Implementing Organizational Change for Cost Estimating and Cost Estimate Management

Project cost escalation is a serious problem for many State Highway Agencies (SHAs). This problem is challenging because the duration between the initiation of a project and the completion of construction makes it very difficult to predict the impact of the many factors that influence project costs. The National Cooperative Highway Research Program research project 8-49 developed a Guidebook on highway project cost estimating practices and cost estimate management to aid in achieving greater consistency and accuracy of cost estimates from planning, through programming, preliminary design, and final design. The Guidebook presents a systematic approach to addressing project cost escalation, structured around eight strategies, 30 methods, and 90 tool applications. It argues that SHAs must develop structured cost estimating processes and that the estimating function cannot be stove piped. As a consequence, organization wide implementation of the Guidebook requires that a SHA address four key challenges. The Minnesota Department of Transportation (Mn/DOT) is currently conducting a multi-year effort that focuses on the four key challenges. All Districts and staff sections in Mn/DOT have been engaged in open forums where they expressed their perceptions of the Mn/DOT culture and the interactions in developing cost estimates. Now, Mn/DOT has moved forward and is developing management policies and processes for cost estimating and cost estimate management based on the strategies, methods, and tools discussed in the Guidebook. The objective of this paper is to demonstrate to SHA officials the level of effort needed, and the manner in which the implementation challenges can be addressed through a strategic and agency wide implementation endeavor that is currently underway by the Mn/DOT. Other SHAs will benefit from early reporting of the Mn/DOT effort if they desire to implement an agency-wide strategy to improve their cost estimating and cost management practices.

• Corporate Authors:

  Transportation Research Board

  500 Fifth Street, NW
  Washington, DC  United States  20001
• Authors:
  • Shane, Jennifer S
  • Molenaar, Keith R
  • Anderson, Stuart D
  • Schexnayder, Cliff J
  • Patil, Shekhar S
• Conference:
  • Transportation Research Board 87th Annual Meeting
  • Location: Washington DC, United States
  • Date: 2008-1-13 to 2008-1-17
• Date: 2008

Language

• English

Media Info

• Media Type: DVD
• Features: Figures; References; Tables;
• Pagination: 18p
• Monograph Title: TRB 87th Annual Meeting Compendium of Papers DVD

Subject/Index Terms

• TRT Terms: Construction projects; Cost estimating; Implementation; Planning and design; Programming (Planning); Project management; State highway departments; Systems analysis
• Uncontrolled Terms: Cost escalation; Cost management
• Geographic Terms: Minnesota
• Subject Areas: Administration and Management; Construction; Finance; Highways; Research; I10: Economics and Administration;

Filing Info

• Accession Number: 01088349
• Record Type: Publication
• Report/Paper Numbers: 08-1959
• Files: TRIS, TRB
• Created Date: Feb 25 2008 2:32PM