Estimating the cost of new construction projects using an integrated, computer-based approach

Abstract

The availability of accurate conceptual cost estimates of construction projects is widelyrecognized as a key factor for project planning. However, estimating the cost of a project at thisstage is a difficult problem because of the great uncertainty of forecasting the cost when theinformation, the scope definition of the project and the time available are very restricted. Thispaper addresses these limitations using an approach based on the application of case-basedreasoning (CBR) and parametric estimating (PE) methodologies integrated in a computersystem (CASEST). The CBR is applied for modeling the project scope of a new project and isbased on the effective reuse of historical project scopes. The resulting project scope definitionserves as the fundamental input for the conceptual cost estimate. The second method isapplied to estimate the cost of the new project based on the resulting scope information andhistorical parametric estimating relationships that provide the quantities of work, and historicalcosts. For validation purposes, the system was tested in a construction company with actualdata from 17 historic building projects. The system produced a suitably detailed and accuratecost estimate for each of the tested projects. Furthermore, the project scope defined by thesystem allowed the estimation of the cost of a new project to be performed more easily andprovided a realistic work breakdown structure that can be used for different project planningpurposes. The proposed approach would help construction estimators to generate moreaccurate cost estimates in a timely and more efficient way.