Posted: March 4, 2016 | Estimating
By Rich Ullrich, CPE
Are you getting the most out of this publication? Is it possible that DCD can be an even greater resource to you and your firm?
We have been subscribers for years, and each issue of DCD is a welcome and valuable part of our perpetual real-time cost library. We operate as independent cost consultants, always looking to provide additional value to our clients in the ever-changing, demanding, and competitive industry of the built environment. Our ongoing challenge is to effectively communicate that we have the knowledge, experience, and lifecycle vision. It’s this vision, coupled with our methods, which influence cost, time, and quality – and help to make a project successful.
Before realizing there was a real need in the marketplace for unbiased, independent forecasting of probable construction costs, we viewed DCD differently. DCD was a source of general interest, information, and entertainment. I would review the article, making mental notes of the parameters and particulars, while building an estimate in my head. At the same time, I’d cover the cost side of the article and mentally formulate an answer as to what the cost range may be. Often my “guesses” would be in the ballpark, and other times, they would not even be close! I’d ask myself, “Do you have any idea at all as to what you’re doing?”
Upon further review of the DCD case study, the quality, building systems, and special conditions weren’t even similar to our initial perception. Yes, estimators are a strange lot. These days, we don’t simply read a DCD case study, we take it much further. We read and re-read and make a decision to investigate further. Analysis can become time consuming — depending on the depth of the effort. We analyze, scrutinize, and break down pieces (line items, components, and assemblies). We then move these parts around and put them back together into alternate formats, and then finally convert them into useful data.
How do we do that? We structure our efforts around the standardization of the UniFormat System. Using actual cost history that we are knowledgeable about works best, especially when you follow up with your past estimating efforts.
We use Excel spreadsheets — lots and lots of spreadsheets tied to indexes and formulas. What has evolved is similar to the DCD Archives, but with more bells and whistles — information that can illustrate critical components and program requirements.
Most projects presented in DCD are highlighted, dog eared, and coffee stained. We take this per-project data, tie it to a basis of the estimate, mark time, and index it to inflation, with production/labor rates and material indices. We then catalog them per product type. We do this to provide a tighter target range with greater confidence.
The real art and science of what we do is taking this information and adjusting it for size, location, and market conditions. This helps us quickly get it close to the actual price. We separate the building sitework, substructure, shell, services, and interiors using the organizational structure of UniFormat II.
We spend additional time carving out and tagging the exterior enclosure costs and what we term “wheels,” which can be building cores or space clusters (i.e., bathrooms & special construction items) to help identify where the money is and what’s influencing our opinion. From that, design professionals can make informed decisions.
Most architects cringe at the term “value engineering”, but if you possess a value engineering mindset early and creatively in the process, you can deliver tremendous value. VE late in the design process is painful and should be avoided if at all possible.
We are highly analytical, detailed, and thorough, and work for clients with dominant personalities. Many of our clients ask questions, but don’t have time for the answers. They seek quick solutions for small fees and are not at all interested in what it should cost … they want to know what it will cost.
Earlier this year, we were asked to provide design development opinions on various building types and unit configurations to identify the best value in an affordable housing complex. In learning the Owner’s budget and with quick ciphering, I informed him he had a budget problem. With our history and the assistance of DCD “adjusted” figures, we proceeded to give him more than a dozen examples of similar projects, with the warning, “Do not continue down this road, the bridge is out!” Ten months later, working on another effort, I asked, “Who’s building that?” I was informed that the job is “In redesign and they are looking for more money… it came in over budget.” In my best Jerry Seinfeld impression, I said, “That’s a shame… hey, how about that game last night!?”
We have DCD indexed into cost keys and product type, by both size and year. This DCD data and the DCD archive tool are used to supplement our body of work and add value and confidence for our clients. By doing this, we can tighten up the probability of opinion, before the resources are expended down the wrong path.
Often, preconstruction and estimating fees are not what they need to be for the required effort. With certain product/project types, what is really needed is a running “video,” unfortunately we are constrained by time and money, and are granted fees for providing a mere “snapshot” for program cost.
Before we run your meter, before we peel off the layers of a complex project, before the peer gate reviews and reality checks, we call upon DCD and our collective history to see if we may have a project. We can provide a quick opinion before many resources are invested or wasted.
Early on at the “Cost of Magnitude,” “schematic,”and “conceptual” levels of cost forecasting, DCD magazine and the DCD archives are invaluable resources to complement our efforts in providing informed, focused opinions and an executive summary of probable cost that is both reasonable, reliable, and bankable.
About the author: Rich Ullrich, CPE is a Certified Professional Estimator with Lifetime status from ASPE, American Society of Professional Estimators. He is in his tenth year of operating as an independent cost consultant. His practice, Everest Estimating, LLC, St. Louis, MO. is a Validated Consulting Cost Estimating firm as recognized by CERT, the Consulting Estimators Round Table. He can be reached at firstname.lastname@example.org