gregory s. martin, esq. the construction estimate and cost controls from formulation to project...

Gregory S. Martin, Esq.

The Construction Estimate and Cost Controls

From Formulation to Project Closeout – A Help or Hindrance in Litigation

Gregory S. Martin, Esq.

Common Issue in Construction Litigation

I. CommunicationA. Who is listening?

B. Who is the Audience?

II. PerceptionA. Boring Logs are clear, but jury disagrees.

B. Perception = Reality

So what does this have to do with Estimating?

Gregory S. Martin, Esq.

Communication and Perception

Estimating and Bidding

Gregory S. Martin, Esq.

What is Estimating?

I. A guarantee?

II. A promise?

III. Simply a guess?

Gregory S. Martin, Esq.

ASPE Canon #1

Professional estimators shall perform services in areas of their disciple and competence.

Gregory S. Martin, Esq.

ASPE Canon #6

Professional estimators shall utilize their education, years of experience and acquired skills in the preparation of each estimate or assignment with full commitment to make each estimate or assignment as detailed and accurate as their talents and abilities allow.

Gregory S. Martin, Esq.

ASPE Canon #4

Professional estimators shall safeguard and keep in confidence all knowledge of business affairs and technical procedures of an employer and client.

Gregory S. Martin, Esq.

Martin’s Corollary

Professional estimators shall use best efforts to understand the project, bid documents and site conditions and shall reconcile or raise questions about apparent conflicts.

Gregory S. Martin, Esq.

The Extreme

When the Estimate is under a microscope –

The Claim.

Gregory S. Martin, Esq.

5 Basic Methods of Damage Calculation

I. Total Cost or Modified Total CostII. Direct CostIII. Measured MileIV. % FactorV. Estimated

Each implicate the Estimate – either directly or indirectly.

Gregory S. Martin, Esq.

Total Cost Method or Modified TCM

I. What is it?

II. What about a Line Item actual to budget comparison?

III. Estimate is Front and Center!What is the reasonableness?

IV. When is reasonableness tested?Right after the bid is submitted? Or, years later?

Gregory S. Martin, Esq.

Total Cost Method or Modified TCM

V. Canon #6 – Detailed and accurate

VI.Martin’s Corollary – Was project understood? Were conflicts reconciled?

VII.Case Example

Gregory S. Martin, Esq.

Remaining Methods

I. Direct Costs, Measured Mile, % Factor and Estimated

II. What are each?

III. How does each implicate the estimate?

IV. Case Example

Gregory S. Martin, Esq.

So what are the Lessons Learned?

Lesson #1 – Be organized and maintain organization.

Lesson #2 – Make notes – describe your thought process.

Lesson #3 – Make sure you understand the Bid Docs. If you don’t know, ask.

Lesson #4 – Understand and evaluate the risk.Lesson #5 – Communicate

Gregory S. Martin, Esq.

Questions

Gregory S. Martin, Esqwww.gsmartinlaw.com

Gregory S. Martin, Esq.

The Construction Estimate and Cost Controls

From Formulation to Project Closeout – A Help or Hindrance in Litigation