Early Estimates

Question 1

What is contingency in early estimates?

Answer 1

A multiplier to cover anticipated risks, based on risk management plan.

Question 2

What are AACEI cost estimate classifications?

Answer 2

Class 5 (-50% to +100%, screening), Class 4 (-30% to +50%, feasibility), Class 3 (-20% to +30%, budget/control), Class 2 (-15% to +20%, control/bid), Class 1 (-10% to +15%, check/bid). Early estimates include Class 5, 4, and 3.

Question 3

What are characteristics of early estimates?

Answer 3

Basis for business decisions, limited scope definition, high scope change potential, results often fixed, early in estimate series.

Question 4

What is an early estimate?

Answer 4

Any estimate prior to and including the full funding estimate, but not based on detailed design.

Question 5

What are methods for early estimating?

Answer 5

Cost capacity curves, capacity ratios, plant cost per unit, equipment factored estimates, computer-generated estimates.

Question 6

What are computer-generated estimates?

Answer 6

Software-driven estimates (e.g., ESP) considering factors influencing accuracy, sponsored by CII.

Question 7

What is plant cost per unit of production?

Answer 7

Estimate plant cost using cost per unit from previous projects (e.g., $1000/kW for power plant).

Question 8

What are the four divisions of early estimate drivers?

Answer 8

Who is involved, how the estimate is prepared, what is known (scope), and other factors.

Question 9

What are cost capacity curves?

Answer 9

Curves showing relationship between system capacity and cost, often for process units.

Question 10

How does estimate accuracy change over project life?

Answer 10

Accuracy improves as project progresses from conceptual to design and construction.

Question 11

How does ESP work?

Answer 11

Calculates score, compares with database, correlates scores to accuracy, recommends contingency, highlights strengths/weaknesses.

Question 12

What are equipment factored estimates?

Answer 12

Include installation costs as a multiplier of purchase cost (Total Installed Cost).

Question 13

How to improve early estimates?

Answer 13

Better scope definition, experienced teams, effective estimating process, alignment/communication, tools/techniques.

Question 14

Why are early estimates important?

Answer 14

Support asset development strategy, screen potential projects, allocate resources, and avoid poor estimate impacts like lost opportunities or wasted effort.

Question 15

What is PDRI?

Answer 15

Project Definition Rating Index; higher definition increases chance of project success.

Question 16

What are key estimate accuracy drivers?

Answer 16

Basic design, cost info/experience, time to prepare, site information, market issues, alignment, owner costs.

Question 17

What are capacity ratios?

Answer 17

Cost of one process unit estimated based on another with different capacity, reflecting economies of scale.

Question 18

Which division has the strongest influence on estimates?

Answer 18

Scope definition (what is known).

Question 19

What are CII cost estimate classes?

Answer 19

Order-of-magnitude (±30–50%), Factored (±25–30%), Control (±10–15%), Detailed (<10%). Early estimates include order-of-magnitude and factored.