Capital Project Cost Estimating Checklist

Purpose:

This guide presents a high level perspective of the capital project estimating and budgeting

process and it consolidates and summarizes a wide range of King County and industry financial

and management practices that should be considered in order to prepare consistent capital project

cost estimates. It does not impose new requirements, constitute official policy nor instruct staff in

how to prepare capital project cost estimates.

Definition of a Capital Project Cost Estimate

A capital project cost estimate (herein referred to as “estimate”) is the forecasted cost associated

with labor (staff, consultant, management and construction), acquisitions, material, and

equipment that are required to complete a project within a specified schedule according to a

scope of work defined by charter and design documents.

Importance of Project Budgets and Cost Estimates

The process of planning, estimating and control is an integral part of a capital project and a key

to its success. The reliability of capital project cost estimates at every stage of the project

delivery process is vital for responsible project, program and fiscal management.

King County capital projects policies require formal budget cost estimates be presented to

sponsors/management for review no less than three times during their lifecycle: planning,

initiation and baseline. In addition to these specific budget presentation and approval

requirements, budget projections are generally updated at 60%, 90% and 100% design levels to

ensure the project can still be completed within authorized funding limits and to notify finance

departments of pending cash flow and budget requirements. Each successive estimate builds

upon the known scope, degree of project definition, and decreasing unknowns to more accurately

predict the expected cost. The document entitled Key Deliverables by Phase Checklist (a partial

excerpt of the applicable cost items is shown below) demonstrates the relationship between a

project’s timeline, estimate deliverables, and level of expected accuracy.

Figure 1 Excerpt from Key Deliverables by Phase Checklist

I. Planning Phase V. Close-Out Phase

Line

No.

List of Key Deliverables by Phase Re

qu

ire

d fo

r

Ba

se

lin

e A

pp

rov

al

Planning / Concept Alternatives Analysis Alternative Selected /

Design at 30% - 40%

Project Baseline

Scope / Schedule / BudgetDesign Refinements

Ad for Construction

Start of Construction or

InstallationSubstantial Completion /

Beneficial Use

Final Acceptance or End of

Construction / Installation Close-Out

11 Life Cycle Cost Analysis Draft Updated Final

14 Project Budget Draft Updated Proposed Baseline BaselineFinal Performance

Report

15 Costs Estimate (phase level) ROM Draft Updated Updated Final

16Phase and Contract Level Annual

Cash Flow ForecastDraft Updated Updated Final

Track, Monitor, and Refine

Track, Monitor and Refine

Track, Monitor and Report Performance

III. Final Design IV. Implementation PhaseII. Preliminary Design Phase

Scalable Cost Estimating

Scalability in cost estimating recognizes that projects of varying sizes and complexity require

modifying project management tools and techniques to manage project risks, and predict project

costs. Selection of an estimating method and process is dependent upon many factors including

the purpose of the estimate, the time available to produce the estimate, the project’s

characteristics, level of complexity and size, the amount of project documentation available, and

the estimating resources available.

A Project Cost Estimating Checklist illustrating potential cost elements during a project’s

lifecycle is attached for reference and guidance. After the Implementing Agency (IA) has

determined the applicable level of project complexity, use the checklist to identify the required

deliverables and sub deliverables, estimate their cost and then distribute those costs by phase.

The Project Cost Estimating Checklist is shown below.

:

Cost Estimate Types and Accuracy Ranges

Estimate types are defined by the level of design that was available to define the scope of work.

The accuracy of an estimate varies depending on the estimating method used, the amount of

project information, and the amount of time for estimate preparation. The Association of the

Advancement of Cost Engineering International (AACEI) classifies estimates into five different

class types (AACE recommended practice no. 18R-97). AACE’s cost estimate classification

matrix correlates the primary estimating characteristic of a project and the degree of project

definition, showing secondary characteristics that could occur during a project. The matrix

shown in Table 1 below summarizes how King County capital phases relate to AACE estimate

classes, degree of project definition, estimate use, and accuracy range and preparation effort.

