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Blog Series: Get More Accurate Estimates, Faster

Check out our blog series and hear from industry experts on estimating best practices for today’s competitive capital projects market.

December 04, 2016 by David LeGrand / 0 Comment
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David LeGrand

Getting to Zero – Calibrating Aspen Capital Cost Estimator for Success

Who would have thought that zero was such an important number? But who wants zero salary, or zero sunny days? I guess it’s all in the way you look at it. Most Owner Operators or EPC’s would love a capital cost estimate that has zero deviation from expectation!

The importance of accurate and precise capital equipment estimates and related bids can’t be overstated in the chemical and process industry. In today’s marketplace of low operating margins and owner operators demanding fix priced bids; engineering, procurement and construction firms need a sharp pencil to make a profit. Winning companies have found that the speed and accuracy of a bid can be used as a strategic weapon when soliciting business. Speed and the ability to develop creative product control measures by all stakeholders are required in order to achieve successful project outcomes and maximize return on investment. Owners and their contractors must be agile to take advantage of market changes and achieve industry-leading positions.

Tuning and calibrating Aspen Capital Cost Estimator is not something that is embedded in a Black Box, but rather a pretty straightforward path to follow.

“Choose it” – Select a reference project for calibration that you can use as the basis for your comparison. Most Estimators are going to say that each estimate is unique, but don’t let that stand in the way of seeking a project with the following attributes: Represents typical projects; Contains typical component mixes; Simple in design; Familiar to you; and uses contractor’s/construction workforce's you know

“Design it” – Lay out your overarching principles in the Design Basis that will guide the definition of your project. Remember that some critical components will have a larger effect on the design than others

 

“List it” – Develop a detailed code of accounts. This is an important step, as these files can be used as reusable templates for future projects. Insure your code of account is thorough, as mistakes will trickle down and effect future accuracy

“Compare it” – Develop your first estimate and compare to your base estimate. You can then understand the differences between the historical estimate and the ACCE estimate

“Tune it” – Take a closer look into the detailed line items of the Code of Accounts and tune ACCE to increase accuracy

“Check it” – Expand the calibration to other similar projects, it will uncover areas where you need further tuning

“Finalize it” – The calibration of Aspen Capital Cost Estimator is a straight forward process that will take you beyond the basics to estimating accurately with your specific estimating and business model

Get to zero…and win the bid!

 

Do you want to learn more? Check out my recent white paper, “Tailoring your Competitive Edge – Calibrate Aspen Capital Cost Estimator to Fit your Business.

 

LEAVE A COMMENT

  • David LeGrand
    October 06, 2016 by David LeGrand / 0 Comment

    Let's Make It Easy - It's Really Not a Black Box

    Who wants to sit in the hot seat of an estimator? They have all the risk in creating an estimate out of little information and sometimes a poorly defined scope.

  • David LeGrand
    August 25, 2016 by David LeGrand / 0 Comment

    Make Your Estimate a True Strategic Weapon

    Companies bidding and building large capital projects are increasingly nervous as their decisions, based upon all of this confusing information, weigh heavily on bid profitability and feasibility. Model-based estimating has become a strategic weapon in the bidding and estimating of capital projects.