Drivers of the accuracy of developers' early stage cost estimates in residential construction

Purpose – Preliminary cost estimates for construction projects are often the basis of financial feasibility and budgeting decisions in the early stages of planning and for effective project control, monitoring and execution. The purpose of this paper is to identify and better understand the cost drivers and factors that contribute to the accuracy of estimates in residential construction projects from the developers’ perspective. Design/methodology/approach – The paper uses a literature review to determine the drivers that affect the accuracy of developers’ early stage cost estimates and the factors influencing the construction costs of residential construction projects. It used cost variance data and other supporting documentation collected from two case study projects in South East Queensland, Australia, along with semi-structured interviews conducted with the practitioners involved. Findings – It is found that many cost drivers or factors of cost uncertainty identified in the literature for large-scale projects are not as apparent and relevant for developers’ small-scale residential construction projects. Specifically, the certainty and completeness of project-specific information, suitability of historical cost data, contingency allowances, methods of estimating and the estimator’s level of experience significantly affect the accuracy of cost estimates. Developers of small-scale residential projects use pre-established and suitably priced bills of quantities as the prime estimating method, which is considered to be the most efficient and accurate method for standard house designs. However, this method needs to be backed with the expertise and experience of the estimator. Originality/value – There is a lack of research on the accuracy of developers’ early stage cost estimates and the relevance and applicability of cost drivers and factors in the residential construction projects. This research has practical significance for improving the accuracy of such preliminary cost estimates.

Human factors in estimating

It is commonly held that the ability of the estimator to apply professional skill and judgement is an important factor in the production of an accurate cost estimate. This chapter identifies these abilities and attributes of the individual estimator that affects estimating accuracy. These human factors are examined under the headings of the role of the estimators, skills of the estimator, characteristics of the estimator, interpretation of data, and the influence of expertise.

Creating flexible mappings between building information models and cost information

During the early design stages of construction projects, accurate and timely cost feedback is critical to design decision making. This is particularly challenging for cost estimators, as they must quickly and accurately estimate the cost of the building when the design is still incomplete and evolving. State-of-the-art software tools typically use a rule-based approach to generate detailed quantities from the design details present in a building model and relate them to the cost items in a cost estimating database. In this paper, we propose a generic approach for creating and maintaining a cost estimate using flexible mappings between a building model and a cost estimate. The approach uses queries on the building design that are used to populate views, and each view is then associated with one or more cost items. The benefit of this approach is that the flexibility of modern query languages allows the estimator to encode a broad variety of relationships between the design and estimate. It also avoids the use of a common standard to which both designers and estimators must conform, allowing the estimator added flexibility and functionality to their work.

Using coloured petri nets to simulate DoS-resistant protocols

In this work, we examine unbalanced computation between an initiator and a responder that leads to resource exhaustion attacks in key exchange protocols. We construct models for two cryp-tographic protocols; one is the well-known Internet protocol named Secure Socket Layer (SSL) protocol, and the other one is the Host Identity Protocol (HIP) which has built-in DoS-resistant mechanisms. To examine such protocols, we develop a formal framework based on Timed Coloured Petri Nets (Timed CPNs) and use a simulation approach provided in CPN Tools to achieve a formal analysis. By adopting the key idea of Meadows' cost-based framework and re¯ning the de¯nition of operational costs during the protocol execution, our simulation provides an accurate cost estimate of protocol execution compar- ing among principals, as well as the percentage of successful connections from legitimate users, under four di®erent strategies of DoS attack.

Report : development of a methodology for assessing variation in maintenance and rehabilitation costs

In the previous research CRC CI 2001-010-C “Investment Decision Framework for Infrastructure Asset Management”, a method for assessing variation in cost estimates for road maintenance and rehabilitation was developed. The variability of pavement strength collected from a 92km national highway was used in the analysis to demonstrate the concept. Further analysis was conducted to identify critical input parameters that significantly affect the prediction of road deterioration. In addition to pavement strength, rut depth, annual traffic loading and initial roughness were found to be critical input parameters for road deterioration. This report presents a method developed to incorporate other critical parameters in the analysis, such as unit costs, which are suspected to contribute to a certain degree to cost estimate variation. Thus, the variability of unit costs will be incorporated in this analysis. Bruce Highway located in the tropical east coast of Queensland has been identified to be the network for the analysis. This report presents a step by step methodology for assessing variation in road maintenance and rehabilitation cost estimates.

Why do tenders vary?

This paper describes the development of hypothetical models of tendering sets. Each tender is theorized as consisting of two variable components, the cost estimate and the mark-up, and in consideration of these variables, the concept of a 'winning zone' is postulated.

Integrating object locations in the memory representation of a spatial layout

The present study investigated how object locations learned separately are integrated and represented as a single spatial layout in memory. Two experiments were conducted in which participants learned a room-sized spatial layout that was divided into two sets of five objects. Results suggested that integration across sets was performed efficiently when it was done during initial encoding of the environment but entailed cost in accuracy when it was attempted at the time of memory retrieval. These findings suggest that, once formed, spatial representations in memory generally remain independent and integrating them into a single representation requires additional cognitive processes.

