1 Project Budget & Cost Management

1 Project Budget Project Budget & cost & cost ManagementManagementSeptember 15, 2008 September 15, 20081 Hamid Omidvar, AIAC hief, Office of Planning & DevelopmentDepartment of General Services Montgomery County MarylandProject cost and Budget Management2 Hamid Omidvar, SafetyThe world of a successful projectMeet the scopedefined for the projectIt is within the established budgetIt is designed and constructed within the established scheduleMeets and exceeds industry standard of qualityProject is well documented andcommunicatedMeets sustainability and safety requirementsProject cost and Budget Management3 Hamid Omidvar, of change on projects Low client satisfaction High cost of Project Delay in the use of the facility Possible lower quality Additional draw on scarce public resources Reduced support/confidence of community and elected officials Scope Budget Schedule QualityIf changedIf changedProject cost and Budget Management4 Hamid Omidvar, challengeWe have encountered significant challenges in recent years figuring out how much to Budget for projects and how to contain costs once the Project is cost and Budget Management5 Hamid Omidvar.

2 Of projects are experiencing cost overrun and delay First chance to implement solution was in summer of 2007 for our FY09-14 CIP cycle2005-2006 Project Management studyDecided to review process and identify issues impacting our projects deliveryWe are facing new challenges and are continuously in search of better Project delivery Issues & Developed SolutionsReviewed our Project Management processConsulted with experts in this fieldStudied other jurisdictions for their methodologiesAttended seminars and classesGathered projects historical data & analyzed themProject cost and Budget Management6 Hamid Omidvar, Program of Requirements (POR)is well written (Building program)2. cost estimatesare accurate, Scheduleis realistic3. Risk factorsare recognized and successfully assessed4. Good Project Management skills5. Qualified AEwith track record of design to Budget is selected6.

3 Good design and construction documentsare produced7. Changesare minimum during design and construction8. Project costs and schedule are controlledin all phases of project9. Market is analyzed at the bid time10. Qualified construction contractorwith track record of construction to Budget is selected11. Good construction Management and administration 2005-2006 Project Management study-characteristics of a successful projectMay 20051. Standardize Program of Requirements2. Create a Project cost and Budget development system. 3. Quantify risk factors and incorporate them as cost4. Train Project managers in systematic Project management5. Look for track record in A/E selection6. Develop design quality control system7. Develop change tracking system8. Professional cost estimates are produced in all phases of the Project & maintain a cost data base system for projects9.

4 Check with the local contractors and owners before bid10. More RFP (qualification) than IFB (low bid) for construction11. Develop construction quality control systemSolutionRequirementProject cost and Budget Management7 Hamid Omidvar, to develop an accurate and reliable cost estimate and Project budgetProject cost and Budget Management8 Hamid Omidvar, Management cycle in CIPE stablish ScopeProgram of RequirementsCost Estimate Program of RequirementsIdentifyCost ( Project )RisksCreate Project BudgetBudget ApprovalDevelopBudget Control &Risk ManagementPlanImplementation/ ExpenditureInvoicesBudget & ExpenditureControlAdjustmentsneededAdjus tmentsneededProjectClose outProject cost and Budget Management9 Hamid Omidvar, preparationProject ApprovalConceptual PlanningSchematic DesignDesign DevelopmentConstruction DocumentBidConstructionPost ConstructionDesignProject Phases & BudgetingTypical Project ScheduleNote:Operating budgets are not included in this presentationNote.

