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AASHTO Technical Committee on Cost Estimating Annual Report Frank Csiga, Nevada DOT Committee Chair. 2006 Action Plan 1. Develop Guidance 2. Review NCHRP 8-49 3. FHWA minimum standards 4. FHWA Peer Review Program 5. Final Guidance Cradle to Grave. - PowerPoint PPT Presentation
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AASHTOTechnical Committee on Cost Estimating
Annual ReportFrank Csiga, Nevada DOT
Committee Chair
2006 Action Plan1. Develop Guidance2. Review NCHRP 8-493. FHWA minimum standards4. FHWA Peer Review Program5. Final Guidance Cradle to Grave
Committee Focus1. Historical Bid-Based Estimating2. Cost Based Estimating3. Bid Analysis
Where does the TEA fit in:Chapters for review within the weekReturn comments within four weeksCommittee RevisionsPresentation to SCOD
A GUIDE FOR COST ESTIMATING
Draft Chapter for Review Historical Bid-Based
EstimatingTechnical Committee on Cost Estimating
IGENERAL OVERVIEWII.PROS & CONS OF USING HISTORICAL BID BASED ESTIMATINGIII.ESTABLISHING, MAINTAINING, AND UTILIZING A BID HISTORY DATABASE
IV.USING SPREADSHEETS FOR DATA ANALYSIS IN ESTIMATING COSTS
V.ESTIMATING LUMP SUM ITEMSVI.ESTIMATING PROJECT SPECIFIC OR UNIQUE ITEMSVII.BIDDING CLIMATEVIII.REFERENCE MATERIALIX.TOOLSX.SKILL SETS REQUIRED
Cost-Based Estimates
• Elements of a Cost Based Estimates– Time– Material– Labor– Time– Overhead & Profit
Cost-Based Estimates
• Example Carried Through Chapter– Culvert Pipe Replacement
• Earthwork Sample
• More to be added
Cost-Based Estimates
• Other Topics Discussed– Subcontract Items– Lump Sum Items– Software Applications
Cost-Based Estimates
• Information Sources– RS Means Cost Guide– Rental Rate Blue Book– Rental Rate Green Book– TEA
Cost-Based Estimates
• Information Sources – IN YOUR DOT!– Construction Division
• Production Rates• Equipment• Labor Staffing Levels
– Materials Division• Sources• Supplier Contacts
Cost-Based Estimates
– Value Added• More information to make Award/Reject
Decisions• Knowledge of details for Contractor dialogue• Generally more accurate estimates than bid-
based
Cost-Based Estimates
– Conclusion• May take more resources• Need some expertise in the area of
construction • Extra effort is worth it!• DOT can make more informed decisions
BID REVIEW – Document current bid review practices– Identify definitions and processes
currently in practice – Provide recommendations to the bid
review process
STATES REVIEW PROCESSES ARE VARIED
• Contract types vary– Low bid– A+b– Design build
• State laws vary• A common decision process is needed• Fhwa guidelines apply to many projects
FHWA CURRENTLY HAS GUIDANCE IN PLACE
• Provides a general guideline
• Includes evaluation elements
• Provides criteria for awarding high cost
projects
FHWA GUIDANCE DOCUMENTS
http://www.fhwa.dot.gov/programadmin/contracts/ta508046.htm#6
TCCE RECOMMENDATIONS:
• Provide a standard process for bid evaluation
• Organize the review methods
• Make the review process efficient
• Identify roles and eliminate conflicts
INITIAL CONTRACT REVIEW
• Bid document sufficiency review
– Completed bid form
– Subcontractor disclosures
– Minority requirements
• Bid data processing and summary
– Bid line item data processing
FAIR MARKET COST ANALYSIS
• Fair market economic analysis– Total price comparison– Line item comparison– Collusion review
• Bid document quality review– Bad quantities – Missing bid items– General bid document quality
• Constructability review– Bid schedule– Site location and access
COST/ECONOMICANALYSIS
• Which bidders provide qualified bids
• Compare total prices to the ee
• Compare line items to ee and each other
• Document quality (quantities/items missed)
• Recommendation based on fair value and document quality
PROJECT SPONSOR REVIEW
• Project budget– Available funding– Reduction in work scope– Project redesign (bridges)
• Document quality – design corrections– Quantity errors– Missing items– Risk transfer to contractor
• Project need– Emergency work– Closing gaps in facility construction
PROJECT SPONSOR DECISION
• Evaluate the content of the cost review
• Determine document improvements
• Compare risk costs to available budget
• Decision point – Cancel project– Redesign and rebid– Delay and rebid– Recommend award with justification to higher
authority
DOT FINAL RECOMMENDATION OF AWARD BY HIGHEST AGENCY
DELEGATED AUTHORITY• Delegated final authority
• Weights all review information
• Represents the entire organization
• Direct report to federal and legislative decision oversite
• Make independent final decisions – not participate in development of bid review
OVERVIEW OF REVIEW PROCESSFINAL AUTHORITY – AWARD
RECOMMENDATION • Considers economic review
• Considers project sponsor information
• Evaluates federal guidance
• Carries agency authority in making final
decision
• Is responsibility for agency program delivery