Guidance for Cost Estimation and Management for Highway Projects During Planning, Programming, and Preconstruction (2007)

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69 Introduction Once a project reaches the final design phase of its devel- opment, cost estimation focuses on the engineer’s estimate and the project’s scope is now reflected in the contract plans and specifications, including specific line items with quantities. Figure 7.1 is a flow diagram of how the cost estimation practice and cost estimation management processes proceed during final design. As shown in Figure 7.1, consideration of market conditions, the requirements imposed by third par- ties, and the macroeconomic environment are critical inputs to cost estimation in this phase. In addition, the estimate should reflect a level of contingency congruent with project risks. Estimation management would cover the steps of obtaining appropriate approval of the engineer’s estimate and comparing the engineer’s estimate with bid prices received from contractors. Additionally, it is necessary to consider the funds available in the STIP once the engineer’s estimate is complete. Finally, another purpose of the engineer’s estimate is to obligate funds for construction. In the final design phase of a project, many of the meth- ods and tools of a strategy help address the pressure to meet previous commitments concerning cost and schedule and to expand project scope. Additionally, many of the meth- ods and tools discussed in this chapter help identify and mitigate project risk by drawing attention to market condi- tions, including the possibility of unforeseen events and unforeseen conditions. Table 7.1 shows the link between strategies and cost escalation factors in the final design phase. Methodology This chapter is based on and uses the cost escalation factor definitions and strategies described in Chapter 3. Agencies should seek to identify the cost escalation factors that, during the final design phase of a project, have historically caused estimation problems for their organization and then apply the appropriate strategies to achieve better performance. Use Table 7.1 to determine which strategies may provide resources to address escalation factors that are causing prob- lems. Specific strategies of interest for the final design phase, along with the methods and tools that are available, are found within Chapter 7. Detailed information on the tools can be found in Appendix A. Once a strategy is selected to address a cost escalation fac- tor, the user must decide if it is better to use a cost estimation management solution, a cost estimation practice solution, or both. The question of which approach should be used is influenced by internal agency constraints. 7.1 Strategy: Management The execution side of cost estimation—cost estimation practice—depends highly on how the agency manages proj- ect development and the management support provided to those charged with executing project development, including estimate and schedule preparation. This section specifically identifies management methods and tools that support achieving estimate quality. The esti- mation practice methods that track with the management strategy methods are also identified in Table 7.2 and will be discussed in the estimate quality section of this chapter. Senior state highway agency managers should view them- selves as investors, developers, and strategists. Management has the responsibility to invest and develop project staff and to provide the staff with the resources to effectively perform their jobs. Senior management can create an environment for success, ensure that appropriate oversight processes are established and functioning, and position the right people for the tasks. Success in estimation practice is linked to the envi- ronment created by agency management. C H A P T E R 7 Guide for Final Design Phase

There are seven different management methods described here for use during the final design stage of project develop- ment, as shown in Table 7.2. 7.1.1 Budget Control Why? Even during final design, there can be scope changes; there- fore, management must approve the scope that is the basis for the final estimate. This confirmation would normally take place before the final estimate is prepared. As depicted in Figure 7.1, the “determine estimate basis” step would encom- pass this assumption of management control. One way to control scope and cost is to demand that the proj- ect design conform to the project budget; this forces designers to be constantly aware of the cost implications of their designs. Even at this late stage in project development, management must maintain strict control of the budget and be regularly updated as to scope and cost changes or to external pressures that could impact cost. 70 Award Or Not Award Determine Estimate Basis (Scope/ Location) Prepare Base Estimate Determine Risk (Set Contingency) Review Construction Estimate Compare Engineer’s Estimate versus Bid Bid Data Obtain Appropriate Approvals Release Engineer’s Estimate Traffic Pavements Structures ROW/RES Environmental Construction Utilities AD VE R TI SE & B ID Historical Data Market Conditions Project Scope Type Final Plans/Specs Schedule-Line Items & Quantities Project Complexity Input from Third Parties Input from Disciplines Engineer’s Estimate CO NS TR UC TI ON Awarded FI N AL D ES IG N PS&E Documents Not Awarded Project Development Process COST ESTIMATION PRACTICE AND COST ESTIMATION MANAGEMENT Input Step Database Document Ph as e Legend Decision Macro Environment ROW = right-of-way RES = real estate service PS&E = plans, specifications, and estimates Figure 7.1. Flow diagram for cost estimation practice and cost estimation management during final design.

Project Complexity The importance of strict budget control increases with more complex projects and with projects that have longer develop- ment durations. Because external groups view project dollars as a source of funds for their pet schemes, longer development times provide more opportunities for such groups to prevail. Tips for Success Budget control is tied to scope control and rests in the hands of state highway agency management. The estimator provides a forecast of cost based on a defined project scope. To control cost—that is, to protect the estimate—management can use budget control methods to limit scope creep. Tools B1.2 Constrained Budget B1.4 Summary of Key Scope Items (Original/Previous/Current) B1.5 Variance Reports on Cost and Schedule 7.1.2 Consistency Why? An estimate is a permanent document that serves as a basis for business decisions. It must be in a form that can be understood, checked, verified, and corrected. There must be consistency. Necessary consistency is achieved by instituting operating procedures that serve as guides for all parties engaged in the estimation processes. Therefore, in Figure 7.1, consistency comes to play in all the activities: input from disciplines, input from third parties, assessing market conditions, extracting historical data, prepare base estimate, determine risk, and re- view estimate. Management should ensure that the agency’s estimation group has developed a standard estimation manual of prac- tice and that training is provided to all those involved in esti- mate preparation. Other good practices are the establishment of a section or staff dedicated to estimate preparation and the use of cradle-to-grave estimators. 71 Strategies Cost Escalation Factors M an ag em en t Sc o pe an d Sc he du le O ff- Pr ism Is su es Ri sk D el iv er y an d Pr o cu re m en t D oc u m en t Q ua lit y Es tim at e Qu al ity In te gr ity Section 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 Bias √ √ Delivery and Procurement Approach √ √ √ Project Schedule Changes √ √ Engineering and Construction Complexities √ √ √ √ Scope Changes √ √ √ Scope Creep √ √ Poor Estimation √ √ √ √ Inconsistent Application of Contingencies √ √ Faulty Execution Ambiguous Contract Provisions √ In te rn al Contract Document Conflicts √ Local Concerns and Requirements √ √ √ √ √ Effects of Inflation √ √ Scope Changes √ √ √ Scope Creep √ √ Market Conditions √ √ √ √ Unforeseen Events √ Ex te rn al Unforeseen Conditions √ Table 7.1. Link between strategies and cost escalation factors in the final design phase.