Table 1 Estimating Type and Expected Accuracy Range

King County’s Capital Project Management Work Group (CPMWG) and King County

Ordinance 16764 recommend the AACE cost estimate classification matrix serve as the

guideline for determining expected accuracy ranges. King County Ordinance 16764 requires

high-risk capital projects seek appropriation approval by phase, and establishes standardized

requirements for capital project reporting and cost estimating. The ordinance states that prior to

establishing a baseline, high risk projects with a range of potential project costs shall budget the

highest cost in the range.

Methods of Estimating

There are three commonly used estimating methods. The determination of which method to use

is dependent upon factors such as project characteristics, level of complexity, total project

budget, and maturity level of project definition and deliverables.

1. Cost Curves – This method uses historical cost curves, scale-up or scale down factors,

and cost ratios. Cost curve estimates are typically used to produce conceptual or

feasibility estimates based on a minimal amount of information with a short estimate

preparation time and few estimating resources.

2. Conceptual Parametric This method uses parametric factors to estimate elements of a

project. Parametric factors are typically used when preliminary layouts, flow sheets, and

equipment lists are available to calculate cost items that apply to a reference cost source.

Its accuracy is based on the selection of comparable factors and an analogous cost

reference. Parametric estimates are typically used to produce pre-design or early design

development estimates based on preliminary design information with a short estimate

preparation time and minimal estimating resource availability.

3. Detailed Unit Cost – This method is based on a detailed quantity take-off using defined

engineering data. This data may include detailed plans, process flow diagrams, electrical

diagrams, equipment data sheets, structural sketches/details, soil data, and specifications.

Equipment and unit costs are typically based on vendor quotations. This is the most

comprehensive estimating method and is used to produce definitive estimates during final

design phases and for bidding. Accordingly, the detailed unit cost method requires the

longest estimate preparation time and the greatest quantity of estimating resources.

Developing Capital Project Budgets and Estimates

For consistency, uniformity, and tracking/ reporting purposes, project costs are usually organized

into three major categories: Construction, Non-Construction and Project Contingency.

Construction costs are often referred to as implementation costs. Non-construction costs are also

referred to as soft capital or allied. The construction and non-construction categories are further

broken down for reporting and management purposes into sub-categories that group similar costs

together by topic. Figure 3 below is an example of a summary level project cost by category

report:

Figure 3 Sample Cost Report (from King County PRISM)

2013 ANNUAL BUDGET/FORECAST

Dec (open) 2013Current Forecast%Spent

Difference

Spent %Spent

Difference

ANNUAL ACTUALS

YTD

Spent YTDYTD

Spent LTD

LTD

%Spent

LTD

%Spent

Dec (open) 2013Dec (open) 2013

Current Forecast

Cost Report for 2003-01 Garrison Creek Relief - Kent Planning Zone

LIFETIME ACTUALS & BUDGET/FORECAST ESCALATED

2013Dec % Diff

CONSTRUCTION

Construction Contracts

Owner Furnished Equipment

Outside Agency Construction

Other Capital Charges

NON-CONSTRUCTION

Engineering Services

Planning & Management Services

Permitting & Other Agency Support

Right-of-Way

Misc. Service & Materials

Non-WTD Support

WTD Staff Labor

Indirect Burden

PROJECT RESERVE

Project Contingency

SETTLEMENTS, REIMBURSEMENTS, & LDs

Settlements, Reimbursements & LDs

Uncommitted/Adjustment

PROJECT TOTAL

Revenues

TOTAL WITH REVENUES

12/20/2013 | Page 1 of 1

Construction Costs

Construction or implementation costs represent any tangible cost that contributes to the physical

cost of constructing the asset or project. Such costs are generally not directly controllable by the

owner. They can be estimated, quantified, and determined with relative certainty. However,

because of public procurement requirements and market conditions, the actual costs have a

degree of uncertainty.

