Technical Cost Estimating Approach

Q Consulting Services, LLC has an outstanding history of preparation of accurate cost estimates for all types of design, construction and demolition including specialty engineering services such as blast and shock criteria, facilities such as biosafety laboratories, laboratories handling nuclear material, and other technically unique buildings and structures.

Q Consulting Services, LLC utilizes an approach that combines accuracy with a defensible and well-documented estimate and has established an approach incorporating a graded approach with the necessary level of detail appropriate for each estimate. QCS, LLC utilizes its contractor licenses and contacts to receive accurate and up to date quotes for material, labor and waste shipping and packaging costs. QCS has an adequate number of cleared, qualified and experienced resources to perform the estimating and scheduling work that is required for unique, difficult and challenging projects.
Ground Rules and Assumptions, a critical step in any estimate, are clearly presented in all documentation and presentation material that QCS, LLC prepares. Ground Rules and Assumptions define the program clearly and allow clients to understand what costs are being included and excluded for the current estimate and future comparisons. Q Consulting Services LLC develops and confirms with the client accurate Ground Rules and Assumptions at the beginning of an estimating project in order to avoid problems that may cause an inaccurate or misleading estimate.

Q Consulting Services, LLC understands and recognizes the differences between the purposes of estimates, the customer or requesting organizations needs, and the use and expected result of the estimate. It is essential that the appropriate estimating technique be used for the specific estimating task. Q Consulting Services, LLC recognizes that each estimate has a slightly different focus; however, the estimating process itself does not vary greatly between the different types of estimates. It is important to build a solid foundation before the estimate process is initiated.
There are four critical elements to any estimate that need to be understood and agreed upon between the cost estimator and the decision-maker before a methodology can be chosen and an estimate can be prepared. The extent of the data available, the schedule, the purpose and expectations for the estimate, and the approach. An estimator conducting any estimate, from the back of an envelope to a formal estimate, must consider these factors before choosing a methodology for each estimate.

There are several different types of estimating services required by LANL. Below is a brief description of a few types and the approach QCS takes when preparing them.

Planning/Study/Conceptual Design Estimates; These estimates are often referred to as Rough-Order-of-Magnitude (ROM) estimates. These estimates are used for budgetary and scoping purposes in planning. Planning Estimates are based on past experience with similar type facilities and order of magnitude in the absence of previous cost experience. Engineering costs in this type of estimate generally are based on a percentage of estimated construction costs and consideration needs to be given to the complexity of the project in establishing the percentage to be used. Contingency is included in the total project cost estimate using a percentage of total engineering and construction costs established on the basis of complexity and uncertainties of the component parts. The estimate will contain a high degree of contingency in consideration of the alternative approaches to the final activity. Conceptual design estimates are based on concepts and relies on past knowledge of similar activities for the estimate; however any new or different concepts are factored into the estimate. This type of estimate still retains a higher degree of contingency to cover the eventual decisions on the approach to completion of the activity.

Parametric Estimating: Parametric estimates are most often used when there are only a few key pieces of data that are known. This data often relates to weight characteristics and design complexity. QCS bases parametric estimates on historical data and mathematical expressions relating cost as the dependent variable to selected, independent, cost-driving variables through regression analysis. The implicit assumption of this approach is that the same forces that affected costs on a type of project in the past will affect costs the same way on similar types of projects in the future. Q Consulting Services, LLC has developed a database of past cost information for field work, demolition, renovations and new construction of facilities ranging from simple office structures, to nuclear facilities that is used for parametric estimating.

Activity Based Estimating: Activities associated with the work can be defined at the lowest level to which definitive costs can be assigned. The costs are those associated with labor, material, equipment, and subcontracts. This estimate is generally based on historical data for similar activities and on specific material and equipment costs, depending on the type of estimate being prepared (i.e. conceptual, preliminary, or final estimate).

Q Consulting Services, LLC has found that Activity Based Estimating is generally the preferred approach and has developed the required historical databases and experience to produce accurate estimates utilizing this method.

Cost estimates prepared by Q Consulting Services, LLC include the necessary contingency based upon a well-defined risk assessment of the activity. Developing the cost range, risk reserves and determining how the different ranges affect the different specific point estimates are performed by conducting a sensitivity analysis of the activities. Developing a reserve range and determining the risk adjusted point estimate for probability of occurrence is completed by conducting a risk analysis.

Data collection is typically one of the most difficult, time-consuming, and costly activities in cost estimating. Q Consulting Services, LLC has an established record of obtaining information and data from past, obsolete, and records from 50-year-old facilities which can be utilized in developing cost estimates. Often, exactly what is needed cannot be found and typically there is a “story” behind the data that is obtained which is important to understand. Q Consulting Services, LLC has developed that ability to understand how to use the information obtained.