Improved Construction Cost Estimating Procedures (PDFDrive)

Improved Construction Cost
Estimating Procedures
For Developing the PS&E Estimate at
WisDOT
WisDOT Project ID: 0657-45-12

CMSC: 2006 WO 1.2
Final Report
August 2007
Submitted to the Wisconsin Department of Transportation
Dr. Awad S. Hanna, PhD, PE

Gary Whited, PE
Ryan Menke
Construction and Materials Support Center

University of Wisconsin – Madison
Department of Civil and Environmental Engineering
Disclaimer
This research was funded by the Wisconsin Department of Transportation (WisDOT) and the
United States Department of Transportation (USDOT) in the interest of information exchange. The
material or information presented/published/reported is the result of research done under the
auspices of the Department. The content of this presentation/publication/report reflects the views of
the author, who is responsible for the correct use of brand names, and for the accuracy, analysis and
any inferences drawn from the information or material presented/published/reported. WisDOT and
FHWA (US DOT) assume no liability for its contents or use thereof. This
presentation/publication/report does not endorse or approve any commercial product, even though
trade names may be cited, does not reflect official views or policies of the Department or FHWA
(US DOT), and does not constitute a standard specification or regulation of the Department or
FHWA.
Construction Materials & Support Center 2

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Table of Contents
List of Figures................................................................................................................................ 6
List of Tables ................................................................................................................................. 6
SECTION 1 – PS&E ESTIMATE BACKGROUND ................................................................ 7
SECTION 2 – PROBLEM STATEMENT ................................................................................. 8
SECTION 3 – PROJECT SCOPE .............................................................................................. 9
SECTION 4 – STATEMENT OF WORK................................................................................ 10
SECTION 5 – RESEARCH DATA........................................................................................... 12
5.1 The Construction Cost Index........................................................................................... 14

5.1.1 Cost Index Background............................................................................................. 14
5.1.2 Estimating with the Cost Index ................................................................................ 16
5.1.3 Regional Use of the Cost Index ................................................................................. 19
5.1.4 Cost Index Items ........................................................................................................ 19
5.1.5 Cost Index Appropriateness ..................................................................................... 21
5.2 Mobilization....................................................................................................................... 22
5.2.1 Current state of Mobilization ................................................................................... 23
5.2.2 Speculation on Mobilization...................................................................................... 24
5.2.3 Mobilization Cap........................................................................................................ 25
5.3 Project Types & Time of Year......................................................................................... 26

5.4 Regions, Project Leaders Engineering Consulting Firms ............................................. 27
5.4.1 Regions & Project Leaders ....................................................................................... 27
5.4.2 Consulting Firms........................................................................................................ 28
5.4.3 Bid Item Track Records ............................................................................................ 28
SECTION 6 - INTERVIEWS .................................................................................................... 29
6.1 Regional Interviews .......................................................................................................... 29

6.1.1 Regional Estimating................................................................................................... 29
6.1.2 Statewide Historical Database .................................................................................. 31
6.1.3 Estimating Software & Tools.................................................................................... 31
6.1.3.1 Trns*port Estimator® Software....................................................................... 32
6.1.3.2 Bid Express .......................................................................................................... 33
6.2 State DOT Interviews ....................................................................................................... 34
6.3 Consulting Firm Interviews ............................................................................................. 35
6.4 Wisconsin Earth Movers Association (WEMA) Interview ........................................... 36

SECTION 7 – RECOMMENDATIONS................................................................................... 37
7.1 Estimating Process ............................................................................................................ 38

7.2 Trns*port Estimator® ..................................................................................................... 38
7.3 State Wide Historical Database ....................................................................................... 39
7.4 Construction Cost Index................................................................................................... 41
7.5 Mobilization Cap............................................................................................................... 42
7.6 Construction Risk ............................................................................................................. 43
7.7 Estimator Position............................................................................................................. 44
Appendix A - Bids Compared To Estimates 2000 - 2005 ........................................................ 46
Appendix B – Mobilization Plots 2000 - 2005........................................................................... 50
Appendix C – Project Work Type Codes ................................................................................. 55
Appendix D – Regional Interviews............................................................................................ 57
Appendix E – State Interviews .................................................................................................. 69
Appendix F – Consultant Interviews ........................................................................................ 74
Appendix G – Standardized Estimating Procedures............................................................... 81
Appendix H – Trns*port Estimator Procedures for Updating Unit Prices........................... 83
Appendix I – Bid Express Procedures for Selecting Unit Prices............................................ 91
Appendix J – Cost Index and Price Trends Example Report Format................................... 99
Appendix K – Construction Risk Identification Form.......................................................... 103
About Us: CMSC ...................................................................................................................... 106

List of Figures
Figure 1 – A summary of bids compared to estimates from 2000-2005 ...................................... 13

Figure 2 – Plot of bids more than 10% over the PS&E Estimate from 2000-2005 ...................... 14
Figure 3 –The WisDOT twelve month moving average Price Index plot .................................... 16
Figure 4 – The WisDOT twelve month moving average Price Index plot with trend lines ......... 17
Figure 5 - The Midwest Consumer Price Index plot..................................................................... 18
Figure 6 – Summary plot of mobilization bids from 2000-2006 vs. project size ......................... 23
Figure 7 – Bids compared to estimates in 2000............................................................................ 47
Figure 10 – Bids compared to estimates in 2003.......................................................................... 48
Figure 13 – Plot of mobilization bids in 2000 vs. project size ..................................................... 51
List of Tables
Table 1- WisDOT Construction Cost Index Items ....................................................................... 15

Table 2 - WisDOT Price Index items as a percent of total bid in each year................................. 19
Table 3 – Other State DOT Price Index items as a percent of total bid in 2006........................... 20
Table 4 – Weighted distribution of the WisDOT Price Index items............................................. 21
Table 5 – WisDOT Mobilization Payment Criteria...................................................................... 22
Table 6 – Yearly Average Mobilization Bids as a Percent of Total Bid by Project Size ............. 24
Table 7 – Other State DOT Mobilization Caps ............................................................................ 25
Table 8 – Percentage of Mobilization Bids More Than 10% of the Total Project Bid................. 26
Table 9 – Project Work Type Estimates within ±10% of Winning Bids for 2000-2005.............. 27
Table 10 – Percent of Estimates within ±10% of Bids by Regions and Month............................ 28
Table 11 – WisDOT Project Work Type Codes ........................................................................... 56

SECTION 1 – PS&E ESTIMATE BACKGROUND
Preparation of the engineer’s estimate is a critical component of the PS&E (Plans, Specifications,
and Estimate) process. Throughout the project development process several different
construction cost estimates of the project are prepared both for planning and program
management purposes. The final engineering estimate that is submitted prior to bidding is
referred to in this report as the PS&E Estimate. It is particularly important for the PS&E
Estimate to be as accurate as possible for both budgetary and contract management purposes.
The Bureau of State Highway Programs utilizes the PS&E Estimate to evaluate and monitor
progress towards meeting the Department’s annual letting program. Projects are added or
deleted to the program based upon the PS&E estimates. Inaccurate estimates lead to greater
fluctuation in the program and results in increased programming and engineering effort as
projects are added or deleted from the letting schedule.
The Bureau of Project Development relies upon the PS&E Estimate in making a number of
crucial decisions regarding the project bids, including:
• Correctness and suitability of the low bid
• Level of competition within all the bids received
• Determination if detrimental unbalancing has occurred within the low bid
• Appropriateness of a bid in single bid situations
• Examination of the unit bid prices for reasonable conformance with the estimate

In short, the PS&E Estimate forms the basis for either awarding the project to the as read low
bidder or rejecting the project and identifying another course of action to be pursued. Such
decisions are vitally important to the contracting community and the Department, thus it is
essential that the PS&E Estimate provide an accurate prediction of the bids and that the Bureau
decision makers have confidence that the estimate has been carefully and consistently prepared.
SECTION 2 – PROBLEM STATEMENT
Accuracy of the PS&E Estimate, as determined by comparing the estimate to the low bid
submitted by the contractor, has remained fairly consistent over the years. However, recently a
greater number of projects are being under estimated, i.e., the bid price exceeds the estimated
cost. By WisDOT policy, all bids more than 5% over the PS&E Estimate must be carefully
evaluated and all costs justified before awarding the contract. This review and justification
process is causing a great deal of work effort for both the Bureau of Project Development’s
Proposal Management Group and the Region’s project development personnel.
Recent experience has shown the bid prices are reasonable and the estimate is in error.
Explanations for this recent shift in underestimating construction costs include a construction
cost environment that is rising more quickly than in the past and the estimates are not
recognizing this inflation factor; a cost environment that has more risk than in the past and thus
contractors are adding contingencies to their bids (penalties, expedited schedules, escalating
material, and fuel costs); inexperience of new staff in preparing cost estimates; and lack of
understanding of the importance of the PS&E Estimate.

