Click for next page ( 40

The National Academies of Sciences, Engineering, and Medicine
500 Fifth St. N.W. | Washington, D.C. 20001

Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement

Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 39
Appendix E Glossary of Estimating Terms Used by Federal Agencies Federal agencies use many different terms when discussing- cost estimates for construction. The following glossary of cost estimating terms was taken from a Federal Construction Council report prepared by the Consulting Committee on Planning and Design Terminology (1988~. The initials in parentheses after each definition indicate the agen- cies that use that term essentially as defined. The initials shown refer to the following agencies: AF Air Force Directorate of Engineering and Services; CE Army Corps of Engineers; DoE Department of Energy (Real Property and Facilities Manage- ment Division); NASANational Aeronautics and Space Administration (Facilities Engineering Divi- sion); NAV Naval Facilities Engineering Com- mand; USPSU.S. Postal Service (Facilities De- partment); and VA Veterans Administration (Office of Facilities). COST ESTIMATESee ESTIMATE, COST COST, ALLOWABLE CONSTRUCTION The total estimated cost set forth in an authorization act for a construction project plus a stated per- centage, as specified in the authorization act (historically 10 or 25 percent), is referred to as the "allowable cost" for that project. (AF,CE, DoE) See also ESTIMATE, BUDGET 39 COST, DIRECTAny cost that can be specifically identified with a particular project or activity, including salaries, travel, equipment, and sup- plies directly benefiting the project or activity. (AF, CE, DoE, NAV, USPS, VA) COST, ESTIMATED TOTA~The cost of the project, including the costs of land and land rights, engineering, design and inspection costs, direct and indirect construction costs, and initial equipment necessary to place the plant or instal- lation in operation whether funded out of operat- ing or plant and capital equipment appropria- tions. (AF, CE, DoE, USPS) COST, INDIRECT A cost incurred by an organi- zation for common or joint objectives and which cannot be identified specifically with a pariicu- lar project or activity. (AF, CE, DoE, NAV, USPS, VA) COST, LIFE CYCLE The sum total of the direct, indirect, recurring, nonrecurring, and other re- lated costs incurred or estimated to be incurred in the design, development, production, opera- tion, maintenance, support, and final disposition of a major system over its anticipated useful life span. Where system or project planning antici-

OCR for page 39
40 pates use of existing sites or facilities, restore- lion and refurbishment costs should be included. (AF, CE, DoE, NASA, NAV, USPS, VA) COST, TOTAL PROJECTAll generic (research and development) operating costs associated with test and evaluation, and plant and capital equip- ment costs specifically associated with a project. It is the sum of the total estimated cost plus all other costs identifiable to the project. (AF, CE, DoE, USPS, VA) See also ESTIMATE, PROGRAM COST ESTIMATE, BUDGET An estimated fund re- quirement for any element included in the budget. Collectively all estimated fund requirements for a particular operating agency or component or consolidation thereof. (NASA) Or The basis for project approval and initial fund- ing request submitted to Congress for project authorization and appropriation actions. Usu- ally based on 35 percent design submittal. (NAY) ESTIMATE, CBCK~heck estimate is a vali- dating estimate. Its development and use is similar to an independent cost estimate except it is developed by program/project or operations office personnel or their supporting contractor. A check estimate should be developed by some- one who had no involvement in the original esti- mate, but who may be an advocate of the proj- ect. (DoE, NASA) ESTIMATE, COST A documented statement of costs estimated to be incurred to complete the project. Cost estimates provide baselines against which cost comparisons are made during the (life of a) project. (AF, DoE, NASA, USPS, VA) APPENDIX E Or A general term referring to any officially pre- pared estimate whether in the planning, design, or construction stage. Although in wide use, this term requires further description to be mean- ingful. (NAY) ESTIMATE, CURRENT COSTA calculated anticipated amount which reflects the latest and best professional estimate for a given project at any given time during planning, design, or con- s~uction. It is the amount which is anticipated will be expended for labor, materials, and other items and contractor services required to exe- cute folly the planned facility project. It in- cludes all amounts anticipated to be expended for: land acquisition; site work; construction; the purchase and/or installation of building-type and built-in equipment or furnishings as well as large substantially affixed equipment. It must include a reasonable estimate for contingencies. If the project is to be earned out for NASA by a construction agent, the estimated cost also in- cludes costs associated with the use of such an agent. (NASA3 ESTIMATE, CURRENT WORKING Current estimated cost of a project based on best avail- able information including estimated or actual contract cost; contingencies; supervision and adrninistrat~on; inspection and overhead; engi- neering and design after contract award; other direct costs; pending costs; and government fur- nished materials and purchase orders. (AF, CE) Or The sum of the construction cost estimate plus any other allowable contract project costs. Nor- mally prepared at each stage of design accom- plishment to monitor funding and to control design alternatives which will affect overall project costs. (NAY)

