Saybrook Associates, Inc. Program Management and Project Controls
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Estimate Review & Cost Validation
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Project Auditing

‘Ground Zero’ for the successful management of any Program or Project is the identification and determination of Success Measures and Key Performance Indicators. Irrespective of the intensity or sophistication of Management techniques and skills applied, efforts become meaningless if not beginning with and managing to ‘the right number’! A thorough and accurate Estimate of Time, Cost, and Resources required for execution of the Project establishes the platform from which to measure Progress and Performance.

The Project Estimate serves as the basis for the Business Case ‘Go/No Go’ determination, Project Funding Approvals, and for measurement of performance and success: as such it must be both ADEQUATE and ACCURATE. Adequate in that all of the Project’s scope and deliverables are included, Assumptions are reasonable and clearly documented, Risks & Threats are considered and incorporated, and that Industry Benchmarks and Internal Performance indices and history is utilized appropriately. Accuracy demands not only mathematical correctness, but that a Range of values is presented appropriate to each specific Phase of the Project.

Development of an Estimate represents a multi-step, complex, and iterative compilation and analysis of input from many data sources and persons. To ensure the quality of an Estimate, a review protocol or process is required to determine adequacy and accuracy and that the Estimate meets project and organizational requirements. With Projects increasing in complexity, cost and strategic importance, it is imperative to have confidence in the accuracy and adequacy of your capital cost estimate - whether conceptual, semi-detailed or detailed construction ready.   Given the cost implications of design changes, allowances, impacts from escalation and inflation and the uncertainties around risk and contingency, a good understanding of the adequacy and accuracy of your capital cost estimates is vital for project success.

Our Approach:

Saybrook Professionals can Develop, Review, and Validate estimates to establish and help you manage to the ‘right’ number.  We rely on industry standards, combining our proprietary database with an in-depth knowledge of industries and local conditions, to increase your confidence in all cost estimates, from concept to detail.

Our capabilities and experience can assist in and add value to projects in of varying size and complexity, in multiple industry sectors, and at any Phase of the Program or Project cycle.

Case Study
An owner of a fast-track project could not procure construction services under a guaranteed lump sum contract, and because the design process would be concurrent with construction, a detailed estimate was impossible at the outset.  This meant that the construction manager could only consider a cost-plus contract with a target price, with both parties sharing in the risk.

We were asked to validate and ensure the equity of the target price, and help the project manager perform due diligence in reviewing and approving that price.  So we analyzed the proposed target estimate, considering industry standards and benchmarks, as well as assumptions, quantity projections, and pricing for commodities and services.  Using a proprietary database with costing factors for similar facilities in other global locations, we modeled site-specific productivity and cost adjustment factors.

Our result?  Our review and validation process established that the estimate was reasonable.  However we did identify significant amounts included for yet-to-be realized or, in some cases, yet-to-be identified events, actions or risks. We recommended that these costs be managed separately as contingencies.  Had they been included in the target price, the construction manager would have been unjustly rewarded with a percentage of the amount not expended.  In fact, the owner’s savings exceeded our fees by a factor of 12.

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