Project Complexity Consistency is an important feature of all estimates, but its impact on performance increases with project complexity. Tips for Success Poor administration—including overly complex organiza- tional structures, convoluted contracting practices, and inexpe- rienced personnel—will cause project cost problems stretching from the original estimate to completion of construction. Tools C4.1 Cradle-to-Grave Estimators C4.2 Estimation Checklist C4.3 Estimation Manual (Guidelines) C4.4 Estimator Training C4.5 Major Project Estimation Guidance C4.6 Standardized Estimation and Cost Management Procedures C4.7 State Estimation Section 72 MANAGEMENT STRATEGY Manage the estimation process and costs through all stages of project development Cost Estimation Management Cost Estimation Practice Budget Control Budget Control B1.2 Constrained Budget B1.2 Constrained Budget B1.4 Summary of Key Scope Items (Original/Previous/Current) B1.4 Summary of Key Scope Items (Original/Previous/Current) B1.5 Variance Reports on Cost and Schedule Consistency Consistency C4.1 Cradle-to-Grave Estimators C4.1 Cradle-to-Grave Estimators C4.2 Estimation Checklist C4.2 Estimation Checklist C4.3 Estimation Manual (Guidelines) C4.3 Estimation Manual (Guidelines) C4.4 Estimator Training C4.4 Estimator Training C4.5 Major Project Estimation Guidance C4.5 Major Project Estimation Guidance C4.6 Standardized Estimation and Cost Management Procedures C4.6 Standardized Estimation and Cost Management Procedures C4.7 State Estimation Section C4.7 State Estimation Section Estimate Review—External Estimate Review—External E2.1 Expert Team E2.1 Expert Team Estimate Review—Internal Estimate Review—Internal E3.1 Formal Committee E3.1 Formal Committee E3.2 Off-Prism Evaluation E3.2 Off-Prism Evaluation E3.3 In-House/Peer E3.3 In-House/Peer E3.4 Round Table E3.4 Round Table Gated Process G1.1 Checklists G1.2 Cost Containment Table Identification of Changes I1.1 Cost Containment Table I1.2 Estimation Scorecard I1.3 Project Baseline I1.4 Scope Change Form Plans, Specifications, and Estimates (PS&E) Plans, Specifications, and Estimates (PS&E) P1.1 Agency Estimation Software P1.1 Agency Estimation Software P1.2 Commercial Estimation Software P1.2 Commercial Estimation Software P1.5 Trns•port P1.5 Trns•port Table 7.2. Final design phase management strategy: Methods and tools.

7.1.3 Estimate Review—External Why? Cost estimates are merely predictions and can therefore be wrong. All project estimates should be reviewed for the valid- ity of their basis; however, the formality and depth of the review will vary depending on the type of project and its com- plexity. In Figure 7.1, there is an “estimate review” step that is positioned after the “determine risk” step has quantified the project risk and an appropriated dollar amount has been included in the estimate. While this is depicted as a single activity, it would normally be repetitive, taking place to some extent whenever the estimate is modified. Project Complexity The formality of a project estimate review and the depth of the review at this stage in project development will vary depending on the type of project and project complexity. When very complex projects or projects involving new con- struction methods are being estimated, management should require that there be an external review of the estimate by qualified professionals. This external review should include a risk analysis that identifies the critical elements of the esti- mate, identifies the high and low cost limits for each critical element, and assigns a probability to the actual cost. Tips for Success To be of value, the review must closely examine the assump- tions that form the basis of the estimate, and knowledgeable and experienced individuals who are independent of the project team must conduct the review. Tool E2.1 Expert Team 7.1.4 Estimate Review—Internal Why? Often, estimators focus mainly on the accuracy of unit costs and the project quantities and fail to consider the effects of soft issues. Therefore, to address such lack of perspective, an “estimate review” step is positioned after the “determine risk” step in Figure 7.1. While this is depicted as a single activ- ity, it would normally be repetitive, taking place whenever the estimate is modified. Project Complexity In the case of a simple overlay project, the review may con- sist of a simple verification against a standard checklist. How- ever, as project complexity and scope increase, it is necessary to conduct formal reviews. When very complex projects or projects involving new construction methods are being esti- mated, management should require that, in addition to the internal review, there be an external review of the estimate by qualified professionals. Tips for Success To be of value, the review must closely examine the assump- tions that form the basis of the estimate. Knowledgeable and experienced individuals who are independent of the project team must conduct the review. Tools E3.1 Formal Committee E3.2 Off-Prism Evaluation E3.3 In-House/Peer E3.4 Round Table 7.1.5 Gated Process Why? The project estimated early in project development is often not the project actually built. Scope changes to the original concept usually result from a better understanding of the needs that drive a project. With most scope changes, there is a result- ing increase in project cost. In order to ensure that designers are aware of how scope changes will affect project cost, it is advantageous to require submittal of a cost estimate along with each design submittal. Management can then create a gated project development process that controls the project devel- opment steps and the advance of project development from one milestone to the next. Projects cannot advance to the next step without approval. Gates can be placed at management’s discretion, but the critical points during final design are after the “determine risk” and “review estimate” steps. One nontransportation source reported using an extremely formalized gated process. Before a project can continue in the development process, the project team in this organization must hold a meeting in which the Construction Industry Insti- tute’s (CII’s) Project Definition Rating Index (PDRI) is com- pleted. The PDRI scores a project’s level of scope definition as compared with historic data on scope definition. The project must achieve a minimum score before the project can continue. If the project does not obtain the minimum score, then the proj- ect is returned to the previous phase for more definition. Project Complexity As project complexity increases, the benefits to be derived from a gated process increase because the gated process forces the project development team to carefully review the issues impacting project cost increases before proceeding. 73

