CEE 404 Winter 2011

Cost Estimating
WSDOT Unit Bid Analysis

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CEE 404 Winter 2011

Outline
• Construction organizations (review) • Construction contracts (review) • Contract documents

• Unit prices

– Standard specifications – Standard specifications for DOTs – Unit bid items – WSDOT Unit bid items – Short in-class exercise

• Quality control/acceptance • Price adjustments
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CEE 404 Winter 2011

Construction Organizations
Construction Using Owner Forces
Owner

Owner-Managed Construction
Owner

Construction Staff

Construction Staff

Project Director

Project Director

Construction Forces 3

Hired Forces

Contractors

CEE 404 Winter 2011 Construction Organizations General Contractor Owner Design/Build Owner Design Firm Prime Contractor Design/Build Firm Subcontractors Design Force Contractor Work Force Construction Force Subcontractors 4 .

CEE 404 Winter 2011 Construction Organizations Construction Management Owner Construction Manager Design Firm Construction Firms 5 .

CEE 404 Winter 2011 Construction Contracts • Method of award – Formally advertised contracts – Negotiated contracts • Method of pricing – Fixed-price • Lump sum contract • Unit price contract – Cost-plus • • • • 6 Cost Cost Cost Cost plus plus plus plus percentage of cost fixed fee fixed fee with a guaranteed maximum cost incentive fee .

CEE 404 Winter 2011 Contract Documents • General conditions – Defines responsibilities and rights • Supplementary conditions – Types: • Modification of general conditions • Additional information beyond general conditions • Technical Specifications • Drawings 7 .

DBE.CEE 404 Winter 2011 Contract Documents : What You Might See • Standard Specifications • Contract Provisions – – – – – – General conditions – Technical specifications • Plans Bid proposal forms and regulations Required contract provisions (bond.) Amendments to the standard specifications Special provisions Wage rate documentation – Project drawings – Standard plans 8 . etc.

CEE 404 Winter 2011 Standard Specifications • Construction Specifications Institute – MasterFormat 2004 Edition • 50 Divisions of construction information • Specifications-writing standard for most construction 9 .

13 Plant-Mix Asphalt Paving 32 12 16 13 = Level 1 = = Level 2 = = Level 3 = = Level 4 = Division 32: Exterior Improvements Flexible Paving Asphalt Paving Plant-Mix Asphalt Paving 10 .CEE 404 Winter 2011 MasterFormat 2004 Example 32 12 16.

Water Mains. and Conduits – Miscellaneous Construction – Materials http://www.gov/Design/ProjectDev 11 .CEE 404 Winter 2011 Standard Specifications for DOTs • Typically do not use MasterFormat 2004 • Generally use 9 Divisions: – – – – – – – General Requirements Earthwork Production from Quarry and Pit Sites and Stockpiling Bases Surface Treatments and Pavements Structures Drainage Structures.wa.wsdot. Storm Sewers.

CEE 404 Winter 2011 Unit Prices • Standard Units – Defined in Standard Specifications 12 From 2010 WSDOT Standard Specifications .

CEE 404 Winter 2011 Cost Estimating Guidance – Key Principles • • • • • • Integrity Contents Year of expenditure dollars Do not rely on historic records alone Risk and uncertainty Validation 13 .

CEE 404 Winter 2011 Cost Estimating Guidance – Key Principles • Integrity – Open and transparent – Explain uncertainty in laymen’s terms – Avoid false precision • • • • • Contents Year of expenditure dollars Do not rely on historic records alone Risk and uncertainty Validation 14 .

CEE 404 Winter 2011 Cost Estimating Guidance – Key Principles • Integrity • Contents – Account for what the public perceives the cost estimate to be – Not just construction costs – Do not include the cost of acquiring revenue • • • • Year of expenditure dollars Do not rely on historic records alone Risk and uncertainty Validation 15 .

CEE 404 Winter 2011 Cost Estimating Guidance – Key Principles • Integrity • Contents • Year of expenditure dollars – This is what people expect – state it explicitly – Assign an inflation rate to midpoint in project • Do not rely on historic records alone • Risk and uncertainty • Validation 16 .

