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Project Estimates Volatility of Material Costs. California Transportation Commission Tab 7, Reference # 4.5 Action Item Presentation by: California Department of Transportation November 3, 2005. Recent Trends. Increasing Bids Increasing Costs and Volatility in the Materials Market

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project estimates volatility of material costs

Project Estimates Volatility of Material Costs

California Transportation Commission

Tab 7, Reference # 4.5

Action Item

Presentation by:

California Department of Transportation

November 3, 2005

recent trends
Recent Trends
  • Increasing Bids
    • Increasing Costs and Volatility in the Materials Market
  • Decreasing Number of Bidders
    • Less Competition
    • Higher Prices
objectives
Objectives
  • Improve Department’s Estimating Practices to Better Forecast Costs at time of Bid Opening
    • Get Better at Estimating Future Projects.
    • Vote the Correct Funds.
    • Outcome: Engineer’s Estimate at time of Vote Within 10% of Low Bid.
  • Improve Contractor Confidence that Reasonable Low Bids will be Awarded.
    • Ensure Contract Award (where reasonable).
    • Outcome: More Bidders, Greater Competition, and Lower Prices.
proposed material cost adjustment
Proposed Material Cost Adjustment

Material Cost Adjustment

Engineer’s Estimate

slide10

Update

Engineer’s

Estimate At Vote

Monitor

Monthly

materials cost update enhanced process
Materials Cost Update Enhanced Process
  • Office Engineer will Establish an Adjustment Forecast Reflecting Expected Material Cost at Bid Opening.
  • Apply Adjustment, if Needed, at Vote for Material Cost Forecast.
  • Monitor Estimate Monthly During Advertisement Period.
action to restore contractor confidence
Action to Restore Contractor Confidence

Maximizing the use of delegated approval of supplemental funds requests (July action).

• Outcome: Timely Award of Contracts.

• Outcome: Faster Contract Awards

• Outcome: Reasonable Low Bid will be Awarded.