NEOM-NCC-PRC-002 - 02.00 - Cost Estimation Performance Measurement Procedure

COST ESTIMATION PROCEDURE
COST ESTIMATION PERFORMANCE

MEASURMENT
NEOM-NCC-PRC-002 Rev 02.00, October 2022
©NEOM [2022]. All rights reserved.

Document History
Revision code Description of changes Purpose of issue Date
Rev 01.00 First Issue Issued for Implementation 13.05.2020
Rev 02.00 Revised Version Issued for Implementation 26.10.2022
Document Approval
Prepared by Reviewed by Approved by

Name Ammar Alhaddad Haashiem Tayob Ian Hawkes
Job Title Cost & Planning Analyst Senior Manager (A), Cost Cost Estimation Director
Estimation, ETSD, NEOM ETSD, NEOM
ETSD, NEOM
DOCUMENT CODE : NEOM-NCC-PRC-002 REVISION CODE: 02.00 P AGE 2 OF 38

Contents
1 PURPOSE ..................................................................................................................4
2 SCOPE .......................................................................................................................4
3 LIST OF DEFINITIONS AND ABBREVIATIONS .......................................................4
3.1 Definitions .................................................................................................................. 4
3.2 Abbreviations ............................................................................................................. 6
4 RELATED NEOM DOCUMENTS ...............................................................................6
5 ROLES AND RESPONSIBILITIES ............................................................................7
6 PROCEDURE .............................................................................................................8
6.1 Cost estimating as a functional area.......................................................................... 8
6.2 The need for KPIs ...................................................................................................... 8
6.3 KPI groups ................................................................................................................. 8
6.4 Cost estimating KPIs ................................................................................................. 8
6.5 Cost Estimator performance measurement ............................................................... 9
6.6 Cost Estimator performance ratings ........................................................................ 10
6.7 Reporting KPIs......................................................................................................... 11
7 FORMS AND TEMPLATES .....................................................................................11
8 APPENDICES ..........................................................................................................11
APPENDIX A - COST ESTIMATING KEY PERFORMANCE INDICATORS ........................12
APPENDIX B - EXAMPLE KPI CALCULATIONS ................................................................20
APPENDIX C - COST ESTIMATE REPORT CHECKLIST ...................................................24
APPENDIX D- COST ESTIMATE REPORT SCORECARD (MS EXCEL SPREADSHEET) 29
APPENDIX E- COST ESTIMATOR PERFORMANCE REPORT FORM ..............................31
APPENDIX F - COST ESTIMATOR PERFORMANCE SCORECARD (MS EXCEL
SPREADSHEET)......................................................................................................35
APPENDIX G - COST ESTIMATOR KPI RESULTS RECORD (MS EXCEL
SPREADSHEET)......................................................................................................37
List of Tables
Table 1: Table of Definitions ................................................................................................... 4

Table 2: Table of Abbreviations .............................................................................................. 6
Table 3: Related NEOM Documents ....................................................................................... 6
Table 4: Roles and Responsibilities ........................................................................................ 7
Table 5: Cost Estimating KPIs ................................................................................................ 8
Table 6: Cost Estimator Performance Ratings Definitions .................................................... 10

Purpose
This procedure establishes the NEOM Cost Estimation Division’s framework for measuring the performance
of Cost Estimators and the quality of their deliverables (e.g., Cost Estimates and Cost Estimate Reports).
The framework comprises key performance indicators (“KPI’s”) that matter the most to NEOM in terms of
cost estimation. They provide the key targets for Cost Estimators to achieve in terms of “Time,” “Quality,
and “Customer Satisfaction.”
From NEOM Cost Estimation Division’s perspective, the purpose of Time KPIs is to monitor if Cost
Estimators are submitting their Cost Estimate Reports within the agreed time parameters. Whereas the aim
of the Quality KPIs is to improve visibility of quality relating to Cost Estimates and Cost Estimate Reports
through the measurement of “Quality Issues”. The objective of the Customer Satisfaction KPIs is to assess
NEOM’s satisfaction with its Cost Estimator’s services.
KPIs give NEOM Cost Estimation Division a realistic look at the quality of Cost Estimates, Cost Estimate
Reports, and the service provided by Cost Estimators engaged for cost estimation services. They help
identify issues and inform the corrective measures required to resolve them, so that NEOM can rely on the
Cost Estimates and Cost Estimate Reports received.
Scope
These Procedures relate to NEOM’s cost estimation function (i.e., the NEOM Cost Estimation Division).
They apply to all cost estimating services provided by both NEOM’s cost estimators (internal) and NEOM’s
external cost estimating service providers (external).
List of Definitions and Abbreviations

3.1 Definitions
Several terms used for performance measurement are used interchangeably, often within the same
organization, NEOM has adopted the following definitions of these terms:
Table 1: Table of Definitions
Term Definition
Cost Estimate(s) Collective term for an Order of Cost Estimate and/or an Elemental Cost
Plan.
Cost Estimator/ Cost The organisation contracted by NEOM Cost Estimation Division (or a
Consultant NEOM Proponent) to provide cost estimating services to NEOM.
Indicator(s) A qualitative or quantitative factor or variable that provides a simple and

reliable means to measure achievement.
Key Performance Indicator A selected indicator considered key for monitoring the performance of a
(“KPI”) strategic objective or a key result area important to the success of an
activity and growth of an organisation overall. KPIs make objectives
quantifiable, providing visibility into the performance of individuals, teams,
departments, and organisations and enabling decision-makers to act in
achieving desired outcomes. KPIs will be communicated through
dashboards, scorecards, and other forms of performance reports.
Major Quality Issue The Quality Issue results in NEOM rejecting the Cost Estimate Report.

