77 lines
1.9 KiB
Markdown
77 lines
1.9 KiB
Markdown
---
|
|
tags:
|
|
- topic/estimating
|
|
- type/philosophy
|
|
- topic/construction
|
|
title: 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
|
|
|
|
This is a dangerous superstition
|
|
which encourages unproductive conflict.
|
|
|
|
Operations is blamed for failing to meet targets
|
|
not intended for the purpose,
|
|
...
|
|
|
|
***
|
|
|
|
Construction contract bids are inherently risky.
|
|
|
|
Executives want to bid because construction can be profitable.
|
|
Executives hire estimators to mitigate risk of loss.
|
|
|
|
An estimator's value is determined by their
|
|
|
|
An estimator's job is to mitigate
|
|
|
|
Estimators downplay estimate risk
|
|
in order to receive approval to bid
|
|
|
|
It is not possible to measure productivity from estimate quantities.[^1]
|
|
|
|
[^1]: Not with certainty anyway. With Bayes, though, anything is possible.
|
|
|
|
## For Each Party
|
|
|
|
### For the Solicitor
|
|
|
|
#### System Coordination
|
|
|
|
#### 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)
|
|
|
|
%% TODO: "Determine the sale price of a service" %%
|
|
|
|
> [!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.
|