This Recommended Pracice (RP) is brought to you as public service by AACE Internaional, the Authority for Total Cost Management.
The AACE Internaional Recommended Pracices are the main technical foundaion of our educaional and cerificaion products and services. The RPs are a series of documents that contain valuable reference informaion that has been subject to a rigorous review process and recommended for use by the AACE Internaional Technical Board.
AACE Internaional is a 501(c)(3) non-profit professional associaion serving the total cost management community since 1956. AACE Internaional provides its members and stakeholders with the resources they need to enhance their performance and ensure coninued growth and success. With over 8,500 members world-wide, AACE Internaional serves total cost management professionals in a variety of disciplines and across all industries. AACE Internaional has members in 87 countries. If you share our mission to “enable organizaions around the world to achieve their investment expectaions by managing and controlling projects, programs, and porfolios and create value by advancing technical knowledge and professional development”, then we invite you to become one of our members.
In addiion to this and other Recommended Pracices, here are just a sample of the products and services that AACE has to offer you:
Total Cost
Management®
Framework:
Total Cost Management is a systemaic approach to managing cost throughout the life
cycle of any enterprise, program, facility, project, product or service. AACE’s flagship publicaion, the TCM Framework: An Integrated Approach to Porfolio, Program and Project Management, is a structured, annotated process map that for the first ime explains each pracice area of the cost engineering field in the context of its relaionship to the other pracice areas including allied professions.
Visual TCM
Framework:
Visual TCM graphically demonstrates the integraion of the strategic asset management and project controls
process maps of the TCM Framework. The Visual TCM applicaion has been designed to provide a dynamic view of the TCM processes, from the overall strategy process maps to the mid-level processes and detailed aciviies. The processes are hyperlinked, giving the user the ability to move to and from related process maps and reference
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Recommended Practice |
material. This allows for the opimal effeciveness of understanding and using the process and sub-process in the context of and relaionship to associated sub-processes that share common strategies and objecives. Visual TCM allows the user to view and apply TCM secion-by-secion, at a sub-process or funcional level. Visual TCM is available to members at no extra fee.
Virtual Library:
Members receive free access to the Virtual Library, an online collecion of over 5000 complete technical aricles on virtually every aspect of cost engineering. Search
this extensive database and immediately retrieve the best techniques and potenial soluions to the problems confroning you and your organizaion.
Professional Practice Guides (PPGs):
Professional Pracice Guides contain the most worthwhile contribuions to the field of total cost
management. Comprehensive, well organized, and imely, each PPG is a collecion of selected aricles covering a paricular technical topic area or industry segment. The PPGs provide an excellent source of reference material and is a welcome addiion to any reference library.
Certification:
Since 1976, AACE has been cerifying individuals as Cerified Cost Consultants (CCC)/Cerified Cost Engineers (CCE); Cerified Cost Technicians (CCT);
Cerified Esimaing Professionals (CEP); Cerified Forensic Claims Consultants (CFCC); Earned Value Professionals (EVP); and Planning & Scheduling Professionals (PSP). In the midst of staggering business and economic turmoil, you need all the tools at your disposal to help shore up your career prospects. AACE cerificaion can help you and the organizaions that rely on you for help!
Online Learning
Center:
The Online Learning Center features modules based upon actual technical presentaions captured
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at our Annual Meeings. Each recorded unit includes a live audio recording of the speaker synchronized to the slides accompanying the presentaion. Each unit includes the technical paper associated with the presentaion, and a downloadable audio-only version that you may play on your mobile device or iPod. Compleion of each unit earns 0.1 AACE recerificaion credits (i.e. 0.1 CEUs). An electronic cerificate of compleion will be atached to your profile.
Conferences:
AACE Internaional’s Annual Meeing brings together the industry’s leading cost professionals in a forum focused on learning, sharing, and networking. Over 100
hours of technical presentaions and an industry tradeshow that will challenge you to beter manage, plan, schedule, and implement technology for more effecive and efficient business pracices.
The Internaional TCM Conference is a similar event that is held outside of North America – complete with technical presentaions, seminars and exhibits.
Discussion
Forums:
The discussion forums encourage the exchange of thoughts and ideas, through posing quesions and discussing topics. They
provide a great means for networking and interacion with your peers. Paricipate anyime at your convenience and receive automaic e-mail noificaions on topics that are of interest to you. With several thousand users, if you have quesions or concerns about a technical subject, program, or project - the forums are a great resource for you.
Mentoring
Program:
Looking to gain more knowledge from an experienced professional or an opportunity to help another professional?
Included with your membership, AACE offers a comprehensive mentoring program for individuals interested in sharing knowledge with others or advancing their own careers to the next level.
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Career Center:
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Salary and
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Survey:
Conducted annually, salary survey is a great resource for employers that want to gain a beter
understanding of the compeiive marketplace for talent and for employees interested in knowing how their compensaion compares with their peers in the profession.
Periodicals
Members receive a complimentary subscripion to the Cost Engineering journal, AACE’s bi-monthly professionally
peer-reviewed publicaion. It contains best-in-class technical aricles on total cost management related subjects.
It is published as both a print version and an online version.
