A Familiar Problem for Road Authorities
Estimating the outturn costs of major projects when only a limited design concept exists is fraught with problems. Estimators and decision makers are faced with:
- a lack of information,
- high levels of uncertainty, and
- a delivery programme that may run many years into the future.
But making sure that the first cost estimate prepared for a major project is accurate is hugely important.
All too often schemes struggle through the project lifecycle requiring a succession of lengthy, additional budget approvals. Or worse, schemes that were initially purported to offer excellent value for money don’t; schemes that appeared affordable aren’t – and both are scratched after wasting considerable development time and money. England’s Highways Agency is not alone in facing this problem. Following a review of its cost estimating and project management processes, commissioned by the Secretary of State for Transport, Benchmark Estimating was engaged to help the Highways Agency.
The Benchmark Estimating Software Solution
- Development of a consistent and robust estimating process and cost database
- Implementation of Benchmark Estimating Software for use by Highways Agency staff
- Provision of expert cost estimating services
Development of a consistent and robust estimating process and cost database
Working with HA Major Projects, Benchmark Estimating (UK) implemented:
- a comprehensive Work Breakdown Structure covering all construction and non-construction costs,
- a standard cost-build was developed and rigorously implemented covering the base estimating, risk, uncertainty and inflation, and
- “Range estimating” was introduced to reflect the range of potential outturns rather than reporting just a single point estimate.
Implementation of the Benchmark Estimating Software Solutions
The Highways Agency selected:
- Benchmark Estimating’s Roadworks Estimator software – a validated software service designed to generate robust estimates at early stages of highways schemes using limited information on key parameters; and
- Benchmark Estimating Software Professional – the core package for first principles, resource-based estimating. Subsequently, bespoke cost models were developed for Managed Motorways schemes and probabilistic, three-point estimating was introduced.
Provision of Expert Cost Estimating Services
Since 2008, Benchmark Estimating Software has produced over two hundred cost estimates for Roads Programme scheme options. Typically schemes are in excess of £50million but several schemes are over £1billion in value and estimates encompass motorway and dual carriageway widening, bypasses, junction improvements, ITS works, major bridgeworks and tunnelling works.
Each estimate has included extensive liaison with project teams and designers and input to risk and value management. The basis of estimate is documented including bill of quantities and all estimate data stored centrally in a single, easy accessible database for excellent knowledge management.
The result – Improved Estimating for Major Projects
HA Major Projects has made huge improvements to its cost estimating and cost engineering practices since the Nichols Review. Benchmark Estimating’s software and client services have been a key contributor to realising these benefits including:
- Robust decision support and transparency of the range of potential outturn costs
- Consistent, comprehensive appraisal of schemes and analysis of alternatives
- Quick turnaround of estimates for project teams
- Better integration of cost, risk and value
- All awarded target costs within estimate ranges and KPIs for cost predictability achieved
- Smoother progress of schemes to construction and progress KPIs achieved
- Good data management, development and sharing of knowledge and commercial capability.
“When the Highways Agency was looking for a supplier who could provide immediate expertise with estimating project costs in a more accurate and consistent way, Benchmark stood out as a talented consultancy that offered a unique service. Benchmark Estimating have provided invaluable assistance in preparing and reviewing the Agency’s major roads project estimates. Your work has always been timely and of the highest quality and we are delighted with the work you have done for us to date.”
Paul Doney, Highways Agency Change Programme Office Leader, Major Project Directorate
About the Highways Agency
The Highways Agency is an Executive Agency of the Department for Transport (DfT) in England, and is responsible for operating, maintaining and improving the strategic road network in England on behalf of the Secretary of State for Transport. Visit the Highways Agency website for more information. Or visit our UK Website for more details www.benchmarkestimating.co.uk