Tips for Success A gated process is a means for achieving project and esti- mate success because it provides the basis for a structured assessment of scope definition, cost, and schedule before a project can move to the next step in its development. State highway agencies could make a gated process part of their work program update cycles. Tools G1.1 Checklist G1.2 Cost Containment Table 7.1.6 Identification of Changes Why? The scope and cost baseline of every project should be the reference against which all changes are compared. Through- out project development and construction, the baselines are used to evaluate performance. Most agencies that practice baselining of their projects report doing so usually when an identified need becomes a real project and is budgeted. The identification of changes method is normally posi- tioned to intercept inputs impacting scope and cost. In Fig- ure 7.1, identification of changes would filter the inputs from disciplines and the inputs from third parties. It would also identify any downstream changes to the “determine estimate basis” step. Project Complexity As project complexity increases, more rigorous manage- ment attention to conformance with the scope and cost base- line is critical. The establishment of a project scope and cost baseline is fairly straightforward for routine projects but becomes much more difficult as project complexity increases. This is primarily because complex projects have many more scope and design unknowns during the early phases of project development. Tips for Success Management must be informed of project changes and external impacts that affect the baselines and should have procedures in place that restrict changes unless approved by senior management. Tools I1.1 Cost Containment Table I1.2 Estimation Scorecard I1.3 Project Baseline I1.4 Scope Change Form 7.1.7 Plans, Specifications, and Estimates (PS&E) Why? Computer software supports consistence, allows the manip- ulation of large amounts of data, and speeds the transfer of information. In Figure 7.1, the impact is primarily with the han- dling of the historical data and in the estimate creation activi- ties, but software is also used in the “determine risk” step when simulations are conducted to assess the impact of specific risks. Computers and estimation software enhance the ability of engineers to manage large data sets that are used in develop- ing estimates for all types of projects. Additionally, estimation software provides a record of changes to the estimate and permits easy screening of decisions. In the case of state highway agencies, the most widely used estimating software is Estimator™ by InfoTech. Due to the flexibility that software provides, the estimator can adjust unit costs or percentages according to the project’s complexity. One state highway agency currently uses a commercial esti- mation program that is used by many contractors and that was originally developed to facilitate detailed estimation by a large contracting organization. Such programs allow the develop- ment of estimates based on selected materials, equipment, methods, and crew productivity instead of historical bid data. Project Complexity In the case of a complex project for which there is no his- torical bid data, the development of a bottom up estimate using commercial software maybe the only way to arrive at a realistic estimate of project cost. Tips for Success Estimation programs with preloaded templates help proj- ect teams define the project scope, cost, and schedule. The software provides a means to track estimate changes during project development, and it can assist in project review. A training program is vital—this can be a formal set of classes for all estimators, mentoring among the estimators in the sec- tion, or support for estimators to attend off-site conferences, seminars, or classes pertinent to their work. Tools P1.1 Agency Estimation Software P1.2 Commercial Estimation Software P1.5 Trns•port 74

7.2 Strategy: Scope and Schedule Even at this late stage in project development, cost estima- tion management is the key to controlling project scope and schedule. Agencies should seek to implement management solutions, as identified in Table 7.3. However, it must not be forgotten that success in estimating practice is linked to the environment created by agency management. There are six different scope and schedule methods de- scribed here for use during the final design phase of project development. 7.2.1 Buffers Why? Underestimation—driven by optimism—is the demon- strated systematic tendency to be overoptimistic about key project parameters. Internally, underestimation of cost can arise from the state highway agency estimator’s or consul- tant’s identification with the agency goals for maintaining a construction program. External pressures can also cause problems. Actions by the state highway agency are often required to alleviate perceived negative impacts of construction on the local societal environment as well as the natural environ- ment. Measures may include, but are not limited to, intro- ducing changes to project design, alignment, and the conduct of construction operations. These steps are often taken to appease the local residents, business owners, and environ- mental groups. All such changes in scope must be approved by management with a full understanding of their cost impacts. Buffers are positioned between or within processes impact- ing scope and cost. In Figure 7.1, buffers would typically be found separating any scope and schedule decision from actual estimation processes, such as the “prepare base estimate” step. 75 SCOPE AND SCHEDULE STRATEGY Formulate definitive processes for controlling project scope and schedule changes Cost Estimation Management Cost Estimation Practice Buffers B2.1 Board Approvals B2.2 Constrained Budget B2.3 Management Approvals Communication C1.1 Communication of Importance C1.2 Communication of Uncertainty C1.3 Communication within State Highway Agency C1.4 Definitive Management Plan C1.7 Year-of-Construction Costs Estimate Review—External E2.1 Expert Team Estimate Review—Internal E3.1 Formal Committee E3.2 Off-Prism Evaluation E3.3 In-House/Peer E3.4 Round Table E3.5 Year-of-Construction Costs Identification of Changes I1.1 Cost Containment Table I1.2 Estimation Scorecard I1.3 Project Baseline I1.4 Scope Change Form Value Engineering V2.1 Value Engineering Table 7.3. Final design phase scope and schedule strategy: Methods and tools.

Project Complexity Internal and external pressures can become problems, even on very small (dollarwise) and seemly simple projects. Urban projects that impact the community and projects through environmentally sensitive areas will usually generate signifi- cant external pressure. So the issue is more dependent on project content than on complexity. Tips for Success If state highway agencies truly want accurate project esti- mates, there must be organization structures in place that shield estimators from external and internal pressures to produce a low project estimate. Additionally, to control scope and, conse- quently, project cost, management must require that an esti- mate of the cost associated with any scope change accompany the change request. Tools B2.1 Board Approvals B2.2 Constrained Budget B2.3 Management Approvals 7.2.2 Communication Why? A thorough understanding of community expectations, together with the identification and communication of the uncertainty, project scope, and cost unknowns, helps in managing project cost in all phases of project development. Communication is a very important aspect of state high- way agency relations with third parties, and it is important in conveying the precision of the estimate. In Figure 7.1, this involves the input from third parties, the “determine risk” step, and the statements about estimated cost (including the values from the “prepare base estimate,” “review estimate,” and “engineer’s estimate” activities). Project Complexity Inherently, complexity adds risk to a project; therefore, the importance of communication, particularly communica- tion of uncertainty, becomes more important with project complexity and project visibility. Tips for Success Institutional communication demands attention not just to content, but also to attitude—openness, accessibility, and sincerity are necessary. As the project moves through prelim- inary design to final design, the amount of uncertainty in the estimate should diminish, but there will still be uncertainty, and the level of uncertainty must be effectively communi- cated. Communication between internal departments of an agency is imperative throughout project development given the intricacy and number of people involved in developing even the simplest project. Tools C1.1 Communication of Importance C1.2 Communication of Uncertainty C1.3 Communication within State Highway Agency C1.4 Definitive Management Plan C1.7 Year-of-Construction Costs 7.2.3 Estimate Review—External Why? Estimation experience of state highway agency personnel charged with developing estimates ranged from less than 1 year to more than 40 years across the 50 state highway agen- cies. Several state highway agencies have reported having esti- mators with minimal experience and additionally stated that they had in recent years lost their most experienced person- nel to retirement and had not retained mid-level personnel to ensure that the overall experience level in estimation would remain high. Previously, in Section 7.1.4, an external estimate review was offered as a validation of the estimated project cost, but an external review also serves to ensure that the estimate matches the scope and schedule of a project. In Figure 7.1, the “estimate review” step is positioned after the “risk determi- nation step.” However, for major projects this could be a repetitive activity. Project Complexity The formality of a project estimate review and the depth of the review will vary depending on the type of project and the project’s complexity. In the case of very complex projects or projects involving new construction methods, estimation management should require that there be an external review of the estimate by qualified professionals. Tips for Success The external review should carefully study the scope and schedule of the project as described in the contract docu- ments. To be of value, the review must closely examine the match between the stated scope and the project design as pre- sented in the contract documents that are available at this point in project development. 76

