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Improving Early Estimates

Event Date

Jul 31, 1998

Type

Conference Presentation

Research Team

RT-131

Slides

Topic

Improving Early Estimates

DOCUMENT DETAILS

Abstract

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Abstract

A well-prepared early estimate enables businesses to make sound economic decisions. An early estimate helps to formulate execution strategies, provides a basis to plan engineering and construction, and serves as a baseline for changes. The research team has developed a "Best Practice Guide" for the development of early estimates. The guide features processes, procedures, techniques, and checklists that have been successfully used to prepare early estimates and includes the following: Team alignment and early communication is necessary to ensure a clear understanding of customer expectations. Alignment is established with the estimate kick-off meeting held between all participants and maintained through regular estimate meetings and communication. Level of scope definition can determine the range of accuracy at the time the estimate is prepared. When scope definition is low, businesses can still produce accurate estimates by using good estimating practices and an experienced estimating team. Appropriate tools and techniques such as Estimate Work Plans, Early Estimate Checklists, and Estimate Reviews are methods to develop and support early estimates for communication with the customer. Risk assessment is a collaborative approach which requires involvement of all project stakeholders to properly assess risk and assign contingency to the base estimate. The lead estimator is typically responsible for selecting the technique of risk analysis and determining the appropriate contingency amount for a desired confidence level. Continuous feedback loop is necessary to capture lessons learned during project execution for improving the accuracy of early estimates. RT-131 developed an estimate scoring process that provides a method of assessing the driving factors and provides a basis of predicting the level of accuracy by comparing historical data in the database. Project teams can use drivers that fail to achieve the desired level of accuracy to identify opportunities for improving the estimate. Note this database is no longer supported and does not run on current platforms; however the Best Practices Guide remains a very good primer for improving early estimates.

Filters & Tags

Knowledge Area

Project & Program Management, Project Controls, Project Planning

Project Phase

Feasibility, Concept

Project Function

Project Business Sponsor, Project Management, Architects & Engineering, Project Controls, Procurement & Contracts, Construction, Commissioning & Startup, Operations & Maintenance, Risk Management

Industry Group

Light Industrial, Heavy Industrial, Buildings, Infrastructure

Research Topic

Improving Early Estimates

Keywords

Early Estimate Accuracy, Estimate Assessment, Estimate Score Program, Estimate Evaluation, Project Estimating, Contingency Assessment, Risk Assessment, Predicting Project Cost, Predicting Total Install Cost, rt131

Related Resources

Improving Early Estimates

Related Resources

Qualititative Prediction of Estimate Accuracy

Improving Early Estimates Best Practices Guide

Advanced Project Controls

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