Costing Estimates and Budgeting

2668 WordsMar 8, 201311 Pages
AACE International Recommended Practice No. 34R-05 BASIS OF ESTIMATE TCM Framework: 7.3 – Cost Estimating and Budgeting Acknowledgments: Todd Pickett, CCC (Author) Peter R. Bredehoeft, Jr. Ted A. Downen Larry R. Dysert, CCC Bruce G. Elliott, CCC John K. Hollmann, PE CCE Copyright 2010 AACE International, Inc. Stephen M. Jacobson CCC Carlton W. Karlik, PE Christopher L. Kinney Donald F. McDonald, Jr. PE CCE PSP Bernard A. Pietlock CCC Richard A. Selg, CCE AACE International Recommended Practices AACE International Recommended Practice No. 34R-05 BASIS OF ESTIMATE TCM Framework: 7.3 – Cost Estimating and Budgeting July 28, 2010 PURPOSE AACE International’s Total Cost Management (TCM) Framework identifies a basis of estimate (BOE)…show more content…
Project Scope Description This section of the estimate basis should be organized to correspond with the project’s work breakdown structure (i.e., plant, building, floor, etc.). A semi-detailed description of the scope of work should be provided for each major segment of the project. Identify any major pieces of process equipment or components. It’s also good practice to indicate the primary trades that will be involved with the project. Be as thorough as necessary, without being overly descriptive, so as to adequately explain the scope of work being estimated. Methodology The BOE should indicate the primary estimating methodology used to prepare the cost estimate. This should include documentation of the use of cost resources, historical data and project benchmarking. Documenting the level of effort or man-hours used in preparation of the estimate may also be helpful. Estimate Classification The AACE International estimate classification should be identified, along with reasons or justification used in the selection of the estimate classification. Design Basis Company standards will typically specify the technical and project information required for the classification of the estimate that is being prepared. In this section, the estimator will identify the types and status
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