Examples of such physical costs include construction contracts and change orders, owner

procured equipment, design contingency, sales tax, utility work performed by non-County

agencies, work directly implemented by county forces and certain miscellaneous costs such as

utilities and chemicals used during testing and startup. A brief description of each category and

subcategory is included below:

Construction

Construction Contracts

Construction Contract(s) – The final expected cost of public works construction

contract(s) that will implement construction. Revised Code of Washington (RCW)

39.04.010 http://apps.leg.wa.gov/RCW/default.aspx?cite=39.04.010 , "Public work"

means all work, construction, alteration, repair, or improvement other than ordinary

maintenance, executed at the cost of the state or of any municipality, or which is by

law a lien or charge on any property therein. Many King County construction

contracts are advertised and awarded through the low bid or small work roster

methods. Design Build (DB), General Contractor/Construction Manager (GCCM),

Job order Contracting (JOC), Unit Price (UP), small works roster, work order as well

as other methods of contracting are also utilized.

Construction Contracts Mitigation – The cost of any tangible mitigation construction

that is not co-mingled into an above general construction contract.

Construction Design Uncertainty Factor – See contingency section below

Construction Contract Change Order Contingency – See contingency section below

Retail Sales Tax – Unless specifically exempted, retail sales tax must be collected on

behalf of all public works contracts. Retail sales tax is generally excluded from the

contract price per the bid documents. Retail sales tax is paid to contractors based

upon the rate of the jurisdiction where the work is physically performed.

Owner Furnished Equipment

Procurement Contracts – Occasionally, situations arise where a capital agency will

choose to furnish material or equipment to a contractor. This generally results if

specialty material and equipment have long purchase, fabrication and delivery cycles

that would jeopardize completion schedules if procured by a contractor.

Outside Agency Construction

Utility Relocations – Many agencies do not allow outside agencies to work on their

utilities. Outside agency construction includes the cost of contracts with agencies

outside of King County that perform utility relocation work related to a construction

project.

Other Capital Charges

Direct Implementation – Would include the cost of public works implementation

performed by a Division’s own labor forces (where allowable by law).

KC Direct Implementation – Would include the cost of public works implementation

performed by other King County labor forces (where allowable by law).

Miscellaneous Capital Costs – Includes funds spent by a Division due only to

construction and that should be capitalized. Examples include utilities and chemicals

necessary during testing and startup, owner controlled insurance or direct art

purchases (not 1% for the arts).

An example of the summary sheet for a capital construction estimate is shown below in figure 4.

Figure 4 Example Total Cost of Construction Estimate

DESCRIPTION

ConstructionEstimateSummarized

byMajorWBSTopic % AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT

Demolition 2.3% 25,000.00$ 2.1% 25,000.00$ 1.8% 25,000.00$ 2.3% 30,000.00$ 2.3% 30,000.00$

Utilities 1.1% 12,000.00$ 1.0% 12,000.00$ 1.5% 20,000.00$ 1.5% 20,000.00$ 1.7% 22,000.00$

PumpStationModification 15.9% 175,000.00$ 14.6% 175,000.00$ 14.8% 200,000.00$ 15.3% 200,000.00$ 16.2% 210,000.00$

StorageTank 36.4% 400,000.00$ 41.7% 500,000.00$ 53.6% 725,000.00$ 55.4% 725,000.00$ 56.9% 740,000.00$

ConveyanceLines 22.7% 250,000.00$ 25.0% 300,000.00$ 18.5% 250,000.00$ 19.1% 250,000.00$ 18.8% 245,000.00$

Street/SidewalkRestoration 1.8% 20,000.00$ 1.7% 20,000.00$ 1.5% 20,000.00$ 1.5% 20,000.00$ 2.3% 30,000.00$

Landscaping 1.6% 18,000.00$ 1.5% 18,000.00$ 1.7% 23,000.00$ 1.8% 23,000.00$ 1.8% 23,000.00$

Estimator'sAllowance 18.2% 200,000.00$ 12.5% 150,000.00$ 6.7% 90,000.00$ 3.1% 40,000.00$ -$

SubtotalDirectConstructionCosts 100.0% 1,100,000.00$ 100.0% 1,200,000.00$ 100.0% 1,353,000.00$ 100.0% 1,308,000.00$ 100.0% 1,300,000.00$ -$

GeneralConditions 7.0% 77,000.00$ 7.0% 84,000.00$ 7.0% 94,710.00$ 7.0% 91,560.00$ 7.0% 91,000.00$ 0.0% -$

Subtotalw/GC's 1,177,000.00$ 1,284,000.00$ 1,447,710.00$ 1,399,560.00$ 1,391,000.00$ -$

