Estimating in Disaster Recovery. Prof. Ralph V. Locurcio, PE Director, Construction Management Program Florida Institute of Technology

Transcription

1 Estimating in Disaster Recovery Prof. Ralph V. Locurcio, PE Director, Construction Management Program Florida Institute of Technology

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3 The 1991 Gulf War had just ended

4 Debris was everywhere

5 750 Oil Fires blackened the skies

6 The Scope of Work

7 Key Facilities 3 Major Power Plants partially destroyed

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10 Electrical systems 750 Oil Fires blackened the skies 5000km of 300KV Power Lines

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12 Water systems 2 Water Pumping stations & distribution lines

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14 Debris Roads & Bridges to be cleared

15 Roads & Bridges Repave a major hiway

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17 Ports & Harbors 2 Harbors mined & destroyed

18 Fire damage Major facilities were torched

19 Terrorist actions International Airport bombed & burned

20 Unknowns 300 Schools were severely damaged

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37 Construction Methodology Hired 11 Contractors Based on conceptual estimates Used Cost Plus Contracts No time for design Pre-qualified Contractors Made selection based on quals Mobilized with contingency

38 The Estimating Process 1200 Damage Survey Reports Prep Govt Estimate Excel Data Base Prioritize DSRs Issue Work Order to Contractor Compare estimates Negotiate differences Issue NTP Inspect labor & materials Difinitize at 50%

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55 Estimating Class at FIT 55 January 20, 2010

56 My Background Corps of Engineers 30yrs Hurricane Eloise - PA 1975 Hurricane Hugo - SC 1989 Kuwait Reconstruction Hurricane Iniki - HI 1993 Pinatubo Recovery Atlantic Hurricanes 1994 to 1996 Private sector engineering Florida Tech 2004 (4 Hurricanes)

57 Estimating defined A complex process involving the collection of available information on the scope of a project, the expected resource consumption, and future changes in resource costs. This information is synthesized in a visualization of the construction process and translated into an approximation of the final cost.

58 Qualifications of an estimator Extensive knowledge of: Construction processes & methods Materials & methods Contracts & work practices Construction documents & details Background business factors Design & code requirements Verbal & written communications Good common sense & judgment

59 Estimating & Bidding Establish Standards Lessons Learned Kickoff Meeting Work Plan Prepare Estimate Revise Update Database Document Estimate Reality Check Yes Review Estimate Adjust Estimate? No Submit Bid Project Execution Feedback to improve data base Project Completion

60 Key Estimating Activities Read the Plans, Specs & Contract Conduct Site Visit Decide Construction Method Prepare Schedule Material Take-Offs Plan for Equipment Plan for Subcontracts Estimate costs Analyze Risk Factors Determine contingency Finalize Bid

61 Components of an estimate Project components Equipment needed Construction methods Temporary work items Support activities Externalities

62 Two broad types of estimates Conceptual Used for early decisions & feasibility Rough estimate using minimal data Relies heavily on past data Level of accuracy about 70% Detailed Used for major decisions; i.e. bids & budgets Based on final design documents Level of accuracy up to 95%

63 Accuracy increases over time % Design % Accuracy

64 Conceptual types: Based on prior experience: Weight check weight of equipment Cost-capacity factor- ratio of Q/$ Comparative cost of structure $/unit Feasibility estimates Appropriations estimates Time & location adjustments

65 Comparative cost of structure Basis is cost per unit based on past experience with similar units. Compare structures of like construction, (e.g. school: steel, concrete, quality, local labor, weather) Develop cost per unit, e.g. A$/pupil = A Cost/A pupils Apply to new construction: B Cost = B pupils x A$/pupil

66 Examples: Schools: $/pupil Bridges: $/feet of span Stadium: $/seat Hospital: $/beds Offices: $/ft 2 Warehouses: $/ft 3

67 Variations of comparative cost Plant cost ratio process plant ratio differentiates machine ft 2 from admin ft 2 Floor area cost/ft 2 but Total horizontal area all floors equal Finished floor area $ based on type finish Cubic foot of volume floor height varies

