Level: Intermediate
Author(s): Shoshanna Fraizinger
Venue: 2017 AACE International Annual Meeting, Orlando, FL
Abstract: Typically, project management (PM) & engineering costs are estimated as a percentage of the overall direct field construction costs and are developed using a simple set of known estimating metrics and fragnets for engineering phases of work.
This limited approach lacking an interrogative basis, results in cost estimates for PM and engineering functions which are very limited making it difficult for an owner to validate baseline budgets & schedules.
We have recently developed a new estimating tool and approach to developing these functional costs to a situation where development of these costs is based on the activity, tasks, deliverables & resources defined by the client organization’s governance.
This achieves a bottom’s up, granular estimate which quickly approaches an AACE® class III level estimate with a high level of confidence very early on in the project life cycle. It is proposed that articulation of the process, when applied fully, will build confidence in stated AACE® Class and provide assurance of PM and engineering costs as early as the investment appraisal and conceptual engineering phases.
In addition, because we are able to develop these costs on a resource-deliverable basis, the data coming from the tool has potential to improve a variety of organizational planning and reporting activities such as owner’s organizational resource validation, confirmation of headcount requirements over project life cycle phases, validation of lace ups between interfacing governance procedures. It provides the planner with the tools for alignment to the work breakdown structure, is aligned to any stage gate syndrome and through its resource identification provides an early sight of potential performance management issues.
Author(s): Shoshanna Fraizinger
Venue: 2017 AACE International Annual Meeting, Orlando, FL
Abstract: Typically, project management (PM) & engineering costs are estimated as a percentage of the overall direct field construction costs and are developed using a simple set of known estimating metrics and fragnets for engineering phases of work.
This limited approach lacking an interrogative basis, results in cost estimates for PM and engineering functions which are very limited making it difficult for an owner to validate baseline budgets & schedules.
We have recently developed a new estimating tool and approach to developing these functional costs to a situation where development of these costs is based on the activity, tasks, deliverables & resources defined by the client organization’s governance.
This achieves a bottom’s up, granular estimate which quickly approaches an AACE® class III level estimate with a high level of confidence very early on in the project life cycle. It is proposed that articulation of the process, when applied fully, will build confidence in stated AACE® Class and provide assurance of PM and engineering costs as early as the investment appraisal and conceptual engineering phases.
In addition, because we are able to develop these costs on a resource-deliverable basis, the data coming from the tool has potential to improve a variety of organizational planning and reporting activities such as owner’s organizational resource validation, confirmation of headcount requirements over project life cycle phases, validation of lace ups between interfacing governance procedures. It provides the planner with the tools for alignment to the work breakdown structure, is aligned to any stage gate syndrome and through its resource identification provides an early sight of potential performance management issues.