Preparation of the PS&E Estimate requires knowledge of the plans, specifications, quantities,
construction methods, materials, unique aspects of the project, and market conditions. The
Project Leader (PL) typically prepares the estimate as they have been involved in all aspects of
the project through the design process. Estimates can be prepared either on a cost basis or a
historical basis, with the historical basis almost universally used currently by WisDOT Regions
and consultants. While WisDOT prefers project leaders to utilize the Trns*port Estimator tool to
prepare the estimate, there is no requirement that this tool be used. In fact, there is no standard
method that is used throughout the Regions and a variety of personal cost data information and
techniques are being used to prepare the estimate. There is a feeling that those Project Leaders
that use Trns*port Estimator have more accurate estimates and are more likely to produce
estimates that fall within the ± 5% range of the actual bid price.
SECTION 3 – PROJECT SCOPE
The scope of this project involves reviewing the accuracy of past PS&E Estimates to determine
if a particular Region, Project Leader, or consulting firm consistently produces more accurate
cost estimates, interviewing those firms or persons that produce accurate estimates for best
practices, investigating the cost estimating practices of other state DOT’s and engineering
consulting firms, reviewing the current Construction Index to verify it captures the correct items
and if it could be utilized to provide inflation corrections at the time of bidding, review of the
Trns*port Estimator tool and developing guidance and training tools for use by Project Leaders;
developing recommendations for how Regions can improve the accuracy of their PS&E
Estimates; and investigating the use of statewide mandated tools for consistency and improved
accuracy.

SECTION 4 – STATEMENT OF WORK
This project involved seven distinct tasks.
Task 1. Project Management
A technical advisory group (TAG) was formed and provided oversight of the project. Four
meetings were held over the course of the study.
Deliverables:
• Meeting Agendas and Summaries
• TAG Correspondence
• Monthly Invoices and Progress Reports
Task 2
Task 2 examined the WisDOT bid summary data base and other bid summary reports for the last
two years to determine:
• If there are Regions, Engineering Consulting Firms, or individual Project Leaders that
have a particularly good track record in developing accurate PS&E Estimates
• If there are specific items that are routinely underestimated or other problem areas
• If there are specific types of projects that are more likely to have cost estimates that
are incorrect.
Task 3
Task 3 involved interviewing five other Department of Transportations to determine how they
prepare their PS&E Estimate, if their accuracy is better than WisDOT’s, and if they have
processes and procedures established that might be adopted by WisDOT. CMSC staff worked
with WisDOT to determine five states to be interviewed.

Task 4
Task 4 involved interviewing Project Development Staff from the five WisDOT Regions as to
their current practices of developing the PS&E Estimate. Questions were asked to capture their
current processes and identify problem areas they feel hinder them in developing accurate cost
estimates.
Task 4a
Task 4a is similar to Task 4, but it focused on those Regions, firms, or individuals that are
identified in Task 2 as being particularly good at developing their project PS&E Estimates.
Task 5
Task 5 reviewed the Trns*port Estimator tool to determine how it could be best used to develop
construction cost estimates in light of the findings from Tasks 2, 3, 4, and 4a. It is anticipated
that the Trns*port Estimator program will remain the tool of choice for the Department and a
significant amount of the budget is devoted to this task. The Department provided attendance at
a Trns*port Training Class for one CMSC staff person.
Deliverables:
• Guidelines, instructional materials, and “how to” procedures for inclusion in the
Department’s Facility Development Manual.
• Training materials for use by WisDOT staff or others to conduct cost estimating
training to WisDOT staff and consulting engineering firms.
Task 6
Task 6 evaluated the Construction Cost Index (CCI) currently used by the Department to
determine the inflation rate of highway and bridge construction. This task specifically looked at

the list of items currently used to calculate the index and determine if there are more appropriate
items for today’s construction activities.
Deliverables:
• Report on appropriateness of the current CCI
• Recommendations regarding cost items that make up the CCI
• Recommendations on how to convert from the existing CCI to a new CCI should
one be recommended.
• Suggested additional uses of a CCI
Task 7
Task 7 focused on development of a final report that summarizes the results and findings of the
previous tasks. Specific recommendations for WisDOT consideration are presented and the final
report will be published by CMSC with up to 10 copies delivered to the Department.
Deliverables:
• Final Project Report (Draft and Final) and Recommendations
SECTION 5 – RESEARCH DATA
The research data used for this project was obtained from the WisDOT Proposal Management
Section of the Statewide Bureau of Project Development. The initial scope of work suggested
CMSC review the past 2 years of WisDOT bid data, but in order to better analyze trends, bid tab
data for the three low bids from the first quarter of 2000 through the fourth quarter of 2005 was
extracted from the DOT database. All analysis was performed using the calendar year. The bid
tab data included: Contract ID, contract description, project ID, work type, county ID, county
name, region, winning/losing status, bid total, PS&E Estimate amount, item number, item
descriptions, item quantities, bidder’s unit prices, and PS&E Estimate unit prices. Construction
Cost Index data was also available from 1963 to the first quarter (Also calendar year) of 2006.

The bid data shows that 47% of the estimates produced by WisDOT and the consulting firms in
the past 6 years are within ±10% of the bids (Figure 1). WisDOT would like to have 75% of
projects within ±10% in order to meet performance goals.
Bids Compared to Engineer Estimates

2000-2005
90
Below ±10% Above
80
70
60
Frequency
50
40
30
20
10
0
%
0%
5%
%
0%
5%
0%
5%
0%
5%
0%
5%
0%
%
%
%
%
%
%
%
%
-5
45
10
15
20
25
30
35
40
50
-5
-2
-1
-1
-4
-4
-3
-3
-2
>
<
Figure 1 – A summary of bids compared to estimates from 2000-2005. Of the 2,242 projects bid during these years
there were 1,048 bids (47%) within ±10% of the estimate. There were 889 bids (40%) more than 10% below their
estimates and 305 bids (14%) more than 10% above their estimates.
The mean bid over the past six years is 5.9% below the estimate, however, the bid tab data has
confirmed that more bids are coming in above the PS&E Estimates in recent years; most notable
is 2005 where 25% of the projects bid were more than 10% over the estimates (Figure 2). From

2000 to 2005 there has been a noticeable shift of bids coming in higher than the PS&E Estimates.
Additional histograms (Figures 7-12) showing the distribution of projects bid above and below
the estimate from 2000-2005 can be found in Appendix A.
Percent of Bids More than 10% Over the PS&E

Estimate
30%
25%
Percentage (%)
20%
15%
10%
5%
0%
1999 2000 2001 2002 2003 2004 2005 2006
Year
Figure 2 – A plot showing the percent of bids more than 10% over the PS&E Estimate. In the last three years
there has been a sharp rise in the number of bids that are greater than the estimates.
5.1 The Construction Cost Index
5.1.1 Cost Index Background
A construction Cost Index (CCI), or Price Index (PI) as it is sometimes called, is used to show
how an industry is affected by inflation. The most current WisDOT CCI uses 1990 as its fixed-
base year to calculate quarterly (calendar based) indexes. This state wide index is calculated by
central office and is reported to the Federal Highway Administration.

The WisDOT construction Cost Index is calculated from the current weighted average unit prices
of a select sample of commonly used major bid items. The seven indicator items currently used
are listed in Table 1.
Table 1- WisDOT Construction Cost Index Items

Item Number Description
1. 205.0100 Common Excavation
2. 455.0105 Asphaltic Material
3. 460.1100 Asph.Conc.Pavt, Type E - 0.3
460.1101 Asph.Conc.Pavt, Type E - 1
460.1132 Asph.Conc.Pavt, Type E - 30X
460.1700 Asph.Conc.Pavt, Type SMA
4. 415.0090 Conc. Pavt. 9"
415.0100 Conc. Pavt. 10"
415.0110 Conc. Pavt. 11"
5. 502.0100 Structure Concrete
6. 505.0405 Reinforcing Steel
7. 506.0605 Structural Steel
The quarterly Cost Indexes are calculated using the same item quantities from the fixed-base
year, allowing an identical quantity of construction contracted in one period to be compared to
any other period that was calculated under the same fixed-base. The percent change in index
from one period to another is a measure of the percent change in material, labor, & equipment
costs, as well as overhead, and profit. Cost index trends can be identified to project future costs
for estimating and budgeting.

