DoD Construction Estimating

DoD Construction estimating can be significantly improved with the use of local market, objective, and current construction cost data.

Historically many DoD sites have use “national average” cost data and have attempted to localize information with “area cost factors” and/or other forms of “cost indexes”.   This traditional method can introduce significant errors in cost estimation as demonstrated by several independent sources.

The primary issue associated with construction cost location factoring is Data Accuracy.  Inaccurate data can lead to incorrect cost estimates. Cost data must be up-to-date, and reflect local market conditions (labor, material, and equipment), at a granular level.  The application of factors to an estimate introduces significant error as the method cannot account for a wide range of variances.

Whether new builds, repairs, renovation, or maintenance, including preventive maintenance, the use of local market, current and verifiable granular cost data can significantly improve cost visibility and cost management.

If you are a DoD department or agency and wish to beging a journey to save 30%-40% of construction, renovation, repair, or maintenance costs, reach out to schedule an educational online meeting or reach our capability statement.

Four BT, LLC
CAGE/NCAGE: 7RB80
84 COTTONWOOD LN
NAPLES, FL 34112-7230 USA
www.4bt.us
info@4bt.us
903.326.9965‬

Additional Information;

While construction cost factors are widely used for estimating project costs, there are several challenges and potential problems associated with their use. Here are some common issues:

1. Regional Variations: Construction cost factors rely on regional averages. Local variations in labor costs, material prices, equipment availability, and regulatory requirements can greatly affect the estimate. If your project is in an area with significantly different market conditions, estimates may be poor.
2. Project Size and Scale: Cost factors may not scale linearly with the size or scale of a project. Large or complex projects may have different economies of scale, and cost factors may not accurately reflect these variations.
3. Limited Detail: Cost factors are often broad and generalized, providing average values for various  construction aspects or categories. This lack of detail can be a limitation for most projects that generally require a more detailed breakdown of costs.
4. Inflation and Economic Changes: Economic factors, such as inflation rates, can impact construction costs over time. Cost factors may not account for these changes, leading to significant discrepancies between estimated and actual costs.
5. Technology and Innovation: Advancements in construction technology and methodologies may not be reflected in traditional cost factors. Innovative approaches or new materials might not be accurately represented, leading to potential underestimation or overestimation of costs.
6. Lack of Project-Specific Information: Cost factors are based on average conditions, and they may not take into account the specific conditions of a project site. Site-specific challenges, such as environmental conditions or logistical constraints, may not be adequately considered.
7. Over-Reliance on Averages: Averaging costs across various projects do not capture outliers.  Relying solely on averages without considering the range of potential costs can lead to significant errors.

To mitigate these issues, it’s advisable limit the use of construction cost factors and rely upon detailed local data, expert judgment, and a thorough understanding of specific project requirements.