Estimating Smarter...Not HarderUsing Construction Records to Improve the Accuracy, Precision, & Certainty of Estimating, Bid Analysis, & Post-Construction Analysis

Jeff HisemAdministrator

Joseph Anthony, P.E. Construction Cost Estimator

Ohio Department of Transportation, Office of EstimatingTransportation Estimators Association Annual Conference, Baton Rouge, Louisiana, October 2010

Wake-Up Exercises- Ohio Trivia

Q. What is Unique about Ohio’s State Flag?A. It’s the Only State Flag That’s Not

Rectangular

Wake-Up Exercises- Ohio Trivia

Q. Ohio is Home to How Many U.S. Presidents?A. SevenQ. Name ThemA. Ulysses S. Grant, Rutherford B. Hayes, James A.

Garfield, Benjamin Harrison, William McKinley, William H. Taft, and Warren G. Harding

Wake-Up Exercises- Ohio Trivia

Q. Which Ohio College is One of Only Eight in The Country to Sport a Female Mascot?

A. The University of Akron’s Zippy the Kangaroo(Zippy has a Pouch)

Survey

• How many people in this room collect and use bid histories?

• How many people in this room collect and use construction data for cost-based estimating?

• Why not?

Engineer’s Estimate

Overview

Engineer’s Estimate

Bid AnalysisPost-

Construction Analysis

Two Measures of a “Good” Estimate

“Good” Estimating

PrecisionAccuracy

How Close to a “Fair and Reasonable” Value

Estimating Accuracy

Estimating in a Consistent Manner

Estimating Precision

Accuracy & Precision

Estimating in a “Fair & Reasonable” Manner Consistently

Cost-Based Estimate Prepared With Generic Data …

(Average Accuracy & Reasonable Precision)

Cost-Based Estimating

Cost-Based Estimating

Cost-Based Estimate Prepared With DOT Specific Construction Data…

(Good Accuracy, Good Precision)

Improving Cost-Based Estimating

• Collect Detailed Construction Records– Production Rates– Crew Counts– Equipment Counts

• Create a Construction Database Much Like a Bid History Database to Easily Retrieve This Information

Improving Cost-Based Estimating

• DOT Specific Construction Data– Fair & Reasonable Cost-Based Estimating– Makes Cost-Based Estimating Possible For More Items– Enhance Items That Already Use Cost-Based Estimating– Increases DOT Certainty

ODOT’s Challenges

• ODOT’s Current Software (CMS) Does Not Make Construction Data Readily Available– Read Through Inspector’s Daily Reports– Quality of Reports Varies from Inspector to Inspector

• CMS Software is Being Retired• Switching to SiteManager

Cost-Based Estimating ExampleUsing Authoritative Reference as Basis

• Two-Lane Asphalt Resurfacing– Minor Urban Arterial– 13,797 Vehicles / Day

• Production Rate – 352 CY / 8 Hour Day

• Crew– 1 Foreman– 7 Laborers– 3 Equipment Operators

• Equipment– 1 Paver– 1 Steel Roller– 1 Pneumatic Roller

• Total Estimated Cost = $143 / CY

Cost-Based Estimating ExampleUsing State Developed Estimating Data

• Two-Lane Asphalt Resurfacing– Minor Urban Arterial– 13,797 Vehicles / Day

• Production Rate – 200 CY / 8 Hour Day

• Crew– 1 Foreman– 4 Laborers– 3 Equipment Operators

• Equipment– 1 Paver– 1 Steel Roller– 1 Pneumatic Roller

• Total Estimated Cost = $149 / CY

Cost-Based Estimating ExampleUsing DOT Construction Data as Basis

• Two-Lane Asphalt Resurfacing– Minor Urban Arterial– 13,797 Vehicles / Day

• Production Rate– 504 CY / 8 Hour Day

• Crew– 1 Foreman– 4 Laborers– 1 Equipment Operators

• Equipment– 1 Paver– 1 Steel Roller– 1 Pneumatic Roller

• Total Estimated Cost = $120 / CY

Cost-Based Estimating ExampleSummary of Methods

Means State Developed Data

Construction Data

Production Rate (CY / Day) 352 200 504

Crew(Total Number) 11 8 6

Equipment(Total Number) 3 3 3

Cost($ / CY) $143 $149 $120

The Next Step

Bid Analysis

Engineer’s Estimate

Bid AnalysisPost-

Construction Analysis

Improving Bid Analysis

• DOT Specific Construction Data– Increased Certainty Levels– Single Bidder Analysis– Increased Control of Contractor Profit

Bid AnalysisExample

• Two-Lane Resurfacing• Single Bidder• Engineer’s Estimate: $1.6M• Bid: $2.0M• Difference 25%• Contractor Sends Letter Stating They are Over

Estimate Because of Low Production

Engineer’s Estimate

Bid AnalysisPost-

Construction Analysis

Post-Construction

Analysis

The Next Step

ImprovingPost-Construction Analysis

• DOT Specific Construction Data– Analyze Construction Activities• Production Rates• Labor Hours• Equipment

– Develop Cost-Based Estimating Worksheet Based on Actual DOT Specific Data

– Change Order Analysis– Profit Margin Analysis

Change Order Analysis

• District Requests cost evaluation of change order proposal– Contractor Claims Low Production Rate– Want to Verify Production Rate Based on Actual

Construction Data– Collection of Post-Construction Data and Creation of

Database Would Facilitate Analysis

Profit Margin Analysis

• Profit Margin Analysis Can Only Be Performed if You Use Accurate and Precise Cost-Based Estimating Techniques

• Perform Profit Margin Analysis After a Project Has Been Constructed

Profit Margins Analysis

Material Cost (Known)+ Labor Cost (Known)+ Equipment Cost (Known)+ Profit & Overhead (Unknown)*

Cost Based Estimate (Known)

*1 Equation, 1 Unknown, Can Solve For Unknown

Conclusions

DOT Specific Construction Data Improves Accuracy, Precision, and Certainty of all aspects of the estimating process from the development of the Engineer’s Estimate to Bid Analysis and beyond.