Right-of-Way Methods and Tools to Control Project Cost Escalation (2009) / Chapter Skim
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Pages 49-72
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From page 49... ...
CHAPTER 4 RIGHT OF WAY PROCEDURE DEVELOPMENT The goal of Task 4, Develop Procedures on ROW Cost Estimation and Management was to develop a "how to" Procedures Guide to support right-of-way cost estimating and management processes. The framework for the procedures guide is the series of process flowcharts that describe the right-of-way cost estimation and cost estimate management processes during project development phases.
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1. Determine Estimate Basis; 2.
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September 2007 although no major changes or revisions to the flowcharts were suggested. The panel was interested in how the inputs might change from one cost estimate to another.
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Figure 6. Agency-level right-of-way cost estimating and cost management flowchart 49
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The intent of displaying the project development phases linked to right-of-way cost estimating and cost estimate management is to communicate the critical relationship that exist between the two activities. Moreover, it stresses the relationship that should exist between the personnel who estimate and procure right-of-way and the project development team.
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Right-of-way Cost Estimating and Estimation Management The flowcharts documenting Conceptual Right-of-way Cost Estimating, Baseline rightof-way Cost Estimating, and Update Right-of-way Cost Estimating are shown in Figure 7, Figure 8, and Figure 9, respectively. These flowcharts are discussed in combination here due to similarities in the process steps.
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Figure 7. Conceptual Right-of-way cost estimating process flowchart 52
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Figure 8. Baseline Right-of-way cost estimating process flowchart 53
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Figure 9. Update Right-of-way cost estimating process flowchart 54
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The Conceptual Right-of-way Cost Estimate process flowchart, Figure 7, is so named because it is based on a conceptual definition of project scope. The conceptual scope sets the general right-of-way requirements.
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Table 4. General process steps and descriptions for right-of-way cost estimating Process Step Activity Description ROW Requirements from Development Team Development team communicates ROW requirements to ROW personnel.
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Input: Right-of-way Requirements from Development Team The primary input to the cost estimating flowcharts is the set of right-of-way requirements as defined by the development team and communicated to right-of-way section. The major difference between right-of-way estimates is the varying amount of certainty (or uncertainty)
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A robust effort must be made by the right-of-way estimator to define the estimate basis in as much detail as possible so that a deterministic cost value can produced. If the estimate basis is not defined accurately the estimator has little solid data on which to base the projected cost.
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lessens, therefore, the amount of contingency that is applied to subsequent estimates should be less, but risk analysis and the application of contingency should still be performed as there are always cost and schedule risks. The amount of detail involved in the Conceptual Right-of-way Cost Estimate is usually minimal when compared to later estimates, but it is critical for the right-of-way estimator to identify the major risks to project cost and schedule.
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Figure 9, as a decision milestone following "Review Updated ROW Cost Estimate" and denoted by a diamond. If the estimate is within the Baseline Right-of-way Cost Estimate budget, then the estimate should be approved for release back to the development team.
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Cost Estimating Inputs In addition to the right-of-way requirement input and estimate output shown in the Table 4, there are other keys inputs needed to perform the process steps. As previously discussed, the major input into the process flowcharts are the right-of-way requirements which are used to establish the estimate basis for right-of-way cost estimates and to determine whether changes have occurred in Right-of-way Cost Management.
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should include documenting existing conditions and making notes of potential damages and improvements or other issues that may impact the cost of acquiring the right-of-way. Although the field visit gathers the same information for each of the estimates, the level of detail and certainty varies.
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the future. The inflation rate becomes somewhat less uncertain with a shorter duration between the estimate and acquisition but the rate can still be volatile.
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fees, appraisals, and other costs. Moreover, condemnation is a risk to the project schedule.
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Figure 10. Right-of-way cost management process flowchart 65
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Right-of-way Cost Management Process Steps The process flowchart documenting right-of-way activities during final design is primarily describing the Right-of-way Cost Management steps during real estate acquisition. The process steps used in the Right-of-way Cost Management Flowchart are presented and explained in Table 5.
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Input: ROW Requirements from Design The final right-of-way plans (requirements) are the major input into the Right-of-way Cost Management process.
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Output: Forecasted Total ROW Cost Following adjustment of the budget and notification to the project manager of expected right-of-way cost, the adjusted budget should be communicated to the project development team. The Right-of-way Cost management process continues until all rightof-way is acquired.
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Tools – illustrations and references to the Tool Appendix Tips for Success – important points to remember Outputs – main deliverable(s) of the step Flowchart Step (e.g., Prepare Base Estimate)
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Key Terms
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