Tool E2.1 Expert Team 7.2.4 Estimate Review—Internal Why? As discussed in Sections 7.1.4 and 7.1.5, a very effective management approach for establishing the reliability of a cost estimate is to subject the estimate to review and verification. In Figure 7.1, reviews occur to some extent following each “prepare estimate” activity, but the primary examination is the depicted “review estimate” step. Project Complexity Whether the review is conducted by agency personnel or by individuals who are independent of the agency depends on the type of project and project complexity. In the case of a straightforward overlay project, a formal review may not be necessary. However, as project complexity and scope increase, it is necessary to conduct formal reviews. Very complex and high-profile projects should have an external review of the estimate by qualified professionals. Tips for Success To be of value, the review must closely examine the assump- tions that form the basis of the estimate and the review must be conducted by knowledgeable and experienced individuals who are independent of the project team. Tools E3.1 Formal Committee E3.2 Off-Prism Evaluation E3.3 In-House/Peer E3.4 Round Table E3.5 Year-of-Construction Costs 7.2.5 Identification of Changes Why? Every project should have an established baseline for both scope and cost. The project baseline scope and cost estimate is used to measure performance throughout project develop- ment and construction. Different agencies that already prac- tice baselining of their projects report doing so usually when an identified need becomes a real project and is budgeted. The identification of changes method is normally positioned to intercept inputs impacting scope and cost. In Figure 7.1, identification of changes would filter the input from disci- plines and input from third parties. It would also identify any downstream changes to the “determine estimate basis (scope/location)” step. Project Complexity Establishing reliable baseline definitions of scope and cost in the early stages of project development is difficult, primar- ily because of the many project unknowns at that time. How- ever, studies have found that projects that receive the most robust front-end planning have the fewest problems during execution. The establishment of a project scope and cost baseline is fairly straightforward for routine projects and becomes more difficult as project complexity increases. Yet it is with the complex project that the use of this method will yield the greatest benefits. Tips for Success Engineering and construction complexities caused by the project’s location or purpose can make early design work very challenging and lead to internal coordination errors between project components. Constructability problems that need to be addressed may also be encountered as the project devel- ops. Early identification of such issues and a structured sys- tem for controlling their impacts is essential to achieving estimate quality. Tools I1.1 Cost Containment Table I1.2 Estimation Scorecard I1.3 Project Baseline I1.4 Scope Change Form 7.2.6 Value Engineering Why? Value engineering is used throughout the construction industry. Within state highway agencies, value engineering is used to increase the project deliverables within the limita- tions of the funds available for a project. By breaking the project into components, reviewing the function, and for- mulating solutions and developing recommendations for improvements, one state highway agency has shown an increase in constructability, a minimization of right-of-way and/or environmental impacts, and a compression of construction schedules. Value engineering actions should take place before the final plans and specifications pass into the “determine estimate basis” step in Figure 7.1. Value engineering actions should also be applied to the input from disciplines contributions. Additionally, the FHWA value engineering regulation (23 CFR Part 627—Value Engineering; the regulation can be 77

found at www.fhwa.dot.gov/ve/vereg.htm and the policy at www.fhwa.dot.gov/ve/veplcyg.htm) requires state highway agencies to ensure that a value engineering analysis has been performed on all federal-aid highway projects on the National Highway System with an estimated cost of $25 million or more and that all resulting, approved recommendations are incorporated into the plans, specifications, and estimate. Project Complexity With straightforward or routine projects, there may be limited opportunity to realize savings by means of a value engineering process. However, as project complexity and scope increase, so do the opportunities to apply value engi- neering and realize significant savings while retaining quality. Tips for Success During feasibility studies, preliminary design, and even detail design, the relative expenditures for value engineering studies are small compared with the cumulative cost of the project. Typically, engineering fees amount to less than 10% of total construction costs. However, the decisions and commitments made during design have great influence on the cost of construction, a far greater influence than what the constructor can effect by making changes during the actual construction process. Tool V2.1 Value Engineering 7.3 Strategy: Off-Prism Issues At this stage in project development, cost estimation man- agement is the key to controlling project scope and schedule. However, market conditions and macroeconomic events, which state highway agencies and estimators do not com- monly consider, can significantly affect project cost. These events are related to regional or even global economic con- ditions. Agencies should seek to implement management approaches identified in Table 7.4, which will help in identi- fying such impacts. There are three different off-prism issues methods described here for use during the final design phase of project development. 7.3.1 Communication Why? Communication was stressed for a scope and schedule strategy in Section 7.2, and communication is also extremely important in an off-prism issues strategy. Agencies are very good at articulating the engineering aspects of a project, but often are “blind sided” by macroeconomic events and chal- lenges. Figure 7.1 has a market conditions input activity to call attention to this need to be aware of the economic condi- tions under which the project will be pursued. This is an area of analysis where the engineering community has very little experience or training. When dealing with stakeholders, communication of the uncertainty and of project scope and cost unknowns is criti- cally important. As the project moves through design, the amount of uncertainty in the estimate should diminish, but there will still be uncertainty, and the level of uncertainty must be communicated. Communication between internal state highway agency departments is imperative throughout project development given the number of parties involved in even the simplest of projects. There should be a definite point during project development when the scope is fixed. This decision point should be clearly identified. 78 OFF-PRISM ISSUES STRATEGY Use proactive methods for engaging external participants and assessing the macroenvironmental conditions that can influence project costs Cost Estimation Management Cost Estimation Practice Communication Risk Analysis C1.2 Communication of Uncertainty R3.2 Contingency—Identified C1.3 Communication within State Highway Agency R3.4 Estimate Ranges C1.5 Proactive Conveyance of Information to the Public Right-of-Way R2.5 Right-of-Way Estimator Training R2.6 Separate Right-of-Way Estimators Table 7.4. Final design phase off-prism issues strategy: Methods and tools.

