Construction Management
Construction Budgets & A Case for Certifying Estimators
By Edward Walsh
Aug 14, 2005 - 10:47:00 PM

CONSTRUCTION BUDGETS & A CASE FOR CERTIFYING ESTIMATORS


Before the first dirt is moved, or the first nail driven, a construction project may be in serious trouble and paramount amongst the reasons is a flawed cost estimate.

• Every year publicly funded state and federal agency's, and private parties, construction projects face the prospect of cancellation or going through an expensive rebiding process, because the bids came in well above a budget estimate that was set too low.

• Contractors may suffer serious financial losses, or slip into bankruptcy, because of a bid based on a flawed estimate.

• Often bonding companies must take over failed projects and suffer great losses all because of a contractor's poorly prepared cost estimate. This scenario results in higher premiums for bonds, contractors not qualifying for bonds and lowering of competition for bidding on projects.

Construction cost estimating, if not done in a professional manner, may result in financial damages and construction delays, which in some cases precipitate excessive cost cutting. Recouping lost profits from a bad estimate by cutting corners can lead to shoddy workmanship or, worse, unsafe construction practices.

The issues described above are resolvable if acted upon properly. Currently in the United States owners, federal agencies and state governments all require that the architects and engineers involved in the design of a project be recognized by having been licensed or registered, why not construction cost estimators? All too often the task of preparing a cost estimate is simply left to anyone that cares to call themselves an "estimator".

Certified Professional Estimators (CPE's) are available through the American Society of Professional Estimators (ASPE).

• The ASPE requires a minimum of five years experience and a passing grade in both a General Estimating Knowledge (GEK) test and a Discipline Specific Test, and acceptance of a technical paper, before granting the designation Certified Professional Estimator (CPE).

• To date the States of California, New Jersey and New Mexico, the General Services Administration, the U.S. Postal Service, the U.S. Army, U.S. Coast Guard and the U.S. Navy require that parties involved in preparing, supervising or checking their project construction cost estimates be certified professionals as designated by the ASPE. Several other states and federal agencies are proposing similar requirements and FEMA has adopted the Standard Estimating Practices of the ASPE.

Promotion of certification of cost estimating personnel is an effort that will benefit everyone.
• The prospect of a reduction in financial losses due to bad estimates could be realized through the utilization of certified professional estimators if state and federal agencies, as well as private parties, write into their general conditions and RFPs, that preference will be given to certified professional estimators for the development of, supervision of or verification of construction cost estimates.

• Surety bonding companies should actively encourage their contractor clients to have their in-house estimators seek certification or utilize the services of certified professionals and perhaps even offer a small discount in bonding rates to those clients that do utilize certified professionals.

• Construction associations should encourage their members to promote certification of their in-house estimators and coordinate with the ASPE for on-line training and educational activities.
Information on certification maybe obtained on the Internet from:

The American Society of Professional Estimators - http://www.aspenational.org


Edward B. Walsh
Executive Director national ASPE