Term Definition
Minor Quality Issue The Quality Issue results in NEOM returning the Cost Estimate Report to
the Cost Estimator or NEOM accepts the Cost Estimate Report although it
is below the agreed standard (compromises).
Measure A number or a quantity that records a directly observable value. All

measures are composed of a number and unit of measure. The number
provides the magnitude (how much) for the measure, while the unit gives
the number a meaning (what). Examples of units are percentage, number,
Metric, Performance The quantitative basis by which objectives are established and
measure, or Performance performance is assessed. It helps quantify the achievement of a result, the
indicator quantifiable component of the cost estimator’s performance.
Note:
In the context of measuring and managing performance these terms can be used
interchangeably.
NEOM Cost Estimation Reviews and endorses cost estimates submitted by Cost Estimators/Cost
Division Consultants, NEOM Sectors, NEOM Departments and NEOM Proponents.
Currently a division of “Engineering & Technical Services Department”.
NEOM Cost Estimation The representative of NEOM Cost Estimation Division who is responsible
Division Representative or for liaising with the Cost Estimator/Cost Consultant about service
NEOM Representative deliverables (i.e., the Cost Estimate and Cost Estimate Report).
NEOM Head of Cost The head of NEOM Cost Estimation Division who has overall responsibility
Estimation for delivering accurate and timely Cost Estimates to NEOM
NEOM Plan of Work The objectives and activities during project implementation through
business case, master planning, design, construction, and operation and
maintenance stages.
NEOM Proponent The NEOM Region, Sector or Department.
Project The development and delivery of a NEOM asset or a group of NEOM

assets.
(Project) cash flow The cash flow forecast of a particular project

forecast
Project Brief, Project The project brief is the key document upon which design of a project will
Requirements, Statement be based.
of Need, Scope of Work
Note:
In the context of cost estimating, the terms can be used interchangeably.
Quality The degree to which a requirement meets, fails to meet, or exceeds

NEOM’s requirements.
Quality Issue An issue that affects the Cost Estimate or Cost Estimate Report so that
work needs to be redone, modified, or compromised to a lower standard
than originally agreed.
Risk allowance The sum included within a cost estimate for an unknown condition, or yet-
to-be-specified product.

Term Definition
Risk allowance estimate The amount added to the base cost estimate for items that cannot be
precisely predicted.
Service Improvement Plan A documented strategy for improving service delivery. The Plan identifies
the areas in which improvement is required and what actions the Cost
Estimator is to take to achieve the improvements. The Plan is produced by
the Cost Estimator and agreed by NEOM. Improvement actions by the
Cost Estimator are monitored by NEOM.
Significant cost item(s) Major cost items, such as concrete, structural steelwork, reinforcement,
cladding, excavation, groundworks, piled foundations, etc.
3.2 Abbreviations
Definitions and abbreviations in this document follow NEOM-NEN-SCH-006. Additional definitions and
abbreviations covered by this procedure are found below:
Table 2: Table of Abbreviations
Abbreviation Description
CE Cost Estimator
DIFOT Delivery in full, on time
KPI Key Performance Indicator.
Related NEOM Documents

Other NEOM documents that relate to this Performance Measurement and Reporting procedure are listed in
Table 3 below:
Table 3: Related NEOM Documents
Document Code Document Name
NEOM-NCC-MAN-001 Cost Estimation Manual: Cost Estimation Policies and Guidelines
NEOM-NCC-PRC-001 Cost Procedures: Cost Estimation Procedures
NEOM-NCC-PRC-003 Company Bid Procedure
NEOM-NEN-PRC-029 NEOM Plan of Work
NEOM-NEN-MAN-001 Quality Management System Manual

Roles and Responsibilities
The roles and responsibilities under this procedure are set out in Table 4:
Table 4: Roles and Responsibilities
Role Responsibilities
Cost Estimator Cost Estimate Report review:

• Receives notification of rework or rejected Cost Estimate Report
from NEOM Cost Estimation Division.
• Completes rework of Cost Estimate Report requested by NEOM
Cost Estimation Division.
• Resubmits corrected or new Cost Estimate Report to NEOM Cost
Estimation Department.
Cost Estimator service:
• Receives Cost Estimator Performance Report Form” from NEOM
• Completes Part 3 of the “Cost Estimator Performance Report
Form” and returns to NEOM Cost Estimation Division within three
(3) working days.
NEOM Cost Estimation Cost Estimate Report review (for all Cost Estimate Reports):
Division
• Receives Cost Estimate Report, including Cost Estimate, from
Cost Estimator.
• Reviews Cost Estimate Report.
• Completes “Cost Estimate Report Checklist” by:
- Confirming if requirements have been met.
- Scoring each requirement.
- Identifying and recording the number of “Quality Issues”.
• Completes “Cost Estimate Report Scorecard”, which generates
“Ratings”, and the total number of Quality Issues.
• Notifies Cost Estimator of any rework required, together with
resubmission date.
• Notifies Cost Estimator if Cost Estimated Report rejected,
together with resubmission date.
Cost Estimator service (Quarterly):
• Completes Parts 1 and 2 of “Cost Estimate Performance Report
Form”.
• Issues “Cost Estimate Performance Report Form” to Cost
Estimator for feedback.
• Completes “Cost Estimator Performance Scorecard”, which
generates performance “Ratings” for the Cost Estimator.
• Records KPI measurements on “Cost Estimator KPI Results
Record”.
• Reappraises the Cost Estimator’s “Rating” if instructed to do so
by the NEOM Head of Cost Estimation following review of the
Cost Estimator’s feedback.