5.1.2 Estimating with the Cost Index
To evaluate the CCI, the bid tab data and central office index calculation spreadsheets were
analyzed. After review of the Price Index calculations and other literature on the history of the
Price Index, it was determined that the index is being calculated in a manner consistent with
conventional practice. Figure 3 is a plot of the WisDOT quarterly Price Index.
WisDOT Price Index

1990 Base Year = 100
Twelve Month Moving Average
240
220
200
180
Price Index
160
140
120
100
80
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
Figure 3 –The WisDOT twelve month moving average Price Index plot depicts the fluctuation and overall increase
in construction costs from 1998 through the first quarter of 2006.
A steady rise in costs is the expected result of inflation, but other market influences can result in
a few significant Price Index fluctuations. The sharp rise in Price Index from the fourth quarter
of 2003 to the first quarter of 2006 has a very strong correlation and corresponds to a sharp
increase in construction material prices. Figure 4 shows two trend lines: one using the Price

Index from 1989-2004 and the other for the fourth quarter of 2003 through the first quarter of
2006. The more recent trend line has an R2 statistic of 0.9747 that confirms the strong
correlation. The R2 statistic (0.9156) for the earlier period also indicates a fairly strong
correlation. From 1989-2004, price inflation has been fairly steady, making it ideal for
projecting future prices on a historical cost basis.
WisDOT Price Index

240
220
200
180
Price Index
160
y = 6.9468x - 13724 y = 26.211x - 52353
140 R2 = 0.9156 2
R = 0.9747
120
100
80
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
Figure 4 – The WisDOT twelve month moving average Price Index plot with past trend line and the stronger
correlation trend line from the fourth quarter of 2003 through the first quarter of 2006.
Inflation for the Consumer Price Index (CPI) in the Midwest Region is depicted in Figure 5.
Compared to the WisDOT Construction Cost Index, the Consumer Price Index increases at a
slower rate and is also less volatile. The difference between the sharp increase in prices from
2004 through 2006 in the CCI (Rate of 26.2 Index points per year) and the steady increase over

the same time period in the CPI (Rate of 4.0 Index points per year) may explain why more
estimates were lower than the bids. Recognizing a sharp rise in construction prices earlier can
help estimators adjust for inflation more accurately.
Midwest Consumer Price Index

1982-84 Base Year = 100
240
220
y = 4.0258x - 7883.7
R2 = 0.9981
200
180
Price Index
160
140
120
100
80
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Year
Figure 5 - The Midwest Consumer Price Index plot with trend line from 1989 through 2007 (US Dept. of Labor).
Since the construction Cost Index quantifies a general change in construction prices from a small
sample of items, comparisons between periods and projecting future prices will not depict true
costs. However, the construction Cost Index can be useful as a general guideline or for
preliminary budgeting and planning stage estimating even though it may not provide the
accuracy desired for the final PS&E estimate.

5.1.3 Regional Use of the Cost Index
The 5 regional interviews that were conducted confirmed that the CCI is not being used to
develop PS&E Estimates and there is little awareness that it exists. There was a general response
that a CCI would not be used even if instruction on how to apply it was provided. The regional
staff expressed that a state wide CCI would not be beneficial because of the significant
differences between regions. If a CCI was calculated for each region, they believed the current
bid tab data that is currently used to develop estimates would still provide better results. There
was a general consensus that a CCI would be better used as a budgeting tool.
5.1.4 Cost Index Items
As shown in Table 1, the current CCI is comprised of seven common items. Table 2 shows the
total cost of these index items as a percent of the total cost of all projects bid for that year.
Table 2 - WisDOT Price Index items as a percent of total bid in each year
Year Index Items as a % of Total Bid
2000 22.9%
2001 30.2%
2002 32.6%
2003 33.9%
2004 26.8%
2005 21.6%
2005* 27.0%
*Does NOT include Marquette Interchange
From 2001 to 2005 the Cost Index items account for 20-30% of the total bid. Since the CCI
items only make up approximately 30% of the items in a project bid it again reinforces that a

Cost Index can not realistically be used to prepare a final PS&E Estimate. Table 3 displays three
other state highway agencies (SHA’s) Cost Indexes as a percent of total amount bid in 2006.
Colorado has an unusually high amount of index items bid in 2006 as these items generally will
only make up about 30% of the total cost. The Cost Indexes for these DOTs are comprised of
the same seven main categories of items as the WisDOT construction Cost Index. However,
some of the other states do have more or less items within each category. Some of the item
differences include more types of excavation, the combination of asphalt concrete and asphaltic
material, thicker concrete pavements, and the addition of base aggregates.
Table 3 – Other State DOT Price Index items as a percent of total bid in 2006
State DOT % of Total Bid
Oregon 24.6%
Utah 33.9%
Colorado 48.4%
The bid tab data was reviewed to identify additional commonly used items that make up a
significant portion of the total amount bid. However, the data was inconclusive and did not
strongly suggest any items that should be added based on statistics. If additional items are added
to the CCI, the CCI with the original items would still have to be calculated for reporting to the
Federal Highway Administration.
The Price Index was also analyzed to determine the weighted distribution of the index items.
Breaking the Price Index down allowed the shift in construction items use to be observed
between the base year and some of the more recent years. Table 4 shows the break down of the

current Price Index base year and the average percentage of each item from 2000-2005. The
noticeable shifts in the distribution were increases in asphaltic material and asphalt concrete
pavement, with slight increase in common excavation and concrete pavement. Decreases in
distribution were found in structural concrete, reinforcing steel, and structural steel. Since there
is a significant shift in distribution of the index items, the current index will not accurately reflect
current construction trends. Thus, the data suggests the index is outdated and should be updated.
Table 4 – Weighted distribution of the WisDOT Price Index items

1990 (Base) 2000-2005
Index Item
% of Index Avg % of Index
Common Excavation 13.6% 17.3%
Asphaltic Material 8.5% 14.1%
Asphalt Concrete Pavement 14.8% 26.6%
Concrete Pavement (9",10",11") 13.3% 16.7%
Structural Concrete 27.4% 19.5%
Reinforcing Steel 8.8% 2.6%
Structural Steel 13.5% 3.2%
Cumulative Index Items 100.0% 100.0%
5.1.5 Cost Index Appropriateness
The current index has a fixed-base year of 1990, making the index more than 17 years old.
Based on literature review, it is recommended the base year of the index be updated
approximately every 10 years (Leonin, 1989). Updating the base year is necessary to recognize
changes in the types of construction and quantities of materials that are more commonly used in
WisDOT projects. Establishing a new base year (and back calculating several years of Price
Indexes) will produce more appropriate and accurate trends if the current market has

significantly changed since the last base year. To update the base year the quantities on the
WisDOT Price Index extraction spreadsheets must be updated to the quantities used in the
quarter that is desired to be the fixed-base. When establishing a base year, index item quantities
are established by taking the average of three years (The middle year is the desired base year).
Using the average of three years prevents the data from being skewed by discrepancies in
volume from year to year.
5.2 Mobilization
According to the 2006 Standard Specifications of WisDOT, mobilization (Item 619.1000) is
defined as, “the work and operations necessary to move personnel, equipment, supplies, and
incidentals to the project site and to establish all of the contractor’s offices, buildings, sanitary
accommodations, and other facilities necessary to work on the project. It also includes all other
work and operations whose performance is required, or for costs necessarily incurred before
beginning work on various items on the project site.” Payment of mobilization is performed
according to the state specifications criteria in Table 5.
Table 5 – WisDOT Mobilization Payment Criteria

Original Contract Completed Mobilization Paid out
5% 25%
25% 50%
50% 75%
75% 100%

5.2.1 Current state of Mobilization
WisDOT has expressed concern about a rise in the price of mobilization bids. The bid tab data
was analyzed to determine the amount of mobilization bid as a percent of the total bid for each
project. Figure 6 displays the mobilization bids for the years 2000–2006. Additional
mobilization plots (Figures 13-19) containing both winning and losing bids for 2000-2006 can be
found in Appendix B. All of the mobilization plots show a sharp rise in mobilization for project
under $2 million and several contain extreme outliers.
2000-2006 Mobilization - % of Total Bid

90%
80%
70%
60%
% of Total Bid
50%
40%
30%
20%
10%
0%
0 1 2 3 4 5 6 7 8 9 10
Project Size ($ Millions)
Figure 6 – Summary plot of mobilization bids from 2000-2006 vs. project size. Mobilization is calculated as a
percent of the total bid for both winning and losing bids. Notice outlier bids as mentioned in other plots.
The mobilization results were also broken down by project size to produce average mobilization
bids as depicted in Table 6. This table shows that the average amount bid for most project sizes
has experienced a gradual increase from 2000 to 2005. Most notable are the smaller project sizes

(<$100,000) that have experienced larger mobilization bid increases. In 2005 projects greater
than $10 million also experienced a rise in mobilization because of the Marquette Interchange
project.
Table 6 – Yearly Average Mobilization Bids as a Percent of Total Bid by Project Size
Project Size ($) 2000 2001 2002 2003 2004 2005
<= 50K 3.8% 9.6% 3.6% 8.9% 8.4% 17.1%
50K - 100K 7.5% 7.2% 8.6% 6.8% 6.2% 10.4%

100K - 250K 7.5% 8.3% 8.7% 6.7% 9.2% 7.2%
250K - 500K 4.8% 4.9% 6.6% 5.5% 5.7% 6.7%
500K - 1M 3.8% 4.4% 3.7% 4.2% 4.8% 5.6%

1M - 2.5M 2.3% 3.1% 2.7% 3.6% 2.9% 3.9%
2.5M - 5M 2.6% 3.2% 2.7% 3.3% 2.6% 3.6%
5M - 10M 3.0% 2.7% 2.1% 2.6% 2.7% 3.3%
> 10M 6.5% 6.9% 4.1% 2.1% 4.7% 10.1%
5.2.2 Speculation on Mobilization
Estimating mobilization with historical data that has large price ranges has been difficult for the
regional project leaders and consulting firms. The interviews performed revealed that many
individuals believe the contractors are not bidding mobilization under the conditions stated in the
state specifications. Instead they are putting more of their cost in mobilization which results in
lower unit prices for other items. The historical data will not accurately depict true construction
costs. Speculation as to why mobilization bids are high include: contractors putting risk items
such as penalties, lane rentals, fuel costs, and warranties into the mobilization item.

