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## Conceptual Cost Estimating

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**Design**Stage 1 Preconstruction Stage 2: Procurement Conceptual Planning Stage3: Construction Stage 4: Project Close-out Conceptual Cost Estimating Topic 3 Chapter 4 Stage 1:Preconstruction - Conceptual Planning– Conceptual Cost Estimating**Lecture Outline**• We are still in the conceptual phase • The owner selected the site, the scope, decided on type of contracts, and hired a Consultant, and or a CM. • To take a GO/ NO GO decision, the owner needs a rough estimate of the cost of the project • So far, no design documents are available, not even the floor area of the structure. • Available information is of the type: nice motel of 50 rooms, two story house of such quality, parking garage that can park 400 cars. • A conceptual estimate will provide that rough estimate of cost Stage 1:Preconstruction - Conceptual Planning– Conceptual Cost Estimating**Estimating Fundamentals**• Why and when to estimate • conceptual phase: conceptual estimating • schematic and design development phases: square foot and assemblies estimating • procurement phase: detailed estimating. Stage 1:Preconstruction - Conceptual Planning– Conceptual Cost Estimating**Estimating Fundamentals**Estimate considerations • project size: larger projects are more expensive. Figure 4-2 and learning curves. Stage 1:Preconstruction - Conceptual Planning– Conceptual Cost Estimating**To adjust for size, use table in Figure 5-3 page L7-1, or**page 108 of the book • compute the size factor = proposed area/typical area • From the graph, get the cost multiplier at the size factor • multiply the cost by the cost multiplier. • project quality: figure 4-4. • location: taken into consideration by location indices.**time: cost need to be projected to payment time fig 4.5 page**L-68 Present cost at city (X) = former cost at (X) x present historical index at (X) former index at (X) cost at any city at a given time/historical cost index at that city at that time = constant For example, a building that cost $1,000,000 in Seattle in 1965 will cost in 2003 in Seattle= 1,000,000 (100/16.6) = $ 6,024,096 Historical Cost Index (page L-68) Pay attention to location factors if needed. • other factors: economic situation, relationship with owner owner Stage 1:Preconstruction - Conceptual Planning– Conceptual Cost Estimating**Conceptual Estimate (ROM)**• Also called rough order of magnitude (ROM). • Commonly used to determine approximate costs of projects or subsystems within a project, most commonly in building construction. • Can be quite general or very detailed, according to the level of details shown in the drawings, if any. • Similar to any pre-construction estimate, prepared by the owner, designer, and/or CM. • Can be done in minutes and provide accuracy in the ±20% range. • Can be done in many ways. A base cost is obtained, from guides?, and then modified for location, size, and time if necessary**Cost Estimating Guide Books**• Cost Estimating guides differ in the level of details and cost. • different guides are available for different specialties and different parts of the country. • We will use material from R. S. Means Inc. • The estimate covers the cost of construction, plus overhead and profit, but not the price of land or cost of demolition. Stage 1:Preconstruction - Conceptual Planning– Conceptual Cost Estimating**Conceptual cost estimating using Means guides**1) Parameter Estimates It relates the total cost to few physical measures (parameters) that reflect the size or scope of the project. Examples • Estimate of the cost of a school by multiplying the area by the unit price based on area. • A parking garage estimate based on the number of cars Stage 1:Preconstruction - Conceptual Planning– Conceptual Cost Estimating**Examples**1) Using Means Assembles Cost Data 2003, Estimate the cost of constructing a 50 units high quality motel in Pittsburg, Tampa FL, or New York NY in January 2003? Answer a) basic cost: from table K1010 000, figure 5-1 (L-69), line 590-9000: cost per unit ( high quality-- use column 3/4) = $51,500 total base cost = 50 units X $51,500 = $2,575,000 Stage 1:Preconstruction - Conceptual Planning– Conceptual Cost Estimating**Examples**b) adjustment for size: from table K1010-031 figure 5-2(L-70): - typical high quality motel unit gross area = 620 SF gross area of the motel = 50 X 620 = 31,000 SF, consider that your “ proposed area”. Stage 1:Preconstruction - Conceptual Planning– Conceptual Cost Estimating**- from the table in figure 5-3 (L-71)**typical total size of the motel is 40,000 SF size factor = proposed building area/ typical building area = 31,000 / 40,000 = 0.775**from the graph in figure 5-3, cost multiplier at size factor**= 0.775 is 1.04. cost adjusted for size = $2,575,000 X 1.04 = $2,678,000 the cost increased because the unit cost goes up as the project size goes down. The base cost was for a motel of a larger size. c) adjustment for location: the base cost assumes the national average. City index is obtained from the table in figure 5-4 page L- 72 in general: adjusted cost for city = estimated cost X city index /100 Stage 1:Preconstruction - Conceptual Planning– Conceptual Cost Estimating**city index for New York is 132.6, for Tampa is 80.3, for**Pittsburg is 100.2 New York City cost = $3,551,028 cost at Tampa = $2,150,434 cost at Pittsburg = $2,678,535 2) What is the cost to build that motel in NY today? Answer Assuming 2.6% per year, what is the cost today? 3) What was the cost to build that motel in NY in 1955? Use “Historical Cost Indexes” Figure (4-5) page L-68 where, past project cost/index past year = project cost in 2003 /index 2003 project cost in 1955 = $3,551,028 X 12.7/100 = $ 450,980 Stage 1:Preconstruction - Conceptual Planning– Conceptual Cost Estimating