Overhead 8.0% 94,160.00$ 8.0% 102,720.00$ 8.0% 115,816.80$ 8.0% 111,964.80$ 8.0% 111,280.00$ 0.0% -$

Profit 4.0% 50,846.40$ 4.0% 55,468.80$ 4.0% 62,541.07$ 4.0% 60,460.99$ 4.0% 60,091.20$ 0.0% -$

Subtotalw/GC's,OH&P 1,322,006.40$ 1,442,188.80$ 1,626,067.87$ 1,571,985.79$ 1,562,371.20$ -$

MarketConditionsAdjustment 5.0% 66,100.32$ 3.0% 43,265.66$ 2.0% 32,521.36$ 1.0% 15,719.86$ 0.0% -$ 0.0% -$

DesignContingency 25.0% 330,501.60$ 20.0% 288,437.76$ 15.0% 243,910.18$ 10.0% 157,198.58$ 0.0% -$ 0.0% -$

Escalation 4.0% 66,242.04$ 4.0% 69,373.48$ 3.0% 56,099.34$ 2.0% 34,583.69$ 1.0% 15,623.71$ 0.0% -$

TotalContractEstimateatBid 1,784,850.36$ 1,843,265.70$ 1,958,598.75$ 1,779,487.92$ 1,577,994.91$ -$

ConstructionChangeOrderContingency 10.0% 178,485.04$ 10.0% 184,326.57$ 10.0% 195,859.88$ 10.0% 177,948.79$ 10.0% 157,799.49$ 10.0% -$

StateRetailSalesTax 9.5% 186,516.86$ 9.5% 192,621.27$ 9.5% 204,673.57$ 9.5% 185,956.49$ 9.5% 164,900.47$ 9.5% -$

TotalContractEstimatewithCont./Tax 2,149,852.26$ 2,220,213.54$ 2,359,132.20$ 2,143,393.20$ 1,900,694.87$ -$

OwnerFurnishedEquipment

OutsideAgencyConstruction

OtherCapitalCharges

TotalCostofConstrution 2,149,852.26$ 2,220,213.54$ 2,359,132.20$ 2,143,393.20$ 1,900,694.87$ -$

Bid(Sample)

Construction

InitialEstimate(Class5)

ExampleTotalCostofConstructionEstimate

Gate2(Class4) Baseline/Gate3(Class3) 60%(Class2) 90%orFinal100%(Class1)

Non-Construction or Allied Costs

Non-construction, or allied costs represent the costs associated with planning, design and

coordination of the asset or construction project, and are often budgeted as a percent of

construction. Such costs are generally thought to be controllable via the owner’s assertion of

scope, quality and budget during the planning and design process. Examples of such costs

include engineering costs, planning and management costs including construction management,

the cost of permits and doing business with other local agencies, miscellaneous services and

materials and all non-construction county labor. Land and easement acquisition costs are also

included with the non-construction, soft or allied cost category. However, land and easement

costs are generally excluded from measures such as allied cost.

Non-Construction

External Engineering Services

Engineering Design Services – Engineering design services related to building new,

upgrading or rehabilitating existing facilities.

QA/QC Services – Also known as peer review or value engineering services. Services

for evaluating a project’s functions and ways to achieve the functions at the lowest

total cost.

Engineering Services During Construction – Engineering services performed during

implementation (phase 4 construction). Services include design consultation and

review of submittals, RFI’s and change requests.

External Planning and Management Services

Planning or Study Services – External consulting, professional or engineering

services used during planning (phase 1) aimed at determining the need or direction of

a project or program.

Program/Project Management Services – External consulting or professional

contracts used to assist with program and/or project management.

Construction Management Services – External construction management services

including inspection, resident engineering, cost and schedule support, office support,

project control services, safety and quality management and monitoring and

coordinating daily construction activities.

Other Consulting Services – Specialized services such as information technology,

communications, marketing, etc.

Other Technical Services – Scientific services including pollution monitoring, seismic

survey data analysis, chemical analysis, etc.

Outside Legal Services – Non-King County legal representation and advice

Testing Services – Testing services during construction including concrete, soils,

welding, materials, etc.

