Guidelines for Construction Cost Estimating for Dam ...

1 United States Society on DamsGuidelines for ConstructionCost Estimating forDam Engineers and OwnersMay 2012 United States Society on DamsGuidelines for ConstructionCost Estimating forDam Engineers and OwnersMay 2012 The information contained in this report regarding commercial products or firms may not be used foradvertising or promotional purposes and may not be construed as an endorsement of any product or firm bythe United States Society on Dams. USSD accepts no responsibility for the statements made or the opinionsexpressed in this 2012 U. S. Society on DamsPrinted in the United States of AmericaISBN 978-1-884575-Library of Congress Control Number Society on Dams1616 Seventeenth Street, #483 Denver, CO 80202 Telephone: 303-628-5430 Fax: 303-628-5431E-mail: Society on DamsVisionTo be the nation's leading organization of professionals dedicated to advancing therole of dams for the benefit of USSD is dedicated to: Advancing the knowledge of dam engineering, Construction , planning,operation, performance, rehabilitation, decommissioning, maintenance,security and safety.

2 Fostering dam technology for socially, environmentally and financiallysustainable water resources systems; Providing public awareness of the role of dams in the management of thenation's water resources; Enhancing practices to meet current and future challenges on dams; and Representing the United States as an active member of the InternationalCommission on Large Dams (ICOLD).i FOREWORD Guidelines for Construction Cost Estimating for Dam Engineers and Owners was prepared by the USSD Committee on Construction and Rehabilitation. The White Paper provides support for responsible cost Estimating for new dams and dam rehabilitation projects.

3 It has been written for engineers and owners engaged in the planning, design and Construction of dam-related engineering projects anticipated to cost up to $100 million. This represents the collaborative effort of representatives from federal agencies, public utilities, private engineering companies and Construction contractors. Stages of project design and associated estimates, the development of a work breakdown structure, direct and indirect project costs, overhead, contingency, profit, and other owner costs are addressed as they relate to responsible cost Estimating .

4 Examples of Work Breakdown Structures for various sized projects are also presented. USSD Committee on Construction and Rehabilitation Daniel L. Johnson, Chair Samuel M. Planck, Vice Chair Horst Aschenbroich Randall P. Bass Thomas A. Brown Woodrow W. Crouch Timothy P. Dolen Frederick Ehat William R. Fiedler Kenneth D. Hansen Sara J. Heinlien Daniel J. Hertel Paul Krumm Michael J. Miller James Ray Obermeyer David B. Paul Warren J. Paul Dietmar Scheel Paul G. Schweiger Del A. Shannon John D. Smart Steven D. Summy Daniel L. Wade White Paper Sub-Committee David B.

5 Paul, Chairman Kenneth D. Hansen Daniel J. Hertel Daniel L. Johnson Michael J. Miller Warren J. Paul Samuel M. Planck Del A. Shannon The Committee on Construction and Rehabilitation would like to acknowledge and thank the following individuals, agencies and corporations for their invaluable contributions to this paper: Susan Penner, Kim Callum Paula Boren, Dan Maag, Bob Baumgarten, Ed O Connor, Robert Resch, Luis Casta eda, Matthew Wigle, Army Corps of Engineers, Bureau of Reclamation, Denver Water, Barnard Construction Company, Inc., URS Corporation, HDR Engineering, Inc.

6 , ASI Constructors, Inc., Tetra Tech, Inc. and ii TABLE OF CONTENTS SCOPE AND PURPOSE ..1 STAGES OF PROJECT DESIGN AND ASSOCIATED ESTIMATES ..3 Introduction ..3 Association for the Advancement of Cost Engineering (AACE) International ..4 The United States Bureau of Reclamation ..5 The United States Army Corps of Engineers ..6 Other Organizations.

7 9 USSD Committee on Construction and Rehabilitation ..10 Summary ..10 DEVELOPMENT OF WORK BREAKDOWN STRUCTURE ..12 Introduction ..12 Work Breakdown Structure ..12 Developing the Cost Estimate ..13 Pay Items / Bid Schedule ..14 Summary ..15 DIRECT PROJECT COSTS ..16 Introduction ..16 Labor Costs ..16 Equipment Costs ..17 Material Costs ..20 Subcontractor Costs.

8 22 Production Rates ..23 Summary ..23 INDIRECT PROJECT Introduction ..24 Bonds ..24 Safety Program ..26 Quality Control Program ..26 Contractor and Resident Engineer Job Staff ..26 Mobilization and Demobilization ..27 Job Offices and Facilities ..28 Indirect Equipment Costs ..29 General and Miscellaneous ..29 Environmental Program ..29 Construction Surveying and Staking.

9 30 Insurance and Warranty Costs ..30 Taxes ..31 Summary ..32 iii CORPORATE OVERHEAD ..34 Introduction ..34 Home Office / G&A Cost Items ..34 Cost Types ..35 Suggested Corporate Overhead Cost ..35 Summary ..35 CONTINGENCY ..36 Introduction.

10 36 Building an Engineer s Estimate with Contingency ..37 Major Sources of Uncertainty Contingency Cost ..39 Reducing Risk to Reduce Contingency ..42 Contingency at Each Level of Project Development ..42 Summary ..45 PROFIT ..46 Introduction ..46 Market Conditions / Bidding Climate ..46 Number of Qualified Bidders ..48 Prequalification of Contractors ..48 Profit ..48 Summary ..49 OTHER OWNER COSTS ..50 Introduction ..50 Project Financing.