1. Problem Recognition
In my company we encountered leak in fire water pond. Divers were hired for under water inspection to identify the source of leak. After each repair still the water level goes down which indicates the leak is persist. The fire water pond bottom material is rubber liner. It is proposed to do permanent solution to overcome the problem for ever. The solution is to make the bottom of the pond concrete instead of existent rubber liner. In this blog am going to do cost estimation for the project. The project will be executed in house and we have to make back up plan for fire water network system during the repair of the water pond. We have to arrange alternative arrangement by utilizing the adjacent storm water sump through installing rental pumps to make the system available in case of emergency.\
2. Development the Feasible Alternative
Many cost estimating methods/techniques are available on Cost Estimating Guide (by U.S. Department of Energy Washington, D.C. 20585) to facilitate the cost estimating process. Depending on project scope, estimate purpose, project maturity, and availability of cost estimating resources, the following techniques may be employed in developing cost estimates.
- Detailed Estimating Method
- Expert Opinion Method
- Full-Time Equivalent Method
3. Development of the Outcome for Alternative
The job will be done in-house. The cost of the project can be divided into three parts:
Civil works will be done by company’s maintenance contractor .cost of civil works based on unit rate as per the contract in between the company and its maintenance contractor.
Cost of backup arrangement for fire water system by rental pumps and man hour cost for tiens with existent fire water network system. And cost of pipes and fittings.
4. Selection of Criteria
Since the cost of civil works is based on unit rate the method which is required to be used must be in details (based on WBS). Also the cost of rental pumps will be on daily rate plus cost of mob/demobilization of equipment, system tiens will be executed in house.
5. Analysis and Comparison of the Alternative
Detailed Estimating Method : Activity-based, detailed or unit cost estimates are typically the most definitive of the estimating techniques and use information down to the lowest level of detail available. They are also the most commonly understood and utilized estimating techniques. Each activity is further decomposed into detailed items so that labor hours, material costs, equipment costsareitemized and quantified.
Expert Opinion Method: As stated in the GAO Cost Estimating and Assessment Guide, “expert opinion, also known as engineering judgment, is commonly applied to fill gaps in a relatively detailed WBS when one or more experts are the only qualified source of information, particularly in matters of specific scientific technology”.
Full-Time Equivalent Method: The number of individuals anticipated to perform specific functions of a project forms the basis. The man-hour quantity is calculated and multiplied by the cost per labor hour and the duration of the project function to arrive at the cost.
6. Selection of the Preferred Alternative
The project is divided in three parts: Civil works, hiring pumps for backup arrangement for fire water system & man hours spent on pipes fabrication for the tiens with existent system. I will adapt all three methods previously explained to determine estimated cost for each phase. Then will be added all together.
Detailed Estimating Method will be used for estimating cost of civil works.
Expert Opinion Method will be used to estimate the cost of the rental pumps.
Full-Time Equivalent Method will be used for estimating the cost per labor hour and the duration of the project.
7. Performance Monitoring and the Post Evaluation of Result
These methods will be implemented and tested. The results and the steps will be posted in the next coming weekly blogs.
- 4 Tools to Estimate Costs in the Project Management retrieved on June 18, 2014 http://pmstudycircle.com/2012/06/4-tools-to-estimate-costs-in-the-project-management/
- Top down and bottom-up unit cost estimation retrieved on June 18 http://data.gov.uk/sib_knowledge_box/top-down-and-bottom-unit-cost-estimation
- Create a Budget Estimate Using the Bottom-Up Approach retrieved on June 18 http://www.dummies.com/how-to/content/create-a-budget-estimate-using-the-bottomup-approa.html
- Cost Estimating Guide (by U.S. Department of Energy Washington D.C.20585) retrieved on June 26 https://www.directives.doe.gov/directives-documents/0413.3-EGuide-21/view