Our bi-monthly digital publicaion, Source, focuses on AACE aciviies and items of interest to the total cost management community, with special features for our members.
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AACE International Recommended Practice No. 56R-08
COST ESTIMATE CLASSIFICATION SYSTEM –
AS APPLIED FOR THE BUILDING AND GENERAL CONSTRUCTION
INDUSTRIES
TCM Framework: 7.3 – Cost Estimating and Budgeting
Rev. December 5, 2012
Note: As AACE International Recommended Practices evolve over time, please refer to www.aacei.org for the latest revisions.
Contributors: |
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Peter R. Bredehoeft, Jr. CEP (Author) |
Frank Kutilek |
Jeffery J. Borowicz, CCC CEP PSP |
Tamera L. McCuen |
Robert B. Brown, PE |
Donald E. Parker, PE CCE |
Daniel C. Donaldson, PE CEP |
Todd W. Pickett, CCC CEP |
Larry R. Dysert, CCC CEP |
Kumar Sinnathamby, CCC |
Ricardo Garcia da Roza |
H. Lance Stephenson, CCC |
Jon M. Hollman, CCC CEP |
Kul B. Uppal, PE CEP |
John K. Hollmann, PE CCE CEP |
James D. Whiteside, II PE |
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Copyright © AACE® International |
AACE® International Recommended Practices |
AACE® International Recommended Practice No. 56R-08
COST ESTIMATE CLASSIFICATION SYSTEM – AS
APPLIED FOR THE BUILDING AND GENERAL
CONSTRUCTION INDUSTRIES
TCM Framework: 7.3 – Cost Estimating and Budgeting
December 5, 2012
PURPOSE
As a recommended practice of AACE International, the Cost Estimate Classification System provides guidelines for applying the general principles of estimate classification to project cost estimates (i.e., cost estimates that are used to evaluate, approve, and/or fund projects). The Cost Estimate Classification System maps the phases and stages of project cost estimating together with a generic project scope definition maturity and quality matrix, which can be applied across a wide variety of construction industries.
This addendum to the generic recommended practice (17R-97) provides guidelines for applying the principles of estimate classification specifically to project estimates for the building and general construction industries. It supplements 17R-97 by providing:
•a section that further defines classification concepts as they apply to the building and general construction industries;
•a chart that maps the extent and maturity of estimate input information (project definition deliverables) against the class of estimate.
As with the generic recommended practice, the intent of this addendum is to improve communications among all of the stakeholders involved with preparing, evaluating, and using project cost estimates specifically for the building and general construction industries.
The overall purpose of this recommended practice is to provide the building and general construction industry definition deliverable maturity matrix which is not provided in 17R-97. It also provides an approximate representation of the relationship of specific design input data and design deliverable maturity to the estimate accuracy and methodology used to produce the cost estimate. The estimate accuracy range is driven by many other variables and risks, so the maturity and quality of the scope definition available at the time of the estimate is not the sole determinate of accuracy; risk analysis is required for that purpose.
This document is intended to provide a guideline, not a standard. It is understood that each enterprise may have its own project and estimating processes and terminology, and may classify estimates in particular ways. This guideline provides a generic and generally acceptable classification system for the building and general construction industries that can be used as a basis to compare against. This addendum should allow each user to better assess, define, and communicate their own processes and standards in the light of generally-accepted cost engineering practice.
INTRODUCTION
For the purposes of this addendum, the term general construction is assumed to include both new construction, as well as renovation construction projects. It is intended to be used for building (vertical) construction, as well as site/civil projects. It is intended to cover projects which are repetitive and repeatable. Examples for buildings include: residential construction, commercial buildings, hotels, resorts, offices, retail, etc. This also includes site/civil projects. Examples for site/civil projects include: site development, utility infrastructure, telecommunications, water pipelines, sanitary sewer pipelines, stormwater and water resources projects. The common thread among these industries for the purpose of estimate classification is their reliance on project
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definition documents (basis of design) and schematic drawings as primary scope defining documents. These documents are key deliverables in determining the degree of project definition, and thus the extent and maturity of estimate input information. This applies to both traditional design, bid, build(DBB), design-build (DB), construction management for fee (CM-fee), construction management at risk (CM-at risk), and private-public partnerships (PPP) contracting methods.
Estimates for buildings center on: functional space requirements, structural requirements, site requirements, architectural elements, sustainability, and supporting mechanical, electrical, plumbing, and life-safety systems. As building information modeling (BIM) evolves and expands into cost estimating, AACE will be developing BIM related recommended practices in the future.
This addendum specifically does not address cost estimate classification in: process industries, environmental remediation, transportation (horizontal) infrastructure, dams, reservoir, tunnel, processes such as assembly and manufacturing, “soft asset” production such as software development, and similar industries. This RP does not cover “one-of-a-kind” type project, like concert halls, sports stadium, research building, health facilities, science laboratories and hi-tech manufacturing. Future cost estimate classification recommended practices may be defined for these specific industries.
The owner, agency, or contractor may require individual cost estimates at each of these estimate classifications or phases. The owner, agency or contractor may provide specific input on the project data or design deliverable requirements.