5.2.3 Mobilization Cap
Other SHA’s have specifications on how to bid mobilization. One method is to put a cap on
mobilization in order to limit the amount a contractor can bid based on a percent of the total
project cost. However, many of the states with caps on mobilization pay mobilization upfront or
much faster than WisDOT. Some state mobilization caps are listed in Table 7. Michigan’s
specification is unique because it allows the design engineer to decide what percentage of the
total bid the contraction can use for mobilization.
Table 7 – Other State DOT Mobilization Caps

State Cap (% of Total Bid)
Arkansas 5%
Illinois 3%
Indiana 5%
Massachusetts 3%
Michigan Variable
Nebraska 10%
New York 4%
South Dakota 25%
In order to evaluate how to apply a mobilization cap, the percentage of mobilization bids that
were greater than 10% of the total project bid were determined. The results that are found in
Table 8 show that the problematic project sizes are primarily less than $1Million. The data from
Table 8 included both winning and losing bids. From 2000 to 2005 there is a noticeable increase
in the number of bids with mobilization greater than 10% of the total project cost. In 2006 the
number of high mobilization bids dropped for all project sizes.

Table 8 – Percentage of Mobilization Bids More Than 10% of the Total Project Bid
(Contains both winning and losing Bids)
Project Size
Year
<500K 500K-1M 1-2 M 2-3 M 3-4 M 4-5 M >5 M
2000 25% 7% 4% 8% 0% 0% 15%
2001 26% 13% 6% 0% 0% 0% 9%
2002 36% 13% 4% 2% 0% 0% 2%
2003 26% 11% 6% 4% 5% 3% 1%
2004 36% 14% 4% 3% 0% 0% 4%
2005 33% 21% 12% 9% 8% 3% 4%
2006 23% 4% 0% 0% 0% 0% 0%
5.3 Project Types & Time of Year
Analysis was also performed on the bid tab data to determine if the time of year or any specific
project types have better estimating records. The data was broken down by month, quarter
(calendar), and project type. The data did not produce any conclusive evidence showing a
specific time of year or project type was estimated better. The percentage of projects within
±10% of the bid averaged 40-60% for the more commonly estimated project types (More than 50
projects of the same type estimated in last six years) under all of the analysis combinations. The
project types that were estimated less often are more likely to deviate from the bid by more than
10%. From 2000-2005, the only notable construction types that were commonly estimated and
had a history of more estimates falling outside ±10% of the bids were incidental construction
(Work type - K - 72% of all the projects), asphaltic surfacing (D - 63%), and general
construction with asphaltic surfacing (AD - 60%). See Table 9 for a general summary of the
project type performance. Appendix C contains the project code descriptions (Table 11).

Table 9 – Project Work Type Estimates within ±10% of Winning Bids for 2000-2005
Work Type Projects Bid Within 10% of Bid Ouside 10% of Bid
F 427 57% 43%
A 387 50% 50%
AF 357 57% 43%
K 234 28% 72%
D 213 37% 63%
AD 194 40% 60%
AC 122 56% 44%
AB 76 41% 59%
AK 54 54% 46%
U 51 47% 53%
H 48 19% 81%
C 16 13% 88%
B 13 31% 69%
ACF 8 63% 38%
ACK 7 43% 57%
I 7 43% 57%
ABF 6 33% 67%
AFH 3 - 100%
ADK 3 33% 67%
AE 3 33% 67%
AFK 3 33% 67%
AH 2 - 100%
ADE 2 100% -
FK 2 50% 50%
ACD 1 - 100%
ADF 1 - 100%
DE 1 - 100%
J 1 - 100%
AG 1 100% -
5.4 Regions, Project Leaders, & Engineering Consulting Firms
The scope of work for this report included the identification of regions, project leaders, and
engineering consulting firms that have good estimating track records.
5.4.1 Regions & Project Leaders

The WisDOT project tracking data does not record which project leader is responsible for
producing each estimate, but the bid tab data did allow the project data to be analyzed by region.
The data showed that 41% - 52% of the estimates produced by the regions are within ±10% of
the bids. Only 25% - 32% of estimates were within 10% and larger than the bids. Time of year
(by month) was also analyzed to see if regional accuracy improved during certain times of the
year. The data did not reveal any trends since each region’s track record is relatively similar.
None of the regions were identified as having a significantly better track record of estimating.
Summary results of regional data by month between 2000 and 2005 are shown in Table 10.
Table 10 – Percent of Estimates within ±10% of Bids by Regions and Month

Percent Percent
Month of all of all
Estimates Estimates
Region
within >Bid and
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec ±10% of within
Bids 10%
NC 54 53 48 44 53 41 56 38 40 60 34 54 48 30
NE 52 50 50 41 39 37 44 62 30 22 33 22 41 25
NW 45 60 45 58 59 39 56 65 71 56 44 57 52 32
SE 38 26 30 55 34 48 49 54 45 20 56 42 42 26
SW 43 48 51 39 45 52 49 33 61 50 63 57 49 30
5.4.2 Consulting Firms
Research also revealed that the project tracking data of WisDOT does not record information on
the consulting firms or project leaders that are responsible for estimating each project. Analysis
could not be performed to identify consulting firms or project leaders that have better estimating
track records.
5.4.3 Bid Item Track Records

Individual bid items were extracted from the bid tab data to be analyzed when they followed the
80-20 rule (80% of the project cost usually comes from 20% of the items). Using the 80-20 rule
criteria to identifying items that were significantly under or over bid did not yield any useful
results. Most items had similar track records of estimating, having a similar proportion of the
item bids within ±10% of the engineer’s item bid estimate. The problematic areas mostly
consisted of items that were not bid frequently enough to have a strong bid tab history,
mobilization items, and special (SPV) items.
SECTION 6 - INTERVIEWS
The cost estimating project scope included interviews with the five WisDOT regional offices,
five other state DOTs, and four consulting firms that are used by the WisDOT regions.
6.1 Regional Interviews
Project development staff personnel from the five WisDOT regions (NW, NC, NE, SW, and SE)
were interviewed to capture current practices and identify areas that would help the regions
improve the accuracy and efficiency of developing estimates. Details from the individual
regional interviews can be found in Appendix D.
6.1.1 Regional Estimating
Estimating in the regions is performed by the project leaders. Since project leaders lack regular
exposure to construction cost trends and only create one or two estimates a year, they expressed
some lack of confidence in the estimating process, especially newer and less experienced staff.
Estimates are created using historical bid tab data and the Construction Cost Index is not used.

The regions prefer the estimates to be prepared in the regions because their project leaders are
familiar with the project details and unique local aspects of material availability and geophysical
conditions.
While regional estimating is preferred, all of the estimating staff said they have difficulties
estimating earthwork, hot mix asphalt, mobilization, and SPV items. An interest in capping
mobilization was expressed, and one region mentioned a lack of competition for asphalt bids was
resulting in highly volatile bid prices from project to project. The Construction Cost Index is not
used by the regions primarily because the staff was unaware it existed and did not know how to
incorporate it into the final PS&E estimating process. The regional staff felt that applying a state
wide index would not help improve accuracy and would only be good for budgeting purposes.
The regional staff did provide some suggestions on how to improve the accuracy of estimates. A
main concern is estimates are not being reviewed before they are submitted due to a lack of
resources. The regions would like to have a person designated to review estimates who has a
general knowledge of item pricing to validate the assumptions made and check for errors and
unreasonable prices. Another suggestion was to combine the asphalt items. Currently hot mix
asphalt and the liquid binder are bid separately, but since WisDOT no longer does its own mix
design, combining the items in to one would help simplify the estimating asphalt work. The
most widely expressed suggestion is to provide estimating guidance in the FDM and have
updated training that correlates with the FDM procedures.

