This method is the most accurate, generally ±10%, but it can be costly and time-consuming, as detailed takeoffs must be made of all labor and material units in the system. This method requires that engineering be sufficiently advanced so that accurate material quantity takeoffs can be produced. It also requires detailed historical data for applying unit manhour rates and monetary costs to the estimated quantities.
This last, general category is usually referred to as a detailed cost estimate.
This estimate can be developed only when the process design has essentially been completed. It will also require a significant amount of detailed engineering to be completed so that bulk material takeoffs can be developed for civil work, mechanical, piping, electrical, etc.
The following would be typical for an EPC project:
a) Approved process descriptions - feedstock and product slate b) Licensor engineering (schedule A package)
c) Approved flow sheets d) Heat and material balances e) Approved process piping and instrumentation diagrams (PIDs) (process and utilities)
Approved plot plans g) General specifications h) Equipment specifications and data sheets i) Completed site-soil survey and report j) Site development and grading drawings k) Underground piping and electrical layouts
Concrete foundation layouts Above-ground piping layouts One-line electrical drawings Milestone schedule
Detailed project-owner conditions and requirements Project-owner conditions and requirements Environmental and governmental requirements Equipment quotations - transportation costs Bulk material takeoffs Labor cost-productivity data Layouts for construction temporary facilities Organization charts (project, engineering, and construction) Personnel schedules and manpower histograms Construction equipment schedules
A detailed estimate would be quantity based with separate unit costs for material, labor, and manhours. Construction would be based on an area breakdown rather than on the "system" basis of a conceptual estimate. This estimate could be an updated, trended version of the first conceptual estimate and subsequent updates or a completely separate exercise. In most cases, it would be a separate exercise, as the format and work breakdown structure would be different and more detailed than that of a conceptual estimate. In particular, the construction estimate would be on an area basis with takeoffs by work units and manhour unit rates.
Apart from "trend" updates, this estimate breakdown could be sufficient to control costs to completion of the project. This estimate could be developed about 6-8 months after contract award, on an EPC reimbursable type project, as this amount of time would be required to provide an adequate completion of detailed engineering.
The most significant element of a high quality estimate is the maximizing of quantities and minimizing of factors and statistical relationships.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.