This guideline reflects generally-accepted cost engineering practices. This addendum was based upon the practices of a wide range of companies in the building and general construction from around the world, as well as published references and standards. Company and public standards were solicited and reviewed by the AACE International Cost Estimating Subcommittee, and the practices were found to have significant commonalities.
COST ESTIMATE CLASSIFICATION MATRIX FOR THE BUILDING AND GENERAL CONSTRUCTION INDUSTRIES
Table 1 provides a summary of the characteristics of the five estimate classes. The maturity level of definition is the sole determining (i.e., primary) characteristic of Class. In Table 1, the maturity is roughly indicated by a % of complete definition; however, it is the maturity of the defining deliverables that is the determinant, not the percent. The specific deliverables, and their maturity, or status, are provided in Table 3. The other characteristics are secondary and are generally correlated with the maturity level of project definition deliverables, as discussed in the generic RP. The characteristics are typical for the building and general construction industries but may vary from application to application.
This matrix and guideline outline an estimate classification system that is specific to the building and general construction industries. Refer to the generic estimate classification RP for a general matrix that is non-industry specific, or to other addendums for guidelines that will provide more detailed information for application in other specific industries. These will provide additional information, particularly the project definition deliverable maturity matrix which determines the class in those particular industries.
Table 1 illustrates typical ranges of accuracy ranges that are associated with the building and general construction industries. Depending on the technical and project deliverables (and other variables) and risks associated with each estimate, the accuracy range for any particular estimate is expected to fall into the ranges identified (although extreme risks can lead to wider ranges).
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Primary Characteristic |
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Secondary Characteristic |
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MATURITY LEVEL OF |
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EXPECTED |
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PROJECT DEFINITION |
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ESTIMATE |
END USAGE |
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METHODOLOGY |
ACCURACY RANGE |
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DELIVERABLES |
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CLASS |
Typical purpose of estimate |
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Typical estimating method |
Typical variation in low |
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Expressed as % of complete |
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and high ranges [a] |
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definition |
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Functional area, or |
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SF or m2 factoring, |
L: |
-20% to -30% |
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Class 5 |
0% to 2% |
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parametric models, |
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concept screening |
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H: |
+30% to +50% |
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judgment, or analogy |
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or Schematic design or |
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Parametric models, |
L: |
-10% to -20% |
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Class 4 |
1% to 15% |
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assembly driven |
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concept study |
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H: |
+20% to +30% |
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models |
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Design development, |
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Semi-detailed unit |
L: |
-5% to -15% |
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Class 3 |
10% to 40% |
budget authorization, |
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costs with assembly |
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H: |
+10% to +20% |
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feasibility |
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level line items |
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Class 2 |
30% to 75% |
Control or bid/tender, |
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Detailed unit cost with |
L: |
-5% to -10% |
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semi-detailed |
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forced detailed take-off |
H: |
+5% to +15% |
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Class 1 |
65% to 100% |
Check estimate or pre |
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Detailed unit cost with |
L: |
-3% to -5% |
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bid/tender, change order |
detailed take-off |
H: |
+3% to +10% |
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Note: [a] The state of construction complexity and availability of applicable reference cost data affect the range markedly. The +/- value represents typical percentage variation of actual cost from the cost estimate after application of contingency (typically at a 50% level of confidence) for given scope.
Table 1 – Cost Estimate Classification Matrix for Building and General Construction Industries
In addition to the degree of project definition, estimate accuracy is also driven by other systemic risks such as:
•Complexity of the project.
•Quality of reference cost estimating data.
•Quality of assumptions used in preparing the estimate.
•Experience and skill level of the estimator.
•Estimating techniques employed.
•Time and level of effort budgeted to prepare the estimate.
Systemic risks such as these are often the primary driver of accuracy; however, project-specific risks (e.g. risk events) also drive the accuracy range[9].
Another way to look at the variability associated with estimate accuracy ranges is shown in Figure 1. Depending upon the technical complexity of the project, the availability of appropriate cost reference information, the degree of project definition, and the inclusion of appropriate contingency determination, a typical Class 5 estimate for a building and general construction industry project may have an accuracy range as broad as -30% to +50%, or as narrow as -20% to +30%.
This figure also illustrates that the estimating accuracy ranges overlap the estimate classes. There are cases where a Class 5 estimate for a particular project may be as accurate as a Class 3 estimate for a different project. This may be the case if the Class 5 estimate was based on a repeat project with good cost history and data, whereas the Class 3 estimate was for a project involving a more complex building. It is for this reason that Figure 1 provides ranges of accuracy values. The accuracy range is determined through risk analysis of the specific project.
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For example, extremes are often caused by items well outside the scope of the estimate or by not defining the scope properly. An example would be a building based on a US average cost and a final decision to build it in New York City, without the estimate being re-estimated or updated to account for this change in scope.
Figure 1 – Example of the Variability in Accuracy Ranges for a Building and General Construction Industry Estimate
DETERMINATION OF THE COST ESTIMATE CLASS
The cost estimator makes the determination of the estimate class based upon the maturity level of project definition (design % complete). While the determination of the estimate class is somewhat subjective, the design input data, completeness and quality of the design deliverables serve to make the determination more objective.
