Construction Cost Analysis and Estimating

by Ostwald, Phillip F.

• ISBN13: 9780130832078
• ISBN10: 0130832073
• Edition: 1st
• Format: Paperback
• Copyright: 2000-05-25
• Publisher: Pearson

Summary

The most current guide of its kind on the market, this essential book for today's construction managers and engineers provides the latest principles and techniques for the evaluation of construction design by presenting a balanced and cohesive study of construction cost analysis and estimation. Begins with four chapters on the analysis of labor, material, accounting, and forecasting--then systematically segues into the area of estimating, with in-depth discussions on how it applies to methods, work, and projects. Covers statistics for cost analysis, general cost analysis and bidding strategies for construction (i.e., bidding, estimate insurance, engineering economy, benefit cost, and life cycle), and the newest models and techniques for cost estimating. "Practical Applications" encourage field trips and communication through the internet, and a variety of interesting open-ended case studies actively engage readers in realistic scenarios and help develop critical thinking skills. Integrates an extensive array of exercises, qualitative questions, and problems, and limits math to algebra and introductory calculus. For professionals in construction, civil and environmental engineering, and architecture.

Table of Contents

Preface	xv
Importance	1	(23)
Construction---What It Is, What It Is Not	1	(5)
Design and Economic Evaluation	6	(3)
Strategies for the Enterprise	9	(2)
Information	11	(2)
International System of Units	13	(3)
International Construction	16	(2)
A Look at the Book	18	(6)
Summary	19	(1)
Questions	19	(1)
Problems	20	(1)
More Difficult Problems	21	(1)
Practical Application	22	(1)
Case Study: Professor Jairo Munoz	22	(2)
Labor Productivity and Analysis	24	(48)
Labor	24	(1)
The Mythical Man Hour	25	(2)
Productivity Measurement	27	(20)
Job-Ticket Reports and Man-hour Analysis,	29	(2)
Nonrepetitive One-Cycle Time Study and Man-hour Analysis,	31	(1)
Multiple-Cycle Time-Study and Man-Hour Analysis,	31	(10)
Work Sampling and Man-hour Analysis,	41	(6)
Wages and Fringe Rates	47	(25)
Summary	56	(1)
Questions	56	(1)
Problems	56	(9)
More Difficult Problems	65	(5)
Practical Application	70	(1)
Case Study: Highway Construction	70	(2)
Material Resources and Analysis	72	(27)
Overview	72	(3)
Quantity Take-off	75	(3)
Material Calculations	78	(2)
Pricing Measured Quantities	80	(3)
Coding and Specifications of Material and Work---A Necessary Computer Chase	83	(16)
Coding,	83	(4)
Specifications,	87	(1)
Summary	88	(1)
Questions	89	(1)
Problems	89	(8)
Practical Application	97	(1)
Case Study: Chemical Process Plant	98	(1)
Accounting Analysis	99	(42)
Business Transactions	99	(1)
Conventions	100	(4)
Chart of Accounts	104	(3)
Structure of Accounts	107	(4)
Balance-Sheet Statement	111	(1)
Profit-and-Loss Statement	112	(2)
Percentage-of-Completion Method	114	(1)
Depreciation	115	(7)
Fixed, Semifixed, and Variable Costs	122	(3)
Overhead	125	(3)
Job-Order and Process-Cost Procedures	128	(13)
Summary	129	(1)
Questions	129	(1)
Problems	130	(7)
More Difficult Problems	137	(2)
Practical Application	139	(1)
Case Study: Percentage Completion Construction, Inc.	139	(2)
Forecasting	141	(48)
Graphic Analysis of Data	141	(5)
Least Squares and Regression	146	(18)
Least Squares,	146	(5)
Confidence Limits for Regression Values and Predictions Limits for Individual Values,	151	(3)
Curvilinear Regression and Transformation,	154	(5)
Correlation,	159	(2)
Multiple Linear Regression (Optional),	161	(2)
Computers and Software,	163	(1)
Time Series (Optional)	164	(5)
Cost Indexes	169	(20)
Summary	174	(1)
Questions	175	(1)
Problems	176	(9)
More Difficult Problems	185	(2)
Practical Application	187	(1)
Case Study: Market Basket Index for Groceries	188	(1)
Estimating Methods	189	(50)
Design and the Enterprise	189	(1)
Much Ado About Nothing	190	(1)
Opinion	191	(1)
Conference	192	(1)
Comparison	192	(3)
Unit	195	(2)
Unit Quantity	197	(3)
Factor	200	(5)
