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105R-19: Estimate Requirements Document – As Applied in Engineering, Procurement, and Construction for the Process Industries

105R-19: Estimate Requirements Document – As Applied in Engineering, Procurement, and Construction for the Process Industries
AACE International, October 11, 2019

Price: $0 (Member) / $100 (Non-Member)

This recommended practice (RP) is a guideline for the development of an estimate requirements document defining the estimate requestor, typically the owner, estimate requirements to a third party estimate provider of an engineering, procurement, and construction (EPC) cost estimate for the process industries.

The main body of this document refers to deterministic (Class 3, 2, and 1) estimates. Conceptual (Class 5 and 4) estimates require a very different approach and are defined in Appendix I and J. These sections provide basic guidelines for the development of a basis of estimate for some of the more common methodologies used in the development of these classes of estimate.

The Total Cost Management (TCM) Framework section 7.3.2.1, Plan for Cost Estimating and Budgeting highlights the need to develop estimate plans. This document addresses the need for the requestor of the estimate to define to the estimate provider many of the elements that will eventually comprise the estimate plan. This RP could also be considered an estimate requestor specification. This RP focuses on the relationship between an estimate requestor, typically the owner, and a separate estimate provider; however, the principles may apply to other estimate requestor to estimate provider relationships such as contractor to subcontractor, or within an individual organization. The key principle is that the estimate requestor identifies the various requirements that the estimate should meet when prepared by the estimate provider.

This recommended practice (RP) is intended to provide a guideline (i.e. not a standard) for establishing and communicating how to prepare, review and approve an estimate requirements document, to be issued from the estimate requestor to the estimate provider. The estimate provider should prepare an estimate plan in alignment with the requirements document. The estimate plan should be approved by the estimate requestor. After estimate preparation, the estimate provider prepares the basis of estimate to provide final documentation of the cost estimate. The final estimate plan shall be the result of collaboration between the estimate requestor and estimate provider.

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