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CHARACTERISTICS OF THE ESTIMATE CLASSES
The following tables (2a through 2e) provide detailed descriptions of the five estimate classifications as applied in the building and general construction industries. They are presented in the order of least-defined estimates to the most-defined estimates. These tables include brief discussions of each of the estimate characteristics that define an estimate class. For each table, the following information is provided:
•Description: A short description of the class of estimate, including a brief listing of the expected estimate inputs based on the maturity level of project definition deliverables.
•Maturity Level of Project Definition Deliverables (Primary Characteristic): Describes a particularly key deliverable and a typical target status in building and general construction decision processes, plus an indication of approximate percent of full definition of project and technical deliverables. For the building and general construction industries, this correlates with the percent of engineering and design complete.
•End Usage (Secondary Characteristic): A short discussion of the possible end usage of this class of estimate.
•Estimating Methodology (Secondary Characteristic): A listing of the possible estimating methods that may be employed to develop an estimate of this class.
•Expected Accuracy Range (Secondary Characteristic): Typical variation in low and high ranges after the application of contingency (determined at a 50% level of confidence). Typically, this provides an 80% confidence level that the actual cost will fall within the bounds of the low and high ranges. The estimate confidence interval or accuracy range is driven by the reliability of the scope information available at the time of the estimate in addition to the other variables and risk identified above.
•Alternate Estimate Names, Terms, Expressions, and Synonyms: This section provides other commonly used names that an estimate of this class might be known by. These alternate names are not endorsed by this Recommended Practice. The user is cautioned that an alternative name may not always be correlated with the class of estimate as identified in Tables 2a-2e.
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CLASS 5 ESTIMATE |
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Description: |
Estimating Methodology: |
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Class 5 estimates are generally prepared based on very limited |
Class 5 estimates generally use stochastic estimating methods |
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information, and subsequently have wide accuracy ranges. As |
such as area factors and other parametric and modeling |
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such, some companies and organizations have elected to |
techniques. For example, historical unit prices or functional |
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determine that due to the inherent inaccuracies, such |
use unit prices driven. |
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estimates cannot be classified in a conventional and systemic |
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manner. Class 5 estimates, due to the requirements of end |
Expected Accuracy Range: |
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use, may be prepared within a very limited amount of time |
Typical accuracy ranges for Class 5 estimates are |
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and with little effort expended—sometimes requiring less than |
-20% to -30% on the low side, and +30% to +50% on the high |
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an hour to prepare. Often, little more than proposed building |
side, depending on the construction complexity of the project, |
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type, location, functional space building requirements (SF or |
appropriate reference information and other risks (after |
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m2), and number of stories are known at the time of estimate |
inclusion of an appropriate contingency determination). |
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preparation. |
Ranges could exceed those shown if there are unusual risks. |
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Maturity Level of Project Definition Deliverables: |
Alternate Estimate Names, Terms, Expressions, Synonyms: |
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Key deliverable and target status: Total building area and |
Block schematic estimate, functional area based estimate or |
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number of stories agreed upon by stakeholders. 0% to 2% of |
scoping study estimate, concept design, ratio, rough order of |
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full project definition. |
magnitude, idea study, concept screening estimate, prospect |
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estimate, rule-of-thumb. |
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End Usage: |
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Class 5 estimates are prepared for any number of strategic |
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business planning purposes, such as but not limited to market |
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studies, assessment of initial viability, evaluation of alternate |
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schemes, project screening, project location studies, |
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evaluation of resource needs and budgeting, long-range |
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capital planning, etc. |
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Table 2a – Class 5 Estimate
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CLASS 4 ESTIMATE |
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Description: |
Estimating Methodology: |
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Class 4 estimates are generally prepared based on limited |
Class 4 estimates generally use stochastic estimating methods |
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information and subsequently have fairly wide accuracy |
such as parametric models, and assembly driven models. For |
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ranges. They are typically used for project screening, |
example, functional space unit price or model driven. |
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determination of feasibility, concept evaluation, and |
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preliminary budget approval. Typically, engineering is from 1% |
Expected Accuracy Range: |
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to 15% complete, and would comprise at a minimum the |
Typical accuracy ranges for Class 4 estimates are |
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following: preliminary room layouts, new proposed site plan, |
-10% to -20% on the low side, and +20% to +30% on the high |
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existing site plan, markups of existing drawings for demolition |
side, depending on the construction complexity of the project, |
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and utilities, design criteria report or technical memorandum |
appropriate reference information and other risks (after |
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by division of work. |
inclusion of an appropriate contingency determination). |
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Ranges could exceed those shown if there are unusual risks. |
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Maturity Level of Project Definition Deliverables: |
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Key deliverable and target status: Functional space |
Alternate Estimate Names, Terms, Expressions, Synonyms: |
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requirements have been fully indentified. 1% to 15% of full |
Schematic design estimate or pre-feasibility estimate, |
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project definition. |
feasibility, screening, top-down, feasibility, authorization, |
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factored, pre-study, concept study. |
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End Usage: |
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Class 4 estimates are prepared for a number of purposes, such |
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as but not limited to, detailed strategic planning, business |
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development, project screening at more developed stages, |
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alternative scheme analysis, confirmation of economic and/or |
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technical feasibility, and preliminary budget approval or |
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approval to proceed to next stage. |
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Table 2b – Class 4 Estimate