Role Responsibilities
Record management:
• Retains copies of all completed “Cost Estimate Report
Checklists”, “Cost Estimate Report Scorecards”, “Cost Estimator
Performance Report Forms”, “Cost Estimator Performance
Scorecards”, and all other KPI records. (Records Management).
Reporting KPIs:
• Reports KPIs to the NEOM Head of Cost Estimation at the agreed
frequency (i.e., monthly, quarterly, six monthly, yearly).
NEOM Head of Cost Cost Estimator service:

Estimation
• Receives completed Cost Estimator Performance Report Form”
from Cost Estimator.
• Completes Part 4 of the “Cost Estimator Performance Report
Form”, including specifying any actions to be taken by the NEOM
• Communicates actions to be taken to the appropriate person(s) in
NEOM Cost Estimation Division.
Procedure
6.1 Cost estimating as a functional area
These Procedures apply to all cost estimating services provided by Cost Estimators.
6.2 The need for KPIs
NEOM undertakes verification activities, which include checking that cost Estimating service providers have
provided the services specified in their contract with NEOM and meet quality requirements.
6.3 KPI groups
The KPI framework for cost estimating services consists of three main groups:
• Time.
• Quality.
• Client satisfaction.
Within these KPI groups, a range of indicators has been developed to analyze either cost estimator or
NEOM performance, or both.
6.4 Cost estimating KPIs
NEOM has established Cost Estimating KPIs to measure the performance of both NEOM’s cost estimators
(internal) and external cost estimating service providers (external). The Cost Estimating KPIs are reflective
of the Cost Estimating Function and are presented in ‘Table 5: Cost Estimating KPIs’ below. Table 5 shows
the ‘Indicator’ (i.e., the KPI), the ‘KPI Group’, and the ‘KPI Definition’.
Table 5: Cost Estimating KPIs

Indicator KPI Group KPI Definition
1.01 Delivery in full, on time (DIFOT) Time Measures the percentage of fully compliant
rate Cost Estimate Reports delivered on time by the
Cost Estimator.
2.01 Quality of Cost Estimate Quality Measures the quality of Cost Estimate Reports
Reports against predetermined criteria using the 1 to 10
scale set out in Appendix C: Cost Estimate
Report Checklist.
2.02 Quality Issues Quality Measures the number of “Quality Issues”

identified within Cost Estimate Reports.
2.03 Rework Quality Measures the number of Cost Estimate

Reports returned to the Cost Estimator for
rework by NEOM.
2.04 Rejection Quality Measures the number of Cost Estimate

Reports rejected by NEOM.
2.05 Compromise Quality Measures the number of Cost Estimate

Reports below the agreed standard that are
accepted by NEOM without rework.
3.01 Cost Estimator service Client Measures the overall NEOM satisfaction with
Satisfaction the cost Estimating services provided against
predetermined criteria using the following
performance ratings: Unacceptable; Marginal;
Acceptable; Very Good; and Exceptional.
See Appendix D: Cost Estimator Performance
Report Form.
The purpose of each of the above KPIs are explained in Appendix A (Cost Estimation KPIs), together with
the method of measurement, the data collection method, the calculation formula, the frequency of
measurement, the source of data, the target rating, the required trend, and the reporting period.
Example calculations of KPIs are contained in Appendix B (Example KPI Calculations).
6.5 Cost Estimator performance measurement
Cost Estimator’s performance shall be monitored by NEOM. Each Cost Estimators’ performance is to be
measured and analyzed quarterly, or more frequently in cases of mediocre or deficient performance.
Metrics are to be gathered by way of performance reports (using the Cost Estimator Performance Report at
Appendix D), which shall be completed by the NEOM Representative responsible for procuring the Cost
Estimate Report on completion of service delivery.
The NEOM Representative inserts the metrics recorded on the Cost Estimator Performance Report on to
the Cost Estimator Performance Scorecard, which will automatically calculate the Cost Estimator’s overall
rating, as well as ratings for each performance criteria.
Cost Estimators are to be given an opportunity to comment on the performance ratings given by NEOM.
This is achieved by the NEOM Representative sending a copy of the Cost Estimator Performance Report to
the Cost Estimator. The Cost Estimator is invited to comment on the ratings given by the NEOM
Representative.
The Cost Estimator returns the completed Cost Estimator Performance Report to the NEOM Head of Cost
Estimation, who assesses the Report and the ratings and informs the NEOM Cost Estimation Division of
any actions to be taken by them in connection with the Cost Estimator’s performance.

If there is poor or downward trend in Cost Estimator performance, it is important to act quickly. Quick action
can reduce the risk of future performance issues and gives the NEOM Cost Estimation Division and the
Cost Estimator the ability to take steps to prevent poor outcomes.
Cost Estimators whose performance falls below requirements shall be required to provide the NEOM Cost
Estimation Division with a Cost Estimation Service Improvement Plan, which NEOM will monitor.
The NEOM Head of Cost Estimation may instruct the removal of Cost Estimators from the NEOM Approved
Supplier List where performance consistently falls below expectations and where Cost Estimation Service
Improvement Plans are not achieved.
6.6 Cost Estimator performance ratings
Definitions of the ratings used to rate the Cost Estimator’s performance are given in Table 6 (Cost Estimator
Performance Ratings Definitions) below.
Where a performance criterion is not applicable, insert “Not Applicable” for performance criteria that are not
applicable.
Table 6: Cost Estimator Performance Ratings Definitions
Rating Definition
Quality of Service Cost Timeliness Business
Relations
Unacceptable: Non-conformances There were significant Delays significantly Responses to
compromised issues in connection compromised the enquiries/technical
achievement of with fees and/or time achievement of service and
contract records, which required programme/delivery administrative issues
requirements despite major help from NEOM schedule, despite was/is neither
help from NEOM resources to resolve help by NEOM effective nor
resources resources responsive
Marginal: Non-conformances There were Delays required Responses to

required major considerable issues in help by NEOM enquiries/technical
involvement of connection with fees resources to ensure service and
NEOM resources to and/or time records, achievement of administrative issues
enable achievement which required some programme/delivery was/is occasionally
of contract help from NEOM schedule effective and
requirements resources to resolve responsive
Acceptable: Non-conformances There were minor Delays impacted on Responses to

required minor issues in connection achievement of enquiries/technical
involvement of with fees and/or time programme/delivery service and
NEOM resources to records, which required schedule administrative issues
enable achievement some help from NEOM was/is often effective
of contract resources to resolve and responsive
requirements
Very Good: Non-conformances There were minimal Delays did not Responses to
did not impact the issues in connection impact on enquiries/technical
achievement of with fees and/or time achievement of the service and
contract records programme/delivery administrative issues
requirements schedule was/is mostly
effective and
responsive
Exceptional: There were no quality There were no issues There were/are no Responses to
problems in connection with fees delays enquiries/technical
and/or time records service and
administrative issues
was/is always
effective and
responsive

