Level: Intermediate
TCM Section(s):
7.3. Cost Estimating and Budgeting
10.4. Project Historical Database Management
Venue: 2023 AACE International Conference & Expo
Abstract: Internal cost benchmarking will optimize the bid performance of EPC contractors. The result should be a competitive bid which takes into consideration factors which include intense competition, execution risk, complicated bidding process, and tight bid preparation schedule. By comparing the proposed bid cost with benchmarks developed from internal historical cost data which has been cleaned and adjusted, internal cost benchmarking plays a significant role in bid validation. This process, as described, is a vital component in the continuous loop of the costing process.
This technical paper will focus on the utilization of internal cost benchmarking in EPC project bidding, illustrating the workflow of internal cost benchmarking and the methodology of benchmark development. The advantages of internal versus external cost benchmarking in the EPC bidding environment will also be discussed. Finally, a case study from the author’s experience will demonstrate the effectiveness of an internal cost benchmarking practice in EPC project bidding.
TCM Section(s):
7.3. Cost Estimating and Budgeting
10.4. Project Historical Database Management
Venue: 2023 AACE International Conference & Expo
Abstract: Internal cost benchmarking will optimize the bid performance of EPC contractors. The result should be a competitive bid which takes into consideration factors which include intense competition, execution risk, complicated bidding process, and tight bid preparation schedule. By comparing the proposed bid cost with benchmarks developed from internal historical cost data which has been cleaned and adjusted, internal cost benchmarking plays a significant role in bid validation. This process, as described, is a vital component in the continuous loop of the costing process.
This technical paper will focus on the utilization of internal cost benchmarking in EPC project bidding, illustrating the workflow of internal cost benchmarking and the methodology of benchmark development. The advantages of internal versus external cost benchmarking in the EPC bidding environment will also be discussed. Finally, a case study from the author’s experience will demonstrate the effectiveness of an internal cost benchmarking practice in EPC project bidding.