CEE 404 Winter 2011 Cost Estimating Guidance – Key Principles • • • • Integrity Contents Year of expenditure dollars Do not rely on historic records alone – Best information available – Consider construction cost trends • Risk and uncertainty • Validation 17 .

CEE 404 Winter 2011 Cost Estimating Guidance – Key Principles • • • • • Integrity Contents Year of expenditure dollars Do not rely on historic records alone Risk and uncertainty – There are uncertainties related to cost – Contingency amounts reflect expected risk – Do not be overly optimistic (low early contingency amounts) • Validation 18 .

CEE 404 Winter 2011 Cost Estimating Guidance – Key Principles • • • • • • Integrity Contents Year of expenditure dollars Do not rely on historic records alone Risk and uncertainty Validation – Unbiased team should validate estimates – Periodic reviews of estimates 19 .

CEE 404 Winter 2011 Cost Estimating Guidance – Estimate Elements • • • • • • • • Preliminary engineering Right-of-way External 3rd party Miscellaneous design Transportation demand/system management Construction estimate Construction contingencies Construction administration – Estimated as a percentage • Public outreach • Management reserve 20 .

testing.wa. admin.gov/Publications/Manuals/M3034.htm • Table 3 and related text 21 . ad/bid/award process. environmental work.CEE 404 Winter 2011 Cost Estimating – Preliminary Engineering • Definition – The cost to prepare the construction documents • Guidance – Includes field investigation.wsdot. – Can be estimated as a percentage of construction costs • WSDOT average for all types of projects = 15% • Help – Cost Estimating Manual for WSDOT Projects (July 2009) • http://www. etc. preparing plans/specs.

stormwater.zillow. complete takes Urban Seattle: $20-50/ft2 • Help – Real estate experts – Zillow (http://www. Costs vary widely depending upon location Partial vs. wetland mitigation. etc.com) 22 .CEE 404 Winter 2011 Cost Estimating – Right-of-Way • Definition – Cost to research and acquire ROW for the project • Guidance – – – – Covers ROW for road.

gov/Publications/Manuals/M22-87.02 23 . roads cross by easement • Help – WSDOT Utilities Manual • http://www.CEE 404 Winter 2011 Cost Estimating – External 3rd Party • Definition – Costs associated with 3rd parties (e.g.htm • Who pays for utility relocation? Section 200. railroads) • Guidance – High potential for risk and change – Utility adjustments • Located in WSDOT ROW by franchise or permit = utility pays costs • Located in WSDOT ROW by easement or outside ROW = WSDOT pays – Railroads • Take a LONG time to negotiate • Railroads were generally there first.02(2) • Railroads: Section 300.wsdot.wa.. utilities.

ITS deployment.gov/wz/resources/publications/trans_mgmt_pla ns/trans_mgmt_plans.pdf • Laundry list of TDM/TSM items 24 .CEE 404 Winter 2011 Cost Estimating– TDM/TSM • Definition – Costs for TDM/TSM strategies along construction corridor and in neighboring communities • Guidance – Can include items like signal retiming. etc. • Help – ITS Big I optional reading – FHWA’s Developing and Implementing Transportation Management Plans for Work Zones (chapter 4) • http://ops.dot.fhwa. staffing at command centers.

wa.gov/Design/ProjectDev/EngineeringApplications/UnitBi dHistory.wsdot.htm • Section 800.htm – Mobilization: WSDOT Plans Preparation Manual (Dec 2009) • http://www.03(1) 25 . costs of labor/materials/equipment.wa.gov/Publications/Manuals/M22-31. mobilization – Estimates are usually: • Bid-based (we will use this one) • Cost-based • Help – Historical bid prices: WSDOT Unit Bid Analysis • http://www.CEE 404 Winter 2011 Cost Estimating– Construction Estimate • Definition – Cost of physically constructing the project in the time required • Guidance – Includes profit.wsdot.

wsdot.wa.03(2) – 4% max allowed 26 .htm • Section 800.gov/Publications/Manuals/M22-31.CEE 404 Winter 2011 Cost Estimating– Construction Contingencies • Definition – Cost to allow for the likelihood of additional construction work identified after design completion and project awarded • Guidance – – – – Typically calculated as a percentage Typical values are 5-10% but can be higher Type and nature of contract can influence contingency estimate May be higher for time-sensitive projects • Help – WSDOT Plans Preparation Manual (Dec 2009) • http://www.

inspection. duration. etc.CEE 404 Winter 2011 Cost Estimating – Construction Administration • Definition – Cost of construction engineering.gov/Publications/Manuals/M22-31.htm • Section 800.03(2) – 8-20% based on construction cost 27 .wa. size. admin oversight during construction • Guidance – Can be estimated as a percentage – Depends on type of job. • Help – WSDOT Plans Preparation Manual (Dec 2009) • http://www.wsdot.

