Level:
Advanced
TCM Section(s):
7.3. Cost Estimating and Budgeting
7.4. Resource Planning
Venue: 2022 AACE International Conference & Expo
Abstract: It is not surprising that today’s owner organizations are looking for more accurate project cost estimates. For the purposes of this paper, the term ‘owner’ is defined as a heavy industrial owner/operator.In addition to other recurring issues, owners are cash sensitive as they recover from the impacts of the pandemic and are dependent on the fact that, as projects transition from one phase of project development to the next, they will achieve the desired level of estimate accuracy (or better) that their established capital project delivery process defines. With this said, in many cases owners have dramatically reduced their internal capabilities associated with the development of early estimates and instead rely on their front-end engineering contractors. This has proven only partially successful due to biases, conflicting objectives, limited owner cost experience, etc.
A growing trend in the industry is the use of outsourced cost estimating support. This technique provides qualified, experienced cost estimating expertise, as needed, while also delivering company and industry benchmarks and data that offer an independent perspective without hindrance from internal company pressures, biases, etc. The outsourced estimators use of various cost estimating tools, proprietary as well as industry available data, risk analysis systems, etc. creates an environment for highly reliable, accurate and timely estimates on an ‘as needed’ basis. This paper will provide a road map and checklist for successful use of outsourced estimating support and will identity pitfalls of a poorly implemented process.
TCM Section(s):
7.3. Cost Estimating and Budgeting
7.4. Resource Planning
Venue: 2022 AACE International Conference & Expo
Abstract: It is not surprising that today’s owner organizations are looking for more accurate project cost estimates. For the purposes of this paper, the term ‘owner’ is defined as a heavy industrial owner/operator.In addition to other recurring issues, owners are cash sensitive as they recover from the impacts of the pandemic and are dependent on the fact that, as projects transition from one phase of project development to the next, they will achieve the desired level of estimate accuracy (or better) that their established capital project delivery process defines. With this said, in many cases owners have dramatically reduced their internal capabilities associated with the development of early estimates and instead rely on their front-end engineering contractors. This has proven only partially successful due to biases, conflicting objectives, limited owner cost experience, etc.
A growing trend in the industry is the use of outsourced cost estimating support. This technique provides qualified, experienced cost estimating expertise, as needed, while also delivering company and industry benchmarks and data that offer an independent perspective without hindrance from internal company pressures, biases, etc. The outsourced estimators use of various cost estimating tools, proprietary as well as industry available data, risk analysis systems, etc. creates an environment for highly reliable, accurate and timely estimates on an ‘as needed’ basis. This paper will provide a road map and checklist for successful use of outsourced estimating support and will identity pitfalls of a poorly implemented process.