6.1.2 Statewide Historical Database
All of the WisDOT regional offices utilize the state wide bid tab data to create estimates. Hard
copies of the bid tabs are used by three of the five regions to identify the most current bid item
prices for their estimates. This process requires good knowledge of past projects to select the
best bid tabs to pull and is extremely slow and tedious.
One of the regions has developed a more efficient method of using the historical bid tab data.
This region maintains an electronic database that organized the bid tabs by region, county, and
year in PDF format. Supplementary information is also added to the bid tabs including project
type, length, etc. Past projects are selected based on comparative supplementary information and
viewed using Adobe Acrobat. The search function (by item number, name, etc.) in Adobe
Acrobat is used to scan the bid tab data of a selected project to identify item prices more quickly
than using hard copies.
Another region has developed an extensive personalized Microsoft Excel database. Personnel
who input the bid tab data into the database label projects with additional informational
categories that aid in searching for projects with similar characteristics. Some of the labels
include a more descriptive project type, location, size, and age of bid. Sorting and filtering
features available in Excel allow personnel to quickly search for bid item information of all
projects within the region. This database allows estimators to see the quantities and a range of
prices that have been bid for each item in the past few years.
6.1.3 Estimating Software & Tools

WisDOT currently provides the regions with the Trns*port Estimator software to develop
estimates using the state historical bid tab data. The central office provides training sessions on
how to properly use the Estimator software to create estimates. WisDOT also has a limited
number of Bid Express accounts for use by the regions. The regional interviews have discovered
a desire for a searchable historical database.
6.1.3.1 Trns*port Estimator® Software
The Trns*port Estimator software has the user input information about a new project to be
estimated and uses statistical methods to generate item prices from the historical bid tabs. The
factors that are accounted for in the software generated prices are: county, location, time of year,
quantity, etc. Estimator also contains a feature that allows users to view graphs that depict the
relationship between quantity and price for each item. After an estimate is complete, the
Estimator software exports estimates to Trns*port PES for submission to central office.
The interviews with the regional offices have revealed that few people actually use Estimator to
create estimates. Only one region has staff that regularly uses Estimator, and most regions have
one or two people that know how to use Estimator, but do not actually use the program to create
their estimates. The regions that do not use Estimator create estimates in a Microsoft Excel
worksheets or directly in Trns*port. The reasons regional staff members do not use Estimator
include:
1. Staff does not believe price data is updated as frequently as it could or should be updated.
2. The Quantity-Price graphs do not show how many data points were used to calculate the
relationship.

3. The staff is not able to see the age and type of project the software generated prices are
based on.
4. Lack of training and knowledge on how to use Estimator properly and efficiently.
5. Difficulties exporting estimates from Estimator to Trns*port.
6. Estimates are lost during the export process.
7. Double entering every item during the export process.
The personnel that do use Estimator to develop estimates generally do not accept the software
generated prices. Estimator is viewed only as a starting point and the prices are adjusted
manually for most items using bid tab data from hand picked projects.
6.1.3.2 Bid Express
Bid Express is commercial product that provides a searchable database of WisDOT (and other
DOTs) bid tabs through an online website. The database is updated monthly and maintained by
an external company. The web based database allows users to easily sort and search for item
prices by name, item number, county, quantity, price, contract id, and letting date.
The regional interviews have revealed that very few people are aware of Bid Express. Only one
regional office has used Bid Express, and they have found it relatively quick and easy to use. All
of the regions have expressed an interest in having access to a database like Bid Express that is
easy to search for item prices. WisDOT only has a few Bid Express accounts available for
regional use and they do not provide training on how to use Bid Express.

6.2 State DOT Interviews
Estimates can be created using historical bid tab data or by using a cost approach. It is generally
accepted that a cost based approach will produce more accurate estimates; however, this process
also requires more work and time in addition to a strong understanding of construction methods
and processes. Details from the individual state interviews can be found in Appendix E.
The state DOTs interviewed for this study were Georgia, Iowa, Minnesota, & Missouri. These
states develop their estimates using historical bid tabs, cost based historical data, or a
combination of both. Attempts were made to contact additional states that were recommended
by WisDOT to fulfill the scope of five states as stated in task 3. Since each of the states
interviewed were found to have similar estimating procedures, and nothing significantly new was
learned, the Technical Advisory Group (TAG) reduced the scope to four state interviews. The
regions or districts of these states are responsible for generating quantities for the estimate and
may prepare a preliminary estimate. The estimating process is then adjusted and completed by
centralized estimating groups whose sole responsibility is to prepare estimates. Most states use
historical bid tabs to estimate the minor items (They generally use a philosophy that 80% of the
items are minor and they only make up 20% of the cost) and use the cost approach for the more
significant items (remaining 20%) that make up 80% of the cost.
The centralized offices do not use consultants to develop estimates, but they do have separate
estimating divisions in central office for bridges and structures. None of the states interviewed
used the Trns*port Estimator software because they create estimates directly in Trns*port. Some
states have used Bid Express and stated it was simple and easy to use. Some states use other

commercially available software (OMAN Systems) that provide customizable estimating
spreadsheets with historical bid tabs and historical cost data packages.
The state interviews also revealed that Cost Indexes are not used for creating final estimates.
Furthermore, some states believe that letting more projects annually by creating smaller bid
packages improves the quality of the estimates. It was also recognized that other states reject 1-3
(or more) projects every month for being over the engineering estimate and they are relet at a
later date. Contractors were sometimes found to reduce their bids when projects were relet.
6.3 Consulting Firm Interviews
The interviews with the consulting firms revealed their estimating process are very similar to the
WisDOT regions. Three consulting firms were interviewed and the Technical Advisory Group
(TAG) concurred additional interviews were not necessary. Details from the individual
consultant interviews can be found in Appendix F.
The project leaders for the consulting firms develop estimates using historical bid tabs that are
hand picked based on experience and knowledge of prior projects. The bid tabs are from either
their own data base, or requested from central office. Estimator is used to create initial unit
prices and then adjustments are made based on the three low bidder bid tab prices. Bid Express
is not used by any of the consultants that were interviewed. Most of the project leaders’ time is
spent on 20% of items (bid ticket items that make up 80% of the project cost) and on the special
items that do not have an extensive bid history. Some firms have separate estimating groups for

bridges and these estimates are then incorporated into the estimate package. Estimates are
reviewed by senior level personnel before they are submitted to WisDOT.
The WisDOT construction index is not used by the consulting firms to produce estimates.
However, they do track some other construction indexes for a general guide on how much to
inflate unit prices. The consulting firms also have difficulty estimating earthwork and
mobilization. Mobilization estimates are based on a percentage of the total project or historical
bid data. Access to a searchable data base that contains project descriptors and unique project
information is desired to develop estimates more efficiently.
6.4 Wisconsin Earth Movers Association (WEMA) Questionnaire
From the interviews with the regions and consulting firms, estimating earthwork was a common
difficulty. In order to find guidance on estimating earthwork, members of the Wisconsin Earth
Movers Association (WEMA) were contacted and several earthwork estimating tips were
gathered.
When contractors receive a set of plans, the critical items they focus on include the job overview
plan, linear schedules, and the miscellaneous quantities set up by stage. Haul distances are
determined to see if trucks or scrappers are to be used as well as locations of borrow/aggregate
sources and waste sites. If hauls are over a mile dump trucks are generally used, but if haul
distances are less than a mile scrappers or articulated trucks can be used.

Unit prices for earthwork will vary between jobs and the most common sources of variance are
whether the project takes place in an urban or rural setting and if the road is closed or staged. To
develop the best estimates it is suggested to categorize earthwork as scraper dirt, truck off-road,
or truck on road. Prices will also be influenced by material availability and proximity to the
project. If excavating hard rock an additional 20% should be added for equipment wear and tear.
For estimating common earthwork the general assumption that can be followed is 10% of the
total cost for fuel, 30% of the cost for labor, and 10% of the cost for insurance.
The risk items that should be adjusted for include soil type, traffic presence, weather conditions,
and if disposable materials like gravel, sand, etc. are involved. Expedited schedules with stiff
interim penalties in urban areas should be evaluated closely in addition to whether or not excess
excavation can be disposed of along the project. As a back up, using RS Means to price
earthwork was suggested.
When using historical data to estimate common excavation, the estimator must make sure the
historical project data did or did not have the ASP5 fuel cost adjustment provision. Assuming
the contractor uses a lower unit bid price for the individual qualifying earthwork items, the
estimated unit prices could be inaccurate if the ASP5 factor is not considered in the unit prices.
To do this correctly, a designer would need to add up the qualifying individual items of their
project and the comparison project and see if the ASP5 requirement applies to both. See FDM
procedure 19-15-90 for details on using ASP5.
SECTION 7 – RECOMMENDATIONS