Permitting and Outside Agency Support

Permits and Licenses – Fees assessed by federal, state or local governments for

various permits.

Local Agency Project Costs – Amounts paid to agencies for services provided

including MOA’s, MOU’s, etc.

1% for Art Payment – Required by County ordinance on certain capital projects.

Generally based upon the value of above ground structures (many departments have

exact calculation requirements based upon their particular capital business).

Right-of-Way

Land Purchases/Easements – Cost of land acquisitions, temporary or permanent

easements, right of way acquisitions and relocating occupants and their personal

property.

Local Agency Mitigation – Payments made directly to local agencies, jurisdictions,

etc. when the local entity assumes for the mitigation obligation.

Miscellaneous Services and Materials

Miscellaneous Service and Materials - Such as office and transportation costs, small

equipment, supplies and safety costs, professional development and travel costs,

printing, courier and media services and misc. services and premiums.

King County Staff Labor

Division Staff Labor – County work forces which would include all staff labor except

where staff are engaged in the physical construction of a capital asset.

Indirect Burden associated with Division Staff Labor as defined above except where

staff are engaged in the physical construction of a capital asset.

Contingency Definition and Applications

Contingency is an integral part of the risk management process and is a necessary part of the

capital project budget. Contingency provides a means to mitigate the risk of known or

predictable events that are inherent in capital projects. Contingency levels should be based upon

identified risks, is controlled by the project manager. Contingency is part of the capital project

budget, and should be expected to be spent when risks materialize.

Note: Contingency, no matter its form, is only intended to cover items that fall within the original

project scope of work. The addition of any work beyond the chartered scope or for any work not

included in the initial budget must be approved by management before it can be incorporated

into a project. If approved, the addition of out of scope work or non-funded work would be

grounds for adjusting the scope, rebaselining and would be accompanied by additional budget

and relative contingency.

If potential risks and uncertainties do not materialize as a project progresses, contingency should

be reduced accordingly prior to proceeding to the next phase (requirement is also referenced in

Ordinance 16764).

Note: Contingency, accuracy ranges and range estimating do not mean the same thing and are

not interchangeable.

-Contingency is a provision in the project budget used to mitigate the risk of uncertainties or

unforeseeable events that may occur when executing the scope of a project.

-Expected accuracy range is an indication of the degree to which the final cost outcome for a

given project may vary from the single point estimated cost.

-Range estimating is based upon probabilistic analysis, statistical distributions, and Monte

Carlo modeling and is used to determine the amount of contingency to be added to a

particular estimate to achieve a desired level of confidence that the project will not come

in over that cost.

Within most capital projects, there are three distinct applications of contingency;

construction/design, construction change order and project. Each will be discussed below:

Construction/Design Contingencies

There are several allowances or contingencies that are used to determine the total cost of

construction. Most capital projects use the estimated cost of construction as the basis for

developing the overall project budget. However, during the early stages of planning and design,

many of the project requirements are not defined or available at the time the initial construction

estimate must be prepared, reported or updated. Therefore, allowances or contingencies are

incorporated into the estimates as a means of accounting for the costs associated with lack of

definition and known risks. Known risks, often referred to as known unknowns, encompass

events that are predictable, yet difficult to identify in advance. See the change order section for

an example.

Construction Estimator Allowances

This allowance is familiar to most and is included within the construction estimate by the

estimator. Regardless of how little or how much information is available at the time an estimate

is prepared, the estimator must base the estimate upon a charter document, scope information,

vision, or other available information. Without the benefit of detailed plans and specification, the

estimator generally includes allowances as a means of incorporating costs into the estimate for

items described in the scope of work but not yet sufficiently defined. An example would be an

allowance for mechanical equipment equal to 10% of a structure’s cost. This type of allowance is

not intended to cover general scope uncertainty, changes to the scope or to speculate where the

project may head as design progresses.

Construction/Design Contingency

This is the first true contingency that should be incorporated into the total cost of construction

covers design uncertainty. As a project’s scope solidifies and design progresses, changes in how

to accomplish the scope are likely to occur. Design contingency is used to accommodate minor

changes in the design concept, design detail, etc. that ultimately impact the cost of construction.