68 Parametric estimates Used for capital budgeting Expect 80-90% accuracy Based on historical data base Methods: Panel hist data on typical panels Bay hist data on typical bays Plant component equip cost + other TPC = ET/(1-PT) Where ET=tot equip cost/(1-% all other cost items) ET = $$$ equip/(1-70%)

69 Time & Location adjustments Cost indexing Based on similar group of key items Compare group over time or location Final cost based on ratio x calculated cost: Est Cost = T 2 /T 1 x Calc Cost Est Cost = (T 2 /T 1 )(L 2 /L 1 ) x Calc Cost

70 Cost forecasting The future ain t what it used to be Yogi Berra Need to project costs to mid-point of the construction year for budgeting Generally average past 3-5 years cost data & project forward

71 Detailed estimates Based on three primary factors: A. Scope quantities B. Constructability methods C. Risk externalities

72 A. Scope factors Technology in project - complexity Milestone deadlines for work - timing Material & equipment - availability Staffing needed skill & availability Contract terms allocation of risk Amount of competition - markets

73 B. Constructability factors Construction quality skill required Allowable tolerances productivity Complexity of design learning curve Flexibility of methods special terms

74 C. Risk factors Unspecified material or workmanship Differing site conditions Error in bidding Changes in cost over time Subcontractor error or failures Weather & environmental issues Strikes & labor issues Utilities & support issues

75 Estimating process 1. Determine project characteristics: Scope, constructability, risk 2. Examine the project design & site 3. Structure the estimate 4. Determine elements of cost 5. Calculate estimate

76 Examine Project Design Technical specifications Referenced standards Project drawings Testing and performance Special methods or procedures Physical elements & site characteristics Errors & omissions

77 Structure the estimate Structure often follows specification template Ensure nothing left out Need a plan for completing the project Logical flow of resources & materials Productivity factors

78 Determine elements of cost Labor- craft & skill resources; sub-contractors; union labor; wage rates; training; effective labor rates; productivity factors (weather, complexity, experience, management) Material- price, shipping, availability, storage, relation to specifications Equipment- purchase vs. lease, single use, down time, cost of maintenance Capital- interest rates, payment flow, retainage Time- overhead costs, required completion date,

79 Calculate the estimate Material take-off from plans 1. Quantities of all construction materials 2. Compare with specifications Labor cost for construction or installation 1. Effective labor rates 2. Team composition & duration Construction equipment schedule 1. On hand vs. lease or purchase 2. Time on job Follow elements of cost 1. Ensure all items are covered

80 Some Example Problems Calculate the estimated cost Solution in class

81 Conceptual Estimates Based on historical data Accuracy = +30% Used for planning purposes when no design exists Used to check validity of detailed estimate

82 Cost of equipment method Assumes cost of equipment is dominant factor in plant cost Estimate based on % of cost allocated to equipment relative to total cost of facility Estimated cost is proportional to known cost Must adjust for time & location

83 Example 1 5 min. Assume that the equipment portion of a chemical processing plant constructed in 2006 cost $1.2M and the total plant cost was $2.5M. Therefore the equipment portion of the total cost was 46%. Estimate the cost of a new plant with the same processes if the equipment for the new plant has been determined to cost $2.7M. Assume time and location factors are negligible in this case. Solution:

84 Example 2 Assume that the equipment portion of a chemical processing plant constructed in 2006 cost $1.2M and the total plant cost was $2.5M. Therefore the equipment portion of the total cost was 46%. Estimate the cost of a new plant with the same process if the equipment for the new plant has been determined to cost $2.4M. Assume time and location factors are negligible in this case. Solution: C 2 /E 2 = C 1 /E 1 solve for C 2 C 2 = [C 1 /E 1 ] x E 2 C 2 = [$2.5M/$1.2M] x $2.4M C 2 = [2.08] x $2.7 = $5,625,000M

85 Volumetric unit measure Similar to comparison of $/sf unit measure Used when facility has differing ceiling heights Calculate the $/cf of known facility Determine $/cf of known facility Calculate total cf of new facility Using known $/cf calculate cost of new facility Adjust for time and location