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CLASS 3 ESTIMATE |
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Description: |
Estimating Methodology: |
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Class 3 estimates are generally prepared to form the basis for |
Class 3 estimates generally involve more deterministic |
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budget authorization, appropriation, and/or funding. As such, |
estimating methods than stochastic methods. They usually |
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they typically form the initial control estimate against which all |
involve a high degree of unit cost line items, although these |
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actual costs and resources will be monitored. Typically, |
may be at an assembly level of detail rather than individual |
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engineering is from 10% to 40% complete, and would |
components. Factoring and other stochastic methods may be |
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comprise at a minimum completed design information for the |
used to estimate less-significant areas of the project. For |
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following: defined site civil information such as site plan, |
example, assembly driven, with some detailed items and |
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existing site conditions, demolition drawings, utility plan, site |
engineering/design assumptions and specifications if known. |
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electrical plans, room layouts, mechanical system layouts, |
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plumbing layouts, and one-line electrical diagram. |
Expected Accuracy Range: |
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Typical accuracy ranges for Class 3 estimates are |
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Maturity Level of Project Definition Deliverables: |
-5% to -15% on the low side, and +10% to +20% on the high |
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Key deliverable and target status: building code or standards |
side, depending on the construction complexity of the project, |
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requirements; exterior closure description; and finishes |
appropriate reference information and other risks (after |
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descriptions and requirements, are all defined. 10% to 40% of |
inclusion of an appropriate contingency determination). |
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full project definition. |
Ranges could exceed those shown if there are unusual risks.. |
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End Usage: |
Alternate Estimate Names, Terms, Expressions, Synonyms: |
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Class 3 estimates are typically prepared to support full project |
Budget, scope, sanction, semi-detailed, authorization, |
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funding requests, and become the first of the project phase |
preliminary control, concept study, development, basic |
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“control estimates” against which all actual costs and |
engineering phase estimate, target estimate. |
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resources will be monitored for variations to the budget. They |
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are used as the project budget until replaced by more detailed |
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estimates. In many owner organizations, a Class 3 estimate is |
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often the last estimate required and could very well form the |
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only basis for cost/schedule control. |
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Table 2c – Class 3 Estimate
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CLASS 2 ESTIMATE |
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Description: |
Estimating Methodology: |
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Class 2 estimates are generally prepared to form a detailed |
Class 2 estimates generally involve a high degree of |
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contractor control baseline (and update the owner control |
deterministic estimating methods. Class 2 estimates are |
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baseline) against which all project work is monitored in terms |
prepared in great detail, and often involve tens of thousands |
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of cost and progress control. For contractors, this class of |
of unit cost line items. For those areas of the project still |
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estimate is often used as the bid estimate to establish contract |
undefined, an assumed level of detail takeoff (forced detail) |
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value. Typically, engineering is from 30% to 70% complete, and |
may be developed to use as line items in the estimate instead |
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would comprise at minimum completed design information. |
of relying on factoring methods. For example: assembly and |
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All drawings, plan views, elevation drawings and section |
detail items, with draft specifications across most divisions of |
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drawings are complete; except detailed design schedules, |
work; limited engineering/design assumptions; detailed labor, |
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architectural details and control diagrams, which may still be |
material, equipment, subcontractor and other costs; or some |
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in draft form. |
quotations. |
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Maturity Level of Project Definition Deliverables: |
Expected Accuracy Range: |
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Key deliverable and target status: draft specifications, building |
Typical accuracy ranges for Class 2 estimates are |
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systems, and soils and hydrology report are defined. |
-5% to -10% on the low side, and +5% to +15% on the high |
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30% to 75% of full project definition. |
side, depending on the construction complexity of the project, |
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appropriate reference information and other risks (after |
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End Usage: |
inclusion of an appropriate contingency determination). |
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Class 2 estimates are typically prepared as the detailed |
Ranges could exceed those shown if there are unusual risks. |
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contractor control baseline (and update the owner control |
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baseline) against which all actual costs and resources will now |
Alternate Estimate Names, Terms, Expressions, Synonyms: |
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be monitored for variations to the budget, and form a part of |
Design development estimate, detailed estimate, control, |
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the change management program. |
forced detail, execution phase, master control, engineering. |
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Table 2d – Class 2 Estimate
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AACE® International Recommended Practices |
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56R-08: Cost Estimate Classification System – As Applied for the Building and General Construction |
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CLASS 1 ESTIMATE |
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Description: |
Estimating Methodology: |
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Class 1 estimates are generally prepared for discrete parts or |
Class 1 estimates generally involve the highest degree of |
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sections of the total project rather than generating this level of |
deterministic estimating methods, and require a great amount |
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detail for the entire project. The parts of the project estimated |
of effort. Class 1 estimates are prepared in great detail, and |
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at this level of detail will typically be used by subcontractors |
thus are usually performed on only the most important or |
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for bids, or by owners for check estimates. The updated |
critical areas of the project. All items in the estimate are |
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estimate is often referred to as the current control estimate |
usually unit cost line items based on actual design quantities. |