As with all contingencies, design uncertainty contingency should only be used to cover items

associated with accomplishing the original scope of work. It should be expected that the

contingency will be “spent” as project moves through the design process. Contingency amounts

will depend upon the level of design completion, criteria, and confidence, and should diminish as

the design progresses or is found not needed. Usage or drawdown of the design contingency

should be tracked on a change log.

Pricing or Market Factor Adjustment

When implementation or construction is not scheduled to start for a significant period of time, a

pricing uncertainty or market condition adjustment factor should also be considered. Pricing

uncertainty is not the same as escalation that covers inflation or the future cost of money. Rather,

pricing uncertainty covers market factors that are unique to the construction industry associated

with pricing of future market conditions, labor, materials and equipment for items within the

estimate. This is generally a low figure (less than 5%) as determined by the estimator.

Note: The goal of the construction estimate at any stage of a project is to reflect the expected

total cost of construction. Therefore, it is extremely important that any construction costs

related to insufficient design or pricing uncertainty be included as specific elements and in the

total cost of construction, not in project contingency. Placing such costs in project contingency

not only masks the expected cost of construction but also proportionally underestimates the

associated non-construction costs and overall project costs.

Construction Change Order Contingency

Construction change order contingency – Historical data and experience indicates that once a

construction contract is underway, unforeseen events will occur that will require changes to the

contractual scope or work. Because identifying these changes in advance is not possible, change

order contingency is used to cover the cost of these expected, yet unknown field conditions,

contractor requested change orders, owner requested change proposals or any other changes to

the original contract amount. Paragraph 7.1.2 of CON 7-10-2, (AEP) Project Control Officer

http://www.kingcounty.gov/operations/policies/aep/contractingaep/con7102aep.aspx states “In

applying this P&P, the CONTRACT contingency shall be assumed to be 10% of the initial

CONTRACT value unless otherwise specified by the IA and documented in the project file”.

Therefore, construction budgets should include a 10% contingency to cover the expected costs of

potential change orders. Note that retail sales tax is calculated on both the base and change order

costs.

Note: There are several capital project scenarios that due not lend themselves to the prescribed

10% contingency rule. First, when providing a contractor with owner procured material or

equipment, the value of the change order contingency should amount to 10% of the combined

sum of the contract award amount and the owner furnished material and equipment amount.

Second, construction contracts involving refurbishment, rehabilitation or remodeling of existing

facilities generally require greater than 10% change order contingency as unexpected and

undocumented conditions are often encountered. Usage or drawdown of the construction change

order allowance will be tracked through a change order log. Seek management approval for the

percentages greater or less than 10%.

Project Contingency

Project Contingency is an allowance or safety net in the project budget to accommodate elements

of risk, degree of uncertainty, lack of design definition, desired confidence levels for meeting

initial or baseline requirements directly attributable to the overall scope of work, or the

possibility that execution may not go as expected.

Project contingency is not intended to cover items outside the scope of the project. Project

contingency is also not intended to cover any items known to be within the scope of the project

that were not priced/funded within the estimate due to lack of sufficient design definition or

progress, or due to pricing difficulty. As with all contingencies, project contingency decreases at

each phase as project uncertainty decreases. Need to beware of double counting contingency.

Note: King County does not anticipate, budget or allocate funds in advance for claims that may

or may not occur. Therefore, projects should not reserve funds to cover construction, design,

legal, staff or other costs in anticipation that at some point, a claim may be filed against a

project. Should a claim ever be submitted against a project, seek guidance from management

and the Prosecuting Attorney’s Office (PAO).

Escalation

Escalation is the change in the cost of goods or services over a period of time. Because the

average capital project is many years in duration, the portion of a project’s cost attributable to

escalation can be substantial. In order to ensure that escalation is measurable and calculated

consistently within capital projects. Highlights of escalation rules and methodologies are below:

Project budgets and forecasts should be developed in current year dollars and then

escalated.

Project budgets are generally presented in future year dollars to decision makers and

stakeholders and in annual and long-term budget reports.

Escalating project or construction costs to their mid-point is common practice and

done by many estimators and consultants. Doing so will factor for escalation twice.