6.7 Reporting KPIs
The NEOM Cost Estimation Division records the KPI metrics on the “Cost Estimator KPI Results Record.
Divisional Heads are responsible for developing the Quality Objectives of the department and transforming
them into team members.
The NEOM Cost Estimation Division presents or reports the KPI metrics at agreed frequencies to the
NEOM Head of Cost Estimation.
The NEOM Head of Cost Estimation shares the final KPIs results with the Cost Estimation team members,
the Consultants, and ETSD Management.
Email, meetings, and memos should be maintained as communication means of the KPIs objectives &
Performance Results with the interested parties and teams.
Forms and Templates
Form No. Title

NEOM-NCC-PRC-002_FRM01 Cost Estimate Report Checklist
NEOM-NCC-PRC-002_FRM02 Cost Estimate Report Scorecard (MS Excel spreadsheet)
NEOM-NCC-PRC-002_FRM03 Cost Estimator Performance Report Form
NEOM-NCC-PRC-002_FRM04 Cost Estimator Performance Scorecard (MS Excel spreadsheet)
NEOM-NCC-PRC-002_FRM05 Cost Estimator KPI Results Record (MS Excel spreadsheet)
Appendices
Appendix A: Cost Estimating Key Performance Indicators
Appendix B: Example KPI Calculations
Appendix C: Cost Estimate Report Checklist
Appendix D: Cost Estimate Report Scorecard
Appendix E: Cost Estimator Performance Report Form
Appendix F: Cost Estimator Performance Scorecard

Appendix A - Cost Estimating Key Performance Indicators

Ref: CE KPI 1.01
Delivery in full, on time (DIFOT) rate
Purpose
Key performance question this indicator helps to answer:
To what extent are we are getting what we want by the time we want it?
Was the Cost Estimate delivered on time? Were there reasons for slippage?
Definition
Measures the percentage of fully compliant Cost Estimate Reports delivered in full and on time by the Cost Estimator.
How is it measured?
DIFOT is simply calculated as the number of Cost Estimates delivered in full and on time verses the total number of Cost
Estimate Reports commissioned.
Data collection method
Data for the DIFOT KPI are collected through comparing the number of Cost Estimate Reports received from the Cost
Estimator that are delivered in full and on time with the total number of Cost Estimate Reports received from the Cost
Estimator in a defined period.
Calculation formula
(A/B) x 100
Where:
A = Number of Cost Estimate Reports delivered in full, on time by Cost Estimator
B = Total number of Cost Estimate Reports delivered by Cost Estimator
Frequency
Continuously - Every time Cost Estimate Report delivered.
Source of the data
Required by date stated in contract and actual submission date of Cost Estimate Report by Cost Estimator.
Target
100% - Action required if DIFOT slips below 95%.
Required trend
Increasing or Static if target achieved.
Reporting period
Quarterly.

Ref: CE KPI 2.01
Quality of Cost Estimate Reports
Purpose
Do Cost Estimate Reports meet NEOM’s requirements (i.e., estimating formats, grouping costs under the right work
breakdown structure)?
Definition
Measures the quality of Cost Estimate Reports against predetermined criteria.
How is it measured?
Checking Cost Estimate Reports against predetermined criteria.
Calculation formula
1 to 10 scale set out in the Cost Estimate Report Checklist.
Frequency
Source of the data
Cost Estimate Report.
Target
“Very Good” - Action required if “Unacceptable” or “Marginal”
Required trend
Increasing or Static if target achieved.
Reporting period
Quarterly.

Ref: CE KPI 2.02
Quality Issues
Purpose
To what extent can we rely on the Cost Estimator’s Cost Estimate Report?
Does the Cost Estimate Report include errors?
Definition
Measures the total number of “Quality Issues” identified within Cost Estimator’s Cost Estimating Report.
How is it measured?
Derived from Cost Estimate Report Scorecard.
• Arithmetical errors:
• Quantity measures:
• Rate/Price errors:
• Omissions:
• Duplication:
• Unassessed risks:
• Transparency deficiency
Calculation formula
A= B1+B2+B3+B4+B5+B6+B7 (or A = ∑B1, B2, B3, B4, B5, B6, B7)
Where:
A= Total number of Quality Issues
B1 = Number of Arithmetical errors
B2 = Quantity measures
B3 = Rate/Price errors
B4 = Omissions
B5 = Duplication
B6 = Unassessed risks
B7 = Transparency deficiency
Frequency
Source of the data
Target
0 – Service Improvement Plan required if “Major Quality Issue” found, or more than seven (7) “Minor Quality Issues” found.
Required trend
Decreasing or Static if target achieved.
Reporting period
Quarterly.

Ref: CE KPI 2.03
Rework
Purpose
Does the Cost Estimator’s Cost Estimate Report include errors?
Definition
Measures the number of Cost Estimate Reports returned to the Cost Estimator for rework.
How is it measured?
Through review of Cost Estimate Report.
Calculation formula
A
Where:
A = Number of Cost Estimate Reports returned to Cost Estimator for rework.
Frequency
Source of the data
Target
0 - Action required if greater than five (5) in a reporting period (e.g., Q1, Q2, etc.).
Required trend
Reporting period
Quarterly.

Ref: CE KPI 2.04
Rejection
Purpose
Does the Cost Estimator’s Cost Estimate Report include numerous and/or significant errors?
Definition
Measures the number of Cost Estimate Reports rejected by NEOM.
How is it measured?
Calculation formula
A
Where:
A = Number of Cost Estimate Reports rejected by NEOM.
Frequency
Source of the data
Target
0 – Service Improvement Plan required is more than three (3) in a reporting period (e.g., Q1, Q2, etc.)..
Required trend
Reporting period
Quarterly.