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and becomes the new baseline for cost/schedule control of |
For example, detailed bottoms up estimate, with detailed |
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the project. Class 1 estimates may be prepared for parts of the |
labor, materials, equipment, subcontractor and other costs, |
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project to comprise a fair price estimate or bid check estimate |
with specific quotations, based upon detailed drawings and |
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to compare against a contractor’s bid estimate, or to |
specifications. This would be a unit price estimate driven by |
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evaluate/dispute claims. Typically, engineering is from 70% to |
crews and productivity. |
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100% complete, and would comprise virtually all engineering |
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and design documentation of the project, and complete |
Expected Accuracy Range: |
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project execution and commissioning plans. |
Typical accuracy ranges for Class 1 estimates are |
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-3% to -5% on the low side, and +3% to +10% on the high side, |
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Maturity Level of Project Definition Deliverables: |
depending on the construction complexity of the project, |
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Key deliverable and target status: all deliverables in the |
appropriate reference information and other risks (after |
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maturity matrix complete. 65% to 100% of full project |
inclusion of an appropriate contingency determination). |
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definition. |
Ranges could exceed those shown if there are unusual risks. |
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End Usage: |
Alternate Estimate Names, Terms, Expressions, Synonyms: |
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Generally, owners and designers use Class 1 estimates to |
Construction document estimate, pre-tender estimate, pre- |
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support their change management process. They may be used |
construction estimate, or project control estimate, full detail |
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to evaluate bid checking, to support vendor/contractor |
estimate, release, fall-out, tender, firm price, bottoms-up, |
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negotiations, or for claim evaluations and dispute resolution. |
final, detailed control, forced detail, execution phase, master |
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control, control, control estimate, fair price, bid/tender |
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Construction contractors may prepare Class 1 estimates to |
definitive, change order estimate (if in construction phase). |
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support their bidding and to act as their final control baseline |
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against which all actual costs and resources will now be |
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monitored for variations to their bid. During construction, |
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Class 1 estimates may be prepared to support change |
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management. |
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Table 2e – Class 1 Estimate
ESTIMATE INPUT CHECKLIST AND MATURITY MATRIX
Table 3 maps the extent and maturity of estimate input information (deliverables) against the five estimate classification levels. This is a checklist of basic deliverables found in common practice in the building and general construction industries. The maturity level is an approximation of the completion status of the deliverable. The degree of completion is indicated by the following letters:
•None (blank): Development of the deliverable has not begun.
•Started (S): Work on the deliverable has begun. Development is typically limited to sketches, rough outlines, markup of existing drawings, assumed engineering/design data, or similar levels of early completion.
•Preliminary (P): Work on the deliverable is advanced. Interim, cross-functional reviews have usually been conducted. Development may be near completion except for final reviews and approvals.
•Complete (C): The deliverable has been reviewed and approved as appropriate.
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AACE® International Recommended Practices |
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December 5, 2012 |
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ESTIMATE CLASSIFICATION |
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Class 5 |
Class 4 |
Class 3 |
Class 2 |
Class 1 |
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MATURITY LEVEL OF PROJECT DEFINITION |
0% to 2% |
1% to 15% |
10% to 40% |
30% to 75% |
65% to 100% |
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DELIVERABLES |
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General Project Data: |
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Project General Scope Description |
Assumed |
Preliminary |
Defined |
Defined |
Defined |
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Project Location |
General |
Approximate |
Specific |
Specific |
Specific |
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Total Building Area - SF or m2 |
Preliminary |
Preliminary |
Defined |
Specific |
Specific |
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Functional Space Requirements - SF or m2 |
Started |
Preliminary |
Defined |
Specific |
Specific |
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No. of Building Stories |
Preliminary |
Preliminary |
Defined |
Specific |
Specific |
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Exterior Closure Description |
Assumed |
Preliminary |
Defined |
Defined |
Defined |
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Finishes Descriptions and Requirements |
Assumed |
Preliminary |
Defined |
Defined |
Defined |
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Building Code or Standards Requirement |
Assumed |
Preliminary |
Defined |
Defined |
Defined |
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Mechanical Systems and Total Capacity |
Preliminary |
Defined |
Defined |
Defined |
Defined |
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Electrical Capacity |
Preliminary |
Defined |
Defined |
Defined |
Defined |
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Communication Systems |
Preliminary |
Defined |
Defined |
Defined |
Defined |
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Fire Protection and Life Safety Requirements |
Assumed |
Preliminary |
Defined |
Defined |
Defined |
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Security System |
Assumed |
Preliminary |
Defined |
Defined |
Defined |
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Anti-Terrorism Force Protection Requirements |
Preliminary |
Defined |
Defined |
Defined |
Defined |
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LEED Certification Level |
Preliminary |
Defined |
Defined |
Defined |
Defined |
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Soils and Hydrology Report |
None |
Preliminary |
Defined |
Defined |
Defined |
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Integrated Project Plan |
None |
Preliminary |
Defined |
Defined |
Defined |
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Project Master Schedule |
Approximate |
Defined |
Defined |
Defined |
Defined |
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Work Breakdown Structure |
Preliminary |
Defined |
Defined |
Defined |
Defined |
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Project Code of Accounts |
Preliminary |
Defined |
Defined |
Defined |
Defined |
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Contracting Strategy |
Assumed |
Preliminary |
Defined |
Defined |
Defined |
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Escalation Strategy and Basis |
Assumed |
Preliminary |
Defined |
Defined |
Defined |
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Design Deliverables: |
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Building Codes and Standards Drawing |
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S/P |
C |
C |
C |
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Fire Protection and Life Safety Requirements |
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S/P |
C |
C |
C |
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Site Plan |
S |
P |
C |
C |
C |
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Copyright © AACE® International |
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AACE® International Recommended Practices |
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December 5, 2012 |
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ESTIMATE CLASSIFICATION |
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Class 5 |
