In the highly competitive AEC marketplace, knowing and anticipating a project’s expenses correctly provides a definite advantage when competing for a contract. But, even in the best of circumstances, cost estimating is complicated and there are myriad risks and uncertainties to consider. First, it’s important to understand the complexity of cost estimating. Companies should invest in proper training for estimating professionals. In many organizations, technical experts (e.g., architect, engineer, designer) are automatically assumed to be qualified to collect, build, and analyze project scope and deliver estimates. While this approach sometimes works on smaller ventures, assigning untrained technical people to build scopes and estimates on larger, sophisticated projects can prove to be a very challenging. Deriving high-quality cost estimates depends heavily on the quality of data, for example, historical databases, comprehensive project plans, and standard work break down structures make it easier to make comparisons to similar projects.
In most cases, the better the data, the better the resulting estimate will be. But you should always be on the lookout for common items that significantly increase risk in the planning and budgeting phase of projects.
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