Cost Estimator's Add-on Potentials

Ramani Sundaram
In recent times, with diversified needs of the industry, the traditional estimator's role is changing.

Employers are leveraging the skills of the estimators to wear different hats. Some of these supplemental works may be cross-functional, being techno-financial or techno-legal. The add-on skills, acquired through either experience or additional training, may benefit both the employer and the estimator. An estimator involved in some of the aforementioned tasks may better be described as ‘cost engineer’ or ‘cost manager’ but the intent of this article is not to delve into the description but to highlight some of the areas where estimators or consultants can provide additional support or offer stand-alone services to their clients.

Value Engineering

The objective of value engineering (VE) is to see that there is improved value at a reduced cost, without sacrificing the functionality of a product or service. With tight budgets, the importance of VE is increasingly felt by owners.

The objective of value engineering (VE) is to see that there is improved value at a reduced cost, without sacrificing the functionality of a product or service.

Many owners, especially the public agencies, have started making VE study mandatory during design development. Depending upon the value of the project or the complexity, owners engage VE consultants to perform VE studies on major projects. The estimator supports the VE study by providing estimates for various VE items recommended by the team. The estimator can also propose VE items from the cost point of view and suggest cost reductions or alert on cost increases, if any.

Life Cycle Cost Analysis

One project alternative may have a higher initial cost but may have lower operational and maintenance costs later and vice versa. Life cycle cost analysis (LCCA) enables owners to select the best alternative having the least net present value (NPV).

The estimator will be able to make comparison charts that will support owner’s decision-making. 

Since the estimator prepares the initial cost estimate, he or she will be able to support detailed analysis by doing some additional financial math with the operation and maintenance (O&M) cost provided by the owner’s facility management group or assuming the future O&M and salvage costs. The estimator will be able to make comparison charts that will support owner’s decision-making. Some projects may require cost benefit analysis which can also be done by estimators.

Facility Condition Assessment

Owners having multiple facilities and buildings in different locations require assessment of their assets to plan future replacements and budget capital expenditures. With more company mergers and acquisitions happening frequently, the new owners insist condition assessment of existing facilities of the acquired firms.

When capital needs are to be estimated and prioritized, estimators can provide the backups. Facility condition assessment (FCA) will facilitate the owner a better understanding of assets, planning and managing O&M expenditures and future replacements. Some firms offer FCA as an independent service and may require estimators to assist the firm’s FCA group.

Expert Witness Service

With increasing complexity of construction claims and disputes, attorneys seek the help of professionals to support their legal cases for either the plaintiffs or defendants. Acting as expert witnesses, professionals can leverage their expertise to support the litigation process and aid in resolving disputes. Based on knowledge and experience, expert witnesses are required to assist their retaining attorneys by providing insights and evaluation of technical and contractual issues.

Experienced estimators may act as expert witness and offer testimony and support prosecution of cases. 

Issues involving cost may require estimators to investigate and thoroughly review contract and design documents, specifications, cost estimates, change orders and so forth. Experienced estimators may act as expert witness and offer testimony and support prosecution of cases. An estimating consultant firm may also offer this as a supplemental service.

Constructability Review

Though the intent of 'constructability review' is to ensure design completeness, estimators can do this review from an estimating standpoint. To know the extent of change orders, some contractors and construction management firms (CMs) engage estimators to perform this task before offering their guaranteed maximum price (GMP). An estimator with this add-on potential may be a real asset for any contractor or owner.

There may be more areas the traditional estimator can support than listed but the key is adapting to the industry’s diversified needs. Enhanced job content will provide variety to the estimator. Consultants will also be able to offer diversified services related to estimating, with their estimators’ add-on potentials.