Feb 17, 2019 10:10 AM
Replying to Rami Kaibni
...
This is normal practice. We normally prepare ROM (Rough order of magnitude) estimates based on analogous estimating and past experience in similar projects. Let’s say 4 Storey, X square foot Concrete Building with one underground parking in Y area. Previous experience and historical records shows that the average construction price per square foot = $240 / sf for super structure and $95 for substructure. Based on that we calculate the overall Construction Budget (Hard Cost) but you have to add to this budget lots of item related to the Soft Cost and your contingency based on the overall risk then you will end up with ROM Project Budget which will be refined as more information is available (Progressive Ellaboration) and the same goes for the project overall duration: Design Development + Construction Duration = Overall Project Duration.
When you submit your approval for funding on a corporate level, you need to make sure that you clearly indicate what class is your esimtates (i.e. ROM, or others) and indicate what is the percentage of precision (+-50% or 10%). Transparency is very important. No one expects you to nail down the budget precisely without having enough info.
Hope this Helps.
RK
Community Champion