Next generation low-cost motion capture systems can provide comparable spatial accuracy to high-end systems

The objective quantification of three-dimensional kinematics during different functional and occupational tasks is now more in demand than ever. The introduction of new generation of low-cost passive motion capture systems from a number of manufacturers has made this technology accessible for teaching, clinical practice and in small/medium industry. Despite the attractive nature of these systems, their accuracy remains unproved in independent tests. We assessed static linear accuracy, dynamic linear accuracy and compared gait kinematics from a Vicon MX20 system to a Natural Point OptiTrack system. In all experiments data were sampled simultaneously. We identified both systems perform excellently in linear accuracy tests with absolute errors not exceeding 1%. In gait data there was again strong agreement between the two systems in sagittal and coronal plane kinematics. Transverse plane kinematics differed by up to 3 at the knee and hip, which we attributed to the impact of soft tissue artifact accelerations on the data. We suggest that low-cost systems are comparably accurate to their high-end competitors and offer a platform with accuracy acceptable in research for laboratories with a limited budget.

Factors affecting the accuracy of engineers' estimates

Emerging sciences, such as conceptual cost estimating, seem to have to go through two phases. The first phase involves reducing the field of study down to its basic ingredients - from systems development to technological development (techniques) to theoretical development. The second phase operates in the direction in building up techniques from theories, and systems from techniques. Cost estimating is clearly and distinctly still in the first phase. A great deal of effort has been put into the development of both manual and computer based cost estimating systems during this first phase and, to a lesser extent, the development of a range of techniques that can be used (see, for instance, Ashworth & Skitmore, 1986). Theoretical developments have not, as yet, been forthcoming. All theories need the support of some observational data and cost estimating is not likely to be an exception. These data do not need to be complete in order to build theories. As it is possible to construct an image of a prehistoric animal such as the brontosaurus from only a few key bones and relics, so a theory of cost estimating may possibly be found on a few factual details. The eternal argument of empiricists and deductionists is that, as theories need factual support, so do we need theories in order to know what facts to collect. In cost estimating, the basic facts of interest concern accuracy, the cost of achieving this accuracy, and the trade off between the two. When cost estimating theories do begin to emerge, it is highly likely that these relationships will be central features. This paper presents some of the facts we have been able to acquire regarding one part of this relationship - accuracy, and its influencing factors. Although some of these factors, such as the amount of information used in preparing the estimate, will have cost consequences, we have not yet reached the stage of quantifying these costs. Indeed, as will be seen, many of the factors do not involve any substantial cost considerations. The absence of any theory is reflected in the arbitrary manner in which the factors are presented. Rather, the emphasis here is on the consideration of purely empirical data concerning estimating accuracy. The essence of good empirical research is to .minimize the role of the researcher in interpreting the results of the study. Whilst space does not allow a full treatment of the material in this manner, the principle has been adopted as closely as possible to present results in an uncleaned and unbiased way. In most cases the evidence speaks for itself. The first part of the paper reviews most of the empirical evidence that we have located to date. Knowledge of any work done, but omitted here would be most welcome. The second part of the paper presents an analysis of some recently acquired data pertaining to this growing subject.

Analysis of temporary traffic control cost items in transportation construction bidding process

Temporary Traffic Control Plans (TCP’s), which provide construction phasing to maintain traffic during construction operations, are integral component of highway construction project design. Using the initial design, designers develop estimated quantities for the required TCP devices that become the basis for bids submitted by highway contractors. However, actual as-built quantities are often significantly different from the engineer’s original estimate. The total cost of TCP phasing on highway construction projects amounts to 6–10% of the total construction cost. Variations between engineer estimated quantities and final quantities contribute to reduced cost control, increased chances of cost related litigations, and bid rankings and selection. Statistical analyses of over 2000 highway construction projects were performed to determine the sources of variation, which later were used as the basis of development for an automated-hybrid prediction model that uses multiple regressions and heuristic rules to provide accurate TCP quantities and costs. The predictive accuracy of the model developed was demonstrated through several case studies.

Exploring accuracy factors in cost estimating practice towards implementing Building Information Modelling (BIM)

Cost estimating has been acknowledged as a crucial component of construction projects. Depending on available information and project requirements, cost estimates evolve in tandem with project lifecycle stages; conceptualisation, design development, execution and facility management. The premium placed on the accuracy of cost estimates is crucial to producing project tenders and eventually in budget management. Notwithstanding the initial slow pace of its adoption, Building Information Modelling (BIM) has successfully addressed a number of challenges previously characteristic of traditional approaches in the AEC, including poor communication, the prevalence of islands of information and frequent reworks. Therefore, it is conceivable that BIM can be leveraged to address specific shortcomings of cost estimation. The impetus for leveraging BIM models for accurate cost estimation is to align budgeted and actual cost. This paper hypothesises that the accuracy of BIM-based estimation, as more efficient, process-mirrors of traditional cost estimation methods, can be enhanced by simulating traditional cost estimation factors variables. Through literature reviews and preliminary expert interviews, this paper explores the factors that could potentially lead to more accurate cost estimates for construction projects. The findings show numerous factors that affect the cost estimates ranging from project information and its characteristic, project team, clients, contractual matters, and other external influences. This paper will make a particular contribution to the early phase of BIM-based project estimation.