Project Complexity Inherently, complexity adds risk to a project; therefore, the importance of communication, particularly communication of uncertainty, becomes more important with increasing project complexity and project visibility. Tips for Success Communication is about both listening to stakeholders and providing accurate information to include knowledge about uncertainty. Estimators must realize that the project cost can be severely impacted by market and macroeconomic factors, and they must communicate this to state highway agency management. Tools C1.2 Communication of Uncertainty C1.3 Communication within State Highway Agency C1.5 Proactive Conveyance of Information to the Public 7.3.2 Right-of-Way Why? Estimators who work in a vacuum and fail to consider the information provided by other state highway agency disci- plines cannot produce accurate estimates. Figure 7.1 shows the estimation process—prepare base estimate—being supported by an “input from disciplines” step. The costs of various project items that are included in the estimate must be managed in different ways, and they are usu- ally the responsibility of different sections of a state highway agency, so estimators must involve those supporting sections in order to produce accurate project cost estimates. Project Complexity As projects become more complex, there is a greater need for coordination and communication between the disciplines participating in the development of the project’s scope and estimate. Many more factors—right-of-way cost, multiple utility companies, railroads, agencies that grant environmen- tal permits—impact the cost of projects in urban environ- ments and projects that cross environmentally sensitive areas. The typical highway or bridge project team must be expanded to include expertise in dealing with these other matters. Tips for Success An accurate cost estimate and schedule is dependent on information from the many supporting sections of an agency that feed data to those preparing the estimate. These sections must be active participants in a project’s development. Tools R2.5 Right-of-Way Estimator Training R2.6 Separate Right-of-Way Estimators 7.3.3 Risk Analysis Why? Estimates include a contingency amount to cover the costs of possible identified and unidentified future events. A risk analysis should be preformed to establish the magnitude of the contingency amount. In Figure 7.1, a “determine risk” step is depicted as a required action encompassing the establishment of the contingency amount. Risk analysis is concerned with how future events will turn out and how to deal with the uncertainties of these future events by identifying and examining a range of possible out- comes. The objective is to understand, control, and mitigate risks. Understanding the risks inherent in each potential proj- ect alternative is important to controlling cost and developing estimates that reflect the cost of accepted risks. Project Complexity Added risk comes with project complexity. The need to purchase large quantities of bulk commodities adds uncer- tainty and often results in restraints being imposed on con- struction operations. The degree to which the proposed technology for the project has been demonstrated can be very limited. Large, complex projects stretch contractor and agency resources. Some complex projects require specific experience, resources, and knowledge for successful completion. Tips for Success The project team, not just the estimator, must conduct a comprehensive risk analysis for all major projects. The purpose of such analyses is first to identify risks by likelihood of occur- rence and by consequences and secondly to devise method- ologies and strategies for avoiding or managing the risks. Tools R3.2 Contingency—Identified R3.4 Estimate Ranges 7.4 Strategy: Risk At this stage in project development, cost estimation man- agement is the key to controlling project scope and schedule. 79

Agencies should be seeking to implement the management solutions identified in Table 7.5. However, it must not be for- gotten that success in estimation practice is linked to the working environment created by agency management. There are three different risk methods described here for use during the final design stage of project development. 7.4.1 Communication Why? When dealing with external stakeholders, communication of uncertainty and of project scope and cost unknowns is crit- ically important. Any uncertainty about project scope, sched- ule, and cost must be clearly communicated both within the agency and to external parties. Communication was stressed in terms of its requirement to support a scope and schedule strategy in Section 7.2 and in terms of listening to third parties in Section 7.3. In terms of a risk strategy, communication has to do with how the preci- sion of an estimate is communicated to agency management and to parties outside of the agency. Figure 7.1 includes two notations depicting these communication actions: the “release engineer’s estimate” sidebar and the “obtain appropriate approvals” step. Project Complexity Inherently, complexity and long project development durations add risk to a project; therefore, the importance of communication, particularly communication of uncertainty, becomes greater with greater project complexity and visibility. Tips for Success Communication is about providing accurate information, including knowledge about uncertainty. To maintain credit- ability with stakeholders, it is important to tell the public the truth about project cost and to identify the precision of estimate values. Tools C1.2 Communication of Uncertainty C1.3 Communication within State Highway Agency C1.4 Definitive Management Plan C1.7 Year-of-Construction Costs 7.4.2 Identification of Risk Why? The identification of risk method is used to capture inputs impacting scope and cost, as discussed in Section 7.2. Addi- tionally, as part of the “determine risk” activity in Figure 7.1, there is a need to be very proactive in identifying possible risks that can impact a project’s cost and duration. Identification of risk was previously discussed in Sec- tion 7.2.3. Risk-based estimation and management is used by only a small number of transportation agencies. Range esti- mates and risk charters are common practice in other indus- tries, but the highway sector is just beginning to apply these management processes. The state highway agencies that use a risk-based estimation approach have found it to be successful in communicating the nature of project costs. Project Complexity As project complexity increases, it is necessary to employ formal risk management processes that identify, quantify, and set forth mitigation strategies. Tips for Success A risk charter is a list of identified risks that may be encountered during the life of the project. Such a charter is 80 RISK STRATEGY Identify risks, quantify their impact on cost, and take actions to mitigate the impact of risks as the project scope is developed Cost Estimation Management Cost Estimation Practice Communication Risk Analysis C1.2 Communication of Uncertainty R3.2 Contingency—Identified C1.3 Communication within State Highway Agency R3.3 Contingency—Percentage C1.4 Definitive Management Plan C1.7 Year-of-Construction Costs Identification of Risk I2.1 Red Flag Items I2.2 Risk Charter Table 7.5. Final design phase risk strategy: Methods and tools.

