Estimating Smarter...Not Harder
Using Construction Records to Improve the Accuracy, Precision, & Certainty of
Estimating, Bid Analysis, & Post-Construction Analysis
Jeff Hisem
Administrator
Joseph Anthony, P.E.
Construction Cost Estimator
Ohio Department of Transportation, Office of Estimating
Transportation Estimators Association Annual Conference, Baton Rouge, Louisiana, October 2010
Wake-Up Exercises- Ohio Trivia
Q.
A.
What is Unique about Ohio’s State Flag?
It’s the Only State Flag That’s Not Rectangular
Wake-Up Exercises- Ohio Trivia
Q.
A.
Q.
A.
Ohio is Home to How Many U.S. Presidents?
Seven
Name Them
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.
A.
Which Ohio College is One of Only Eight
in The Country to Sport a Female Mascot?
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?
Overview
Engineer’s
Estimate
PostConstruction
Analysis
Bid Analysis
“Good” Estimating
Two Measures of a “Good” Estimate
Accuracy Precision
Estimating Accuracy
How Close to a “Fair and Reasonable” Value
Estimating Precision
Estimating in a Consistent Manner
Accuracy & Precision
Estimating in a “Fair & Reasonable” Manner Consistently
Cost-Based Estimating
Cost-Based Estimate Prepared With Generic Data …
(Average Accuracy & Reasonable Precision)
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 Example
Using 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 Example
Using 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 Example
Using 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 = $120 / CY
Cost-Based Estimating Example
Summary of Methods
Means
State Developed
Data
Construction Data
Production Rate
(CY / Day)
352
200
504
Crew
(Total Number)
11
8
6
Equipment
(Total Number)
3
3
3
Cost
($ / CY)
$143
$149
$120
The Next Step
Engineer’s
Estimate
PostConstruction
Analysis
Bid Analysis
Improving Bid Analysis
• DOT Specific Construction Data
– Increased Certainty Levels
– Single Bidder Analysis
– Increased Control of Contractor Profit
Bid Analysis
Example
•
•
•
•
•
•
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
The Next Step
Engineer’s
Estimate
PostConstruction
Analysis
Bid Analysis
Improving
Post-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
+ Labor Cost
+ Equipment Cost
+ Profit & Overhead
Cost Based Estimate
(Known)
(Known)
(Known)
(Unknown)*
(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.