Ref: CE KPI 2.05
Compromise
Purpose
Definition
Measures the number of Cost Estimate Reports below the agreed standard that are accepted by NEOM (i.e., Quality Issues
accepted without the need for rework).
How is it measured?
Calculation formula
A
Where:
A = Number of Cost Estimate Reports below the agreed standard that are accepted by NEOM.
Frequency
Continuously - Every time Cost Estimate Report delivered
Source of the data
Cost Estimate Reports.
Target
0 - Action required if more than three (3) Cost Estimate Reports are below the agreed standard that is accepted by NEOM in
any a reporting period (e.g., Q1, Q2, etc.).
Required trend/target
Reporting period
Quarterly.

Ref: CE KPI 3.01
Cost Estimator service
Purpose
Are we satisfied with the performance of our Cost Estimators?
Definition
Measures the performance of Cost Estimators against predetermined criteria.
How is it measured?
Through Cost Estimator Performance Report (refer to Appendix D: Cost Estimator Performance Report Form).
Calculation formula
Derived from Cost Estimator Performance Scorecard.
Ratings:
• Unacceptable
• Marginal
• Acceptable
• Very Good
• Exceptional
Frequency
Source of the data
Cost Estimator Performance Evaluation Report and Cost Estimator Performance Scorecard.
Target
Very Good - Action required if rating is ‘Unacceptable’ or ‘Marginal’.
Required trend/target
Increasing or Static if maximum measure achieved.
Reporting period
Quarterly.

Appendix B - Example KPI Calculations

Time
Data
• Total number of Cost Estimate Reports delivered by the Cost Estimator to
NEOM: 8
• Total number of fully compliant Cost Estimate Reports delivered by the Cost
Estimator to NEOM on or before the due date: 6
Indicator 1.01 – Delivery in full, on time (DIFOT) rate
Total number of Cost Estimate Reports delivered in full, on

time by Cost Estimator
DIFOT = x 100 = __%
Total number of Cost Estimate Reports delivered by Cost
Estimator
6
DIFOT = x 100 = 75%
8
Quality
Data obtained from Cost Estimate Checklist Form

• Arithmetical errors: 2
• Quantity measures: 3
• Rate/Price errors: 2
• Omissions: 1
• Duplication: 2
• Unassessed risks: 6
• Transparency deficiency:
2
• Total number of compliant Cost Estimate Reports received from the Cost
Estimator by NEOM in measurement period: 8
• Number of Cost Estimate Reports returned to Cost Estimator for “Rework”: 2
• Total number of Cost Estimate Reports “Rejected” by NEOM in measurement 1
period:
• Number of Cost Estimate Reports below the agreed standard accepted by 3
NEOM in measurement period:
Indicator 2.01 – Quality of Cost Estimate Reports
Scores input into Cost Estimate Report Scorecard, which automatically ascertains “Rating” for each Cost
Estimate Report requirement.

Indicator 2.02 – Quality Issues
Quality Issue No.

Arithmetical errors: 2
Quantity measures: 3
Rate/Price errors: 2
Omissions: 1
Duplication: 2
Unassessed risks: 6
Transparency deficiency: 2
Total number of “Quality Issues”: 18
Indicator 2.03 – Rework
Number of Cost Estimate Reports returned to Cost Estimator for rework = 2
Note:
The percentage of Cost Estimate Reports returned to Cost Estimator for rework can also be measured using the
following calculation and recorded:
Total number of Cost Estimate reports returned” to the Cost

Estimator for “Rework”
Rework = x 100 = __%
Estimator
2
Rework = x 100 = 25%
8
Indicator 2.04 – Rejection
Number of Cost Estimate Reports rejected by NEOM = 1
Note:
The percentage of Cost Estimate Reports rejected can also be measured using the following calculation and
recorded:
Total number of Cost Estimate Reports returned to the Cost

Estimator as “Rejected”
Rejection = x 100 = __%
Estimator
1
Rejection = x 100 = 12.5%
8

Indicator 2.05 – Compromise
Number of Cost Estimate Reports below the agreed standard that are accepted by NEOM = 4
Note:
The percentage of Cost Estimate below the agreed standard that are accepted by NEOM can also be measured
using the following calculation and recorded:
Total number of Cost Estimate Reports below the agreed

standard that are accepted by NEOM (“Compromised”)
Compromise = x 100 = __%
Estimator
4
Compromise = x 100 = 50%
8
Customer Satisfaction
Indicator 3.01 – Cost Estimator performance
Ratings input into Cost Estimator Performance Scorecard, which automatically calculates Cost Estimates overall
performance rating.

Appendix C - Cost Estimate Report Checklist

NEOM-NEN-PRC-002_FRM01
Guidance
The Quality of Cost Estimate Report KPI is recorded using the following scoring system:
5 = Satisfactory – appears to meet all NEOM’s requirements.
4 = Minor errors – errors contained in Cost Estimate Report which have no significant impact on NEOM.
Rework not required (compromise).
3 = Some rework - some modifications/changes required to Cost Estimate Report to meet the required
standard.
2 = Extensive rework – extensive modifications/changes required to Cost Estimate Report to meet the
required standard.
1 = Rejected – completely unacceptable, considered unusable. Cost Estimate Report to be restarted and
resubmitted.
The aim of this quality KPI is to improve the visibility of quality issues pertaining to Cost Estimate Reports through
the measurement of “Quality Issues”. Therefore, this measure is to record all quality issues on all elements of
Cost Estimate Reports received by NEOM.
In the context of Cost Estimation, a “Quality Issue” is defined as:
“An issue that affects the Cost Estimate or Cost Estimate Report so that work needs to be redone, modified,
or compromised to a lower standard than originally agreed.”
As a result, a “Quality Issue” will encompass errors, but it is also a much wider measure which covers issues
such as incorrect information, missing information, inappropriate rates and prices, duplicate items, use of
incorrect measurement convention, arithmetical errors, unclear statements, and unstructured Cost Estimate
Reports.
Definitions of the three types of “Quality Issue” are:
Rejected: When a “Quality Issue” involves the work being completely restarted and all previous work
deemed unusable, then the “Quality Issue” will be classified as rejected.
Reworked: When a “Quality Issue” involves the work that requires modification/correction to meet the
required NEOM standard, then the “Quality Issue” will be classified as reworked.
Compromised: If NEOM accept the work below the agreed standard this will be classified as
compromised.

