TUNNEL COST ESTIMATING

RICHARD REDMOND PE

AECOM

VICE PRESIDENT / PROGRAM MANAGER

WMATA GALLERY PLACE PROJECT

Richard.Redmond@aecom.com

Resume – 39 Years

15 Years Heavy / Civil / Tunnel Contractor Perini Corporation

Kiewit Construction Co

Schiavone Construction

MacLean Grove

24 Years Program Manager / Construction Manager

Program Manager $ 1.5 Billion San Francisco Central Subway

Construction Manager $ 750 Million NYCT Second Ave 72 St Station Mining

Construction Manager $ 1.1 Billion NYCT 7 Subway Extension

GOALS OF TODAY’S WORKSHOP

Look into an ENHANCED approach tocurrent techniques of creating anEngineer’s Estimating

Cost Estimating as Seen “ through theeyes of the Contractor ”

Understand the way a Contractor pricesa project.

No (2) projects are the same

Current ThinkingThe Engineer’s Estimate

Engineer’s Estimate is Many Times Based on “ Like Work ” – but from other Cities or Countries

Engineer’s Estimate is Based on Recent Project Bid Numbers

Engineer’s Estimate is Prepared Separately from Project Schedule Calculation

WE WILL HAVE DIFFERENCES

Our Estimate, if Prepared inSimilar Fashion to theContractor should Produce:

Less Variance in Pricing

We “ want to come in 2nd orin the middle of the pack ”,when the bids are opened

Good Basis of Comparisonfor Evaluating ContractorChanges or Claims

TODAY is Bid Opening Day

Project Cost Drivers

Scope of the Work Site Constraints Community Mitigation Union Agreements Number of Qualified

Bidders Owners Terms and

Conditions

Types of Estimates

Budget Estimate Conceptual Design

Estimate Preliminary Engineering

Estimate Final Design Estimate

CONTRACTOR’S ESTIMATE

BUDGET ESTIMATE

Estimate developed withoutthe benefit of a design

Based on Initial Studies and“ Hi Level “ Drawings

It’s a starting point, but it isUSUALLY GOSPEL – NEVERCHANGES

Typical tunnel projects in thearea have been costing $ X/ mile

Conceptual Estimate

Some plans / schemes developed Some project issues / constraints encountered Some Constructability defined

Calculate Quantities From Sketches

We are very familiar with what’s typically designed in the Industry

3 ft thick slurry walls and guide walls

utility relocations

support of excavation

cast in place concrete

piping

mechanical and electrical

Preliminary Engineering Estimate

Project Packaging Plan Derived Construction Sequences Become Defined Engineering developed to “ Build-able Level”

Preliminary EngineeringPackaging / Phasing Plan

Phase 1 - 96th to 62nd

Phase 2 - 125th to 96th

Phase 3 - 62nd to HoustonPhase 4 - Houston to Hanover

DESIGN IS DONEFinal Design Estimate

We think we have engineered everything We have dictated sometimes Unrealistic

Terms & Conditions We may not have shared the risk We say all unknowns are his, “ field

conditions ”

We wonder why we get high bids

Overall Project Cost Contractor / Owner Estimate

Contractor OwnerLabor

ProductivityPermanent Materials

SuppliesConstruction Equipment

General ConditionsContractor’s Margin

Design CostConstruction Administration

Change OrdersForce Account

PropertyOCIP

Utility FeeArtAFI

Contractor EstimateUnderlying Principles

Identify Project Constraints and Restrictions

Based on Constructability and Phasing of the work

Identify all Cost categories

Estimates prepared by people familiar with Contracting practices and have bid similar projects

Contractors Cost items

Labor Contractor Construction Material Equipment Permanent Materials Subcontractor Contractors Indirect Costs Margin Insurance

Construction Schedule Duration =Production Rates

Contractors Estimate

Develop “ crews ” with real wage rates, production rates, material and equipment costs to generate “ unit prices ” specific to this project.

Estimate built up using materials, construction procedures, productivity, and mark ups, not unit prices from a “ Means, Dodge ”

How Do We Develop Pricing

Labor “ Loaded Labor rates ” are

calculated using the latest Union Agreements – Davis Bacon Act

Identify Trades to Type of Work, who’s jurisdiction ?

Payroll taxes and Workmans Comp

How Do We Develop Pricing

Material

Recent Quotations from Suppliers or Manufacturers

Permanent Materials

STS – Small Tools and Supplies

How Do We Develop Pricing

Equipment

Cost Reference Guide “ Company Owned Equipment ”

Outside Rental Rates, quotes

Equipment costs include Operating Expenses

How Do We Develop Pricing

Subcontractors

Specialty Work

Not by the GC generally

Hard Pricing from Subs reduce GC’s Cost Exposure

Means and Methods

Develop our Own Construction Sequencing

Develop Production Rates

Develop Temporary Works

Identify Which Trades Perform Which Work

Using HCSS Software

Most Contractors use This Software

Build Crews – Labor, Equip, Materials

Define Production Rates

Calculate Labor rates from Union Agreements, Davis Bacon Act

Cost Estimate Based on Means and Methods of Constructing the Work

HCSS Data Base

Data Base of ; Craft Labor Rates Equipment Rental Rates Permanent material Costs Consumable Costs or ST&S

Produce Construction Crews, Production Rates = Unit Prices

Direct’s, Indirect’s, General Conditions

Direct Costs – work performed by Trades Labor,Equip,ST&S,Subs, Perm Material

Indirect Costs ( Fixed and Variable ) Proj Mgr Superintendent Office Trailers Temporary Facilities Temporary Construction Bonds Safety Equipment

Insurance

Workers Comp

Professional Liability

General Liability

Excess Liability

His own Equipment Insurance

Deductibles

Contractor Margin

Increase cost of Labor Materials Supply Contractors Risk

Management Productivity Owner Risk Sharing Typically a % of Direct

Labor

Calculating the Unit Price

Unit prices are calculated based upon the following:

Labor crews with expected production rates

Equipment costs, rental rates, operating costs

ST&S Material – contractor supplies like form lumber, oxygen & Acetylene, not incorporated in the work

Permanent material – material incorporated in the work

Subcontractors – specialty work quotations, not typically performed by the General Contractor.

Project Contingency

Follow the FTA Guidelines on Most Projects Identify the Risk, _Perform a Risk Assessment

Allowance for Indeterminates (AFI) 25% for Conceptual Design Estimate 15% at end of Preliminary Design 2% at the end of Final Design

Additional Work Orders 0 % to 5 % of Construction Cost

OWNERS - Track Record on Projects What is Your Experience to Date

Recap on Estimating

An Enhanced Approach Tailored to the Specific Project Closely Mirror’s a Contractor’s Estimate Less Variance at Bid Opening Verify’s Contractor Bid Verify’s Contractor Schedule

Thanks !