Class 4 |
Class 3 |
Class 2 |
Class 1 |
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MATURITY LEVEL OF PROJECT DEFINITION |
0% to 2% |
1% to 15% |
10% to 40% |
30% to 75% |
65% to 100% |
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DELIVERABLES |
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Existing Site Plan |
S |
P |
C |
C |
C |
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Demolition Plan and Drawings |
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S/P |
P |
C |
C |
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Utility Plan and Drawings |
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S/P |
P |
C |
C |
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Site Electrical Plan and Drawings |
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S/P |
P |
C |
C |
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Site Lighting Plan and Drawings |
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S/P |
P |
C |
C |
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Site Communications Plan and Drawings |
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S/P |
P |
C |
C |
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Erosion Control Plan and Drawings |
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S/P |
P |
C |
C |
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Stormwater Plan and Drawings |
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S/P |
P |
C |
C |
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Landscaping Plan and Drawings |
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S/P |
P |
C |
C |
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Exterior Elevations |
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S/P |
P |
C |
C |
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Interior Elevations |
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S |
P |
C |
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Interior Section Views |
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S/P |
P |
C |
C |
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Partition or Wall Types |
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S/P |
S/P |
C |
C |
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Finish Schedule |
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S/P |
P |
C |
C |
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Door Schedules |
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S/P |
P |
P |
C |
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Window Schedules |
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S/P |
P |
P |
C |
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Restroom Schedules |
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S/P |
P |
P |
C |
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Furniture Plans, Schedules and Drawings |
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S/P |
P |
C |
C |
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Signage Drawings and Schedules |
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S/P |
P |
P |
C |
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Fire Protection Plan, Drawings and Details |
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S/P |
P |
C |
C |
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Room Layout Plan and Drawings |
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S/P |
C |
C |
C |
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Foundation Plan and Drawings |
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S/P |
P |
C |
C |
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Foundation Sections and Details |
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S/P |
P |
C |
C |
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Structural Plans and Drawings |
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Structural Sections and Drawings |
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Roof Plan, Drawings and Details |
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S/P |
P |
C |
C |
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Material, Equipment and Systems Specifications |
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S/P |
P |
C |
C |
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Building envelope/moisture protection/flashing |
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S/P |
P |
C |
C |
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details |
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Copyright © AACE® International |
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AACE® International Recommended Practices |
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56R-08: Cost Estimate Classification System – As Applied for the Building and General Construction |
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December 5, 2012 |
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ESTIMATE CLASSIFICATION |
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Class 5 |
Class 4 |
Class 3 |
Class 2 |
Class 1 |
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MATURITY LEVEL OF PROJECT DEFINITION |
0% to 2% |
1% to 15% |
10% to 40% |
30% to 75% |
65% to 100% |
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DELIVERABLES |
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Mechanical/HVAC Plan and Drawings |
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S/P |
P |
C |
C |
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Mechanical/HVAC Details |
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S/P |
P |
C |
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Mechanical/HVAC Schedules |
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S/P |
P |
C |
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Flow Control Diagrams |
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S/P |
P |
P |
C |
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Plumbing Plan and Drawings |
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S/P |
P |
C |
C |
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Plumbing Details |
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S/P |
P |
C |
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Plumbing Riser Diagram |
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S/P |
P |
C |
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One-Line Electrical Diagram |
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S/P |
P |
C |
C |
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Electrical Power Plan |
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S/P |
P |
C |
C |
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Interior Lighting Plan and Drawings |
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S/P |
P |
C |
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Security Plan and Drawings |
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S/P |
P |
C |
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Emergency Communication Plan and Drawings |
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S/P |
P |
C |
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Life Safety Plan and Drawings |
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S |
S/P |
C |
C |
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Lightning Protection Plan and Drawings |
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S/P |
P |
C |
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Motor Control Diagram |
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S/P |
P |
C |
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Lighting Control Diagram |
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S/P |
P |
C |
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Lighting Schedules |
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S/P |
P |
C |
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Electrical/Control Panel Schedule |
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S/P |
P |
C |
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Equipment Schedule |
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S |
S/P |
P |
C |
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Information Systems/Telecommunication Plan |
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S/P |
P |
C |
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Information Systems/Telecommunication |
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S/P |
P |
C |
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Details |
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Table 3 – Estimate Input Checklist and Maturity Matrix (Primary Classification Determinate)
DOCUMENTATION
The basis of estimate (BOE) typically accompanies the cost estimate. The basis of estimate is a written documentation that describes how an estimate, schedule, or other plan component which develops and defines the information used in support of development of the cost estimate. A basis document commonly includes, but is not limited to, a description of the scope included, methodologies used, references and defining deliverables used, assumptions and exclusions made, clarifications, adjustments, and some indication of the level of uncertainty.
