Thursday, February 26, 2009

Estimating and Procrastinating

"Keystone Corps" Estimating. The Corps doubles their estimate for the cost to gate 'the funnel.' For all the Times-Pic goes on about the estimate, this one might not be their fault. Honestly, this is an incredibly difficult task right now. I've been involved in writing some detailed estimates for big projects and you either have to be so conservative you'll scare the client or you have to try to explain legitimate cost overruns. Commodity fluctuations since Y2K have made it very hard on estimators. For example steel prices shot way up, affecting piping prices. Industrial pipe (SMLS and ERW) reached the highest price they've ever been, but have slowly been declining since August. I wouldn't be surprised if the Corps estimate didn't take into account steel price changes. By the time they actually get the budget corrected, I wouldn't be surprised if steel prices have dropped enough (thanks to the Financialapocalypse) to keep things in line.

FEMA's Toxic Bureaucracy. CBS alleges Bush-era appointees are intentionally delaying reconstruction projects to ensure personal job security in their $100,000+ benefits government jobs. Who is this Doug Whitmer character and why is he still running the show? Cao and Louisiana's only useful Senator are calling for an investigation. I'll say two things: if they go for a full investigation of FEMA contracts, they're going to turn up some VERY interesting things with some VERY interesting connections. Not necessarily ones you might initially guess. Second, this article makes a some anecdotal stories I've heard within the local engineering community over the past 2 years make a lot more sense... I'll just leave it at that.

...Let the investigating begin!

3 comments:

Tim said...

Yes, material and labor costs continue to rise. I agree that's part of the problem. But there's a bigger problem here. I've worked traditional Design-Bid-Build and the newfangled Design-Build projects and here's what I've observed: Design-Build works best when you're doing traditional, simple to explain and define projects. That's when the power of Design-Build yields a quality project with cost savings. So it is my opinion that using a Design-Build contract for this highly innovative, one-of-a-kind storm surge barrier to be built in difficult terrain was a mistake. The cost overruns we are seeing are, IMHO, a result of choosing the wrong contract vehicle.

Peace,

Tim

Clay said...

I attended a lunch and learn where they went through the difference between Design, Build and Design, Bid, Build for the ACoE. Nobody could really figure out why they decided, after years of doing the latter, to switch to the former.

There was a lot of scrambling to catch up to the change.

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