CEC 2014 Gets Down to Business, Estimating Efficiencies

Geoff Emeigh

Cost engineers found out how to enhance the cost and schedule estimating capabilities of their capital project teams at IPA’s annual gathering of project estimators near Washington, D.C.

Presentations and workshops held during the 2-day Cost Engineering Committee (CEC) 2014 conference, held Sept. 16 to 17, in McLean, Va., honed in on two general themes:

  1. The importance of effectively relaying project estimating knowledge to business professionals
  2. Techniques that can help streamline estimating processes

The goal for the CEC, a subcommittee of IPA’s Industry Benchmarking Consortium (IBC), is for “companies to work together in sharing knowledge that can result in capital effectiveness and business result improvements,” said Luke Wallace, IPA Deputy Director, Cost Engineering Group, and the committee coordinator. The committee’s specific objectives are to develop industry cost and schedule metrics, to assist member cost engineering organizations in identifying and sharing Best Practices, and to benchmark the function of cost engineering and scheduling for owners.

Research studies presented during the 2014 conference covered the following topics:

Communicating Effectively With Business

Project group estimators have a difficult time explaining how project estimates are prepared and what they mean. Business also must recognize that the project team estimating function is also essential to corporate capital investment governance.

Engineering Progression

Based on interviews with CEC member company representatives, companies are fearful of what they perceive as a recent decline in engineering performance. Poor engineering quality and late project scope additions are resulting in costly late changes to projects. Business and owner firms could be more supportive of delivering sufficient resources for engineering and controls.

Cost and Schedule Integration

Based on CEC member representative interviews, IPA reported that companies have found success in integrating their cost account structure with work breakdown structure designs. A single source integration system can offer better cost and schedule predictability.

Labor Hour Growth Research

Field labor work predictability is influenced by what precedes construction and aggressive schedules can erode productivity, the study found. Front-End Loading (FEL) practices for the design, planning, estimating, and control of capital projects can offer a more systematic way of managing labor hour growth.

Major Project Cost Overruns

Aside from truly unforeseeable events like natural disasters, disciplined adherence to FEL Best Practices can stem the occurrence of wildly off-target cost estimates.

Another benefit CEC member companies receive is access to updated summary cost and schedule metrics using data IPA collected from member companies in the last 10 years. Cost engineers can use the data to perform high-level summary cost evaluations and conceptual schedule evaluations and to quantify regional differences in project costs. Civil, pipeline, and minerals metrics were made available to member companies for the first time in 2014.

Approximately 90 people representing 28 companies attended the annual gathering.

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