To Engineers at A/E firms

[SperlingPE]

In a negotiated project delivery scheme, is it common to let the contractor do the estimating during the course of design? I have been involved with a number of projects where the contractor is supposed to put a number on the project at milestones (50%, 75%, 90%, final).

I have no idea how the contractor goes about his estimating other than we provide the contractor with drawings at the various milestones.

What has invariably happened is that I am told to continue to work on the project and that it was under/on budget after submitting the drawings at the milestones. When it comes time to submit final drawings or after submitting final drawings, I hear costs need to be cut. Usually not minor cost cutting. Cost cutting that requires additional work by all involved.

I have queried the various project managers at the firm I work for. I have not really gotten a good answer. When I first started, fresh out of school, some of my earliest assignments were to assist with take-off amounts for estimating purposes. I haven't done anything like that in 5-6 years.

 

[Akhibi]

Hello Sperling PE,

Yes, it is coustomary to let the contractor do the estimating but u must have an in-house estimate and try to negotiate with them around this in-house estimate.

You should get this estimate thru ur mgt for approval. The down side with this is that if the job can be down far less than ur estimate, the contractor can get a tip-off to increase his estimate. On the other hand, if they don't get a tip-off, u can get a positive appraisal for negotiating down the cost and managing the project prudently.

Akhibi

 

[WeeNeil]

I sometimes find that the choice of milestones might affect the over-runs that you are seeing. For exmple, it is very common to see a two-year project in which 90% of the work is done in the first year, and the other 10% take another year. Sound familiar?

I'm not sure if this is your problem, but i suggest that you check to see if the milestones are based upon percentage of time on the critical path - otherwise they are not real indicators of progress. It is quite easy to reach % of work done milestones by working on non-critical tasks - we work based on how we're measured, etc. In just working without any real structure resources get tied up and the overall project gets delayed because the critical tasks are not done on time.

Hope this helps.

 

[IRstuff]

be wary of estimates with insufficient granularity. It usually shows a lack of accounting discipline and a lack of knowledge about whether their bids are accurate.

In aerospace, we have "basis of estimates" that are written for every item bid. A preponderance of "engineering estimate" or "engineering experience" is a warning that they may not have any clue about their bidding accuracy. If, on the other hand, they can show historical data on similar or scalable scope, then there's some assurance that their bids are potentially accurate.

TTFN