After review of the WisDOT bid data and conducting interviews to identify the current
estimating practices of the WisDOT regions, consulting firms, and other state DOTs, the
investigative team has reached the following conclusions.
7.1 Estimating Process
Currently estimates are prepared by the regions using historical bid tabs. Although estimating
using a cost based approach would produce more accurate estimates, the change over from
historical bid tabs to cost based estimating would be costly and time consuming to implement.
With strained resources, establishing a centralized estimating unit is also unlikely at this time. It
is recommended to continue estimating using historical bid tab data in the regions rather than
constructing a centralized estimating unit. The belief is that a centralized estimating unit would
not have the level of knowledge that regional project leaders currently have on past projects and
existing regional conditions the influence estimates. A standardized estimating guidance tool
should be provided to improve consistency in the estimating process. A suggested tool that can
be incorporated into the Facilities Development Manual (FDM) for training and aiding WisDOT
estimators can be found in Appendix G.
7.2 Trns*port Estimator®
It is recommended to use the Trns*port Estimator computer interface as a part of the
standardized estimating process. This software utilizes project information input at the
beginning of an estimate to statistically generate unit prices from WisDOT bid tabs that are

updated quarterly by the Bureau of Project Development. The statistical models incorporates
project location, size, region, time of year, and item quantity to generate the unit prices from the
bid tabs, but users are not able to view the number of data points or the types of projects used in
the statistical model. The graphical relationship of price and quantity available in Estimator
allows a user to view the volatility of each item and may be useful for adjusting the unit prices.
It is recommended to use Estimator as a staring point in the estimating process for generating
unit prices of all items. The special and major bid items should then be updated by the regional
staff by using hand selected bid tab data. While all the unit prices could be analyzed, it is felt
that the Trns*port Estimator prices are adequate for the lower cost items. Again, the goal is to
concentrate on the 20% of the items that make up 80% of the project cost.
It is recommended to have mandatory Trns*port Estimator training for all estimating staff since
most individuals interviewed did not feel comfortable with and/or did not know how to use the
software. Standard procedures for using Trns*port Estimator can be found in the FDM (Sections
19-5-1 though 19-5-55). Supplemental procedures on how to manually update unit prices can be
found in Appendix H and more detailed procedures can be found in the Trns*port Estimator
Training Guide.
7.3 State Wide Historical Database
A centrally managed or privately outsourced state wide historical database with electronic search
options is necessary to improve the efficiency of developing estimates for WisDOT. The
management of WisDOT bid tabs currently varies between the five regions. Some maintain their

own databases in Microsoft Excel or PDF format, while others simply keep hard copies in
binders. Searching through hard copies of bid tabs is tedious and extremely inefficient. While
electronic PDF searches and a Microsoft Excel database may prove to be more efficient than
hard copies, a standardized state wide database that can be searched easily would be more
efficient and simplify the estimating process.
There are several commercially available products/services that accept state bid tabs and make
them available in an electronic database. The commercial products are updated by a third party
company who charges a license fee for user accounts. The users are able to search the database
by item name, item number, region, etc. The data can be easily sorted by quantity, date, etc. and
is in a simple to view format. The investigative team has looked at Bid Express and found it
easy to use and efficient. The only draw back is that PMP project descriptions are not included
in the database. Using Bid Express may still require knowledge of past projects if a user wants
to identify items from projects with similar construction characteristics. There are a limited
number of Bid Express accounts currently available for regional use. As a minimum, WisDOT
should expand the availability and use of this estimating tool by increasing the number of Bid
Express accounts. Procedures for using Bid Express can be found in Appendix I.
The state DOT interviews revealed that a product called Bid Tabs Pro by OMAN Systems is also
an electronically searchable database that contains both historical and productivity cost data.
The investigative team did not have a license to test this product, but it was highly recommended
by the states interviewed. The OMAN Systems product is costly (which is why it was only used

by states with centralized estimating units) and also did not have project descriptors attached to
the items in the database.
It is recommended to eliminate the individual regional databases and establish a standardized
statewide historical database that is centrally managed for consistency and accuracy. The
database should have an electronic search function and incorporate the PMP (or more descriptive
format) project descriptors. Since the commercial databases reviewed do not incorporate
WisDOT project descriptor, a separate database should be developed (in Microsoft Excel or
other format) that allows estimators to search for project descriptions when project IDs are
known or identified in the historical database.
7.4 Construction Cost Index
The WisDOT construction Cost Index has a current base year of 1990. Leonin’s FHWA report
recommends the state index be updated every 10 years to account for changes in construction.
Since it has been more than 10 years since the Cost Index was updated, it is recommended to
update the base year of the Cost Index. It should be noted that the year 2005 should not be used
as an index base year because of the unique aspects of the Marquette Interchange project that are
not a good representation of common construction in the state. Since the base index is calculated
using quantities from a three year average (includes year before and after the desired base year),
it is recommended to use 2003 as the new base year to avoid the unique activities of the
Marquette Interchange. It is also recommended to add crushed aggregate base course to the
index as well as prestressed concrete girders. A Cost Index that represents the current cost trends
of the market can be used by estimators to help project costs and identify trends.

Another recommendation is to generate individual price trend graphs for the items in the Cost
Index and other items (Fuel prices, etc.) for distribution to the regional estimators. Having a
monthly or quarterly price trend update can help estimators recognize price trends that should be
incorporated in their estimates. An example format for such a report is provided in Appendix J.
It should be noted that when the base year of a Cost Index is updated, prior year Cost Indexes
can be back calculated to provide a Cost Index trend. If additional items are incorporated into
the Cost Index, the original Cost Index with the original items may still need to be calculated for
reporting to the Federal Highway Administration.
7.5 Mobilization Cap
The number of projects with mobilization bids larger than 10% of the total project cost has
increased from 2000-2005. Some mobilization bids were seen as high as 75% of the total project
cost. On the contrary, in 2006 only a few projects had mobilization bids higher than 20% of the
total project cost. A standard mobilization bid generally does not exceed 10% of the total project
cost in the majority of construction projects across the country. While there may be
circumstances where higher mobilization unit prices are understandable, the investigative team
recommends capping mobilizations at 15% of the total project cost for projects bid less than or
equal to $1million and 10% of the total project cost for projects greater than $1million. Capping
mobilization will eliminate the extreme variance in mobilization bids that make estimating
difficult for projects under $2 million. It will also force contractors to bid unit prices that reflect
a true representation of the construction cost and help estimator produce more accurate estimates.

7.6 Construction Risk
Understanding construction risk is necessary to more accurately recognize project costs. The
investigative team has developed a risk identification worksheet attached in Appendix K to assist
in identifying possible risks that can impact a project’s cost. This worksheet is to be completed
from the designer’s point of view in order to identify when project costs may be elevated because
the contractor has added contingency costs. The construction risk worksheet is incorporated into
the standard estimating procedures found in Appendix G.
7.7 Regional Estimator Liaison Position
It is recommended that each Region Office identify an Estimator Liaison position. The person
filling this role should be experienced in preparing highway construction project estimates, using
the Trans*Port estimating products, and the estimating process of WisDOT. This position would
be available to assist the Region’s Project Leaders in preparing project estimates and be a
Regional resource for current market and cost trends.
It is expected that the five Regional Estimator Liaison’s would meet or teleconference
periodically with the Statewide Bureau estimating staff to discuss cost trends, problem areas, and
identify when process improvements are needed.
A full-time position in each Region is not warranted, but an initial 20% FTE allocation of time to
this activity in each Region seems reasonable.

7.8 Statewide Bureau Estimator Position
The investigative team recommends an Estimator position to be created in central office. The
primary responsibility of this position would be to act as a resource to the regional estimators.
This position would require adequate knowledge of construction and the estimating process in
order to provide assistance and guidance to the regions. Such a position could help regional staff
follow a more structured format and process in preparing estimates and promote estimate
consistency. The position could also assist in keeping the regional personnel up-to-date on
market conditions.
The centralized estimator position would also have additional responsibilities.
1. Calculate the construction Cost Index and individual item Cost Indexes.
2. Identify cost trends and inform the regions with monthly reports (Indexes & Trends).
3. Conduct training on estimating for regional estimators.
4. Assist the Regions in the review of large or difficult project estimates before final
submission.

References
Colorado Department of Transportation Website. http://www.dot.state.co.us/. Site accessed

September 1, 2006.
Leonin, Cecilio A., (1989). “FHWA Bid Price Index – 1987 Base Year.” Internal Report.
Oregon Department of Transportation Website. http://www.oregon.gov/ODOT/. Site accessed

September 1, 2006.
U.S. Department of Labor Bureau of Labor Statistics Data. http://data.bls.gov. Site accessed
June 1, 2007.
Utah Department of Transportation Website. http://www.udot.utah.gov/. Site accessed

September 1, 2006.
Wisconsin Department of Transportation Website. http://www.dot.wisconsin.gov/. Site

accessed June 1, 2006.
WisDOT Standard Specifications for Highway and Structure Construction (2006, Annotated)

Appendix A
Bids Compared to Estimates
2000 – 2005

Bids Compared to Estimates - 2000
16
Below ±10% Above
14
12
10
Frequency
0
0%
%
%
0%
5%
5%
0%
5%
0%
5%
0%
5%
0%
%
50
-5
10
15
20
25
30
35
40
45
-5
-4
-4
-3
-3
-2
-2
-1
-1
>
<
Figure 7 – Bids compared to estimates in 2000. Of the 347 projects bid in 2000 there were 159 bids (46%) within
±10% of the estimate. There were 145 bids (42%) more than 10% below their estimates and 43 bids (12%) more
than 10% above their estimates.

18
Below ±10% Above
16
14
12
Frequency
10
0
0%
%
0%
5%
5%
0%
5%
0%
5%
0%
5%
0%
%
-5
50
10
15
20
25
30
35
40
45
-5
-4
-4
-3
-3
-2
-2
-1
-1
>
<

18
Below ±10% Above
16
14
12
Frequency
10
0
0%
%
5%
0%
5%
0%
5%
0%
5%
0%
%
0%
5%
50
-5
10
15
20
25
30
35
40
45
-5
-4
-4
-3
-3
-2
-2
-1
-1
>
<

22
Below ±10% Above
20
18
16
14
Frequency
12
10
0
0%
%
0%
5%
5%
0%
5%
0%
5%
0%
5%
0%
%
-5
50
10
15
20
25
30
35
40
45
-5
-2
-4
-4
-3
-3
-2
-1
-1
>
<
±10% of the estimate. There were 223 bids (53%) more than 10% below their estimates and 26 bids (6%) more than
10% above their estimates.

