Section 2.2 Estimating Processes and Practices Flashcards Preview

AACE Certification > Section 2.2 Estimating Processes and Practices > Flashcards

Flashcards in Section 2.2 Estimating Processes and Practices Deck (25)
Loading flashcards...
1

1

Which are the main Estimating Processes and Practices

1

Planning the Estimate
Estimating Methodologies
Quantification
Costing
Pricing
Estimate Conditioning
Risk Evaluation and
Contingency Determination
Estimate Documentation
Estimate Reconciliation
Estimate Review and
Validation
Estimate Reporting
Estimate Closeout

2

1

The initial step in estimating is to prepare a plan to go forward. The major steps are to:

1

Determine the purpose of the estimate

Determine the needs of the stakeholders

Determine the scope

Identify responsibilities

Prepare a timeline.

3

1

WORK BREAKDOWN STRUCTURE

1

Framework for organizing and ordering the activities that makes up a project. Systematic approach to reflect a top-down product oriented hierarchy structure with each lower level providing more detail and smaller elements of the overall work.

4

1

The selection of estimating methodologies depends on

1

The selection of estimating methodologies depends on the level of scope definition, the time available to prepare the estimate, the purpose of the estimate, and the resources and tools available for the estimating effort.

5

1

what is Take‐off

1

a specific type of quantification that is a measurement and listing of quantities of materials from drawings in order to support the estimate costing process and/or to support the material procurement process

6

1

BATTERY LIMIT

1

Comprises one or more geographic boundaries, imaginary or real, enclosing a plant or unit being engineered and/or erected, established for the purpose of providing a means of specifically identifying certain portions of the plant, related groups of equipment, or associated facilities

7

1

QUANTITY SURVEYING

1

A formalized method of periodically (typically monthly) detailing the actual progress accomplished on individual activities and the units of work performed or put in place.

8

1

LABOR BURDEN

1

Fringe benefits plus taxes and insurances the employer is required to pay by law based on labor payroll, on behalf of or for the benefit of labor

9

1

OVERHEAD

1

A cost or expense inherent in the performing of an operation, (e.g., engineering, construction, operating, or manufacturing) which cannot be charged to or identified with a part of the work, product or asset and, therefore, must be allocated on some arbitrary base believed to be equitable, or handled as a business expense independent of the volume of production

10

1

Burden

1

In construction, the cost of maintaining an office with staff other than operating personnel. Also includes federal, state and local taxes, fringe benefits and other union contract obligations. In manufacturing, burden sometimes denotes overhead.

11

1

Labor productivity

1

A measure of production output relative to labor input.

12

1

LABOR PRODUCTIVITY FACTOR

1

A value by which a labor productivity measure for a reference project or activity is multiplied to obtain an adjusted productivity measure for the same of similar project or activity under a different set of conditions

13

1

The process of costing relies on what?

1

The process of costing relies on the estimator’s knowledge of the nature of the scope of work and the resources available for production.

14

1

Pricing

1

Pricing is defined as “the amount of money asked or given for a product” (example., exchange value). The chief function of price is rationing the existing supply among prospective buyers. While quantification and costing are the responsibility of the project cost estimator, pricing is the responsibility of management.

In a project context, pricing is a term used to describe the process of adjusting estimated costs for specific project terms and conditions and commercial terms or market conditions

15

1

The inputs to the pricing process include

1

The inputs to the pricing process include individual item costs, knowledge of the organization’s overhead costs and profit requirements, as well as the current conditions affecting the competitive market situation.

16

1

pricing objectives

1

maximization of short‐term profit, maximization of long‐term profit, market penetration, etc.

17

1

DAMAGES, LIQUIDATED

1

An amount of money stated in the contract as being the liability of a contractor for failure to complete the work by the designated time

18

1

Conditioning

1

Conditioning is adjusting the estimate to conform to all contract conditions. Contract conditions define the rights and obligations of the contracting parties.

19

1

Front End Loading

1

Defining the project scope and plans in a way that assures the best practical level of definition is achieved as needed to support a project decision gate.

20

1

Documentation of the cost estimate is critical because

1

Documentation of the cost estimate is critical because it provides an accurate audit of the project cost history and becomes the basis for change management and dispute resolution.

21

1

The process of estimate reconciliation consists

1

The process of estimate reconciliation consists of resolving or otherwise reconciling variances between the estimate and any previous versions of the estimate, any alternative expectations of the value of the estimate, or any estimates based on a similar scope of work. The process of reconciliation identifies any cost differences due to changes in scope (i.e., quantity), pricing, methods of accomplishment, or risk between the two versions of the estimate.

 

22

1

What is included in a well prepared estimate variance report?

1

A well‐prepared estimate variance report will describe any significant differences in scope,
pricing, or risk resulting in differences between any two estimates or an estimate and an accounting being reconciled.

23

1

When occurs reconciliation?

1

Reconciliation should occur when the differences between two estimates for the same scope of work are greater than or less than an established threshold; i.e., 10% of total estimated cost.

24

1

ADDENDA

1

Written or graphic instruments issued prior to the date for opening of bids which may interpret or modify the bidding documents by additions, deletions, clarification, or corrections.

25

1

The essential steps in review of an estimate include

1

The essential steps in review of an estimate include:

Review of the Basis of Estimate (BOE).

Thorough review of the estimate documents to assure all addenda, drawings, quotes, and other items have been included.

Perform random checks of quantity take‐offs, wage rates, unit pricing, etc.

Validation of the estimate, comparing the cost against other project baselines and performing “sanity checks” of the components and total of the estimate.