Construction Estimating & Cost Control Flashcards

Which cost estimating technique uses historical data from similar completed projects to predict the cost of a new project?

Answer: Analogous estimating

Analogous estimating relies on actual costs from previous similar projects as the basis for estimating the current project.

A construction project has a Budget at Completion (BAC) of $2,000,000. The Earned Value (EV) is $800,000 and the Actual Cost (AC) is $1,000,000. What is the Cost Performance Index (CPI)?

Answer: 0.80

CPI = EV / AC = $800,000 / $1,000,000 = 0.80, indicating the project is getting $0.80 of value for every dollar spent.

What does the term 'allowance' represent in a construction estimate?

Answer: A fund set aside for unknown but anticipated costs

An allowance is a sum included in the estimate to cover costs for items that cannot be fully defined at the time of estimating.

In a unit price contract, the owner bears the risk associated with which of the following?

Answer: Quantity overruns beyond the estimated amounts

In a unit price contract, the contractor is paid per unit of work completed, so the owner bears the risk if actual quantities exceed estimated quantities.

Which document formally defines the detailed scope of work and is a primary basis for the cost estimate?

Answer: Scope of Work (SOW)

The Scope of Work defines what is included and excluded from the project, forming the fundamental basis for accurate cost estimation.

What is a 'learning curve' effect in construction cost estimating?

Answer: The reduction in labor cost per unit as workers repeat similar tasks

The learning curve effect recognizes that workers become more efficient as they repeat tasks, reducing the labor hours and cost per unit over time.

The Estimate to Complete (ETC) using the typical EVM formula assuming future work is performed at the budgeted rate is calculated as:

Answer: BAC - EV

ETC = BAC - EV when it is assumed remaining work will be completed at the originally planned (budgeted) rate.