Cost and Scope Breakdown Structure for Functional Level Estimating of Consultant Fees

Craigie, Emily K.; Gransberg, Douglas D.; Jeong, Hae‐Kwon

doi:10.3141/2573-19

Cited by 6 publications

(3 citation statements)

References 9 publications

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“…A commonly used approach for setting the preconstruction services (PCS) budget is to use a programming-level estimate based on the probable construction cost multiplied by a fixed percentage often found in the client's project development policy documents (Craigie et al, 2016). There are a number of problems with this approach.…”

Section: Preconstruction Phase Engineering Managementmentioning

confidence: 99%

Construction engineering management culture shift: Is the lowest tender offer dead?

Scheepbouwer¹,

Gransberg²,

Puerto³

2017

Front. Eng

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The procurement of public construction projects must walk a fine line between the corruption of state officials and collusion of contractors. The method of awarding projects to the lowest responsible tenderer was originally implemented to guard against corruption of state officials. However, an investigation of the construction industry in the Canadian province of Quebec showed that lowest-tender-offer procurement gave rise to collusion of companies tendering for the contracts. Alternatively, bestvalue procurement has been used for decades, but here problems arise owing to the necessity of subjective judging of measures other than price to compare bids, giving rise to time-and money-consuming protests. The paper proposes a compelling argument that the construction engineering management (CEM) culture should refocus its efforts on enhancing project cost certainty rather than merely searching for means to design a project in a manner that produces the lowest initial cost, and awards the construction to the lowest tender offer that focuses on cost savings during the project development and delivery process. The difference in the two approaches is subtle but extremely important. To make the transition, the engineering management tools must be advanced to the next level. This means that all project control tools for managing cost, schedule, and technical scope must be transformed from working in the deterministic mode to the stochastic mode, thus making the probability of completing the project within or below its official budget the primary decision criterion. To do so, CEMs must accept that there is a benefit in paying more for an alternative that increases cost certainty for the entire project. The authors of this paper hope that it will provide the grist for a more general dialog across all industry sectors where engineering management is practiced.

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Section: Preconstruction Phase Engineering Managementmentioning

confidence: 99%

Construction engineering management culture shift: Is the lowest tender offer dead?

Scheepbouwer¹,

Gransberg²,

Puerto³

2017

Front. Eng

Self Cite

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“…For the purpose of illustrating the process, three-point estimation from subject matter experts was assumed to be the input and Optimistic, Pessimistic, and Most Likely values are obtained (Craigie and Gransberg, 2016). Another assumption is that a triangular distribution function will be used to model the variation.…”

Section: Linear Scheduling Risk Representation Modelmentioning

confidence: 99%

Linear scheduling and procurement tools to manage geotechnical risk in design-build construction projects

Tapia¹

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The nature and unpredictability of geotechnical conditions on a construction project site is a major concern for designers and builders in almost every type of construction project. The risk of encountering conditions that differ from the information contained on the contract could potentially have very high impact on both the project's cost and schedule. This makes the parties want to protect themselves from the consequences of the risk. For example, some owners approach the issue by increasing the extent of pre-award studies included in the contract, others include less and incorporate risk-transferring clauses in the contract, while most contractors allocate this uncertainty in their price as a contingency. These conventional solutions to the problem often result in creating friction between the parties that can lead to legal disputes and additional costs to the project. This paper proposes an additional solution that integrates the efforts between the owner and the contractor to achieve a common goal of effectively mitigating the risk of differing geological site conditions by means of implementing contractual provisions for Alternative Technical Concepts (ATCs) in the procurement phase of the project.

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“…Figure 1 presents a PCS timeline and some of the activities related to each of the development phases. [5] The increase funding uncertainty and tightening of budgets in construction projects has resulted in scrutiny of every dollar spent in the construction phase of building and highway projects. While detailed estimates are routinely developed to estimate material, labor and equipment costs during the construction phase, estimates of costs during the preconstruction phase are rarely performed.…”

Section: Introductionmentioning

confidence: 99%

A Case for Incorporating Pre-construction Cost Estimating in Construction Engineering and Management Programs

Puerto¹,

Agosto²,

Gransberg³

2016 ASEE Annual Conference &Amp; Exposition Proceedings

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The need to effectively manage costs during the construction phase of a project to meet budget constraints is widely understood by both practitioners and academics. Most, if not all, Construction Engineering and Management undergraduate and graduate programs require that students complete construction cost estimating courses as part of their core curriculum. However, the value of estimating the owner's planning, design, and procurement costs during the preconstruction period is not typically included in the Construction Engineering and Management curriculum. Preconstruction costs are usually defined as all work required to develop and advertise construction documents to a point where the construction contract can be awarded. Final project construction documents literally define the level of required construction quality and as such, must also be of adequate quality to achieve the construction project's ultimate success. Thus, failing to provide an adequate and sufficient preconstruction budget constrains the necessary resources to fully develop these documents and may unintentionally constrain the document development process causing planners and designers to match their level of effort to the amount of time permitted by the budget. Not only may the quality of the construction documents be negatively impacted but design factors of safety may be unnecessarily increased due to a lack of time to do detailed design analyses. It can also, eventually, have an impact in design issues related to serviceability, operation, or maintenance. Lastly, the increased use of alternative project delivery methods, such as Design-Build and Construction Manager-atRisk, have created a need to teach preconstruction cost estimating in academic programs to ensure that graduates have the necessary knowledge and skills to effectively manage construction projects delivered using both traditional and alternative methods. This paper contributes to the body of knowledge by demonstrating the importance of accurately estimating owner's preconstruction costs and proposing a framework to assist engineering educators to integrate the subject into the required curriculum in Construction Engineering and Management programs.

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Cost and Scope Breakdown Structure for Functional Level Estimating of Consultant Fees

Cited by 6 publications

References 9 publications

Construction engineering management culture shift: Is the lowest tender offer dead?

Construction engineering management culture shift: Is the lowest tender offer dead?

Linear scheduling and procurement tools to manage geotechnical risk in design-build construction projects

A Case for Incorporating Pre-construction Cost Estimating in Construction Engineering and Management Programs

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