Project Budgeting, Cost Estimating, Control and Life Cycle Costing

Ø INTRODUCTION

IACT course cost of a project is the most significant factor in its becoming a reality. Costs are dealt with at the beginning of a project by preparing a “budget cost estimate” incorporating relevant historical cost data and the creative skill of a seasoned estimator with similar project experience. This is the most important, as well as the most difficult, type of estimate to prepare accurately.

As a project evolves through the normal design process, additional evaluations of cost are made. These cost estimates are done as precisely as possible and include appropriate contingencies for unknown items. The "concept estimate" helps to control the project early in the design process to stay within budget.

As a part of the conceptual design process, building system alternatives are identified. Life cycle costing is a method which compares both the construction cost as well as the operating costs (energy, water, maintenance, major replacements, staffing) of these alternatives. Using engineering economics, the lowest life cycle cost alternative is identified for incorporation in the design.

This course will provide a basis for the many areas of estimating that may be faced by the design and construction professional. It will provide "hands on" examples to facilitate a familiarity with different types of estimates and their components. With this basis, a person, through research, study and practical application, can further expand their cost estimating skills relative to their own profession or branch out into new areas of estimating. Other methods of cost control, such as value engineering will also be discussed briefly.

Ø Objectives

This  training course will enable participants to:

l Use best practice to minimise costs and negative impacts

l Describe a typical project cost management life cycle

l Explain the action required at each phase of the project cost management life cycle and understand the significance of each phase

l List the key attributes of cost necessary to understand and manage cost effectively

l Explain the key steps required to improve project estimates, budget and cost baselining, perfomance measurement and analysis, cost monitoring and control during project execution and interpreting and reporting project performance throughout a technical project life cycle

l Specify key quantitative measures for determining the project performance using Earned Value Management (EVM)

l Apply this cost management process to a simple case study

Ø TRAINING METHODOLOGY

This training course will combine presentations with instructor-guided interactive discussions between participants relating to their individual workplace. Practical exercises, video material and case studies aiming at stimulating these discussions and providing maximum benefit to the participants will support the training.

This interactive training course includes the following training methodologies as a percentage of the total tuition hours:

l 30% Lectures, Concepts, Role Play

l 30% Workshops & Work Presentations, Techniques

l 20% Based on Case Studies & Practical Exercises

l 20% Videos, Software & General Discussions

l Pre and Post Test

Ø WHO SHOULD ATTEND?

This course is targeted for :

l Chief Executive Officers

l  Finance Managers

l  Human Resources Managers

l  Project Managers

l  Engineers and Planners

l  Information Technology Managers

Outline

Day 1

Cost Management Process in Planning & Design

Introduction to Project Budgeting & Concept Estimating

· Budget Elements

· Design Phases

· Cost Control Concept

· Historical Budget Techniques

· Estimating Standards

· The Uniform at Elemental Classification

Capitalized Approach to Project Budgeting

Sample Project Cost Plan / Cost Model

· Construction Market Survey

· Regional & National Market Conditions, Potential Bidders

· Labor Availability, Productivity and Union Rates

· Material Availability and Unit Price Summary

· Market Analysis Survey Questionnaire

Fixin     Project Scope

· Facilities Functional & Technical Programs

· Key Cost Drivers

Computing Program Area Requirements

· Space Efficiency

· Rules of Measurement

· Converting Net of Gross

Case Studies – Example Estimates

· Case Study 1: Historical Comparative Budget Estimate (UDM)

· Case Study 2: Parametric Budget Estimate (EMU)

· Case Study 3: Parametric Concept Design Estimate (4th Precinct):

Day  2

Discuss Reading Assignment

Budget Estimating Approaches

· Capitalized Approach to Project Budgeting

· Historical Projects, Comparable Costs (Per UM)

· Parametric Uniformat Level 3 Systems

Case Study Project Budgeting (DTF Office)

· Team Formation & Project Familiarization

· Project Scope

· Program Area Requirements

Historical Comparative Budget Estimate

· Office Historical Costs

· Estimate Summary Assumptions

Project Workshop

· Determine Average Historical Costs

· Complete Budget Estimate Summary

Parametric Systems Budget Estimate

Establishing Configuration / Massing

· Sitting the Building/ Configuration

· Statistical Configuration Process

· Building Statistical Description Summary

Documenting Quality

· Quality Standards / Levels

· Sample Documentation by Element

Parametric Systems Budget Estimate Completion

· Uniformat Systems & Quantities

Day 3

Discuss Project Assignment/ Turn-in

Concept Design Estimating Approaches

· Parametric Uniformat Level 4 & 5

· Quantity Take-off Cost Items

· Summary Level 1 Uniformat

Case Studies - Concept Estimating (Multi-Tower, NPS, PAAET)

· Team Formation

· Project Familiarization

· Project Scope

· Program Area Requirements

Project Workshop

Determine Configuration Quantities

Determining Quantities/ Costs for Structural Elements

· System 01 – Foundation

· System 02 – Substructure

· System 03 – Superstructure

Determining Quantities/Costs for Architectural Elements

· System 04 – Exterior Closure

· System 05 – Roofing

· System 06 – Interior Construction

Day 4

Discuss Project Assignment/ Turn-in

Determining Quantities/Costs for Mechanical Elements

· System 07 – Conveying Systems

· System 081 – Plumbing

· System 082 – HVAC

· System 083 – Fire Protection

· System 084 - Special Mechanical Systems

Determining Quantities/Costs for Electrical Elements

· System 091 – Primary Power & Distribution

· System 092 –Lighting & Secondary Distribution

· System 093 – Special Electrical Systems

Determining Quantities/ Costs for Equip./ Site Work Elements

· System 11 – Equipment

· System 121 – Site Preparation

· System 122 – Site Improvements

· System 123 – Site Utilities

· System 124 – Off-site Work

Day 5

Discuss Project Assignment/ Turn-in

Project Management Plan (CH 10)

· Methods of Accomplishment

· Scheduling

· Uniformat Elemental Specifications

Budget Development Remaining Items (CH 11)

· General Conditions, OH&P, System 10

· Contingencies, Types & Use

· Escalation

· Design & Management Costs

· Management Costs during Construction

· Real Estate Costs

· Reservations

Closing the Loop – Recycling Cost Data (CH 12)

· Controlling Design Work

· Estimates at SD, DD, CD, Bids, Change Orders

· Historical Data

Life Cycle Costing (LCC)

· Methodology and techniques of life cycle costing

· LCC case studies (building systems, layout alternatives)

· Computer template for analyzing the life cycle costs of alternatives

Value Engineering

· Assuring best value for dollars spent

· Value methodology process & tools