OCR for page 39
APPENDIX E 41 ESTIMATE, ENGINEERING Most projects re- ESTIMATE,lNDEPENDENT A documented cost quire first (preliminary or 35 percent comple- estimate that has the express purpose of serving tion), second (90 percent completion) and final as an analytical tool to validate, cross-check, or (100 percent completion) submittals. The engi- analyze estimates developed by proponents of a peering estimates for these submittals include project. Anindependent cost estimate also serves all labor and material costs for each item, in- as a basis for verifying risk assessments. eluding built-in equipment which would usually be furnished by a contractor and permanently built in or attached to the stricture and items with fixed utility connections. Overhead and profit are added separately. Such costs are based on current prices. A factor for cost growth pro- jection (escalation) is added as a percentage cost, so Mat the cost can easily be updated if the contact award data is changed. (AF, CE, NAV, NASA) ESTIMATE, GOVERNMENT A government estimate is used to determine the reasonableness of competitive bids received in connection with fonnally advertised construction contracts, and serve as a control in evaluating costs and pricing data in negotiated contracts. Normally, the CTitle II) design estimate, after being reviewed and approved by the government, is the basis for the government estimate. However, the services of an operating contractor, architect-engineer, cost- plus-fixed-fee construction contractor (with re- spect to subcontractors), or construction man- ager may be used as appropriate to prepare, re- view, or revise the government estimate prior to government approval. The specifics of a gov- emment estimate vary with the size and type of contract. (AF, CE, DoE, NASA, USPS, VA) Or A formal, approved construction cost estimate prepared for conuact purposes. This estimate is required for all contracts of $25,000 or more MAR 36.203~. It is used to evaluate bids, to protect against erroneous or unbalanced prices, and to serve as a guide in establishing a schedule for partial payments. The government estimate is based on the final design. Contingencies and supervision, inspection and overhead are not included in a government estimate. WAVE (DoE, NASA, VA) ES IIMATE, MAGNITUDE (VA)-See ESTIMATE, PLANNING ESTIMATE, MODIFICATION A government estimate prepared for specific contract change order, incorporating a specific scope, methodol- ogy, and circumstances. In addition to cost of the changes work, the modification estimate must also include any cost the contractor incurs from impact on the unchanged work. The estimate is used to assist negotiations and to protect the government's interests toward a fair price settle- ment. (NAY) ESTIMATE, ORIGINA~The first total estimated cost that is shown: (1) in a project data sheet submitted to the Congress for line item projects; or (2) in a project data sheet submitted to OMB for contingency type projects; or (3) in the initial authorization for general plant, operating-funded, equipment-funded, or other contingency-type projects. (CE, DoE) ESTIMATE, PLANNINGPlanning estimates are developed for each project at the time of project identification. Since these are developed prior to conceptual design, they are order of magni- tude only and have the least amount of accuracy and lowest confidence level. Care should be exercised in these estimates to assure that the order of magnitude is correct, since a tendency exists to avoid changing, particularly upward, this estimate once established. (CE, DoE, NAV) ESTIMATE, PROGRAM COST Provides a cur- rent and accurate cost analysis which identifies the source and basis for each major cost ele-

OCR for page 39
42 -meet. It is provided in support of military con- struction program submittals, including DO form 1391. (AF) ESTIMATE, TITLE I DESIGNPrepared upon completion of Title I design. Through use of plant engineering and design funds, Title I may be completed prior to inclusion of the project in the budget. If this should occur, the Title I design estimate becomes synonymous with the budget estimate. (DoE) APPENDIX E YEAR, BUDGET The fiscal year of the construc- tion program under review by Congress. (AF, CE, DoE, NASA, NAV) YEAR, ESTIMATE The fiscal year for which cost estimates are developed. Example: a costesti- mate developed in February 1979 for Program Year 1980 would be identified as Estimate Year l9XO. (NAY)