Mastering Project Cost Estimation With Budgeting and Value Engineering

Overview:

Introduction:

This training program offers a series of estimating techniques and processes. It presents the value engineering methodology which emphasizes the return-on-investment aspect of decision-making in terms of lifecycle costs during project planning, procurement, and execution.

Program Objectives:

At the end of this program the participants will be able to:

• Acquire expertise in project estimating techniques, spanning from conceptualization to detailed estimates.

• Understand diverse estimate types for accurate and progressive cost estimation throughout projects.

• Comprehend contract variations based on risk distribution among parties involved.

• Implement incentive structures to optimize contract outcomes effectively.

• Gather and organize project-relevant information and costs for informed decision-making.

• Incorporate stakeholder input in project charter development and report project alternatives convincingly to top management.

Targeted Audience:

• Project Managers.

• Project Cost Estimators.

• Cost Controllers.

• Project Planners.

• Contract Professionals.

• Project Procurement Staff.

Program Outlines:

Unit 1:

Cost Estimating Basics:

• Explore the Estimating Life Cycle and Phases of the Design Process.

• Understand various types of Cost Estimates and Contract Structures.

• Learn Basic Estimating Procedures and techniques for Lump-sum, Unit-price, and Cost-plus contracts.

• Differentiate between conceptual and detailed estimates.

• Understand the importance of contingencies in cost estimation.

Unit 2:

Broad Scope Cost Estimating Techniques:

• Dive into Advanced Cost Estimating Techniques including PERT analysis and Standard Deviation calculations.

• Understand adjustments for Project Cost Estimates based on previous projects and economic factors.

• Learn to estimate project durations and costs using Learning Curves and Economic Price Adjustment.

• Apply trend analysis for cost forecasting.

• Incorporate inflation and market conditions into estimates.

Unit 3:

Budget Estimating Process:

• Master the process of Budget Estimating across different project phases.

• Develop budget estimates for programming, schematic design, and design development stages.

• Understand the importance of pre-construction services estimates and budget control mechanisms.

• Explore cash flow analysis and its role in project budgeting.

• Learn techniques for handling project scope changes during budgeting.

Unit 4:

Bid Contract Estimating Process:

• Explore the intricacies of Bid Contract Estimating, including work breakdown structures and subcontractor management.

• Learn the process of soliciting lump-sum bids and pricing self-performed work.

• Understand the accuracy validation and finalization steps in the bidding process.

• Analyze bid comparison techniques to ensure competitive pricing.

• Examine strategies for managing bid adjustments during contract negotiations.

Unit 5:

Unit Price Estimates:

• Understand the process of developing unit price bid forms and estimating direct and indirect costs.

• Master risk analysis techniques and variations-in-quantity contract provisions.

• Finalize bids through comprehensive risk analysis and bid finalization processes.

• Learn how to account for material and labor cost fluctuations.

• Explore methods for handling change orders in unit price contracts.

Unit 6:

Negotiated Contract Estimating:

• Explore the process of developing Guaranteed Maximum Price Estimates and negotiating contracts.

• Understand the fee determination and reimbursement structures for negotiated contracts.

• Develop strategies for responding to requests for proposals and negotiating subcontracts effectively.

• Learn techniques for managing contingency funds in negotiated contracts.

• Explore the benefits and risks associated with negotiated contract agreements.

Unit 7:

Contract Types and Compensation Arrangements:

• Understand the distribution of risk in contracting and project risk profiles.

• Explore various contract types, including fixed-price contracts, cost-plus contracts, and time-and-materials contracts.

• Master the intricacies of fee determination and cost savings strategies in different contract types.

• Understand performance incentives and penalties in contracts.

• Analyze compensation structures for cost savings and project efficiency.

Unit 8:

Narrow Scope Cost Estimating Techniques:

• Delve into specific cost estimating techniques such as power-sizing, factor estimates, and parametric cost estimating.

• Understand adjustments for project type, quality level, and economic constraints.

• Analyze estimating accuracy and apply techniques to adjust for project size and location.

• Explore ways to handle uncertainties in narrow scope projects.

• Understand the role of historical data in developing narrow scope estimates.

Unit 9:

Framework for Applying Value Engineering in Projects:

• Gain insight into the concepts and principles of Value Engineering and its importance in project optimization.

• Understand the Value Engineering process from project definition to initiation and value analysis.

• Learn techniques for identifying relationships between value, cost, and worth, and initiating Value Engineering phases effectively.

• Explore cost-saving opportunities through the application of Value Engineering.

• Learn how to prioritize functions based on cost and value impact.

Unit 10:

Function Analysis and Creative Problem Solving:

• Explore the role of Function Analysis in projects and how it helps define project constraints and cost estimates.

• Foster creativity within project teams and apply creative thinking techniques to optimize project value.

• Understand the output of the Evaluation Phase and its significance in making informed project decisions.

• Apply brainstorming techniques to uncover innovative cost-saving solutions.

• Learn to integrate Function Analysis with overall project goals for enhanced outcomes.