RE: ​​ Measuring estimated cost at budget / actual cost at construction ratio

Has there been recent analysis conducted to reflect what a "reasonable" industry value for measuring the accuracy of estimates prepared for project budgets when compared to the actual costs paid at construction. If so can this be shared?

Based on this, what should a performance baseline metric for cost accuracy be set as? Would that be 50% of projects are awarded within budgeted amount? Or would that be 75%, 80%, or even 90%?

I know there is similar research and benchmarks set in industry but I haven't been able to put my fingers on it yet.

This is focusing on general construction and facilities.


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William Hunt CCP CEP PSP
Chief Estimator
General Services Administration (GSA)
Washington, DC
1 (404) 526-3168
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Interesting question.  I know AACE, IPA and CII have all collected information and done studies within specific industries but I believe you are asking a slightly different and broader question.  My initial thoughts are that if that were to be studied it would be quite difficult to normalize the information for the dynamics such as scope variations, growth and reductions which could greatly affect the results.  @John Hollmann can you provide some insight since I know you have an in depth understanding of who is studying what and there determinations.


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Richard Plumery EVP
Region Vice President
AECOM
Greenwood Village CO
(213) 330-7156
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Original Message:
Sent: 08-21-2018 06:45
From: William Hunt
Subject: Metrics applied in Performance Metric - Budgeted costs vs Actual Costs

RE: ​​ Measuring estimated cost at budget / actual cost at construction ratio

Has there been recent analysis conducted to reflect what a "reasonable" industry value for measuring the accuracy of estimates prepared for project budgets when compared to the actual costs paid at construction. If so can this be shared?

Based on this, what should a performance baseline metric for cost accuracy be set as? Would that be 50% of projects are awarded within budgeted amount? Or would that be 75%, 80%, or even 90%?

I know there is similar research and benchmarks set in industry but I haven't been able to put my fingers on it yet.

This is focusing on general construction and facilities.


------------------------------
William Hunt CCP CEP PSP
Chief Estimator
General Services Administration (GSA)
Washington, DC
1 (404) 526-3168
------------------------------