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(CSC-1352) Controlling Cost through the Estimating and Risk Assessment Process

Primary Author: Mr Joseph W Wallwork PE CCE CFCC PSP

Audience Focus: Intermediate
Application Type: Application
Venue: 2013 AACE International Annual Meeting, Washington, DC, USA

Abstract: The estimator is not someone to be brought into the project at the end just to perform the Engineer's Estimate. At that time it’s too late to impact the project. However, if during the development of the project the estimating process is used properly, the process will identify scope, related costs, potential savings, and act as a quality control of the documents refining how potential bidders will interpret the contract documents and identifying areas where greater clarity will define scope and/or result in reduced contractor risk. Greater clarity of scope and shared and/or reduced risk will result reduced project cost. When performing pre-construction estimates, the incomplete nature of the documents necessitates the addition of a project contingency to the estimated cost. While this can effective, the use of a risk assessment will identify through risk registers and workshops the areas and magnitude of the potential cost impacts due to the status and detail of the design. Using risk (Monte Carlo) techniques can effectively create a project specific contingency complete with the probability of its use.