Detailed Line Item Construction Cost Estimating Matters a great deal to estimating, risk management, facilities management, and service providers (A/E’s, builders…).
While many professionals talk about contingencies, a focus upon assuring the use of experienced line item cost estimators (likely with a decade of more of experience… inclusive knowledge of field work processes) and the use of standardized terms, definitions, and data architectures (CSI MasterFomat – 50 Division) at a detailed line item level, inclusive of quantities, and associated labor, equipment, and material info…. would do wonders in improving …
- Improved definition and communication of a detailed scope of work,
- Full financial visibility and transparency,
- Mutually beneficial relationships between owners and service providers, and
- Overall program/project outcomes.
Others also talk about the value of historical cost data in projecting future outcomes. While an owner’s historical projects costs have some merit, they do not reflect current market conditions, nor necessarily what costs saving may have been achieved via alternative methods. In general, one even might go so far as to say that good information from past projects complete may yield very little useful information for the following reasons:
- Lack of well trained, competent, committed, and collaborative professionals (internal and external)
- No standardized method for collecting, describing, and organizing cost data – Common terms, definitions, and data architectures (CSI MasterFormat – 50 Division) is powerful data architecture)
- Absence of LEAN construction delivery methodology
Building a trustworthy detailed line item estimate requires a knowledge of the following…
- Local labor costs and crew compositions
- Local material costs
- Local equipment rental rates
- Multi-disciplinary information about all requisite trades and associated procedures
Detailed line item construction cost estimating yield the most accurate construction estimate possible (+/- 5.0%). It requires professional domain experts experts, LEAN systems and processes in place, and organization-wide commitment to properly collect, analyse, and use cost data.
Locally researched line item construction cost data, when combined with the experience of knowledgeable estimators can deliver consistently superior results, if leverage within a LEAN construction delivery environment such as Integrated Project Delivery, IPD, for large construction projects, and Job Order Contracting, JOC, for repair, renovation, and minor new construction projects.
