the likelihood of additional construction
work identified after design completion and project awarded
• Guidance– Typically calculated as a percentage– Typical values are 5-10% but can be higher– Type and nature of contract can influence contingency
estimate– May be higher for time-sensitive projects
• Help– WSDOT Plans Preparation Manual (Dec 2009)
• http://www.wsdot.wa.gov/Publications/Manuals/M22-31.htm • Section 800.03(2) – 4% max allowed
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Cost Estimating – Construction Administration
• Definition– Cost of construction engineering, inspection, admin
oversight during construction• Guidance
– Can be estimated as a percentage– Depends on type of job, duration, size, etc.
• Help– WSDOT Plans Preparation Manual (Dec 2009)
• http://www.wsdot.wa.gov/Publications/Manuals/M22-31.htm • Section 800.03(2) – 8-20% based on construction cost
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Cost Estimating – Public Outreach
• Definition– Costs incurred by agency with respect to public outreach
• Guidance– Includes motorist information, advertising, publications,
press releases, PR firm, etc.• Help
– FHWA’s Public Information and Outreach Strategies• http://ops.fhwa.dot.gov/wz/publicinfostrategies.htm • Go to the “Project-level” page (second bullet point link)
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Cost Estimating – Risk Reserve
• Definition– Money kept in reserve by the agency for high-risk projects
to account for unforeseen circumstances• Guidance
– WSDOT Risk Reserve• Base cost (assumes no risk – usually at the 40% confidence level)• Risk percentage (70% confidence level) for use with approval by
Regional Program management – risk reserve• As risks are retired the risk reserve amount is adjusted
– WSDOT Risk Management Plan worksheet (Excel)• Help
– Project Risk Management Guidance for WSDOT Projects (Jul 2010)
• http://www.wsdot.wa.gov/publications/fulltext/cevp/ProjectRiskManagement.pdf
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Risk-Based Estimate
• Base cost estimate– Cost that can be reasonably expected if project goes as
planned– Unbiased and neutral– Includes construction contingency– Does not include risks
• Risk-based estimate– Risk elements applied to base cost and modeled to
provide a probable range for cost and schedule
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Risks change throughout project development
From Project Risk Management Guidance for WSDOT Projects
Evolution of project knowledge through project development
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How WSDOT Does Risk-Based Estimates
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Some Extremely General Rules-of-Thumb
• Density– Gravel borrow, aggregate, soils: 1.85 tons/yd3
– HMA, PCC: 2.05 tons/yd3
• Mobilization– 5 to 15% of construction cost
• Traffic control– 5 to 25% of construction cost– Urban freeway work costs more (up to 30%)
• Design and construction engineering– Usually not included in bid– Can be 5 to 15% of construction cost
• Clearing, grubbing, demolition– $5,000/acre
Do NOT use these in place of actual numbers
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Some Extremely General Rules-of-Thumb
• Right-of-way– Cost is per square foot ($20 to $50/ft2 in urban areas)– Administration cost for each take– Relocation costs
• Detention and water treatment– $6/ft2 of roadway surface– $10/ft2 of roadway surface in pond area is purchased
• Environmental permits and mitigation– $150,000/acre or $31/yd2
• Temporary water pollution and erosion control– 2% of construction cost
• Traffic signals– Variable…but basic ones can cost in the neighborhood of
$200,000• Survey
– Construction survey: 1.5% of construction costs– Design survey: 1.5% of construction costs
Do NOT use these in place of actual numbers
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Primary References
• Nunnally, S.W. (2001). Construction Methods and Management. 5th edition. Prentice Hall, Upper Saddle River, NJ.
• Construction Specifications Institute (CSI). (2010). CSI website. http://www.csinet.org
• Washington State Department of Transportation (WSDOT). (2010). Unit Bid History website. http://www.wsdot.wa.gov/biz/contaa/uba/bid.cfm
• WSDOT. (2010). Project Risk Management Guidance for WSDOT Projects. WSDOT, Olympia, WA. http://www.wsdot.wa.gov/publications/fulltext/cevp/ProjectRiskManagement.pdf
• FHWA. (2007). Cost Estimating Guidance. http://www.fhwa.dot.gov/programadmin/mega/cefinal.cfm.