Playbook of Leading Industry Practices for Estimating, Controlling, and Managing Indirect Constructi
Indirect construction costs (IDCC) comprise from as little as 10 percent to 40 percent or more of the total construction cost of projects. Although IDCC constitute a lesser portion of the total project cost than direct construction costs, nearly all of the subject matter experts (89.3 percent) interviewed by CII Research Team (RT) 282 reported that when project teams do a better job of estimating, controlling, and managing IDCC, they have better project performance. Since global competition now demands that owners and contractors pursue all opportunities for improved performance, this playbook identifies methods to close this neglected performance gap.
As a how-to guide outlining leading industry practices for estimating, controlling, and managing key IDCC categories, the playbook presents comprehensive consideration checklists, detailed process flowcharts, and recommended practical tools that are available for immediate application and that can be modified to fit any particular standard operating procedures. As such, this resource contains valuable suggestions for all parties involved in capital facility delivery to improve project performance. RT 282 prepared it for owners and contractors who wish to increase the probability and predictability of project success, and who want to enhance the overall return on their investments in IDCC.
Following this introductory chapter, Chapters 2 through 5 include recommended industry leading practices for estimating, controlling, and managing IDCC. All the processes and practical tools detailed in this playbook are based on subject matter experts’ input and on actual forms and processes used in the industry. Chapter 6 introduces certain innovative practices for estimating, controlling, and managing IDCC. The estimating, controlling, and managing checklists, flow diagrams, and tools can be used to increase the probability of successful project performance. Chapter 7 presents the team’s conclusions, and is followed by a list of references cited.
The most important item within this area is major construction equipment that incur significant construction costs and are typically either not readily available or require time for planning or sourcing. Of note is that major construction equipment is a direct construction cost when it can be identified with a particular construction operation. Projects should develop a checklist for major construction equipment. The 3 main sub-groups include: (IR282-2, p. 9)
- Road & site vehicles
- Small tools and consumables
- Major construction equipment/material handling
For example, here is the estimating flowchart for major equipment. Other tools include a major equipment checklist, controlling process flowchart, and a managing process flowchart.
This category includes project management, field supervision, project administration and construction/field services. Construction Management and Supervisory Personnel were identified as the most important. Projects should develop a position matrix and a checklist for Construction Management and Supervisory Personnel to indicate. (IR282-2, p. 31)
Practices tools include: Position Matrix, Checklist, and estimating, controlling, and managing Indirect Construction Costs.
(IR282-2, p. 63)
Below is a listing of common temporary provisions.IR282-2, Playbook of Leading Industry Practices for Estimating, Controlling and Managing Indirect Construction Costs
The leading industry practices for optimizing these IDCC are presented in a consistent format of consideration checklists, detailed process flowcharts, and representative practical tools. Each chapter is organized into sections covering practices for estimating, controlling, and managing the costs in each category.
In addition the playbook dedicates a chapter to four innovative advance practices:
- Real-time, online equipment management systems
- Advance small tools inventory systems
- Work-location delivered trade worker amenity services
- Advanced laydown yard management system