Cost Estimate Report Checklist
Project title: Click or tap here to enter text.

Cost Estimator: Click or tap here to enter text.
Date Checklist Completed: Click or tap to enter a date.
Item Requirement Requirement Score/Rating

met
1.01 Cost Estimate Report "Delivery in full, on time (DIFOT): Insert Insert
2.01.01 Structure of Cost Estimate Report Insert Score/Rating

The Cost Estimate Report is structure in accordance with Table 9 of
the Cost Estimation Procedure:
• Executive Summary. Choose an item.
• Introduction. Choose an item.
• Statement of Cost. Choose an item.
• Project Description. Choose an item.
• General Pricing Notes and Assumptions. Choose an item.
• Information Provided (list of information on which cost estimate Choose an item.
has been based).
• List of Exclusions. Choose an item.
• Cost Estimate Summary Page. Choose an item.
• Cost Estimate Summary Reconciliation Page (if applicable). Choose an item.
• Detailed Breakdown of Cost Estimate. Choose an item.
• (Project) Cash Flow Forecast (if applicable). Choose an item.
2.01.02 Understanding project requirements: Choose an item. Insert Score/Rating
The Cost Estimate Report contains satisfactory narrative to confirm
that the Cost Estimator has fully understood NEOM’s project
requirements/Project Brief.
2.01.03 Correct scope: Choose an item. Insert Score/Rating
The correct project scope has been captured in the Cost Estimate
Report?
2.01.04 Quality/Specification: Choose an item. Insert Score/Rating
The Cost Estimate Report contain a satisfactory narrative to confirm
that the Cost Estimator has allowed for the appropriate level of
quality (specification) in the cost estimate.
2.01.05 Collaboration: Choose an item. Insert Score/Rating
The Cost Estimate Report contains satisfactory narrative to confirm
that the Cost Estimator has collaborated with the with Designers and
other Project Team members to ensure understanding of NEOM’s
project requirements/Project Brief.
2.01.06 Basis of Estimate Choose an item. Insert Score/Rating
All exclusions, assumptions, and other qualifications are clearly
communicated in the Cost Estimate Report.
2.01.07 Method of measurement: Choose an item. Insert Score/Rating
The correct method of measurement (e.g., NRM1, NRM2, NRM3 or
CESMM) has been used by the Cost Estimator.
2.01.08 Appropriateness of unit rates and prices Choose an item. Insert Score/Rating
Unit rates and prices used to determine significant cost items (see
definition) are considered appropriate for the project.

met
2.01.09 Contractors/Sub-Contractors Estimates Choose an item. Insert Score/Rating
Contractor’s and Sub-Contractors estimates included in the Cost
Estimate have been checked by the Cost Estimator.
2.01.10 Cost drivers Choose an item. Insert Score/Rating
Key cost drivers have been identified and recorded in the Cost
Estimate Report.
2.01.11 Estimate base date: Choose an item. Insert Score/Rating
The date from which tender inflation is estimated is clearly stated in
the Cost Estimate Report.
2.01.12 Inflation: Choose an item. Insert Score/Rating
Appropriate allowances for tender inflation (estimate base date to
start of construction) and construction inflation (tender return date to
mid-point of construction period) have been included in the Cost
Estimate.
2.01.13 Risks - Inclusion: Choose an item. Insert Score/Rating
All appropriate risks identified in the Risk Register have been
addressed in the Cost Estimate.
2.01.14 Risk allowance estimates - Inclusion: Choose an item. Insert Score/Rating
Appropriate risk allowances have been included in the Cost
Estimate.
2.01.15 Risk allowance estimates - Justification: Choose an item. Insert Score/Rating
Justification has been given for risk allowances.
2.01.16 Value engineering/Value improvements: Choose an item. Insert Score/Rating
Value engineering options/value improvement suggestions are
included in the Cost Estimate Report.
2.01.17 Arithmetical checks: Choose an item. Insert Score/Rating
The Cost Estimate has been independently arithmetically checked
by the Cost Estimator (i.e., by an individual not involved in compiling
the Cost Estimate).
2.01.18 Cost Estimate Sign-Off Form: Choose an item. Insert Score/Rating
Completed ‘Cost Estimate Sign-off Form’ (NEOM-NCC-PRC-
001_FRM01) included within Cost Estimate Report.
2.01.19 Cost Estimate Summary Form: Choose an item. Insert Score/Rating
Completed ‘Cost Estimate Summary Form’ (NEOM-NCC-PRC-
001_FRM02) included within Cost Estimate Report.
2.02 Quality Issue Quantity Unit
2.02.01 • Arithmetical errors. Insert nr
Quantity
2.02.02 • Quantity errors (due to inaccurate measurement) Insert nr
Quantity
2.02.03 • Rate/Price errors Insert nr
Quantity
2.02.04 • Omissions. Insert nr
Quantity
2.02.05 • Duplication. Insert nr
Quantity


met
2.02.06 • Unassessed risks (i.e., no risk allowance included in Cost Estimate for Insert nr
items on Risk Register which would have a cost and/or time impact on Quantity
project if they materialize).
2.02.07 • Transparency deficiency (lack of or unclear explanations included in Cost Insert nr
Estimate Report). Quantity
☐ Sent back for re-work
☐ Rejected
☐ Compromise

Appendix D- Cost Estimate Report Scorecard (MS Excel
spreadsheet)

Cost Estimate Report Scorecard
NEOM-NEN-PRC-002_FRM02A
Project: Enter text.
Name of Cost Estimator (Company) Enter text.
Date: Insert Date of Cost Estimate Report Review
Item Requirement Score RATING
1.01 Cost Estimate Report "Delivery in f ull, on time (DIFOT): Insert Score FALSE
2.01.01 Structure of Cost Estimate Report: Insert Score FALSE