5 Operating budgets are not included in this presentationProject cost and Budget Management10 Hamid Omidvar, study - construction cost change per phase per selected projects100%110%120%130%140%150%160%170% 180%190%PlanningSchematic designDesign DevelopmentConstruction DocumentsBidFinalLong Branch LibraryPiccard DriveDPSgrey CourthouseGermantown Indoor Poolgermantown LibraryRockville LibraryMCCFMCDC ReuseStrathmore HallGlen Echo park IIIGlen Echo ArcadeDriver Training FacilityEOB GarageBrookville Service Park 1 Brookville Service Park 2 PSTA 1 PSTA 2 Travillah PoolBethesda Outdoor Pool4th District Police StationTotal17%6% Project cost and Budget Management11 Hamid Omidvar, Study-Risk Management in request of design and construction funds020406080100120 PlanningBudget Approval Schematic DesignDesign DevelopmentConstruction DocumentsBidFinalHigh Risk Moderate RiskLow RiskRequest Design FundRequest ConstructionFundReliability of cost estimatesProject cost and Budget Management12 Hamid Omidvar, a Project cost and Budget development systemProject cost and Budget Management13 Hamid Omidvar, of Project budgetCost of designCost of constructionGeneral condition of constructionLaborMaterialContractor s overheadContractor s profitContractor s Insurance and bondsContingenciesProject s unknowns or risks contingencyCost estimating contingencyDesign contingencyBid contingencyConstruction contingencyCost Escalation to mid point of constructionCost of landCost of furniture, equipment, move, IT, telecommunication.

6 EtcCost of Project managementProject cost and Budget Management14 Hamid Omidvar, of costs included in the Project Budget ElementsValue LMLabor & material cost $/SF or $/CSI divisionsOPBO verhead + Profit + Bond~18% of LMICI nitial construction cost EstimateLM + OPB BCBid contingency0-3% of CCAPCCC onstruction Contingency10-15% of CCAP (New vs. Reno.)AEA/E and other needed consultants fee7-12% of CCAPPMP roject Management fee2-4% of CCAPOO ther costs (Furniture, move, etc.) Project specific LLand costsProject specific PCTotal Project cost (PDF)CCAP+BC+CC+AE+PM+O+LLDLEED Contingency3-9% of IC Silver to GoldRFCost of unknowns-Risks0-30% of ICDCD esign Contingency10% of ICEE scalation to mid point of constructionx% of IC per year compound methodCCAP construction Contract Award PriceIC+LD+RF+DC+EProject cost and Budget Management15 Hamid Omidvar, Escalation covers Increase in cost of materials and labor from the date of the cost estimate to the mid point of construction It is calculated by the county s chosen indices provided by agencies such as ENR that monitor construction industry construction cost EscalationYear to mid point of constructionEscalation Rate / Year$ EscalationConstruction Escalation amount for a $1,000,000project5 years151234 Project cost and Budget Management16 Hamid Omidvar.

7 Of cost elements in total Project costCost $1000 % of total $/SFCost $1000 % of total $/SFCost $1000% of total $/SFCost $1000% of total $/SFCost $1000% of total $/SFAE969$ $ 1,342$ $ 786$ $ 3,480$ $ 2,968$ $ PM440$ $ 536$ $ 393$ $ 870$ $ 848$ $ Other AE398$ $ 546$ $ 466$ $ 879$ $ 470$ $ Construction6,512$ $ 9,006$ $ 4,791$ $ 34,504$ $ 37,365$ $ Utility190$ $ 440$ $ 430$ $ 240$ $ 160$ $ FFE500$ $ 400$ $ 500$ $ 600$ $ 2,500$ $ Other460$ $ 630$ $ 580$ $ 450$ $ 2,550$ $ LEED374$ $ 542$ $ 309$ $ 1,035$ $ 806$ $ Risks-$ $ -$ $ -$ $ -$ $ -$ $ Design Contingency775$ $ 1,052$ $ 608$ $ 3,653$ $ 3.

