A minimum of information is used to develop this type of "Ball Park Estimate." The estimate is prepared from in-house-data available from past jobs on similar plants. From these actual jobs, the proposed plant capacity is divided by an existing plant cost. This cost is multiplied against the new plant capacity or unit ($bbl,$kW, etc.) to derive new plant cost and then adjusted for escalation. A cost estimate determined this way is only valid for a similar plant.
The accuracy of this type of estimate is highly dependent upon the scope and time allotted to its preparation.
This estimate has a probable accuracy: -50% +50% or worse.
A factored estimate requires that all process equipment must be priced. A factored estimate is produced by taking the cost of individual types of process equipment, and multiplying it by an "installation factor" to arrive at the Total Direct Process Cost. The process installation factors include all subcontracted cost plus all of the associated direct field labor and bulk materials that are required to install these items. Thus, these "installation factors" produce the Total Direct Process Unit Costs only. A correction must also be made if the labor productivity, weather conditions, etc. are expected to be different from those in the Midwest area. Weather conditions may affect foundation depths, insulation and steam tracing requirements, and other items. Additions must be made to the estimate for offsite facilities, extensive piling, unusual plant conditions, long runs of interconnecting piping, etc.
The accuracy of this type of estimate depends upon the definition of scope, equipment costs, and known process factors.
Probable Accuracy: -25% +30%
This type estimate is prepared after the process engineers have completed the conceptual design, made the equipment list by size and category, made preliminary process flow diagrams, and when engineering is from 1% to 10% complete. The following documents serve as the basis from this type of estimate:
Industrial building estimates are from quotations or approximated from their size and type of construction. Equipment is priced via cost curves or six-tenths factor. If the cost information is not available, outside price quotations are solicited from vendors by telephone or correspondence. The total direct cost of the project is derived from quotations or in-house information on as many equipment and bulk material costs including labor man-hours and costs. The total indirect cost is determined by applying a factor to the direct cost. Labor and installation of material are obtained from ratios based upon experience from past projects of similar type. To arrive at the total project cost, the following items must be added: start-up, land, supervision and overhead, escalation, adjustment for labor productivity, building, and site development (including railroad if required). In some cases, it's not possible to use factors for offsite facilities. A more detailed estimate will be necessary.
The accuracy of this type of estimate depends upon the definition of scope and the time allotted to its preparation.
Probable Accuracy: -15% +20%
This type of estimate is prepared after the process engineers have completed the conceptual design, made an equipment list by size and category, made process flow diagrams, and the detail engineering is from 25% to 50% complete. The following scope serves as the basis for this type of estimate:
For this estimate a complete takeoff of equipment, substantial takeoff for piping, electrical, instrumentation etc. The total direct cost of the project is derived from quotations or in-house information (equipment and bulk material costs, labor man-hours, and other costs broken down by category). Also, total direct cost is derived from labor productivity, availability of skilled workmen, and availability of construction materials. Installation of material and labor is obtained from ratios based upon experience from past projects of similar type. The total indirect cost is determined by applying a factor to the direct cost. To arrive at the total project cost, the cost of the following items must be added:
The accuracy of this type of estimate is dependent upon the detail of information and how much time is allowed for completion.
Probable Accuracy: -10% +15%
In a detailed estimate we price each and every item in a thorough manner without "eyeballing", "percentaging", or other forms of educated guesses. (We should note that such approaches and techniques have merit under certain circumstances, but have no place in a detailed estimate.) This estimate is prepared after the process design has been completed and when the detail design is 70% - 90% complete. The documents which serve as the basis for this estimate are the same as a budget estimate - except in a more complete form. The following requirements must be adhered:
This estimate should be put together from engineering, procurement, and construction planning inputs.
Probable accuracy: -5% +10%
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