An overview of how cost estimates are developed
from concept to concrete including procedural
requirements for updating cost estimates and
preparing estimates in the LRE and DQE systems.
July 21, 2015
Preliminary
Final
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Pre-Design & Design
Prior to Bid Letting
For funding allocation
and bid comparison
Construction
Post Award
For contractor payout
Preliminary
Pre-Design
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Design
Pre-Design & Design
Prior to Bid Letting
For funding allocation
and bid comparison
 LRE
 DQE
• Authorization
Estimate
• Official Estimate
Planning through Contract Award
Pre-Design
Contract Procurement
& Bid Review
Design Phases
Scope Estimate
Phase 1
Phase II
Phase III
Phase IV
Final Plans
PS&E
Authorization/
Advertisement
Bid Letting
Bid
Reviews
Award

Long Range
Estimates system
 Pre-Design; conceptual

Design Quantities
and Estimates
system
 Design estimate: used to
estimate: used to
establish funding levels for
the project
develop the Department’s
Official Estimate for bid
comparison purposes
 Generates pay items and
 Contains KNOWN pay items
quantities you can EXPECT
to have, based on project
characteristics (typical
sections, length, etc.)
and quantities, based on
complete (or nearly complete)
plans.
4
Planning through Contract Award
Pre-Design
Scope Estimate
Phase 1
Phase II
Phase III
Construction
Contract Procurement
& Bid Review
Design Phases
Phase IV
Final Plans
PS&E
5
Authorization/
Advertisement
Bid Letting
Bid
Reviews
Award

6
LRE uses characteristics of typical
section models, applied to a length of
roadway, to generate anticipated pay
items, quantities, and unit prices.
The quality of an
LRE estimate depends on a
well-defined Scope of Work and
current/accurate unit prices.
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District Estimator determines unit
prices based on:
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Pay Item Quantity
Project Location
Contract Duration
Material Cost and availability
Labor Cost
Equipment Cost
Contractor Competition
Recent bid prices on similar items are
also taken into consideration
7
Planning through Contract Award
Pre-Design
Scope Estimate
Phase 1
Phase II
Phase III
Construction
Contract Procurement
& Bid Review
Design Phases
Phase IV
Final Plans
PS&E
8
Authorization/
Advertisement
Bid Letting
Bid
Reviews
Award

At 60% - 90% plans, the Designer
determines the pay items and
quantities comprised in the scope of the
project
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District Estimator determines unit
prices for each pay item
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Both bid-based and cost-based
estimating techniques are used
9
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Estimates are based on
Present Day Cost (PDC)

Work Program Office applies
inflation factors for projects that are
scheduled for future years
10
Planning through Contract Award
Pre-Design
Contract Procurement
& Bid Review
Design Phases
Scope Estimate
Phase 1
Phase II
Phase IV
Final Plans
Phase III
PS&E
Annual Work Program Review
11
Authorization/
Advertisement
Bid Letting
Bid
Reviews
Award

Goal: To ensure that appropriate funds are
budgeted for each year in the 5 Year Work Program
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Review Criteria:
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Estimates must be in LRE or DQE
Quantifiable and include all scope
Within tolerance of Work Program
Updated every 6 months
Review Schedule:
 August through November
 “Exceptions List” completed after each review
12
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Develop/revise LRE estimate:
• Pre-Design
• Phase 1 (30% Plans)
• Phase 2 (60% Plans)
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Develop/revise DQE estimate:

Develop/finalize Authorization
Estimate:
• Phase 3 (90% Plans)
• Phase 4 (100% Plans)
• FHWA authorization of funds
• Advertisement for bids
• Work Program Amount (for encumbrance)
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Develop Official Estimate
Perform post-bid analysis
 Present findings to Awards Committee
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13
Review
annually for
Work
Program
Prepare for
Bid Letting
Processes
Conduct Post
Bid Reviews
Planning through Contract Award
Pre-Design
Scope Estimate
Phase 1
Phase II
Phase III
Construction
Contract Procurement
& Bid Review
Design Phases
Phase IV
Final Plans
PS&E
14
Authorization/
Advertisement
Bid Letting
Bid
Reviews
Award