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RANGE ESTIMATING: AN OWNER'S EXPERIENCE

Range estimating measures the uncertainity in every bid by fixing an upper and lower limit for all major cost factors in a project. It also enables the contractor to concentrate upon areas in which costs can be reduced in order to counterbalance the areas in which the biggest cost differentiation is likely to occur. The upper and lower limits of the range are fed into a computer which builds the project several thousand times, and the results are reported in a profile showing several different total costs which the project can incur along with the mathematical probability of overrunning each such total cost. The probability of overrunning the projects total cost is also given along with the reasons why the overrun probability is high or low. The maximum potential overrun and other important data are also shown. Range estimating may be applied in a wide variety of circumstances: by contractors to establish bid prices for competitive or negotiated work; architects and engineers to develop conceptual or preliminary estimates; by owners to establish budgets; and by construction managers and owners to insure that projects are completed within budget. This article discusses the last two of these applications, with particular emphasis on project management.

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  • Corporate Authors:

    Associated General Contractors of America

    2300 Wilson Boulevard, Suite 400
    Arlington, VA  United States  22201
  • Authors:
    • Welker, H J
  • Publication Date: 1977-8

Media Info

  • Features: Photos; Tables;
  • Pagination: p. 20-22
  • Serial:
    • Constructor
    • Volume: 59
    • Issue Number: 8
    • Publisher: Associated General Contractors of America
    • ISSN: 0162-6191

Subject/Index Terms

Filing Info

  • Accession Number: 00163688
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Mar 7 1978 12:00AM