16
Below ±10% Above
14
12
10
Frequency
0
0%
%
%
0%
5%
5%
0%
5%
0%
5%
0%
5%
0%
%
50
-5
10
15
20
25
30
35
40
45
-5
-4
-3
-3
-2
-2
-1
-1
-4
>
<
20
Below ±10% Above
18
16
14
12
Frequency
10
0
0%
%
5%
0%
5%
0%
5%
0%
5%
0%
%
0%
5%
50
-5
10
15
20
25
30
35
40
45
-5
-4
-4
-3
-3
-2
-2
-1
-1
>
<
±10% of the estimate. There were 67 bids (20%) more than 10% below their estimates and 85 bids (25%) more than
10% above their estimates.

Appendix B
Mobilization Plots
2000 – 2005

2000 Mobilization - % of Total Bid
90%
80%
70%
60%
% of Total Bid
50%
40%
30%
20%
10%
0%
0 1 2 3 4 5 6 7 8 9 10
Figure 13 – Plot of mobilization bids in 2000 vs. project size. Mobilization is calculated as a percent of the total bid
for both winning and losing bids. Notice outlier bids on projects below $1Million.

90%
80%
70%
60%
% of Total Bid
50%
40%
30%
20%
10%
0%
0 1 2 3 4 5 6 7 8 9 10
for both winning and losing bids. Notice outlier bids on projects below $2Million and in the $7-$8Million range.

90%
80%
70%
60%
% of Total Bid
50%
40%
30%
20%
10%
0%
0 1 2 3 4 5 6 7 8 9 10
for both winning and losing bids. Notice outlier bids on projects below $1Million and around $7Million.

90%
80%
70%
60%
% of Total Bid
50%
40%
30%
20%
10%
0%
0 1 2 3 4 5 6 7 8 9 10
for both winning and losing bids. Notice outlier bid in $4-$5Million range.

90%
80%
70%
60%
% of Total Bid
50%
40%
30%
20%
10%
0%
- 1 2 3 4 5 6 7 8 9 10
for both winning and losing bids. Notice outlier bids under $3Million.

90%
80%
70%
60%
% of Total Bid
50%
40%
30%
20%
10%
0%
- 1 2 3 4 5 6 7 8 9 10
for both winning and losing bids. Notice outlier bids below $1Million and in $4-$5Million range.

2006 Mobilization - % of Total bid
90%
80%
70%
60%
% of Bid Total
50%
40%
30%
20%
10%
0%
0 1 2 3 4 5 6 7 8 9 10
for both winning and losing bids. Notice outlier bids below $1Million.

Appendix C
Project Work Type Codes

Table 11 – WisDOT Project Work Type Codes
CODE TABLE CODE VALUE CODE DESCRIPTION

------------------ ------------------ -------------------------
PWRKTYP A GENERAL CONSTRUCTION
PWRKTYP AB GENERAL CONSTRUCTION AND GRADING
PWRKTYP ABC GEN CONST AND PCC PAVEMENT AND GRADING
PWRKTYP ABD GEN CONST AND GRADING AND ASPH SURFACE

PWRKTYP ABF GEN CONST AND GRADING AND STRUCTURES
PWRKTYP ABK GEN CONST AND GRADING AND INCIDENTAL
PWRKTYP AC GENERAL CONSTRUCTION AND PCC PAVEMENT

PWRKTYP ACD GEN CONST AND PCC PVMT AND ASPH SURFACE
PWRKTYP ACF GEN CONST AND PCC PVMT AND STRUCTURES
PWRKTYP ACK GEN CONST AND PCC PVMT AND INCIDENTAL

PWRKTYP AD GENERAL CONST AND ASPHALTIC SURFACING
PWRKTYP ADE GEN CONST ASPH SURF GRAVEL OR CR STONE
PWRKTYP ADF GEN CONST AND ASPH SURF AND STRUCTURES

PWRKTYP ADK GEN CONST AND ASPH SURF AND INCIDENTAL
PWRKTYP AE GEN CONST AND GRAVEL OR CRUSHED STONE
PWRKTYP AF GENERAL CONST AND HIGHWAY STRUCTURES

PWRKTYP AFH GEN CONST AND STRUCT AND BRIDGE PAINTING
PWRKTYP AFK GENERAL AND STRUCT AND INCIDENTAL CONST
PWRKTYP AG GENERAL CONSTRUCTION AND RAILROAD

PWRKTYP AH GENERAL CONSTRUCTION AND BRIDGE PAINTING
PWRKTYP AJ GENERAL AND BUILDING CONSTRUCTION
PWRKTYP AK GENERAL AND INCIDENTAL CONSTRUCTION

PWRKTYP B GRADING
PWRKTYP C PORTLAND CEMENT CONCRETE PAVEMENT
PWRKTYP CK PCC PAVEMENT AND INCIDENTAL CONSTRUCTION

PWRKTYP D ASPHALTIC SURFACING
PWRKTYP DE ASPHALT SURFACE AND GRAVEL/CRUSHEDSTONE
PWRKTYP DK ASPHALTIC SURFACING AND INCIDENTAL CONST

PWRKTYP E GRAVEL OR CRUSHED STONE
PWRKTYP F HIGHWAY STRUCTURES
PWRKTYP FH HIGHWAY STRUCTURES AND BRIDGE PAINTING

PWRKTYP FK HIGHWAY STRUCTURES AND INCIDENTAL CONST
PWRKTYP G RAILROAD ROAD AND BRIDGE
PWRKTYP H BRIDGE PAINTING

PWRKTYP I STREET AND AIRPORT LIGHTING
PWRKTYP J BUILDING CONSTRUCTION
PWRKTYP K INCIDENTAL CONSTRUCTION

PWRKTYP NONL NON LET PROJECT

Appendix D
Regional Interviews

NW WisDOT Region Meeting Summary Report
Eau Claire, WI - August 31
Interviewers: Gary Whited & Ryan Menke
What the NW Region uses to prepare the engineer estimates:
The NW Region of WisDOT maintains its own historical database of bid tabs to develop
engineer estimates. Similar project types are identified from the most recent lets and then hard
copies of the bid tabs are gathered to identify unit prices. If bid items are not found in similar
projects within a county, bid tabs from other projects in the region or entire state are used. Using
hard copies of project data is a cumbersome process.
One of the project managers of the NW Region has developed an Excel spreadsheet that all
estimates are created in. The estimating spreadsheet imports data directly into Trns*port and
prevents data entry errors. Importing directly in to Trns*port updates every item field which
makes updating changes before PS&E much easier.
Mobilization is estimated by looking for projects with a similar scope of work. Generally
guessing is used to determine a unit price, but project characteristics such as staging, move-ins,
site location, plant location, and bidder are factored in. One person attending the interview uses
an average between 2% and 4%.
Special items are tracked separately in a database. If the database does not contain an item,
phone calls are sometimes made to manufacturers or industry representatives.
Each project manager prepares the estimate for their project. There is a pavement engineer who
will review the pavement items if asked. Also, the PS&E coordinator will look over estimates on
a macro scale and make a judgment on whether or not the total estimate seems reasonable.
New employees start on construction and then go through design before estimating. They have a
design engineer as a mentor and are always with someone for on the job training.
What the NW Region finds difficult/does not use:
The primary problem of NW Region is that the staff preparing the estimates do not prepare them
often enough to feel comfortable. They don’t know how to sort or analyze the past project bid
data in a manner that makes developing estimates easy. The NW Region also has difficulty with
estimating asphalt. They find a wide range in the bid item prices and it seems to be depended
upon the level of competition available at the time the project is bid. Furthermore, lump sum
items and removing structures also pose estimating challenges as well as subs and primes are
using each other for bidding.

Furthermore, the NW Region does not use Estimator. The staff producing the estimates does not
have an opinion on how hard or easy the software is to use; they just do not use its. However,
the PS&E coordinator may sometimes use Estimator as a check tool, or for unusual items.
The NW Region has not heard of Bid Express, however, they have expressed interest in it.
The Cost Index also is not used by the NW Region. They were unaware of its existence and do
not know how to use it. They do not see the significance of the quarterly Cost Index because
they desire shorter time periods for analysis. Rather, they view it as a tool better suited for gross
budgeting or preliminary estimates, not the PS&E estimates.
The 4 to 7 months between estimate submission and the let date have also been problematic for
selecting unit prices.
What would help the NW Region:
The NW Region would like a list of the companies that are bidding their asphalt projects. As
stated above, the NW Region finds wide fluctuations in the asphalt unit prices depending upon
the level of competition. Knowing the number of prospective bidders would allow them to make
last minute cost estimate adjustments and more precisely predict the expected unit prices. They
also feel that WisDOT should not publicize who has obtained bidding documents as a possible
strategy for increasing the amount of competition.
An additional source of help would be to provide the regions with a report that justifies
problematic items. The report should show the high and low differences broken down by project
as well as any state or regional trends that have developed.
It was also suggested to consider talking directly with contractors on their estimating procedures.
Specifically looking at what influences how they bid projects and reasons for price variances.
Other proposed ideas include capping mobilization and reducing the number of bid items. Any
recommendations that are made should be put in the FDM for training. The FDM manual is
where they currently look for additional help. Subsequently, any suggestions need to have a
means of improving from a local focus.
Other Information:
The NW Region is not in favor of moving away from historical estimating. Possibly
incorporating how contractors bid some items into their training program could help provide
better insight. Escrowing bid documents on larger projects for review and insight could also help
with claims.