typically based on a scientific assessment of risk rather than on simple engineering judgment. The charter may address the likelihood of the risk, the cost and schedule implications of the risk, and mitigation suggestions, as well as identify which risks can have the largest impacts on the project. Tools I2.1 Red Flag Items I2.2 Risk Charter 7.4.3 Risk Analysis Why? Project risk was previously discussed in Section 7.3.3. Con- tingency is typically applied to state highway agency cost esti- mates to cover risk, but its application is not usually based on identification of specific risks. In most state highway agencies, the application of a contingency to an estimate is so loosely defined that there is no consistent application of contingency. Before a contingency amount can be incorporated into an estimate, there must be a risk analysis, which is the “determine risk” step in Figure 7.1. Project Complexity Added risk comes with added project complexity. There- fore, the use of a single percentage contingency amount based on the construction value of the expected contract to cover risk often has no relation to reality. By definition, contin- gency is meant to cover (1) an event that may occur but is not likely or intended or (2) a possibility that must be prepared for, the condition being dependent on chance. Tips for Success There must be a clear definition of what the contingency amount in an estimate is intended to protect against, and that amount must be determined by a careful analysis of project conditions, market conditions, and the macroeconomic environment. Tools R3.2 Contingency—Identified R3.3 Contingency—Percentage 7.5 Strategy: Delivery and Procurement At this stage in project development, the project delivery and procurement method would normally have already been selected and the project documents would be prepared accord- ingly. However, market conditions can change rapidly, and the issue of contract size and market capability should be reviewed again. Market conditions and contractor capability have a sub- stantial impact on the cost of a project. How market forces impact a particular project depends on (1) the specific dates on which a project is advertised and bid (are there a significant number of projects being advertised by other agencies during the same time frame?) and (2) the manner in which the work is packaged into individual contracts (what is the size of a single contract, and how are adjoining contracts coordinated?). The selected contracting method is the foundation for the project estimate because it explicitly establishes how project risk is distributed between the agency and the contractor. The distribution of risk directly impacts the cost of the project work items. In Figure 7.1, the assessment of an appropriate delivery and procurement strategy should be addressed during the “review estimate” step, and the assessment should be addressed again during the “obtain appropriate approvals” step. As shown in Table 7.6, there are two different methods described here for handling delivery and procurement issues during the final design phase of project development. 7.5.1 Off-Prism Issues Why? Cost estimation management is the key to controlling project scope and schedule. However, market conditions and macroeconomic events, which state highway agencies and estimators do not commonly consider, can significantly affect project cost. These events are related to regional or even 81 DELIVERY AND PROCUREMENT STRATEGY Apply appropriate delivery methods to better manage cost because project delivery influences both project risk and cost Cost Estimation Management Cost Estimation Practice Constructability C5.1 Constructability Reviews Identifying Off-Prism Issues Identifying Off-Prism Issues I3.3 Market Conditions I3.3 Market Conditions Table 7.6. Final design phase delivery and procurement strategy: Methods and tools.

global economic conditions—that is, off-prism issues. The macroenvironment can affect project cost in two ways: (1) by being unknown or unrecognized by project managers and estimators and (2) by changes in the environment that are completely external to the project. This method, “Off-Prism Issues,” is also another strategy unto itself. See Section 7.3 for more information about this strategy. However, note that the off-prism issue tool that most directly relates to delivery and procurement is I3.3, Market Conditions. Project Complexity As project complexity increases, the number of off-prism issues to be considered increases. Tips for Success Unlike other aspects of project planning and estimation, understanding the macroenvironment has never been stan- dardized as part of project estimation. It is therefore important to develop planning processes that focus on community con- cerns, externally imposed requirements, and external market conditions. Tool I3.3 Market Conditions 7.5.2 Constructability Why? The quality of the documents used to prepare estimates impacts the quality of the estimate in terms of accuracy. Thus, design documents that provide the basis for cost estimates must accurately portray the design intent. Implementing con- structability analysis will enhance project documents by reduc- ing the potential for errors and omissions and will produce designs that are constructible. Constructability reviews can provide guidance as to the project construction phasing and staging approaches required to cost-effectively build the proj- ect. In this way, constructability will influence both “update design basis” and “prepare base estimate” steps (see Figure 6.1). Project Complexity As project complexity increases, the need for construction knowledge and experience in reviewing designs becomes crit- ical. Construction input can aid the designer in developing designs that can be constructed more efficiently. This need is especially important for very large and complex projects, such as those in urban areas under high-traffic volumes. These types of projects require continuous input from construction experts beginning with project definition during programming and throughout preliminary design. Tips for Success Constructability is most successful when the process is for- malized and is an integral part of the programming and pre- liminary design phase of project development. Identifying and using appropriate constructability experts is also critical in achieving successful constructability reviews. A constructability expert must be able to work effectively with project designers and provide meaningful input on design documents. Tool C5.1 Constructability Reviews 7.6 Strategy: Document Quality At this stage in project development, cost estimation man- agement is the key to controlling document quality. Agencies should seek to implement the management solutions identified in Table 7.7. There are three different document quality methods described here for use during the final design phase of project development. 82 DOCUMENT QUALITY STRATEGY Promote cost estimate accuracy and consistency through improved project documents Cost Estimation Management Cost Estimation Practice Computer Software Document Estimate Basis and Assumptions C C2.1 2.2 C Agency Estimation Software ommercial Estimation Software D4.1 Project Estimation File Estimate/Document Review E1.1 Estimate/Document Review—External E1.2 Estimate/Document Review—Internal Table 7.7. Final design phase document quality strategy: Methods and tools.

7.6.1 Computer Software Why? The use of computer software forces consistent practices, and these practices in turn support the document quality strategy; therefore, the use of computer software in the esti- mation processes—“prepare base estimate” and “engineer’s estimate” in Figure 7.1—is encouraged. Often, state highway agencies use estimation software to calculate the engineer’s estimate. The software is either a pro- gram that has been developed within the department or the estimator module from AASHTO’s Trns•port software. A few state highway agencies use a combination of their in-house software and the AASHTO programs. Estimation software provides a structured format for preparing estimates and promotes estimate consistency. Project Complexity With increased project complexity, there is an increased need to identify construction conflicts when reviewing the plans and specifications. Computer software enables the esti- mator to easily analyze large amounts of data and perform searches or information queries. Tips for Success AASHTO’s Estimator module allows the user to use several different estimation methods, such as creating estimates based on historical bid data, historical cost data, reference tables, or a collection of price derivations. All data used to generate an estimate—such as crew wages, equipment and material costs, production rates, and historical cost data—are stored in Esti- mator. This enhances the estimator’s and management’s abil- ity to check the estimate. Tighter engineering control of document preparation will support better estimates. Tools C2.1 Agency Estimation Software C2.2 Commercial Estimation Software 7.6.2 Estimate/Document Review Why? During the review estimate activity that is identified in Figure 7.1, there should also be a check on the quality of the plans and specifications. As discussed in Sections 7.1.4, 7.1.5, 7.2.3, and 7.2.4, a very effective management approach for establishing the reliabil- ity of a cost estimate is to subject the estimate to review and verification. Project Complexity The formality of a project estimate review and the depth of the review will vary depending on the type of project and proj- ect complexity. In the case of routine straightforward proj- ects, a formal review may not be necessary. However, as project complexity and scope increase, it is necessary to conduct for- mal reviews. When very complex projects are being estimated, management should require that there be an external review of the estimate by qualified professionals. Tips for Success To be of value, the review must closely examine the assump- tions that form the basis of the estimate. Knowledgeable and experienced individuals who bring a broad perspective to the project and estimate formulation should be assigned to conduct the review. Tools E1.1 Estimate/Document Review—External E1.2 Estimate/Document Review—Internal 7.6.3 Document Estimate Basis and Assumptions Why? During the “prepare base estimate” and “engineer’s estimate” activities shown in Figure 7.1, the estimator must clearly state the basis of the cost calculations and all assumptions. Estimate documentation must be in a form that can be understood, checked, verified, and corrected. The foundation of a good estimate is the formats, procedures, and processes used to arrive at the cost. Assumptions about what the contract documents require should be available as estimator notes. Project Complexity Increased project complexity means that more issues must be considered in preparing the estimate. The decisions and assumptions that the estimator makes as to construction requirements must be clearly stated and communicated to those reviewing the estimate. The decisions and assumptions must be tied to specific statements in the contract documents or in the plans. Tips for Success Many state highway agencies do not currently have a pub- lished document that establishes estimation procedures. State highway agencies would greatly benefit by producing their own guidelines of standard processes, procedures, and formats to be 83

