Estimate, then repeat

outdated prices can doom construction projects; avoid them with the right estimating process


By Ed LeBard, PMP

Imagine you discover your construction project has been using outdated pricing estimates.

Cost-estimating reviews should always be factored into the project scope and project schedule.

When the current figures come in, you realize that you've derailed your project and your relationship with the client and possibly endangered your job security. Now the client, architect and preconstruction consultant have to sit together and review how and why the project team got to this point. Tough decisions— such as overhauling the project's requirements, cutting the building area or reducing design quality—have to be made. If your project already has submitted a building permit, you likely will have to submit a new one, adding significant time and expense.

How can we prevent this scenario from happening?

The best way to responsibly manage cost-estimating efforts during the design phase of a project is to document and track when preliminary bids need to be obtained and when the design documents have to be submitted. Communication and consensus are key. For example, if you're leading a design team of architects and engineers on a ground-up 30,000-square-foot (2,800-square-meter) project, ensure that the client and preconstruction consultant agree to the design submission milestones prior to the start of the project. Cost-estimating reviews always should be factored into the project scope and project schedule. A two-week time frame is standard for a cost-estimating effort. For extremely large projects, such as a 1 million-square-foot (93,000-square-meter) stadium, more than two weeks may be needed.


Regardless of the project delivery approach (design/build or design/bid/build), the cost-estimating process should recur frequently. Here is where you should schedule cost estimates during each phase:

Conceptual design phase: at the end of the phase or for each conceptual design scheme/option

Schematic design phase: at the end of the phase

Design development phase: at the 50 percent milestone and the end of the phase

Construction document phase: at the 50 percent and 95 percent milestones

This approach will keep the project team, client and preconstruction consultant on the same page. By drawing on up-to-date prices, you will reduce the risk of the lowest bid proposal from the general contractor far surpassing what you had expected to pay. Should the lowest bid still surpass the earlier cost estimates, the client and project team have four options: cancel the bids and re-bid later, overhaul the project requirements, reduce the building area or cancel the project altogether.

By tracking and documenting cost-estimating milestones, and sharing results with critical stakeholders, your project team increases the prospect of a successful project and a happy client. PM

img Ed LeBard, PMP, is a project manager and architect at Gensler, Washington, D.C., USA.




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