Estimating the Cost of the Job ... Design-to-cost trade studies Cross-checking Architectural studies Long-range planning Sensitivity analysisgenerating statistically correct CERs endobj 8 0 obj The high-level percentages suggested in this post can still be useful in such a case; they can be used as a rough guide to review, cross-check and critic the detailed calculation. In cost engineering, cost estimation is a basic activity. This article summarizes the methods and research related to predicting engineering design costs. Cost Estimating and Best Practices. Cost estimating is a well-developed discipline. Question 3. Variable costs can be greatly cut through optimization techniques and intelligent plant design (Towler and Sinnott, 2013). 1. <>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 720 540] /Contents 8 0 R/Group<>/Tabs/S/StructParents 1>> I am passionate about estimating as a discipline and have been a member of ACostE since 2005 and also a member of AACE International since 2011. There is no one formula that will satisfy every situation and the chances of estimating what a project will cost exactly are almost zero. Sorry, your blog cannot share posts by email. actual costs of several projects in the Front-End Engineering Design phase (FEED) are analyzed. Applying in a business proposal or accepting a job offer from a specific client are followed with the agreements on cost. They seek the optimum balance between cost, quality and time requirements." You get to deal with big budgets, design huge stuff, watch the dirt move, see it built, and hopefully see it used. But it is possible to drastically increase the accuracy of your web project estimates by: However, estimating the total costs of an offshore LNG platform or a high speed railroad is a little more complex. estimating plant capital cost total plant capital cost tic = engineering design costs + tic engineering, procurement, construction management (@20%) commissioning & validation (@ 8%) vast, comprehensive tabulation of estimating cost data presented in the March 24, 1969 issue of Chemical Engineering magazine. Engineering Costs and Cost Estimating Engineering Costs. A greater quantity of initial dredging, associated with higher initial costs, would most likely lead to Ideally, of course, deliverables and activity based resource requirement would be established and costed by Individual estimators / project engineers to arrive at the overall engineering cost for the required scope. Soft costs, soft costs are indirect costs that are normally associated to the hard cost. June 2014. The table above can be utilised to calculate the indicative high level cost for the engineering effort required for a scope (for example, only FEED engineering, or only detailed engineering etc.). Note: The actual percentage for all the above scope of work could sometimes be much more than 15% of the overall CAPEX for small projects. Change ), You are commenting using your Google account. endobj Estimating time for a web project accurately is something many attempt everyday but few manage to succeed at. Value engineering is one of the most commonly misunderstood processes in the world of cost estimating. Estimating requires instinct based on experience. The Engineering Cost Estimating method builds the overall cost estimate by summing detailed estimates done at lower levels of the Work Breakdown Structure (WBS).It’s a technique where the system being costed is broken down into lower-level components (such as parts or assemblies), each of which is costed separately for direct labor, direct material, and other costs. Staff costs (salary plus overhead) Principal: $150 per hour; Project Manager: $120 per hour; Senior Engineer: $100 per hour; Design Engineer: $75 per hour; CADD operator: $50 per hour Once both parties are familiar with each other , this can drop to 50% or even to 25% of the subcontractors engineering effort. These rough percentages are very much high level indicative numbers, based on experience, to just help with a quick calculation of the total engineering costs. Sometimes a very rough high level engineering cost for a future project might be needed for budget approvals, initial planning, contracting strategy discussions, benchmarking of bid prices or negotiating with the engineering contractors. Many engineering design projects are developed to provide sizing information from which estimates of capital and operating costs can be made. <> As a thumb rule, for most Oil & Gas projects, typically, the engineering costs generally ranges between 5 and 15% of the overall CAPEX (Capital Expenditure), depending on the scope of engineering required, project size, complexity, brownfield / greenfield development etc. Ü6±'ÎYÑL«:íeIqÓÚ2Ù"ó ºT}þ]6Å´S ³A ½Y!$Ë×)dåF. Total variable costs = 12.50 + 7.50 = $20 per person This article by K.M. So if you are having a battery pack modified by a new contractor, and they are going to use 40 of their engineering hours to do it, you will have to expend 40 engineering hours managing them. "Cost Engineers budget, plan and monitor investment projects. %PDF-1.5 <> stream The costs are escalated in accordance with the above Engineering Regulation and EM 1110-2-1304 Civil Works Construction Cost Index System (CWCCIS), dated 31 Mar 2013. ( Log Out / Estimate performance can be improved through better estimating of engineering and by cross-checking between two sides of the triangle. Engineering Build-Up Cost Estimating (also called “Grassroots”) C.3.1. NOTE: “Contract” and “Force Account” above mean engineering and design services performed by contract or by an applicant’s own employees, respectively. endobj Sð% A cost engineering reference book has chapters on capital investment cost estimation and operating cost estimation. Uk market for FEED has changed as smaller operating companies have limited access to funds s the same as,. Market for FEED has changed as smaller operating companies have limited access to.... 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