Cost and Time Estimating Relationships	205	(7)
Learning,	205	(5)
Power Law and Sizing,	210	(1)
Other CERs	211	(1)
Probability Approaches (Optional)	212	(9)
Expected Value	213	(2)
Range,	215	(3)
Monte Carlo Simulation,	218	(3)
Single-Value or Probability-Distribution Comparisons? (Optional)	221	(2)
Fuzzy Logic Concepts (Optional)	223	(16)
Summary	227	(1)
Questions	228	(1)
Problems	229	(6)
More Difficult Problems	235	(2)
Practical Application	237	(1)
Case Study: Industrial Process Plant	237	(2)
Work Estimating	239	(35)
Initiation of the Work Estimate	239	(1)
Elements of Construction-Work Cost	240	(3)
Primitive Work Estimating	243	(1)
Contemporary Work Estimating	244	(2)
Unit-Quantity Example	246	(7)
Concrete Forms Work,	246	(1)
Concrete Wall Design,	246	(4)
Reinforcing Steel Work,	250	(1)
Concrete Work,	251	(2)
Equipment Costs	253	(6)
Equipment-Cost Example,	257	(2)
Subcontractor Work	259	(2)
Data Warehouse Examples	261	(13)
Mean Building Construction Cost Data,	261	(1)
Process-Plant Construction-Estimating Standards,	262	(2)
National Construction Estimator,	264	(1)
Computer-Assisted Estimating,	264	(2)
Reflections on Data Warehouses,	266	(1)
Summary	267	(1)
Questions	267	(1)
Problems	268	(3)
More Difficult Problems	271	(1)
Practical Application	272	(1)
Case Study: Estimating a Small Design	272	(2)
Project Estimating	274	(39)
Bid	274	(2)
Work Package	276	(9)
Estimating	285	(4)
Cost and Bid Analysis	289	(24)
Overhead,	289	(2)
Contingency (Optional),	291	(4)
Interest (Optional),	295	(6)
Pricing and Bid,	301	(3)
Summary	304	(1)
Questions	304	(1)
Problems	304	(4)
More Difficult Problems	308	(3)
Practical Application	311	(1)
Case Study: High-Voltage Transmission-Line Project	311	(2)
Bid Assurance	313	(37)
Bidding Strategy	313	(7)
Presenting the Bid	320	(3)
Analysis of Estimates	323	(7)
Behavioral Considerations	330	(3)
Work-Estimate Assurance (Optional)	333	(4)
Project-Estimate Assurance (Optional)	337	(13)
Summary	341	(1)
Questions	341	(1)
Problems	342	(5)
More Difficult Problems	347	(2)
Practical Application	349	(1)
Case Study: Cost-Schedule Performance Reporting	349	(1)
Cost Analysis	350	(59)
First Principles for Tradeoff Studies in Design and Construction	351	(2)
Cash Flow	353	(7)
Break Even	360	(8)
Engineering Economy	368	(13)
Average Annual Rate-of-Return Methods,	369	(1)
Payback-Period Method,	370	(3)
Net-Present-Worth Method,	373	(1)
Net-Future-Worth Method,	374	(1)
Net-Equivalent-Annual-Worth Method,	375	(1)
Rate-of-Return Method,	376	(2)
Comparison of Methods,	378	(1)
Standard Approaches to Engineering-Economy Methods,	379	(2)
Life-Cycle Cost (Optional)	381	(6)
Benefit Cost (Optional)	387	(22)
Summary	393	(1)
Questions	394	(1)
Problems	395	(8)
More Difficult Problems	403	(5)
Practical Application	408	(1)
Case Study: Life Cycle Cost Analysis of Pump for Municipal Plant	408	(1)
Contracts and Ethics	409	(30)
Importance	409	(2)
Basic Contract Types	411	(2)
Fixed-Price Arrangements	413	(4)
Cost-Reimbursement Arrangements	417	(2)
Contract Clauses	419	(2)
Insurance and Bonds	421	(3)
Negotiation and Audit	424	(2)
Ethics and Engineering	426
Summary	427	(1)
Questions	427	(1)
Problems	428	(3)
More Difficult Problems	431	(1)
Practical Application	432	(1)
Case Study: Fundamental Canons of Ethics	432
Picture Lessons
The Historic Hoover Dam, an American Icon	2	(3)
High-Pressure Cracking Tower	5	(9)
Simple Tool	14	(12)
Iron Bridge	26	(22)
Islanbard Kingdom Brunel	48	(28)
Concrete Arch Bridge	76	(5)
Eiffel Tower	81	(21)
Saltash Bridge	102	(1)
Thames Tunnel	102	(21)
Pile Driving	123	(24)
Wooden Trestle	147	(18)
Building the Railroad	165	(28)
Damn Big Dam	193	(48)
Golden Gate Bridge	241	(4)
Civilian Conservation Corps	245	(9)
Penstock	254	(23)
Interstate Highway System	277	(13)
Worker Safety	290	(31)
Steel	321	(10)
Proud Moment	331	(6)
Power House	337	(17)
Airport Terminal	354	(29)
Concrete	383	(27)
Turbine Rotor	410	(4)
United States Capitol Dome Under Construction	414	(19)
Appendixes
Standard Normal and t Distributions, 10% and 20% Tables of Interest	433	(6)
References	439	(4)
Selected Answers	443	(10)
Index	453