CEE 404 Winter 2011 Cost Estimating – Public Outreach • Definition – Costs incurred by agency with respect to public outreach • Guidance – Includes motorist information. etc. • Help – FHWA’s Public Information and Outreach Strategies • http://ops.dot.htm • Go to the “Project-level” page (second bullet point link) 28 .fhwa. PR firm. advertising.gov/wz/publicinfostrategies. publications. press releases.

gov/publications/fulltext/cevp/ProjectRiskManagement.wsdot.wa.pdf 29 .CEE 404 Winter 2011 Cost Estimating – Risk Reserve • Definition – Money kept in reserve by the agency for high-risk projects to account for unforeseen circumstances • Guidance – WSDOT Risk Reserve • Base cost (assumes no risk – usually at the 40% confidence level) • Risk percentage (70% confidence level) for use with approval by Regional Program management – risk reserve • As risks are retired the risk reserve amount is adjusted – WSDOT Risk Management Plan worksheet (Excel) • Help – Project Risk Management Guidance for WSDOT Projects (Jul 2010) • http://www.

CEE 404 Winter 2011 Risk-Based Estimate • Base cost estimate – – – – Cost that can be reasonably expected if project goes as planned Unbiased and neutral Includes construction contingency Does not include risks • Risk-based estimate – Risk elements applied to base cost and modeled to provide a probable range for cost and schedule 30 .

CEE 404 Winter 2011 Risks change throughout project development Evolution of project knowledge through project development 31 From Project Risk Management Guidance for WSDOT Projects .

CEE 404 Winter 2011 How WSDOT Does Risk-Based Estimates 32 .

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CEE 404 Winter 2011 Some Extremely General Rules-of-Thumb Do NOT use these in place of actual numbers • Density – Gravel borrow.000/acre 34 .05 tons/yd3 • Mobilization – 5 to 15% of construction cost • Traffic control – 5 to 25% of construction cost – Urban freeway work costs more (up to 30%) • Design and construction engineering – Usually not included in bid – Can be 5 to 15% of construction cost • Clearing. soils: 1. demolition – $5. aggregate. grubbing.85 tons/yd3 – HMA. PCC: 2.

000/acre or $31/yd2 – 2% of construction cost • Environmental permits and mitigation • Temporary water pollution and erosion control • Traffic signals • Survey – Variable…but basic ones can cost in the neighborhood of $200.CEE 404 Winter 2011 Some Extremely General Rules-of-Thumb Do NOT use these in place of actual numbers • Right-of-way • Detention and water treatment – Cost is per square foot ($20 to $50/ft2 in urban areas) – Administration cost for each take – Relocation costs – $6/ft2 of roadway surface – $10/ft2 of roadway surface in pond area is purchased – $150.5% of construction costs – Design survey: 1.000 – Construction survey: 1.5% of construction costs 35 .

CSI website.wsdot.cfm. Cost Estimating Guidance. http://www.csinet.org • • Washington State Department of Transportation (WSDOT). Unit Bid History website.W.gov/biz/contaa/uba/bid. WA.fhwa.CEE 404 Winter 2011 Primary References • Nunnally. Olympia. (2007).gov/programadmin/mega/cefinal. Project Risk Management Guidance for WSDOT Projects.cfm WSDOT.pdf • • FHWA.wa. NJ. http://www. http://www. Prentice Hall. (2001). http://www.wa. WSDOT. 5th edition. S. Construction Methods and Management. (2010). Construction Specifications Institute (CSI). Upper Saddle River.wsdot.gov/publications/fulltext/cevp/ProjectRiskManagement.dot. (2010). (2010). 50 .