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The Purpose of Construction Estimating |
The Purpose of Construction Estimating
The purpose of construction-estimating in practice is not to determine the actual cost of the scope, which would take far longer than allotted for bid,
The Myth of Estimate Accuracy
Bid estimates are not intended to be accurate individually.
This is a dangerous superstition which encourages unproductive conflict.
Operations is blamed for failing to meet targets not intended for the purpose, ...
For Each Party
For the Solicitor
- Determine feasibility of functional requirements. (see gold-plating)
For the Contractor
- Make profit to meet growth target
- Secure work for current and projected employees (fill backlog)
[!aside] I take increasing issue with the common model of measuring operational success by negative overrun, as it is incompatible with the preferable target of estimate certainty.
The Role of the Estimator
The role of the estimator is to model the potential cost distribution of the project, taking actions to reduce the model's uncertainty.
The effect of estimating methods can be represented as d\sigma,
thus efficiency is \frac{d\sigma}{dt}.
The Role of the Executive
The role of the executive is to allocate profit and contingency according to the potential cost distribution weighted by the organizational desire to win the project.