Improving Project Environmental Cost Estimates
Research Idea Scope
TERI Administrator Note (June 2007): Funded as NCHRP Project 25-25, Task 39, “Improving Project Environmental Cost Estimates.” Project completion date: October 2008.
Improvement of cost estimating practices and the tracking of estimates as they evolve is critical to greater financial accountability and more accurate project scheduling. Cost estimating refers to the processes used to predict the cost of a project at various points in the project development process. Estimate tracking is the ability to document changes in estimated project projects, and the reason for these changes, over time. For both elements, formal procedures should address five critical considerations:
defined process, and staff should follow a uniform approach in developing and
• Quality: All estimates should be as accurate as possible, developed through sound
estimating methodologies, and avoid leading to the perception of cost overruns in the
all available resources to help inform the cost estimating process.
• Accountability: To help establish an organizational culture where “estimates matter,”
all applicable staff must be held accountable for following established estimating
procedures and providing the most accurate estimates possible.
• Documentation: All estimates must be well documented to assist with accountability
and provide continuity between individuals responsible for specific projects.
Moreover, a key issue is developing an effective process for developing and refining cost estimates given a process that involves the public and other agencies in decision making. A framework for accurate cost estimation must recognize that changes in the scope of project are a natural part of a collaborative decision making process. The framework must anticipate these changes, and be able to present these changes in way that does not suggest that changes in scope or design are problems to be avoided.
phases of planning, project development, and project delivery.
b) Identify key milestones at which cost estimates are required and their uses (e.g.,
programming and budgeting).
c) Identify, through case studies and interviews with State DOTs, the problems with
current costing practices and methodologies.
d) Develop a project costing framework and guidance manual that facilitates use of
improved techniques appropriate at different phases of the integrated systems
planning and project development process and the project delivery phase. The
methodology should specifically address costing within a multi-agency, public
involvement process, where changes in the scope of a project are a natural part of the
process of being responsive to customers.
e) Test and refine improved project cost estimation methodologies and approaches via a
demonstration pilot program with at least two State DOTs.
f) Develop and execute a project cost estimating training program for transportation
agencies, built around the framework developed and refined in Tasks a) to e).
Urgency and Payoff
The final products of this research project will be a framework and guidance manual on cost estimating methodologies, as well as a training program for transportation agencies.
Interim Planning Activities for a Future Strategic Highway Research Program: Study 4 - Capacity, Transportation Research Board (2003)