1 September 1997
management needs, the anticipated bidding
schedule, and the appropriate WBS.
BASICS FOR PREPARATION OF
a. The quantity "take-off" is an important part
of the cost estimate. It must be as accurate as
a. This chapter establishes uniform guidance to
possible, and should be based on all available
be used prior to estimate preparation. In the normal
engineering and design data.
sequence of events toward the preparation of any
estimate, it is of utmost importance to understand
b. After the scope has been analyzed and broken
basic fundamental principles and responsibilities.
down into the construction tasks, each task must be
quantified prior to pricing. Equal emphasis should
b. Construction cost estimates consist of:
be placed on both accurate quantity calculation and
accurate pricing. Quantities should be shown in
(1) Descriptions of work elements to be
standard units of measure and should be consistent
with design units (inch-pound/metric). Assistance
for making "take-off's" may be provided by others
(2) A quantity of work required for each task.
within the organization in support of cost
engineering or by A-E contract; however, the
(3) A cost for each task quantity.
responsibility for the accuracy of the quantities
remains with cost engineering.
c. A unit cost for each task is developed to
increase the accuracy of the estimating procedure
c. The detail to which the quantities are
and should provide a reference comparison to
prepared for each task is dependent on the level of
historic experience. Lump sum estimating when
design detail. Quantity calculations beyond design
used at the task level must be documented.
details are often necessary to determine a reasonable
price to complete the overall scope of work for the
3-2. Planning the Work
cost estimate. Project notes will be added at the
appropriate level in the estimate to explain the basis
The cost engineer must thoroughly understand the
for the quantity calculations, to clearly show
project scope of work, the biddability,
contingencies , and to note quantities determined by
environmental constructibility, operability (BECO),
cost engineering judgment that will be reconciled
and aspects of the project being estimated. The cost
upon design refinement.
engineer must also review drawings, specifications,
and other references to formulate a construction
3-4. Types of Costs
sequence and duration. A site visit is strongly
recommended to enable the cost engineer to relate
a. Various types of cost elements must be
the physical characteristics of the project to the
evaluated in detail.
available design parameters and details. This is
particularly important on projects with difficult site
b. Direct costs are those costs which can be
conditions, major maintenance and repair projects,
attributed to a single task of construction work.
alteration/addition projects, environmental projects,
These costs are usually associated with a
and dredging projects. The construction sequence
construction labor crew performing a task using
must be developed as soon as possible and should be
specific materials for the task. Labor foreman cost
used to provide a checklist of construction
should normally be considered as a direct cost.
requirements throughout the cost estimating process.
Subcontracted costs should be considered as direct
The overall format of major cost elements in an
costs to the prime contractor in estimates.
estimate must be compatible with current standards,