• Class and Course

    Risk-Weighted Cost Estimates

    A methodology to derive risk-weighted cost estimates will be presented and practical applications for budget setting and contingency management will be discussed. Group exercises will be conducted with hands on practice on the development of risk-weighted cost estimating risk models. Cost estimating modeling prerequisites including Basis Of Estimate documentation, peer review of cost estimates and risk ranging workshops will be covered.

    Class Orientation

    Data Gathering and discovery  (3-4 hours- morning session)

        • What cost estimating tools are being used
        • Sources of cost estimate data sources (past bids, industry/in-house database)
        • Understanding the estimate review process and estimate reconciliations
        • How are contingencies set and how effective is its management
        • Industry benchmarking
        • Cost estimate classification sued (budget vs AFE)

    Data Preparation for Workshop (3-4 hours – afternoon session)

        • What form of Basis Of Cost Estimate document that is being used
        • Identify projects (actual or hypothetical) for use in the workshop
        • Prepare major cost elements as per code of accounts
        • List typical risk factors from past experiences
        • Identify SME inputs needed for workshop/class

    Day 2

        • Introductions and creation of working teams
        • Casses of Cost Estimates
        • The Dinner Exercise
        • Cost Estimating Approaches
        • Factored Cost Estimates
        • Should Cost Estimates
        • Cost Nomographs
        • Activity Based Cost Estimates
        • Basis of Estimate Document
        • Group Exercise
        • Risk Ranging Methodology

    Day 3

        • Peer Review of Base Cost Estimate
        • Development of Risk Factors
        • Risk Ranging Session
        • Group Exercise
        • Running Simulation Model
        • Analysis of results

    Day 4

        • Setting Budget and Contingency
        • Developing Contingency Drawdown
        • Group Exercise – Building cost estimate risk models

    Day 5

        • Group Exercise – Setting Budget and Contingency, Contingency Drawdown plots
        • Risk Ranging Applications

    This course will be suitable for individuals involved in preparation and approval of cost estimates, budgets and contingency funds. It is also applicable to stakeholders involved in project execution and risk management.

        • Developing Base Cost Estimates
        • Basis of Estimate Documentation
        • Conducting Risk Workshops
        • Developing cost estimating risk models
        • Budget Setting and Contingency Derivation
        • Contingency Drawdown


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