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December 5, 2012
The BOE in some ways is more important than the estimate, since it documents the scope and assumptions and provides a level of confidence to the estimate. The estimate is incomplete without a well documented basis of estimate. See AACE Recommended Practice 34R-05 Basis of Estimate for more information.
PROJECT DEFINITION RATING INDEX
The next logical step in documenting the maturity level of project definition is to develop a project definition rating index (PDRI). The PDRI system is a tool or methodology for users to develop a project specific weighted index, which measures the maturity of project definition and scope definition compared to project success. This measures the completeness of the project definition and scope development. This methodology involves
management and project stakeholders. The following organizations have similar indexes: The Construction Industry Institute (CII) 113-2 (process industry) and 115-2 (buildings)[15,16], NASA adopted CII, US Department of Energy (DOE)[17], and US Army Corp of Engineers (USACE).
The estimate input checklist and maturity matrix (Table 3) can also be turned into your own company’s or organization’s internal project requirements. This rating system can be rated independently by the estimating and the design team, and then reviewed for comparison and overall concessions.
REFERENCES
1.AACE International, Recommended Practice 17R-97, Cost Estimate Classification System, AACE International, Morgantown, WV, (latest revision).
2.American Institute of Architects (AIA), Integrated Project Delivery: A Guide, Version 1, American Institute of Architects (AIA), Washington, DC, 2007.
3.Marr, Kenneth F., Sr., Standards for Construction Cost Estimators, 1977 AACE Transactions, AACE International, Morgantown, WV, 1977.
4.U.S. General Services Administration (GSA), Project Planning Guide, U.S. General Services Administration, Washington, DC, 2005
5.Construction Management Association of America (CMAA), CM Standards of Practice: Cost Management, CMAA, McLean, VA, 2009
6.ASTM, Standard E1804-07 Standard Practice for Performing and Reporting Cost Analysis During the Design Phase of a Project, ASTM International, West Conshohocken, PA, 2006, DOI: 10.1520/E1804-07, www.astm.org.
7.Construction Industry Institute (CII), Project Definition Rating Index Workshop, CII, Austin, TX, September 20, 2004
8.ASTM, Standard 2516-06, Standard Classification for Cost Estimate Classification System, ASTM International, West Conshohocken, PA, 2006, DOI: 10.1520/E2516-06, www.astm.org.
9.AACE International, Recommended Practice 10S-90, Cost Engineering Terminology, AACE International, Morgantown, WV, (latest revision).
10.Hollmann, John K., Editor, Total Management Framework: An Integrated Approach to Portfolio Program and Project Management, 1st Edition, Revised, AACE International, Morgantown, WV, 2012.
11.American Society of Professional Estimators (ASPE), Standard Estimating Practice, Levels of Estimate, section 2, 7th edition, July 11, 2008.
12.The American Institute of Architects (AIA), E202-2008 Building Information Modeling Protocol Exhibit, 2008.
13.Construction Specifications Institute (CSI), Uniformat 2010 and Masterformat 2010, Alexandria VA, 2010.
14.AACE International BIM Committee in Association with the BuildingSmart Alliance, Quantification (Take-off) Process and Standards for BIM: BIM Standards for Cost Estimating, DRAFT – V3 – March 14, 2008.
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AACE® International Recommended Practices |
56R-08: Cost Estimate Classification System – As Applied for the Building and General Construction |
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Industries
December 5, 2012
15.Construction Industry Instate (CII), PDRI: Project Definition Rating Index – Building Projects, Version 3.2 (115- 2), Austin, TX, December 1, 2009.
16.Construction Industry Instate (CII), PDRI: Project Definition Rating Index – Industrial Projects, Version 3.2 (113- 2), Austin, TX, December 1, 2009.
17.U.S. Department of Energy (DOE), Project Definition Rating Index Guide for Traditional Nuclear and Non- Nuclear Construction Projects, DOE G 413.3-12, July 22, 2010.
CONTRIBUTORS
Peter R. Bredehoeft, Jr. CEP (Author)
Jeffery J. Borowicz, CCC CEP PSP
Robert B. Brown, PE
Daniel C. Donaldson, PE CEP
Larry R. Dysert, CCC CEP
Ricardo Garcia da Roza
Jon M. Hollman, CCC CEP
John K. Hollmann, PE CCE CEP
Frank Kutilek
Tamera L. McCuen
Donald E. Parker, PE CCE
Todd W. Pickett, CCC CEP
Kumar Sinnathamby, CCC
H. Lance Stephenson, CCC
Kul B. Uppal, PE CEP
James D. Whiteside, II PE
Copyright © AACE® International |
AACE® International Recommended Practices |
