Budget Estimates & Bid Estimates: Is there a difference? TCCE Annual Meeting September 3, 2014

Budget versus Bid Estimates 6/12/20122 Budget EstimatesBid Estimates Estimated parametersKnown scope Estimated quantitiesDefined quantities Contributing factors assumedKnown contributing factors Risk: Level of plan completeness/unknowns Construction unknowns Risk: Construction unknowns Parametric and bid-based estimatingBid-based and Cost-based estimating

Budget Estimates 6/12/20123  Focus on Project/Corridor Objectives & Scope  Determine Standard Features  Identify Unique Factors  Include Risk:  Design  Construction

Budget Estimating Tools & Strategies 6/12/20124  Update estimate:  Scope change  Milestones  Include human element – put thought to estimate and project uniqueness  Include description of work in estimate  Give a range; close up range with more information; estimators must ask more questions  Be absurd until they provide more information  Be clear on scope and goals of project  Work plan requiring approval for scope changes  Cost estimate documentation – standardized template  Use risk management

Bid Estimates 6/12/20125  Focus on Project Construction  Major Items  Unique Characteristics and Challenges  Include Contractor Risk in Bid Items  Owner Risk Handled with Change Orders

Bid Estimating Tools & Strategies 6/12/20126  LaDOTD Monte Carlo Item Cost 2.0  Estimate Review Committee (pre and post bid)  Multi-disciplinary  Contractor questions  Can be specific to bid item groups

Performance Measurement 6/12/20127  Which estimates should be compared?  Same scope  Tracker measures – MO published quarterly  What are appropriate criteria to measure?  Florida – 4 measures:  Adopted-Work Plan Estimate vs Low Bid (w/in 15%)  Official Estimate vs Low Bid (w/in 10%)  Initial Estimate vs Phase II – midpoint design (w/in 15%)  Initial Estimate vs Adopted (w/in 25%)  Are there reasonable targets?