1 September 1997
designs, designer and cost engineer experience, and
2-6. Parametric Estimates
use of parametric models. When details cannot be
reasonably assumed then historical bid unit prices
As an alternate method to detail task-by-task estimate
will be used. Methodologies and procedures
preparation, especially in the early stages of project
discussed in this manual are applicable whether the
development when details are not available, the use of
cost estimate is prepared manually or by using
parametric estimating may be incorporated.
Parametric estimating is the process of using various
factors to develop an estimate. The factors are based
b. When analyzing construction tasks in an
on engineering parameters, developed from historical
estimate, the cost engineer should identify the tasks
data bases, construction practices and engineering/
that account for the major costs in the estimate.
construction technology. The parameters include
These tasks can be identified by applying the 80/20
physical properties that describe project definition
rule, which states that approximately 80 percent of
characteristics (e.g., size, building type, foundation
the project cost is contained in 20 percent of the tasks.
type, exterior closure material, roof type and material,
Because these significant tasks account for most of
number of floors, functional space requirements,
the project cost, they should receive prime emphasis
interior utility system requirements, etc.). The
and effort in both preparation and review.
appropriateness of selecting the parametric method
depends upon the extent of project definition
2-5. Degree of Detail
available, the similarity between the project and other
historical data models, the ability to calculate details,
a. All cost estimates within the scope of this
and known parameters or factors for the project.
manual will be prepared on the basis of calculated
Appendix E provides additional information on the
quantities and unit prices that are commensurate with
automated parametric system.
the degree of detail of the design known or assumed.
This is accomplished by separating construction into
its incremental parts. These parts are commonly
referred to as construction tasks and are the line-by-
line listings of every estimate. Each task is then
cost estimates. An accurate and complete estimate
defined and priced as accurately as possible. Tasks
establishes accountability with the cost engineer and
are seldom spelled out in the contract documents, but
the cost estimate.
developing their cost.
2-8. Rounding Figures
b. At the most detailed level, each task is usually
related to and performed by a crew. The cost
a. Rounding of costs is desirable to avoid the use
engineer develops the task description by defining the
of decimals when allocating the total distributed cost
type of effort or item to be constructed. Task
(markup) to the direct subtotal costs for each work
descriptions should be as complete and accurate as
possible to lend credibility to the estimate and aid in
later review and analysis. An example, sample forms
b. Cost estimates prepared manually to
and a brief explanation of forms used in preparing
determine preliminary or alternative cost estimates
manually prepared construction cost estimates are
when design details are limited, may be rounded
provided in chapter 17.
based on the experience of the cost engineer, whereby
the end cost is not significantly affected.
c. Whenever a significant amount of design
assumptions are necessary such as in design-build
c. For reporting purposes, the total cost of the
process, the cost engineer should use historical cost
project, represented by the Current Working Estimate
data from previous similarly designed projects and/or
(CWE) for Military and HTRW, and the Total
use parametric estimating models.