8 177$ $ Bid contingency225$ $ 314$ $ 111$ $ 584$ $ 456$ $ construction Contingency774$ $ 1,076$ $ 678$ $ 3,968$ $ 3,707$ $ Escalation1,733$ $ 3,980$ $ 1,530$ $ 5,094$ $ 3,038$ $ Total13,350$ $ 19,864$ $ 11,182$ $ 55,357$ $ 58,045$ $ SF26,000 31,859 25,443 122,000 408,000 Year to mid point of rate5%5%5%5%5%LibraryCommunity CenterFire StationBus depotOffice RenovationSelected CIP projects Budget comparison chart FY09 Project cost and Budget Management17 Hamid Omidvar, , Contingency, , , , AE, , contingency, Project Budget elementsShare of cost elements in total Project costProject cost and Budget Management18 Hamid Omidvar, Commitment to Budget Withholding of contingencies Project expenditure & withholdings during various phases Project cost and Budget Management19 Hamid Omidvar, cost & Budget Development WorkbookProject Budgeting ToolsProject cost and Budget Management20 Hamid Omidvar, Budgeting Tools PDF Preparation WorkbookProject cost & Budget WorkbookDRAFTFY 09-14 Project Information Office of Planning & Development - OPDP roject #5234567 Department of Gener al S er vices - DGSI ndex Code31004567project address101 Rockviile pikeLast updated on:Council District2 September 15, 2008 Council RepresentativeNameCustomer/ Using AgencyUsing DepartmentPri nt ed on.

9 Pl an n i ng Are aPlanning AreaAugust 22, 2008 Project CategoryCategoryThis CIP cycleFY 09-14 Version CIP FYFY08 Last CIP FYFY07 Table o f contentsExecutive ManagerHamid Omidvar01-Cover SheetDesign ManagerRassa Davoodpour02- construction cost EstimateProject ManagerRandall Hawkins03-Permit feeA/E ConsultantTBD04-Risk FactorsConstruction ContractorTBD05-DCD Best cost EstimateProperty Size - Acres506- cost SummaryProgrammable New- SF from POR10,000 07- Project Schedule and ExpenditureProgram to Gross Factor1. 60 08-Expenditure and Appropriation Per FYEstimated Gross New- SF16,000 09-PDF FormRenovation Gross - SF5,000 10-PDF Change Comparison Total Project Gross - SF21,000 Is this a renovation Project ?

10 (Y or N)Y Sample ProjectProject cost and Budget Management21 Hamid Omidvar, Budgeting Tools PDF Preparation Workbook Initial construction cost Estimate Project #5234567 Initial cost EstimateThis ProgramFY 09-14 cost Estimating August 15, 2008 ACTIVITYCostGen. OverheadGC profitPerf. BondEst. of total$/SF02 Existing ConcreteC2196,83519,68417,32111,6924,911 12,522262, MasonryC2275,56927,55724,25016,3696,8751 7,531368, MetalC2275,56927,55724,25016,3696,87517, 531368, Wood, Plastics, and compositesC239,3673,9373,4642,3389822,50 452, Thermal and Moisture ProtectionC2157,46815,74713,8579,3543,92 910,018210, Openings (Doors & Windows)C2236,20223,62020,78614,0305,893 15,027315, FinishesC2157,46815,74713,8579,3543,9291 0,018210, SpecialtiesC278,7347,8736,9294,6771,9645 ,009105, EquipmentC239,3673,9373,4642,3389822,504 52, FurnishingsC239,3673,9373,4642,3389822,5 0452, Special ConstructionC278,7347,8736,9294,6771,964 5,009105, Conveying EquipmentC278,7347,8736,9294,6771,9645,0 09105, Fire SuppressionC2157,46815,74713,8579,3543,9 2910,018210, PlumbingC2157,46815,74713,8579,3543,9291 0,018210, HVACC2944,80894,48183,14356,12223,57160, 1061,262, Integrated AutomationC278,7347,8736,9294,6771,9645, 009105, ElectricalC2314,93631,49427,71418,7077,8 5720,035420, CommunicationsC239,3673,9373,4642,338982 2,50452, Electronic Safety and SecurityC239,3673,9373,4642,3389822,5045 2, EarthworkS1118,10111,81010,3937,0152,946 7,513157, Exterior ImprovementS2314,93631,49427,71418,7077.