Seek assistance from respective IA Finance Department when determining rate.

Escalation is compounded annually.

Escalation is applied to out-year dollars based upon a project’s annual cash flow

forecast.

Funds already spent are carried forward at face value and not escalated.

For consulting and construction contracts, escalation ceases upon Notice-to-Proceed

(NTP) as forecasted costs are replaced with negotiated/bid values.

Rebaselining

King County’s baselined capital projects may occasionally be faced with circumstances and

events where maintaining the baseline is no longer a useful performance measure for managing

the project. The purpose of rebaselining is to objectively establish a new baseline and to provide

the necessary course corrections to the scope, schedule and/or budget for a project. The results of

rebaselining will yield more accurate and realistic project information to be used as a basis for

variance reporting and performance measurement for the remainder of the project. Rebaselining

will improve the level of information for evaluating project delivery processes, and improve the

accuracy of project status information communicated to the Executive or the Council.

A project should only be considered for rebaselining when the scope, schedule, or budget have

exceeded the allowable threshold and can’t be recovered by applying standard project

management tools and techniques. In no event will a project be rebaselined without prior

written approval by the IA’s Division Director. Rebaselining should not be used to compensate

for poor project management and/or lack of sufficient project control oversight.

The complete rebaselining policy, authored by the Capital Project Management Work Group, is

contained in and authorized by King County Executive Order CIP 8-1 (AEO) (see link below).

Existing King County Estimating Governance (2013)

Known King County codes, legislation and executive orders, policies and procedures that

directly or indirectly influence capital project estimating are as follows:

King County Code

Title 4. Revenue and Financial Regulation

http://www.kingcounty.gov/council/legislation/kc_code.aspx

King County Legislation

Ordinance 16764 – Mandatory Phased Appropriation (formerly referred to as High Risk)

This ordinance states that any capital project over $10 million automatically goes into a pool

of large projects from which certain projects will be picked for addition oversight. The

ordinance defines the criteria providing for appropriation by phases for selected capital

projects and establishes standardized requirements for capital project reporting and cost-

estimating.

King County Executive Orders, Policies and Procedures

CON – Contracting Procurement and Sale Management

(Policies/procedures relating to the procurement, contracting and sale of materials and

services.)

CON 7-7-2 (AEP), Procurement for Capital Projects

http://www.kingcounty.gov/operations/policies/aep/contractingaep/con772aep.aspx

CON 7-8-3 (AEP), Change Order/Amendment Administration

http://www.kingcounty.gov/operations/policies/aep/contractingaep/con783aep.aspx

CIP – Capital Projects

CIP 8-1 (AEO), Development and Implementation of Consistent, Comprehensive

Standards for Reporting, Management, and Performance Measurement of Capital

Projects

http://www.kingcounty.gov/operations/policies/executive/cipaeo/cip81aeo.aspx

Capital Project Management Work Group Phase 1, Standards / Key Deliverables

Key Project Deliverable by Phase Flow Chart

Key Project Deliverable by Phase Checklist

CIP 8-2 (AEO), Improving Project Management Processes and Functions, Investing in

Training and Staff Development, and Assuring Accountability and Transparency on

Capital Projects in KC

http://www.kingcounty.gov/operations/policies/executive/cipaeo/cip82aeo.aspx

Capital Project Management Work Group Phase 2, Scalable Project Management Tools

Project and/or Program Characteristics

Acceptable Project Management Tools

King County Baseline (See CPMWG1 April 30, 2010 Work Plan Deliverable for definition)

King County Pre-baselining (See CPMWG2 Task for definition)

King County Rebaselining Guidelines (See CPMWG1 Nov. 15, 2011 document for definition)

AACE International, Inc.

AACE is recognized as an industry leading association that serves cost management

professionals in the disciplines of project management, estimating, risk management, and claims.

AACE’s recommended practice, the Cost Estimate Classification System provides guidelines for

applying the general principles of estimate classification to project cost estimates. KC Ordinance

16764 states that the level of detail incorporated within each estimate shall be commensurate

with the information available at each phase, and shall be consistent with the AACE’s cost

estimate classification system.