used by both state highway agency estimators and design consultants retained for estimation purposes. This guidance document should be specifically written for those having re- sponsibility for preparing the final engineer’s estimate and should discuss how assumptions are to be documented. It should both address how unit costs are to be derived from the agency’s databases and supply the documentation necessary to support decisions to use other cost values. Tool D4.1 Project Estimation File 7.7 Strategy: Estimate Quality Use qualified personnel and uniform approaches to achieve estimate accuracy. At this stage in project development, cost estimation practices are the key to achieving a good proj- ect estimate. Agencies should seek to implement the practices identified in Table 7.8. However, it must not be forgotten that success in estimation practice is linked to the work environment created by agency management. There are four different cost estimation practice methods and two cost estimation management methods for this strat- egy for use during the final design stage of project develop- ment. Management support for internal estimate reviews is usually not an issue, but in the case of complex projects, man- agement should have procedures in place for organizing and conducting external reviews. 7.7.1 Estimate Review—External Why? Estimation experience of state highway agency personnel charged with developing estimates ranged from less than 1 year to more than 40 years across the 50 state highway agencies. Several state highway agencies have reported having estima- tors with minimal experience and additionally stated that they had in recent years lost their most experienced personnel to retirement and had not retained mid-level personnel to en- sure that the overall experience level in estimation would re- main high. Previously, in Section 7.1.4, an external estimate review was offered as a validation of the estimated project cost, but an external review also serves to ensure that the estimate matches the scope and schedule of a project. In Figure 7.1, the “estimate review” step is positioned after the “risk determi- 84 ESTIMATE QUALITY STRATEGY Use qualified personnel and uniform approaches to achieve improved estimate consistency and accuracy Cost Estimation Management Cost Estimation Practice Consistency C4.2 Estimation Checklist C4.3 Estimation Manual (Guidelines) C4.4 Estimator Training C4.5 Major Project Estimation Guidelines C4.6 Standardized Estimation and Cost Management Procedures C4.7 State Estimation Section Estimate Review—External Estimate Review—External E2.1 Expert Team E2.1 Expert Team Estimate Review—Internal Estimate Review—Internal E3.1 Formal Committee E3.1 Formal Committee E3.2 Off-Prism Evaluation E3.2 Off-Prism Evaluation E3.3 In-House/Peer E3.3 In-House/Peer E3.4 Round Table E3.4 Round Table Plans, Specifications, and Estimates (PS&E) P1.1 Agency Estimation Software P1.2 Commercial Estimation Software P1.3 Cost Based P1.4 Historical Bid Based P1.5 Trns•port Table 7.8. Final design phase estimate quality strategy: Methods and tools.

nation step.” However, for major projects this could be a repetitive activity. Project Complexity The formality of a project estimate review and the depth of the review will vary depending on the type of project and the project’s complexity. In the case of very complex projects or projects involving new construction methods, estimation management should require that there be an external review of the estimate by qualified professionals. Tips for Success The external review should carefully study the scope and schedule of the project as described in the contract docu- ments. To be of value, the review must closely examine the match between the stated scope and the project design as pre- sented in the contract documents that are available at this point in project development. Tool E2.1 Expert Team 7.7.2 Estimate Review—Internal Why? As discussed in Sections 7.1.4 and 7.1.5, a very effective management approach for establishing the reliability of a cost estimate is to subject the estimate to review and verification. In Figure 7.1, reviews occur to some extent following each “prepare estimate” activity, but the primary examination is the depicted “review estimate” step. Project Complexity Whether the review is conducted by agency personnel or by individuals who are independent of the agency depends on the type of project and project complexity. In the case of a straightforward overlay project, a formal review may not be necessary. However, as project complexity and scope increase, it is necessary to conduct formal reviews. Very complex and high-profile projects should have an external review of the estimate by qualified professionals. Tips for Success To be of value, the review must closely examine the assump- tions that form the basis of the estimate and the review must be conducted by knowledgeable and experienced individuals who are independent of the project team. Tools E3.1 Formal Committee E3.2 Off-Prism Evaluation E3.3 In-House/Peer E3.4 Round Table 7.7.3 Consistency Why? Consistency is achieved by instituting operating procedures that serve as guides for performing estimation processes. Therefore, in Figure 7.1, consistency comes to play in all the processes: the input from disciplines, input from third par- ties, market conditions, historical data, prepare base estimate, determine risk, and review estimate. Estimates must be structured and completed in a consistent manner. Uniform estimate presentation supports analysis, evaluation, validation, and monitoring of item costing. The purpose of a uniform estimate structure is to avoid duplications as well as to ensure that there are no omissions. Project Complexity Attainment of estimation efficiencies across the agency demands that there be consistent estimation processes to pro- vide ease in reporting, enable data sharing, and make recog- nition of errors much easier. This becomes critically important as project complexity increases. Consistency enables multiple estimators to complete vari- ous items of the estimate and then combine and coordinate their work. These methods permit a second estimator to con- tinue the work from any point where the first estimator stops or to easily check the work of another estimator. Tips for Success The foundation of a good estimate is the formats, proce- dures, and processes used to arrive at the cost. Success in terms of estimate quality is attained by investing the time and effort in developing consistent estimation processes that match how the agency develops its projects. Tools C4.2 Estimation Checklist C4.3 Estimation Manual (Guidelines) C4.4 Estimator Training C4.5 Major Project Estimation Guidelines C4.6 Standardized Estimation and Cost Management Procedures C4.7 State Estimation Section 85