Sampling accuracy of reef resource inventory technique

A new technique called the reef resource inventory (RRI) was developed to map the distribution and abundance of benthos and substratum on reefs. The rapid field sampling technique uses divers to visually estimate the percentage cover of categories of benthos and substratum along 2x20 in plotless strip-transects positioned randomly over the tops, and systematically along the edge of reefs. The purpose of this study was to compare the relative sampling accuracy of the RRI against the line intercept transect technique (LIT), an international standard for sampling reef benthos and substratum. Analysis of paired sampling with LIT and RRI at 51 sites indicated sampling accuracy was not different (P > 0.05) for 8 of the 12 benthos and substratum categories used in the study. Significant differences were attributed to small-scale patchiness and cryptic coloration of some benthos; effects associated with sampling a sparsely distributed animal along a line versus an area; difficulties in discriminating some of the benthos and substratum categories; and differences due to visual acuity since LIT measurements were taken by divers close to the seabed whereas RRI measurements were taken by divers higher in the water column. The relative cost efficiency of the RRI technique was at least three times that of LIT for all benthos and substratum categories and as much as 10 times higher for two categories. These results suggest that the RRI can be used to obtain reliable and accurate estimates of relative abundance of broad categories of reef benthos and substratum.

Reducing the global burden of depression : population level analysis of intervention cost-effectiveness in 14 world regions

International evidence on the cost and effects of interventions for reducing the global burden of depression remain scarce. Aims: To estimate the population-level cost-effectiveness of evidence-based depression interventions and their contribution towards reducing current burden. Method: Primary-care-based depression interventions were modelled at the level of whole populations in 14 epidemiological subregions of the world. Total population-level costs (in international dollars or I$) and effectiveness (disability adjusted life years (DALYs) averted) were combined to form average and incremental cost-effectiveness ratios. Results: Evaluated interventions have the potential to reduce the current burden of depression by 10–30%. Pharmacotherapy with older antidepressant drugs, with or without proactive collaborative care, are currently more cost-effective strategies than those using newer antidepressants, particularly in lower-income subregions. Conclusions: Even in resource-poor regions, each DALYaverted by efficient depression treatments in primary care costs less than 1 year of average per capita income, making such interventions a cost-effective use of health resources. However, current levels of burden can only be reduced significantlyif there is a substantialincrease substantial increase intreatment coverage.

Report : enabling team collaboration with pervasive and mobile computing : cost benefit analysis methodology

Construction is an information intensive industry in which the accuracy and timeliness of information is paramount. It observed that the main communication issue in construction is to provide a method to exchange data between the site operation, the site office and the head office. The information needs under consideration are time critical to assist in maintaining or improving the efficiency at the jobsite. Without appropriate computing support this may increase the difficulty of problem solving. Many researchers focus their research on the usage of mobile computing devices in the construction industry and they believe that mobile computers have the potential to solve some construction problems that leads to reduce overall productivity. However, to date very limited observation has been conducted in terms of the deployment of mobile computers for construction workers on-site. By providing field workers with accurate, reliable and timely information at the location where it is needed, it will support the effectiveness and efficiency at the job site. Bringing a new technology into construction industry is not only need a better understanding of the application, but also need a proper preparation of the allocation of the resources such as people, and investment. With this in mind, an accurate analysis is needed to provide clearly idea of the overall costs and benefits of the new technology. A cost benefit analysis is a method of evaluating the relative merits of a proposed investment project in order to achieve efficient allocation of resources. It is a way of identifying, portraying and assessing the factors which need to be considered in making rational economic choices. In principle, a cost benefit analysis is a rigorous, quantitative and data-intensive procedure, which requires identification all potential effects, categorisation of these effects as costs and benefits, quantitative estimation of the extent of each cost and benefit associated with an action, translation of these into a common metric such as dollars, discounting of future costs and benefits into the terms of a given year, and summary of all cost and benefit to see which is greater. Even though many cost benefit analysis methodologies are available for a general assessment, there is no specific methodology can be applied for analysing the cost and benefit of the application of mobile computing devices in the construction site. Hence, the proposed methodology in this document is predominantly adapted from Baker et al. (2000), Department of Finance (1995), and Office of Investment Management (2005). The methodology is divided into four main stages and then detailed into ten steps. The methodology is provided for the CRC CI 2002-057-C Project: Enabling Team Collaboration with Pervasive and Mobile Computing and can be seen in detail in Section 3.