ETL 1110-2-573 30 Sep 08 APPENDIX H Sample Checklist for Cost Estimate Preparation or Reviewer Checklist H-1.

It is highly advisable that all critical estimates, schedules, and Total Project Cost Summaries receive a quality review by a senior estimator within a formal process. An independent technical review or independent cost review is often requested, but the main quality responsibility lies within the estimating shop that produced the estimate. While much focus is placed on the quality of the bid estimates, other estimates are equally and possibly more important. The earlier estimates used for budgeting, programming, and congressional authorization and funding are very important management tools that should not be overlooked, underutilized, or unsupported. H-2. During the review process, certain items may indicate the need for further resolution by specific project delivery team members. Many times, these items relate to project scope, schedule, site access, contract acquisition, market conditions, value engineering, risk, etc. H-3. The estimate product should comply with applicable cost engineering guidance: a. Engineer Regulation (ER) 1110-2-1150, Engineering and Design for Civil Works Projects. b. c. ER 1110-1-1300, Cost Engineering Policy and General Requirements. ER 1110-2-1302, Civil Works Cost Engineering.

d. ER 1130-2-520, Navigation and Dredging Operations and Maintenance Policies. H-4. The following is a checklist for preparing construction baseline estimates. Prepare cost estimates, schedules, and risk analyses using agency approved software, as appropriate, and structured using the appropriate Work Breakdown Structure for civil works. Confirm the estimates level of development and quality as related to the respective engineering regulations. For civil works estimates, ER 1110-21150 and 1110-2-1302 are crucial to a successful review. Confirm whether a project schedule, risk analysis, and a Total Project Cost Summary are required products based on engineering regulations. If so, they should also be reviewed. The escalation and contingency are critical items within the Total Project Cost Summary. H-1

ETL 1110-2-573 30 Sep 08 Ensure the estimate has been developed under a likely contract acquisition strategy that may have a bearing on the costs. Examples include a competitive Information for Bid, Small Disadvantaged Business set-aside, Design-Build, limited competition, etc. Prepare narrative with statement summarizing purpose of estimate, brief statement and description of the project, type of contract acquisition, level of project scope, and major estimate assumptions. Identify the stage of the estimate (reconnaissance, feasibility, predesign, 30 percent, 60 percent, 90 percent, 100 percent, and bid). Clearly identify and define assumptions and identify significant features upon which the cost estimate is based. Identify special issues, concerns, and technologies. Identify significant findings and concerns during preparation. Coordinate those concerns with the respective project delivery team member, seeking resolution. Develop notes throughout the estimate, particularly to identify sequencing of construction activities and crew productions, and include in the agencyapproved estimating software notes reference. Consider the quantity takeoffs and their application to the estimate. Ensure an adequate process has been used to address material waste, losses, soil factors, metal dropoff, etc. Separate subcontract work from prime contract work. Identify separate markups for subcontractors and prime contractor. Identify sources of unit prices and vendor or subcontractor quotes. Identify what is included within those prices and quotes. Consider unit prices and quotes for reasonableness. Include design contingencies and construction contingencies in the cost estimate, if appropriate. Include cost growth (escalation) from the date of the estimate to the midpoint of construction and/or operation. Identify source of index used for escalation, e.g., Civil Works Construction Cost Index System. Determine how the escalation was developed as related to the estimates productivity rates and project schedule. Total Project Cost includes all Federal and authorized non-Federal costs. Refer to the civil works work breakdown structure to ensure all cost items have been captured. Ensure the project delivery team provides costs for land and damages, engineering and design, construction management, and construction features are coordinated with the Civil Works Breakdown Structure. The cost estimate becomes fully funded when inflation is added to the estimate. An estimate for profit is included in the reconnaissance and feasibility phases to ensure costs represent the total cost of the project; however, profit is not included in the Government estimate for authorized civil H-2

ETL 1110-2-573 30 Sep 08 work contracts for award. Profit is included in construction contracts for modifications and change orders. Minimize use of lump sum pricing. If used, the lump sum description must indicate in detail what is included in the price and whether or not it is based on a quotation. Use prevailing current location-specific wage rates in the estimate. Consider market rates for labor to ensure there is reasonable competition ongoing in the area where the construction is being performed and/or may be competing with the domestic projects being constructed. Check derived unit costs with historical data when available. Override Cost Book labor and/or material unit prices as required, to fit project-specific conditions. Complex or major features of a project should include a detailed breakdown for labor, equipment, and material. Calculate in detail the job office overhead as applicable. Preliminary estimates may need only a percentage markup. Calculate home office overhead as a percentage of total contract cost. Include bond costs, sales tax, and gross receipts taxes as applicable. Include all applicable costs for permits, insurances, licenses, taxes, and fees. Calculate prime and subcontractor profit by weighted guidelines method. Ensure the estimate has adequately captured the escalation and contingencies based on studies from schedules and risk analyses where applicable. A Total Project Cost Summary should capture all escalations and contingencies of all features, their respective durations, and risk. Provide cost engineer point of contact and telephone number. Prepare a formal review document that denotes the items reviewed, items of concern, senior reviewers name, and date of formal review.

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