TM 5-800-4
revitalization improvement projects, underground utility
b. A step-by-step example of procedures for dev-
projects, other projects that are unique in design,
eloping the basic cost model is provided in paragraph 10.
involving complex or innovative technology, and
waterfront projects). Projects for which more than the
10.
Basic Cost Model Example.
normally authorized contingencies are considered
The example calculations below show how to determine
necessary will be fully justified and supported by risk
the facility cost estimate for an administration building
analysis.
general purpose, category code 61050, of 11,250 square
b. Supervision and Administration. Each project es-
feet to be built at Ft. Dix, NJ in the FY93 program. A
timate should include a separate item for supervision and
construction start July 1993 and a construction
administration (S&A). Application of S&A rate will be
completion date of 1 July 1994 are assumed. The equation
in accordance with AR 415-15 and/or latest Army
guidance. The current approved uniform rate of 6 percent
for the basic cost model determination is:
S&A will be used for all projects constructed within the
contiguous United States (CONUS) and 6.5 percent for
$Ab = $E x Sa x La x CEa x TUa x DCa
overseas (OCONUS) projects (including those in Alaska
and Hawaii). The rates for operation and maintenance
Step 1 - Unadjusted Cost. In appendix A, find the
(O&M) funded projects are 8% CONUS and 8.5%
unit cost for the applicable building type and building size
OCONUS.
closest to the size building being programmed. The
25,000 square foot Administration Building, category
9. Programming Cost Estimate Preparation.
code 61050, is the comparable building size closest to the
Estimates may be prepared using the DD Form 1391
11,250 square foot programmed size, and unit cost for the
processor system or latest approved software which uses
building is .00/SF.
this manual and other authorized cost and pricing sources.
Step 2 - Size Adjustment. Calculate a size relationship
The DD Form 1391 processor provides assistance (such
factor by dividing the programmed building size by the
as currency exchange rates, building cost growth indices,
closest comparable building size obtained from table 1.
location adjustment factors, and adjusted unit costs) for
The 11,250 square foot programmed building size divided
the specific location, timeframes, and types of
by the 25,000 square foot comparable building size listed
construction involved. For family housing new
construction, the DOD Family Housing Cost Model (Tri-
in appendix A gives a size ratio factor of 0.45. Using the
Service Cost Model) will be used in programming or
size adjustment table (table 1), find the size ratio factor of
developing costs as described in appendix G.
0.45 and obtain an adjustment factor of 1.100.
a. Procedures. A unit cost for a facility which should
Step 3 - Location Adjustment. Determine the location
reflect the cost under the basic model conditions for the
adjustment factor from appendix B. For Ft. Dix, NJ, the
facility can be obtained by using the following equation:
factor of 1.19 applies.
Step 4 - Cost Growth Adjustment. Make allowance
$Ab = $ExSaxLaxCEaxTUaxDCa
for cost growth due to economic factors expected to occur
between the assumed midpoint of construction date on
Where:
$Ab is adjusted empirical cost,
which the prices in appendix A are based and the expected
Basic Cost Model
midpoint of construction data for the project being
programmed. Divide the cost growth index for the
$E is empirical cost unadjusted
expected midpoint of construction date for the project
(from Appendix A)
being programmed (1880 for 1 January 1994 from
Sa is size adjustment factor
appendix C) by the cost growth index for the assumed
(from table 1)
midpoint of construction date on which the prices in
appendix A are based (1869 for October 1993 from
La is location adjustment factor
appendix C) to obtain a cost growth factor of 1880/1869.
(from Appendix B)
Step 5 - Technological Updating Adjustment. Make
allowance for cost adjustment due to technological updat-
CEa is cost escalation adjustment
ing by using the technological updating factor from
due to inflation factors
appendix D. This factor is found to be 1.00 for
(from appendix C)
administrative facilities.
Step 6 - Design Contingency Adjustment. Determine
TUa is technological updating
the design contingency (DC) factor in accordance with
adjustment factor
paragraph 6. Since the proposed administration building
(from Appendix D)
is not unique and requires no special design, the DC factor
DCa is design contingency
is 1.050 (low complexity).
adjustment factor
4
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