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(EST-3424) Supporting Estimates with Effective Scope of Work Definition

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Level: Basic
TCM Section(s): 7.3. Cost Estimating and Budgeting
Venue: 2020 AACE International Conference & Expo

Abstract: Most estimators realize that one of the essential ingredients for preparation of an accurate cost estimate is the comprehensive and sufficient definition, and subsequent control of project scope. Numerous studies have identified project scope definition as one of the most critical factors that influence project success. In 1982, the Construction Industry Institute (CII) Business Roundtable issued a report stating that “poor scope definition at the (budget) estimate stage and loss of control of project scope rank as the most frequent contributing factors to cost overruns." [1] Nevertheless, obtaining adequate scope definition to support cost estimating continues to be one of the most persistent problems faced by estimators.

This paper discusses issues involved in dealing with scope development problems during the preparation of capital facility cost estimates. Topics to be covered include:
  • Introducing a stage-gate project development process
  • Identifying the minimum requirements to prepare various classes of estimates
  • Communicating information requirements to project teams and estimate providers
  • Correlating estimating techniques to the level of scope information
  • Utilizing a frozen for estimating design basis and incorporating late changes
  • Presenting the estimate in relation to the level of scope definition

This paper expands upon an earlier AACE International paper Scope Development Problems in Estimating [2], incorporating information from AACE International (AACE) recommended practices on estimate classification, as well as from other sources.