Project Cost Estimating

CEI uses several methods of developing project cost estimates to support the funding of projects for our clients. Banks and other financial institutions have accepted CEI’s preliminary engineering cost estimates as valid support of the funding of projects. The level of detail in the estimate depends on the stage of the project and degree of accuracy required for making sound economic decisions.

Cost estimates are generally made for the conceptual and preliminary engineering stages of a project. In both cases, an appropriate contingency is applied to cover items that are needed to meet project objectives but were not included in the project scope, inaccuracies in the estimate, timing of the work, and changing economic conditions. The contingency is not intended to cover scope changes.

The conceptual project cost estimate would typically be based on the following information:

  • Conceptual level of design detail

  • Preliminary process criteria / production rates

  • General scope and definition of the project

  • Basic identification of building areas with approximate size (no layouts)

  • Identification of flexibly and growth objectives

  • Building costs based on estimated $/sq ft for different construction types (Warehouses, offices, production areas, etc.)

  • Contract labor estimated as $/sq ft from prior contractor budget estimates, CEI data base, and estimating guides

  • Estimate of process & process support equipment costs from vendor budget proposals, CEI data base, and estimating guides

  • Estimate of equipment installation costs using past experience to develop a multiplier of equipment cost

  • Estimate of Engineering and General Conditions as a percent of the total project (depends on projects size, schedule, and complexity)

  • Contingency: 20% to 25%

  • Level of accuracy: -15% to +25%

The preliminary project cost estimate would typically be based on the following information:

  • Preliminary engineering and level of design detail

  • Development of process/packaging flow diagrams

  • Determination of detailed scope (including not-in scope)

  • Development of general equipment layout & elevation drawings

  • Development of outline specifications for equipment and services

  • Identification and programming of building areas identifying type of construction and finishes

  • Development of milestone schedule

  • Development of project implementation team with roles & responsibilities identified

  • Building costs based on programming details, preliminary proposals from contractors, estimating guides, unit costing, and material costs from suppliers

  • Building costs on a $/sq ft basis detailed by area (i.e.  office, laboratories, production, packaging, warehousing, etc)

  • Determination of process & process support equipment costs from vendor proposals based on outline specifications, CEI database, and estimating guides

  • Development of equipment installation costs from vendor data, detailed costs for electrical, piping, millwright, and sheet metal trades, using unit costs from CEI’s database and contractor input

  • Contingency: 10%

  • Level of accuracy: -5% to +10%

CEI has experience in estimating projects from several thousand dollars to 100 million dollars. We have provided project cost estimates for many types of new food processing plants including:

 
  • Fluid Milk
  • Bakery
  • Breweries
  • Wineries
  • Cheese
  • Potato Processing
  • Fruits & vegetables

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