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Using Cost Item Assemblies to Improve Estimate Accuracy

Developing accurate, complete and defensible cost estimates on a consistent basis is a difficult and – at times – daunting task. Each project estimate can have its own life, with unique needs and characteristics ranging from challenging architectural and engineering design to meticulous and precise construction execution details. And we haven’t even mentioned other important factors such as geographic impact, resource availability and prevailing market conditions, which usually play a decisive role in the overall cost estimate.

Striving for better precision in cost estimates is nothing new. It has always been part of the estimation landscape. It is more difficult to understand the underlying causes of inaccuracy and how to improve them in order to achieve a better result.

Understanding the root causes of inaccurate estimates

This is usually not a single cause but a combination of important input factors that contribute to the cost estimates being less precise, less thorough and less defensible than hoped. Three of the most important root causes of inadequate cost estimates are:

  • Inaccurate Cost Data: Access to accurate cost data by item is extremely important and may be, in fact, the most important of these causes. Not having a reliable database catalog of material, labor and equipment costs to accurately assess the scope of work based on prevailing market conditions will derail any estimate.
  • Incomplete work scopes: Ensuring that the project or task is adequately represented by a restricted work scope greatly reduces the possibility of missed or incorrect work items and increases the likelihood of producing a more accurate cost estimate.
  • Inconsistent Processes: For most organizations that produce cost estimates as a key part of their business operations, this becomes the most critical aspect of developing consistently accurate cost estimates. Capturing, conditioning, and applying consistent methods of developing estimates helps every cost estimator (from expert to novice), ensures the application of best organizational practices, and creates a repeatable process for developing streamlined reviews. and easily applicable quality assurance governance methods.

Assemblies help eliminate the root causes of inaccuracy

The use of cost item assemblies can counter the root causes mentioned above. Assemblies help estimators and other stakeholders better understand the project and its major components without getting lost in project details at the start of an estimate.

Cost item assemblies help create component-like visualizations and produce detailed cost item lists within the scope of the project, thus tackling the problem of unreliable cost data. Assemblies help ensure scope completeness by providing repeatable items and tasks stored as predefined components in an assembly catalog.

On the process side, the assemblies allow greater efficiency because, over time and use, they become a “tailor-made solution” which is integrated into the fabric of the organization of the estimate. When used consistently, assemblies create value in the process as they become known and trusted components for estimators, checked for completeness of scope and price accuracy, and are an easily repeatable step. on many projects, helping to establish a consistent process.

Assemblies increase the confidence of the estimate

One or more cost line items from a construction cost ledger are used to create an assembly. Essentially, an assembly is a collection of cost line items. The assembly is created by grouping together the elements needed to build a span component. For example, estimating a linear foot of an interior office wall may require the estimator to individually search and select from the construction cost book a dozen cost items (e.g. finishing, etc.) .

This pyramid represents the hierarchy of construction costs. As you move up the pyramid, costs become less granular, with unit prices being the most granular and models the most general. Each cost type is labeled with its corresponding use case. Assemblies are best used to develop early stage estimates for maintenance, repair and replacement projects.

By selecting a “plasterboard wall” from an assembly catalog, these dozen items are already incorporated into the assembly, and the estimator can be sure that they have factored in all the necessary materials (and the corresponding labor) to carry out the scope of the work. By entering a quantity to be removed (for example, the length of the wall), the assembly component is programmed to calculate the estimated total price, including labor and quantities for each cost item included in the cost. Assembly.

This helps ensure a more complete estimate, reduces the risk of missing items, and increases the accuracy of the final estimated cost and deliverable.

Additional Benefits of Using Sets of Cost Items in Estimates

Beyond improving the accuracy of estimates, assemblies of cost items are proving to be extremely useful tools. Here are some of the many direct benefits of assemblies in developing quotes:

  • Increased confidence of estimators in final estimation products.
  • Provide a knowledge base for novice estimators to familiarize themselves with assemblies and their components.
  • Simplify and shorten the estimation process by offering ready-to-use components.
  • Contribute to a better increase in the interpretation of the estimation scope.
  • Facilitate the understanding of the estimate by the stakeholders.
  • Allow quick estimates based on system components by selecting assemblies from catalogs.
  • Help apply a consistent estimation process within an organization.

Using current construction techniques, supplier / contractor prices and
Knowledge of the prevailing market, the data and data engineering professionals of RSMeans are uniquely skilled in customizing the optimal assemblies to generate the greatest benefits while using cost element assemblies to improve the precision of the estimate.


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