2.01.02 Understanding project requirements: Insert Score FALSE
2.01.03 Correct scope: Insert Score FALSE
2.01.04 Quality/Specif ication: Insert Score FALSE
2.01.05 Collaboration: Insert Score FALSE
2.01.06 Basis of Estimate: Insert Score FALSE
2.01.07 Method of measurement: Insert Score FALSE
2.01.08 Appropriateness of unit rates and prices: Insert Score FALSE
2.01.09 Contractors/Sub-Contractors Estimates: Insert Score FALSE
2.01.10 Cost drivers: Insert Score FALSE
2.01.11 Estimate base date: Insert Score FALSE
2.01.12 Inf lation: Insert Score FALSE
2.01.13 Risks - Inclusion: Insert Score FALSE
2.01.14 Risk allow ance estimates - Inclusion: Insert Score FALSE
2.01.15 Risk allow ance estimates - Justif ication: Insert Score FALSE
2.01.16 Value engineering/Value improvements: Insert Score FALSE
2.01.17 Arithmetical checks: Insert Score FALSE
2.01.18 Cost Estimate Sign-Of f Form: Insert Score FALSE
2.01.19 Cost Estimate Summary Form: Insert Score FALSE
Total Score/Overall Rating: 0 UNACCEPTABLE
Overall Score: 1
Item Quality Issue Number of

Errors
2.02.01 Arithmetical errors: Insert
2.02.02 Quantity errors (due to inaccurate measurement): Insert
2.02.03 Rate/Price errors: Insert
2.02.04 Omissions: Insert
2.02.05 Duplication: Insert
2.02.06 Unassessed risks: Insert
2.02.07 Transparency def iciency: Insert
Total number of errors: 0
☐ Sent back f or re-w ork

☐ Rejected
☐ Compromise

Appendix E- Cost Estimator Performance Report Form

Guidance
Parts 1 to 3 of this report are to be completed by the NEOM Representative responsible for monitoring the Cost
Estimator’s performance. Definitions of performance ratings are set out in section 6.6 (Cost Estimator
performance ratings) of the Performance Measurement and Reporting Procedure. The reasons for giving
‘Marginal’ or ‘Unacceptable’ ratings must be given by the NEOM Representative in Part 3 of the report.
The Evaluator submits the Cost Estimator Performance Report to the Cost Estimator for comment. The Cost
Estimator provides feedback by completing Part 4 and returns the completed report to the NEOM Head of Cost
Estimation via email.
The NEOM Head of Cost Estimation reviews the report (including the Cost Estimator’s comments), records any
actions to be taken and by whom, and closes out the report by completing Part 5.
The NEOM Representative inserts the ratings into the Cost Estimator Performance Scorecard and records the
overall scores in the Cost Estimator Performance Record.
Figure 1: Cost Estimator performance measurement
Flowchart for Performance Measurement Process

Assesment
NEOM CED (Representative) NEOM Cost

Estimating Division Cost Estimator
Complete Parts 1 and 2 of Cost (Representative)
Start
Estimator Performance Review Send Form to Cost Complete Part 3 of Form
Form Estimator via email
NEOM CED (Representative) NEOM CED (Representative)

Rating
Enter ratings from Review Form to Cost Record KPI metrics ascertained from
Estimator Performance Scorecard to Scorecard on Cost Estimator s KPI Results
ascertain KPI metrics Record
Review
NEOM Head of Cost Estimation Cost Estimator

NEOM Head of Cost Estimation
Review ratings and comments of both Send Form to
Complete Part 4 of Form NEOM Representative and Cost Estimator NEOM Head of Cost
recorded on Form Estimation via email
Evaluation
NEOM CED (Representative)

Finalizing
NEOM Head of Cost Estimation NEOM Head of Cost

Estimation
Send completed Form to Update ratings on Scorecard if instructed to do so
Communicate actions to be taken to by NEOM Head of Estimation; ascertain revised
appropriate person(s) in NEOM Cost NEOM Cost Estimating rating; and update Cost Estimator s KPI Results
Estimating Division Division via email Record
NEOM Cost Estimating Division

Archive
(Representative)
End
Store completed Form in Cost
Estimator Performance Review File

Cost Estimator Performance Report
Part 1: General information

NEOM Project No.: Click here to enter text.
Project Title: Click here to enter text.
Name of Cost Estimator Click here to enter text.
Part 2: Performance evaluation
Performance criteria Rating

Refer to “Rating Guidelines” at end of Report Form.
1. Quality of service
1.1 Professionalism Choose Rating
1.2 Technical skills Choose Rating
1.3 Co-operation Choose Rating
1.4 Contract compliance Choose Rating
1.5 Accuracy of work completed Choose Rating
1.6 Responsiveness to problems Choose Rating
1.7 Service recovery (i.e., following corrective action or rework) Choose Rating
2. Cost
2.1 On time billing (Applications for payment submitted on time) Choose Rating
2.2 Billing accuracy (complies with Cost Estimator’s contract) Choose Rating
3. Timeliness
3.1 On-time delivery (i.e., adherence to programme/delivery schedule) Choose Rating
4. Business relations
4.1 Effective management Choose Rating
4.2 Accessibility to Director/Senior manager Choose Rating
4.3 Prompt notification of problems/issues Choose Rating
Part 3: NEOM Representative’s comments

Click here to enter text.
Would you use this Cost Estimator again? Choose
Evaluated by: Click here to enter name. Date of Report: Click here to enter a date.
☐ Sent back for re-work
☐ Rejected
☐ Compromise
Submit completed report via email to Cost Estimator for response, stating when response is required by.