7.7.4 Plans, Specifications, and Estimates (PS&E) Why? With many agencies, the PS&E—the “engineer’s estimate” activity in Figure 7.1—is a detailed line-item estimate. Detailed PS&E are necessary to verify that the project can be constructed for the budgeted funds and for checking the validity of bids. Approval of the PS&E will obligate funds for construction. Project Complexity Estimates for standard items of work can often be con- structed based on historical bid averages, but as project com- plexity increases or new methods or construction techniques are required to accomplish the work, detailed line-item esti- mation will usually be employed because historical data are normally nonexistent. Tips for Success Detailed bottom-up estimation enables the estimator to incorporate knowledge about markets into the estimate directly, specifically into the affected work items, instead of having to rely on percent contingencies to cover such effects. Tools P1.1 Agency Estimation Software P1.2 Commercial Estimation Software P1.3 Cost Based P1.4 Historical Bid Based P1.5 Trns•port 7.8 Strategy: Integrity The establishment of management structures that shield estimators from external and internal pressures to produce a low project estimate will support accurate project estimation. Estimate reviews to ensure integrity are repetitive, taking place to some extent whenever the estimate is modified, as shown with the “estimate review” activity in Figure 7.1. Agencies should, therefore, institute the estimating practices identified in Table 7.9. There are two different integrity methods described here for use during the final design phase of project development. 7.8.1 Estimate Review—External Why? It is always necessary to independently verify that an esti- mate is complete and that it matches the project scope. When very complex projects or projects involving new construction methods are being estimated, management should require that there be an external review of the esti- mate by qualified professionals. This external review should include a risk analysis that identifies the critical elements of the estimate, identifies the low and high cost limits for each critical element, and assigns a probability of occurrence to the actual cost. Project Complexity The degree to which a review probes the estimate at this stage will vary depending on project type and project com- plexity. More complex projects must receive an exhaustive in-depth estimate review. Tips for Success To be successful, the review must closely examine the assumptions that form the basis of the estimate and must be conducted by knowledgeable and experienced individuals. Tool E2.1 Expert Team 86 INTEGRITY STRATEGY Ensure that checks and balances are in place to maintain estimate accuracy and to minimize the impact of outside pressures that can cause optimistic biases in estimates Cost Estimation Management Cost Estimation Practice Estimate Review—External E2.1 Expert Team Estimate Review—Internal E3.1 Formal Committee E3.3 In-House/Peer E3.4 Round Table Table 7.9. Final design phase integrity strategy: Methods and tools.

7.8.2 Estimate Review—Internal Why? It is always necessary to independently verify that an esti- mate is complete and that it matches the project scope. In Figure 7.1, there is an “estimate review” activity that is positioned after the “risk determination” activity has quanti- fied the project risk and an appropriated dollar amount has been included in the estimate. While this is depicted as a sin- gle activity, it is normally a repetitive activity, taking place to some extent whenever the estimate is modified. In the case of an uncomplicated overlay project, the review may be limited to the use of a simple checklist to verify that all elements are accounted for. However, as project complex- ity and scope increase, it is necessary to conduct more formal reviews. Project Complexity The extent of the estimate review at this stage will vary depending on the type of project and project complexity. As project complexity increases, the reviewer or review team must devote more attention to probing the assumptions that form the basis of the estimate. Tips for Success To be successful, the review must closely examine the assumptions that form the basis of the estimate, and knowl- edgeable and experienced individuals must conduct it. Tools E3.1 Formal Committee E3.3 In-House/Peer E3.4 Round Table 7.9 Summary Table 7.10 lists all of the methods and tools presented in this chapter for use in the final design phase of project devel- opment. This list can be used as a quick reference to navigate directly to the Tool Appendix for the descriptions of the tools. Tools are listed in Appendix A alphabetically by method, as shown in Table 7.10. Table 7.10 can also be used as a checklist for selecting tools that should be employed on any one project. The checklist forms a self-assessment tool for agencies to benchmark against. These methods and tools were found in highway agencies throughout the country. While no agency was found to possess all of the methods and tools, all methods and tools exist and have the potential to be applied by any single agency. 87 G1.2 Cost Containment Table Identification of Changes I1.1 Cost Containment Table I1.2 Estimation Scorecard I1.3 Project Baseline I1.4 Scope Change Form Identification of Risk I2.1 Red Flag Items I2.2 Risk Charter Identifying Off-Prism Issues I3.3 Market Conditions Plans, Specifications, and Estimates (PS&E) P1.1 Agency Estimation Software P1.2 Commercial Estimation Software P1.3 Cost Based P1.4 Historical Bid Based P1.5 Trns•port Right-of-Way R2.5 Right-of-Way Estimator Training R2.6 Separate Right-of-Way Estimators Risk Analysis R3.2 Contingency–Identified R3.3 Contingency–Percentage R3.4 Estimate Ranges Value Engineering V2.1 Value Engineering Method/Tool Budget Control B1.2 Constrained Budget B1.4 Summary of Key Scope Items (Original/Previous/Current) B1.5 Variance Reports on Cost and Schedule Buffers B2.1 Board Approvals B2.2 Constrained Budget B2.3 Management Approvals Communication C1.1 Communication of Importance C1.2 Communication of Uncertainty C1.3 Communication within State Highway Agency C1.4 Definitive Management Plan C1.5 Proactive Conveyance of Information to the Public C1.7 Year-of-Construction Costs Computer Software C2.1 Agency Estimation Software C2.2 Commercial Estimation Software Consistency C4.1 Cradle-to-Grave Estimators C4.2 Estimation Checklist C4.3 Estimation Manual (Guidelines) C4.4 Estimator Training C4.5 Major Project Estimation Guidance C4.6 Standardized Estimation and Cost Management Procedures C4.7 State Estimation Section Constructability C5.1 Constructability Reviews Document Estimate Basis and Assumptions D4.1 Project Estimation File Estimate/Document Review E1.1 Estimate/Document Review—External E1.2 Estimate/Document Review—Internal Estimate Review—External E2.1 Expert Team Estimate Review—Internal E3.1 Formal Committee E3.2 Off-Prism Evaluation E3.3 In-House/Peer E3.4 Round Table E3.5 Year-of-Construction Costs Gated Process G1.1 Checklists Table 7.10. Final design phase methods and tools.