ENGINEERING TERM OF THE MONTH
Opinion of Probable Cost
Engineers , architects , contractors and owners are often in need of estimating the probable cost of a project or a portion of a project . An opinion of probable cost is a professional opinion based on experience and available knowledge that is developed at various stages of a project to inform the interested party , and to allow for decisions to be made regarding the overall scope of the project and to make knowledgeable decisions on various details of the project .
Various tools are used to develop an opinion of probable cost , including , historical knowledge of similar work , available databases , and industry publications such as RSMeans . Developing an opinion of probable cost generally includes scoping the project , preparing a takeoff report that quantifies numbers of units for each work task , estimating unit prices for each of the units of work , multiplying each unit of work by its unit price , and summing the total cost for each unit of work . Factors to consider in the unit rates or elsewhere in the opinion of probable cost include overhead and profit , contingency , inflation , taxes , subcontractor markups , and other locational considerations . Other factors to be considered include anticipating the sequence of work , equipment needs , size of crews , physical site constraints , specialty materials or labor considerations , and allowances for waste materials , inclement weather , shipping delays and other factors that affect costs .
An opinion of probable cost developed by an engineer or architect should include limitations , including a statement that the opinion of probable cost is only intended to be an opinion based on professional judgement and experience , is not intended to be a contractor ’ s “ cost estimate ,” and that actual contractor pricing should be expected to vary from that developed as part of the opinion of probable cost . The opinion of probable cost should not be misconstrued as an amount that will absolutely not be exceeded , and it is important that the preparer clearly inform the user of factors affecting the level of accuracy and predictability of the opinion provided .
Sources :
• Gordian Heavy Construction Costs with RSMeans data , 2023
• Civil Engineering Reference Manual , 13 th Edition
• https :// loweconsultingllc . com / howshould-opinion-of-probable-constructioncost-be-used /
• https :// www . redvector . com /
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