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Prepare Preliminary Estimate and Schedule

General Description

The Preliminary Cost Estimate is developed based on the best available information, considering that the project is typically at approximately 30% completion. Preliminary cost estimates should be conservative but realistic since they are typically used to determine project funding; therefore, in addition to calculating the preliminary construction costs (costs incurred by the contractor), the preliminary cost estimate should also include costs for items such as construction engineering, change orders, environmental mitigation and right-of-way (ROW) acquisitions including off-site land acquisition for mitigation.

The Preliminary Construction Schedule is developed to ascertain an estimate for the construction duration, critical path items, and to identify major milestones. The Preliminary Construction Schedule portrays the construction project timeline, identifying the dates (absolute or relative to a start date) that a project task or activity will be started and completed. A schedule allows applicable resources to be identified and an anticipated timeframe to be established, and provides the basis for budgeting individual tasks and the project as a whole. The schedule identifies elements that are ahead, behind, and on-schedule and allows appropriate adjustments to reach a certain milestone.

Work Tasks

*Note – Both items are delivered as part of Preliminary Engineering (PE) submission.

Next Steps              Resouces and Related Links                 Frequently Asked Questions               Definitions


Next Steps

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Resources and Related Links

NJDOT Construction Cost Estimation Guide

NJDOT Bid Tabulations

NJDOT Construction Scheduling Manual

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Frequently Asked Questions

Estimating Based On Major Cost Groups
Developing a detailed estimate during PE is difficult since the plans are not fully developed. Cost estimates at this stage of the project development typically rely on estimates based on the larger pay items that typically fall within one of the major cost groups:

Caution should be used when developing unit costs for items on a larger scale since miscellaneous items tend to be unaccounted for. Also important is to identify large ticket items that may not necessarily fall within one of the cost groups listed above or complex work situations that may drive up unit prices (such as hazardous waste clean-up or rock excavation).

Sources for Unit Costs
Bid-based Prices – This method is most common and relies on using bid tabulations from awarded contracts. Bid tabulations for recently awarded projects of similar size and nature should be obtained by the Subregion as samples. Another source for bid information can be found on the NJDOT website, which posts the bid tabulations for awarded state transportation projects.

Vendor Price Quotes – Specialty items (e.g., water quality units, ornamental lighting) that may not be available through bid tabulations may require contacting vendors directly.

Publications and Software – Publications such as RSMeans or professional estimating software programs are available for developing estimates.

Lump-Sum Items
Transportation projects typically include the following lump-sum pay items that are based on the construction costs:

Developing estimates for these lump-sum items can be determined using previous bid prices from other projects of similar size and nature or by using guidelines listed in Appendix H of the NJDOT Construction Cost Estimate Guide.

*Note – The NJDOT Construction Cost Estimate Guide was developed for preparing estimates in the Trns*Port System, which may not be available to all subregions or consultants. However, the guide does provide useful reference materials within the appendices.

Contingency and Escalation
Since preliminary cost estimates are developed without the final details in place, consideration should be given to providing a realistic contingency amount. The contingency amount is based on engineering judgment and on the level of detail provided in the estimate (e.g., contingency amount decreases as more detailed estimates are developed).

An escalation rate should also be considered since preliminary cost estimates are developed in advance of actual construction. The escalation should be based on the time between when the preliminary cost estimate is developed to the anticipated midpoint of construction.

*Note - Escalation rates can be determined from inflation rates based on anticipated Producer Price Index (PPI) for non-residential construction, which are published by the Association of General Contractors (AGC).

Other Related Costs
The construction cost estimate will be based on work performed by the contractor. However, the following other costs should be factored to determine the proper funding amount:

What is included in the Preliminary Construction Schedule?
A construction schedule is a communication tool with different levels of accuracy for different phases of the project. At a minimum, the Preliminary Construction Schedule should include milestones demonstrating the start and completion of major tasks or activities. If the Subregion does not provide a construction schedule procedure, the NJDOT Construction Scheduling Manual may be used.

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Definitions

Activity – An element of work performed during the course of a project.

Critical Path – In a project network diagram, the series of activities that determines the earliest completion of the project. The critical path will generally change as activities are completed ahead or behind schedule. Although normally calculated for the entire project, the critical path can also be determined for a milestone or subproject. The critical path is usually defined as those activities with float less than or equal to a specified value, often zero.

Duration – The number of working days (not including holidays or other non-working periods) to complete an activity or other project element.

Milestone – A significant event in the project, usually the completion of a major deliverable or stage.

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