Excerpts

Preface This first edition of Construction Cost Analysis and Estimatingprovides the latest principles and techniques for the evaluation of construction design. It is not a book about estimating only. Analysis and estimating must abide together, and the one must precede the other. It is this emphasis that makes this text different. The book begins with four chapters devoted to analysis of labor, material, accounting, and forecasting. Then estimating is developed, and methods, work, and project chapters are given. An owner or contractor is concerned with bid assurance, analysis, and contracts and ethics, and these chapters are provided. This book organization develops the principles in a systematic way. With the increasing importance of design over rote skills in contemporary construction courses, this text can be used for a variety of teaching situations: for lecture only, for lecture with a laboratory menu, or with professional mentoring with business, and with developed field trips. Courses that couple to on-line live or delayed video instruction can use this text, as the author has personal experience with these delivery modes. Further, lifelong learning programs for the professional in either formal or informal settings can use the text. Academic requirements for this book/course may vary, and we believe that the text is suitable for a number of teaching approaches. It has been written to appeal to engineering/technology/construction management settings. The student needs a mathematical maturity of algebra and introductory calculus. The instructor will notice internet requirements that search for information and apply it in practical contexts. We provide internet addresses for numerous assignments. (Regrettably, these addresses may change from time to time.) In the interactive environment of teaching, this book is a part of modern courseware. Word-processing and spreadsheet skills are assumed, and some CAD ability is always helpful. It would seem that the student must have access to a computer, and system requirements would be typical of more advanced personal or Pentium computers. Various academic levels and backgrounds are appropriate, and the instructor find this text suitable to a variety of teaching styles. The author attempts to rove the instructor in the leadership of many exercises, calling on you, the instructor, to localize the assignments to your construction needs. The book has more material than can be covered in one semester or quarter and thus chapters and sections can be selected to meet the objectives of each c1 Chapter order can be adjusted. If the students already have an understanding of statistics, then Chapter 5 material can be excluded, for example. Other sections can dropped, depending on student preparation and course objectives. Some sections u identified as "Optional," allowing instructor selection. The instructor will find that the text is versatile. This text has a range of difficulty for Questions, Problems, More Difficult Problems, Practical Applications, and Case Studies. Throughout the text, the author has tempted to give the instructor opportunity for outcomes evaluation of student woe with these many exercises. There are 124 Questions in the eleven chapters. They are qualitative and require back-reading and a response of a few sentences for a thoughtful reply. We stress construction as a design activity; therefore, the 237 Problems and 48 More Difficult Problems request computations or sketches. Whenever the student is asked to prepare open-ended designs, much learning occurs. The Problems have levels of difficulty. We want the Problems and the More Difficult Problems to be tractable, either with calculator or spreadsheet, where the emphasis is on teaching concepts. It is no our desire to cause excessive computation, which is so prevalent in construction problems. Thus, this text ignores software encyclopedias that are found in construction for estimating designs. Those software applications restrict the learning of principles. Nor do we give much attention to the minutia of extensive take-off practices, as those temporal trade details can be learned on the job, if necessary. There is an end-of-chapter addition, which we call Practical Application. The purpose of the Practical Application is to uncouple the student from books, libraries. and the classroom. As will be seen throughout the book, Practical Applications introduce the student to experiences in the real world. For example, they encourage; field trips and communication through the internet to engineers, technologists, and other construction professionals. The instructor will appreciate this experiential approach, allowing him or her to use Practical Applications in exciting ways. The end-of-chapter Case Studies are open ended, perhaps having several solutions. Students are often disturbed by this peculiarity, but instructors recognize that construction courses are unlike calculus courses with their singularity of answer. The book contains Picture Lessons--they describe important historical contributions of civil engineering and construction. It is important that students have an appreciation of the grand heritage of our profession. For the instructor, a comprehensive Solutions Manual is available. This manual can be requested from the Prentice Hall college representative or from Prentice Hall directly. The author is grateful to many people. Their advice and information have made this a much better text. In writing a book of this magnitude, the author is aware that friends and colleagues are hidden but very important advisers. I am indebted to the following: Don Boyle, Boulder, CO; James E. Diekmann, Anthony Songer, Klaus Timmerhaus, and Paul Zoller of the University of Colorado, Boulder, CO; Rodney Ehlers, Boulder, CO; Marty Geist, Boulder, CO; John Heitkamp, Richardson Engineering Services, Inc., Mesa, AZ; Laurence D. Jacobs, Craftsman Book Company, Carlsbad, CA; John Ferguson, RS Means Corporation, Kingston, MA; Anthony Mason, California Polytechnic State University, San Luis Obispo, CA; Liang Y. Lui, University of Illinois, Urbana, IL; Barry McMillan and Christian Heller of the American Association of Cost Engineers, Morgantown, WV; Ruby Ostwald, Bowling Green, KY; Ted Plank, Boulder County Road Department, Longmont, CO; Wayne Shelton, International Brotherhood of Electrical Workers, Broomfield, CO; Neil Wagner, Thermopolis, WY; and Natalie Soulier Webster, American Society of Civil Engineers, Washington, D.C. Finally, it needs to be mentioned that I am sincerely grateful to Irwin Zucker of Prentice Hall, who has attentively improved this book in numerous ways. The names used in the examples and Case Studies are of real people, and they are mentioned because of my sincere regard for their contribution and friendship. Phillip F. Ostwald Boulder, Colorado