Cost Estimating
Background
An important part of the environmental restoration process is the assessment of decommissioning and site restoration costs. We wanted to develop a structured approach to estimating, so that we could produce high-quality estimates systematically and consistently – allowing us to plan future projects more effectively.
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The solution
PRICE is a formalised activities-based cost-estimating tool that covers both facility decommissioning and land remediation. It is an industry-benchmarked multi-user application that records the full estimate history, has supervisor overview and control functions, rapid data update and change analysis, and enables data export for risk and statistical analysis. It combines discipline and rigour to allow production of high-quality estimates systematically and consistently.
At the heart of PRICE is a database that holds resource demand data on a comprehensive range of decommissioning activities – from those requiring minimum protection operatives through to those requiring the use of remote handling techniques. This data is used together with project information to produce cost estimates against a project work breakdown structure.
Estimates are prepared by selecting standard ‘component’ tasks from the database – these are further defined by radiological condition and task complexity. There are three levels of radiological condition, which equate to types of protection needed to carry out the task, and five possible levels of complexity. Each combination of radiological condition and task type has an associated specific norm value, so for each component task there are 15 possible norms. The norm value represents the number of man-hours per measured unit of work – to produce a cost estimate, the norm is multiplied by the relevant man-hour rate and the measured quantity. Adding together the individual task costs and any additional costs produces the total estimate.
The benefits
The industry-benchmarked PRICE tool brings discipline, rigour and auditability to the estimating process. It produces consistent estimates and logs all changes, so all previous estimate versions can be accessed.
It’s possible to export data for risk and statistical analysis, and to produce both detailed and summary reports. As PRICE is being constantly updated with the addition of new data, the system is constantly evolving and improving.
In comparison with actual project out-turncosts, the PRICE estimates have generally shown good agreement.
The estimating system
