21-07-2012, 03:08 PM
Project Development Cost Estimates
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Project Cost Estimating
Importance of Quality Cost Estimates
The reliability of project cost estimates at every stage in the project development process is necessary for responsible fiscal management. Unreliable cost estimates result in severe problems in Caltrans' programming and budgeting, in local and regional planning, and it results in staffing and budgeting decisions which could impair effective use of resources. This, in turn, affects Caltrans' relations with the California Transportation Commission (CTC), the Legislature, local and regional agencies, and the public, and results in loss of credibility.
The term "project cost estimate", as used during the project development process, includes all capital outlay costs, including right of way, structures and landscaping, but does not normally includes capital outlay support costs. Project cost estimates should never be artificially reduced to stay within the funding limits, nor should they be reduced to make available more project funding for the District. Likewise, project cost estimates should not be artificially raised beyond the contingency percentages provided for in this Chapter unless adequately justified.
Cost Estimate Categories
There are two categories of project cost estimates: Project Planning Cost Estimates and Project Design Cost Estimates. Project Planning Cost Estimates are used for project justification, analysis of alternatives, approval, and for programming. Project Design Cost Estimates are used to summarize the cost of a Project's contract items of work and will be part of the construction contract for the Project.
Consistent and Comprehensive Methodology
Cost estimating is not an exact science. However, Caltrans must strive for reliable project cost estimates, so that projects can be delivered "within budget." To this end, it is required that project cost estimates be prepared using a consistent and comprehensive methodology. Even with a consistent and comprehensive methodology, careful attention is needed to ensure a quality estimate. The cost estimator needs to research, compare and, above all, use their professional judgment to prepare a quality cost estimate. Coordination between the project planning cost estimates, the project design cost estimates, and the Standard Specifications that will be used to construct the project is required.