86 Example 2 10 min. Determine the cost of a new warehouse which will have 3 distinct storage areas with differing ceiling heights. Area 1 = 12 ; Area 2=14 and Area 3 = 10. The floor area of all three areas is 4000sf. A similar warehouse was constructed earlier this year for $2.4M. In that building the floor area was 8000sf and the ceiling height was a uniform 14. Assume time and location factors are negligible in this case. Solution:

87 Example 2 Determine the cost of a new warehouse which will have 3 distinct storage areas with differing ceiling heights. Area 1 = 12 ; Area 2=14 and Area 3 = 10. The floor area of each area is 4000sf. A similar warehouse was constructed earlier this year for $2.4M. In that building the floor area was 8000sf and the ceiling height was a uniform 14. Assume time and location factors are negligible in this case. Solution: Existing Building A = 8000sf x 14 = 112,000 cf Cost/cf = $2,400,000 / 112,000 cf = $21.43/cf New Building A1 = 4000sf x 12 = 48,000 cf A2 = 4000sf x 14 = 56,000 cf A3 = 4000sf x 10 = 40,000 cf Total = 144,000 cf Cost = 144,000 cf x $21.43/cf = $3,085,714

88 Adjusting for time Prices escalate over time due to inflation Must adjust estimated cost to mid-point of construction. Determine period of construction Determine start date of construction Determine mid-point of construction = average cost Determine escalation rate = given index Multiply estimated cost by escalation rate Note: escalation is compounded, ie. increase is cumulative over number of years of escalation

89 Adjusting for location Prices differ by region of the country Must consult a reliable index to determine relative cost of construction between regions RS Means Cost Data or Engineering News Record are examples Adjustment is a simple ratio multiplied times the estimated construction cost. So C 2 /C 1 = L 2 /L 1 X Estimated Construction Cost and C 2 = C 1 x L 2 /L 1

90 Example 3 15 min. You have been asked to prepare a conceptual cost estimate for the construction of a new university dormitory at Florida Tech to open in You have 2005 RS Means data that provides a cost of $30,000/bed for similar dormitories in the northeast of the US, and a construction period of 2 years. The Means data states that construction costs escalate at 10% per year in the southeast. If the dorm is to house 200 students at Florida Tech and the Means Cost Comparison Index between the northeast and southeast is 0.80, what is the estimated cost for the new library at Florida Tech at the mid-point of construction? Estimated Florida Tech cost:

91 Solution to pop quiz 1. $30,000 per bed x 200 beds = $6,000,000 in the northeast in In the southeast in 2005 $6,000,000 x 0.80 = $4,800, Construction start is Occupancy 2 years = = Mid-point of construction is = = Years of escalation = 4 yrs

92 Solution to pop quiz 6. Escalation: $4,800,000 x 1.10 = $5,280,000 ( ) $5,280,000 x 1.10 = $5,808,000 ( ) $5,808,000 x 1.10 = $6,388,800 ( ) $6,388,800 x 1.10 = $7,027,680 ( )

93 Solution Therefore the estimated cost of the new dormitory for Florida Tech at the mid-point of construction in 2009 is: $7,027,680

94 Cost Engineering Class Intro problem garden shed Processes covered Conceptual estimating 3 classes Detailed Estimating 25 classes Materials covered steel, masonry, wood Topics foundations, walls, floors, roofing Industry professionals 4 classes

95 Semester Project Groups bid on actual project Lite commercial office = 3000sf Typical Residence = 2400sf Bids presented to panel of professional judges Mystery guest invited

96 Industry Participation at FIT 96 January 20, 2010

97 Harry Johnson explains BRPH estimating 97 January 21, 2011

98 Phillip Jarvis explains how estimating is done at Burgoon-Berger 98 January 21, 2011

99 The class bids on real projects 99 January 21, 2011

100 We appreciate industry support! 100 January 21, 2011

101 That s all folks!!!! Thank you.