Part 4: Cost Estimator’s comments

Click here to enter text.
Reviewed by: Click here to enter text. Date: Click here to enter a date.
Submit completed report via email to:
NEOM Cost Estimation (costestimation@neom.com)
Part 5: NEOM Head of Cost Estimation Review

Actions: Click here to enter text.
Reviewed by NEOM Head of Cost Estimation: Click here to enter text.
Date: Click here to enter a date.
File: [Insert file/folder location]

Appendix F - Cost Estimator Performance Scorecard (MS Excel
spreadsheet)

Cost Estimator Performance Scorecard
Date: Insert Date of Performance Review
Criteria Rating Maximum Achieved Category Sub-Category Weighted SCORE RATING

Score Score Weighting Weighting Score
1 Quality of Service 65.00% 100.00% 0.00% 0.00% UNACCEPTABLE
1.1.1 Professionalism of people Insert Rating 4 0 15.00% 0.00%
1.1.2 Technical skills of people Insert Rating 4 0 20.00% 0.00%
1.1.3 Co-operation Insert Rating 4 0 15.00% 0.00%
1.1.4 Contract compliance Insert Rating 4 0 15.00% 0.00%
1.1.5 Accuracy of work completed Insert Rating 4 0 20.00% 0.00%
1.1.6 Responsiveness to problems Insert Rating 4 0 10.00% 0.00%
1.1.7 Service recovery (following corrective/rework) Insert Rating 4 0 5.00% 0.00%
2 Cost 10.00% 100.00% 0.00% 0.00% UNACCEPTABLE
On time billing (Applications for payment

2.1 Insert Rating 4 0 35.00% 0.00%
submitted on time)
Billing accuracy (complies with Cost
2.2 Insert Rating 4 0 65.00% 0.00%
Estimator’s contract)
3 Time 15.00% 100.00% 0.00% 0.00% UNACCEPTABLE
3.1 On-time delivery Insert Rating 4 0 100.00% 0.00%
4 Business Relations 10.00% 100.00% 0.00% 0.00% UNACCEPTABLE
4.1 Effective management Insert Rating 4 0 50.00% 0.00%
4.2 Accessibility of senior people/management Insert Rating 4 0 25.00% 0.00%
4.3 Prompt notification of problems Insert Rating 4 0 25.00% 0.00%
100.00% TOTAL SCORE: 0.00%
OVERALL RATING: UNACCEPTABLE

Appendix G - Cost Estimator KPI Results Record (MS Excel
spreadsheet)

Cost Estimator KPI Results Record
Item Indicator Cost Estimator Performance Report

Date of Report Date of Report Date of Report Date of Report Date of Report Date of Report Date of Report
[Insert] [Insert] [Insert] [Insert] [Insert] [Insert] [Insert] Trend
Score/Rating Score/Rating Score/Rating Score/Rating Score/Rating Score/Rating Score/Rating
Insert Overall Insert Overall Insert Overall Insert Overall Insert Overall Insert Overall Insert Overall
X Overall Performance Rating Insert
Rating Rating Rating Rating Rating Rating Rating
1 Quality of Service Insert
1.1 Professionalism of people Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert
1.1 Technical skills of people Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert
1.1 Co-operation Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert
1.1 Contract compliance Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert
1.1 Accuracy of work completed Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert
1.1 Responsiveness to problems Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert
1.1
Service recovery (following corrective/rework) Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert
2 Cost Insert
2.1 On time invoicing Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert
2.2 Invoice accuracy Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert
3 Time Insert
3.1 On-time delivery Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert
4 Business Relations Insert
4.1 Effective management Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert
4.2 Accessibility of senior people/management Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert
4.3 Prompt notification of problems Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert Rating Insert

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COST ESTIMATION PROCEDURE

COST ESTIMATION PERFORMANCE

NEOM-NCC-PRC-002 Rev 02.00, October 2022

©NEOM [2022]. All rights reserved.

Revision code Description of changes Purpose of issue Date

Rev 01.00 First Issue Issued for Implementation 13.05.2020

Rev 02.00 Revised Version Issued for Implementation 26.10.2022

Prepared by Reviewed by Approved by

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©NEOM [2022]. All rights reserved.

Table 1: Table of Definitions ................................................................................................... 4

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©NEOM [2022]. All rights reserved.

List of Definitions and Abbreviations

Table 1: Table of Definitions

Indicator(s) A qualitative or quantitative factor or variable that provides a simple and

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©NEOM [2022]. All rights reserved.

Measure A number or a quantity that records a directly observable value. All

NEOM Proponent The NEOM Region, Sector or Department.

Project The development and delivery of a NEOM asset or a group of NEOM

(Project) cash flow The cash flow forecast of a particular project

In the context of cost estimating, the terms can be used interchangeably.

Quality The degree to which a requirement meets, fails to meet, or exceeds

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©NEOM [2022]. All rights reserved.

Table 2: Table of Abbreviations

DIFOT Delivery in full, on time

KPI Key Performance Indicator.

Related NEOM Documents

Table 3: Related NEOM Documents

Document Code Document Name

NEOM-NCC-MAN-001 Cost Estimation Manual: Cost Estimation Policies and Guidelines

NEOM-NCC-PRC-001 Cost Procedures: Cost Estimation Procedures

NEOM-NCC-PRC-003 Company Bid Procedure

NEOM-NEN-PRC-029 NEOM Plan of Work

NEOM-NEN-MAN-001 Quality Management System Manual

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©NEOM [2022]. All rights reserved.

Table 4: Roles and Responsibilities

Cost Estimator Cost Estimate Report review:

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NEOM Head of Cost Cost Estimator service:

6.2 The need for KPIs

6.3 KPI groups

6.4 Cost estimating KPIs

Table 5: Cost Estimating KPIs

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©NEOM [2022]. All rights reserved.

2.02 Quality Issues Quality Measures the number of “Quality Issues”

2.03 Rework Quality Measures the number of Cost Estimate

2.04 Rejection Quality Measures the number of Cost Estimate

2.05 Compromise Quality Measures the number of Cost Estimate

Example calculations of KPIs are contained in Appendix B (Example KPI Calculations).

6.5 Cost Estimator performance measurement

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©NEOM [2022]. All rights reserved.

6.6 Cost Estimator performance ratings

Table 6: Cost Estimator Performance Ratings Definitions

Marginal: Non-conformances There were Delays required Responses to

Acceptable: Non-conformances There were minor Delays impacted on Responses to

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