NC WisDOT Region Meeting Summary Report
Wisconsin Rapids, WI with Rhinelander personnel – October 9
What the NC Region uses to prepare the engineer estimates:
The North Central Region of WisDOT uses historical data to estimate projects. They obtain the
historical data from the state’s bid tabs on the web and print off hard copies to search for
individual items. The Wisconsin Rapids office uses Estimator as a starting point and they get
good prices for the commonly used items. However, Estimator is not trusted for most other
items. The Rhinelander office inputs directly into Trns*port, but the software is more complex
so they limit its use to a few experts. The Rapids office was the first to use and learn the
Estimator software well and they were fairly confident in using it, but software version conflicts
were frustrating.
The state bid tabs required estimators to have a strong local knowledge to estimate projects
accurately. The offices maintain three ring binders for the regional bid tabs that contain the top
three bids of each project. The binders are indexed to show project type and the Rhinelander
office breaks the bid tabs down by county. The most recent letting results are used to develop
estimates and price updates are done on the major items. Estimating requires a substantial
amount of time, especially if staging is involved.
There is 4-6 months between submission and letting. Few individuals expressed any difficulty in
updating after an estimate was submitted, but most do not really update. There is more of a push
for the 90% estimate which is the last time prices are adjusted.
On letting day they look at the results to compare the differences between their projects and the
bid submissions.
What the NC Region finds difficult/does not use:
The state Cost Index is not used by the NC Region because they feel the regional prices differ
significantly and bid histories will provide more accurate numbers. Typically a 3-5% increase is
used to bring prices up to date.
The NC Region is not confident that their estimator prices are being updated as often as they
should or could be updated. Therefore, people have elected to look up the bid prices after the
change over to the new version of Estimator in 2000.
Bid Express is not used by the NC Region, but they have expressed interest in the searchable
format that the software uses. They are concerned that Bid Express does not provide adequate
information on project types to aid in the item/price selection.

The most difficult items to estimate are the SPV items and mobilization. They are concerned
that mobilization is only for the prime contractors and if mobilization is capped, they fear the
contractors will put more money into the unit prices. Higher mobilization bids have been seen
for warranty jobs.
Earthwork is also difficult to estimate. They have difficulty determining how to estimate if
borrow or fill is used in addition to where (staging) and how the work is performed.
The NC Region does not review their consultants work even though they feel the consultants do
not spend much time and effort on their estimates because their responsibility ends after their
estimates are produced.
What would help the NC Region:
The NC Region would like to have a searchable database available in Excel, Access, or other
software format. Currently estimators rely on other employees in the office that are a good
source of specific county data for direction or help. They would like to have access to bid tabs
for neighboring counties of other states because they have projects along their borders that could
benefit.
Mobilization estimating would also help the NC Region. They would like to see a chart, updated
monthly or quarterly, that provides a general guideline for mobilization for various project sizes.
They would also like to see central office establish a method of identifying short term trends in
prices.
Currently projects are not reviewed for accuracy. They would like to have someone with
experience and knowledge to have the responsibility of reviewing projects and checking for
problem areas in the estimates.
Other Information:
The NC Region is skeptical about centralized production/cost-based estimating because the

assigned group would not have the required local knowledge on pricing that varies around the
state. They also believe base aggregates should be added to the CCI.

NE WisDOT Region Meeting Summary Report
Green Bay, WI – August 25
What the NE Region uses to prepare the engineer estimates:
The North East Region of WisDOT uses historical data to prepare engineer estimates. As
quantities for a project develop, the estimate is built in a Microsoft Excel worksheet and refined
approximately every 6 months.
The NE Region maintains its own historical database of lowest bids in PDF format which is
updated monthly. The historical quantity and pricing data is made available by the central DOT
office, but the NE Region adds supplementary information that includes length of project, type,
etc. The search function in Adobe Acrobat is used to scan the database which is broken down by
state, region, and year to find more accurate comparison data. Generally, data for an entire
county is pulled and comparable project types and quantities from past projects are identified.
An average or educated guess is then used to determine the unit prices. If an item is not found
within the region a state wide search is performed. Consideration of distances and material
shortages are also used to adjust the unit prices. Overall, the focus is mainly on the larger items
of the estimate which are greater than 3% of the total cost.
SPV items are also estimated using historical data. However, many SPV items do not have
sufficient historical data and therefore require phone calls to manufacturers for pricing.
Mobilization is estimated as a percentage of the total bid. Smaller projects use a larger
percentage, but adjustments are made based on the amount of mobility required and complexity
of the project.
Once estimates are complete, not much effort is given to review for accuracy. When consultants
are used to prepare estimates, only the major items are reviewed to ensure they are reasonable.
Project managers are then responsible for justifying the bids.
Staff training in the NE Region involves an initial presentation of the available estimating tools
by the project development staff. Thereafter, supervisors act as mentors and provide on the job
training.
What the NE Region finds difficult/does not use:
The NE Region has a few people that have access to the Trns*port Estimator software.
However, it is rarely used mainly because the pricing info in Estimator is not as recent as the NE
Region’s personal database. Estimator also only uses a price and quantity relationship to
determine unit prices. The regional database allows the people developing estimates to use their
better judgment by choosing unit prices based on other situational factors.

Another objection to the use of Estimator is the limited number of accounts. They only have 2
accounts for their region which prohibits work on multiple estimates during the same time.
When uploading estimate data from Estimator to Trns*port many problems can occur. Double
submission of items and lost connections make use of the program undesirable. The NE Regions
recommends to make the estimate in Trns*port rather than Estimator.
The NE Region also does not use the Cost Index provided by the central office. They have not
seen the index reports and do not know where to find them. When asked if they would consider
using the Cost Index if it was made available, the NE Region expressed concerns due to regional
differences. They believe factors such as skilled labor shortages and productivity/quality issues
that vary between the regions make the use of a state wide Cost Index inadequate for most
projects.
Estimating earthwork has also been especially difficult for the NE Region. Bidder unit prices
have had an extreme variance.
The primary problem the NE Region expressed was the bid review process. Most people
developing the estimates are only concerned about getting the bids done and in on time without
much effort for checking accuracy. The 3-6 month time lag between the PS&E and let dates is
also problematic for projecting price variances that may occur after the estimate is submitted.
Updating bid prices after submission is also a hassle. It is cumbersome to update through the
central office since the estimates are locked down.
What would help the NE Region:
The NE Region recommends naming items with better consistency, especially since some item
numbers have changed. This would aid their bid data search in Adobe Acrobat. It was also
suggested to provide separate bid items for day shifts and night shifts.
Another recommendation of the NE Region is to develop a centralized means of helping with

SPV bid items. They would like to see people involved with the project to help develop the
estimate. Breaking down the SPV items into time and material would also be beneficial.
Consultants in the NE Region have highly recommended Bid Express as an alternative method
for finding unit prices. It is their understanding that Bid Express has more recent data and is
much easier to search and sort items. If possible, they would like to have access to an adequate
number of accounts and a manual on how to use the features of the program. They prefer to have
a presentation on how to use the program features over just a manual.
More frequent and local training on the available estimating tools is also desired. This will help
with worker turnover and refresh the minds of those who do not prepare estimates on a regular
basis. Again it is preferred to have an on screen walk-through for training. A presentation given

by Steve Krebs earlier in the year was also found to be helpful because it was informal, question
and answer session.
A general list of “Rules of Thumb” for estimation would also be beneficial. Compile tips that
would simplify estimating procedures so they can be shared with estimators. It was also
suggested to look at trends between unbalanced and balanced jobs. This concern is mainly
directed at the quantities and pricing of earthwork.
Lastly, the NE Region would like to see a compilation of lessons learned. A report that justifies
lessons learned on projects would help estimators adjust in areas where repeated problems occur
Other Information:
It was expressed that some contractors may be putting their risk in mobilization because it is
guaranteed money upfront. When increasing the amount of mobilization bid, contractors must
lower the unit prices of the other items to maintain a competitive bid. Increasing the
mobilization price and reducing other unit prices can be done by contractors to provide a
competitive advantage, e.g. to possibly take advantage of quantity variations or to reduce overall
product costs.
The NE Region is opposed to the use of a non-historical based estimating procedure due to the
lack of knowledge and understanding on how to develop estimates in this manner. They believe
it would make regional estimating more difficult, but it could be better for analyzing “What if”
project scenarios and factors.

SW WisDOT Region Meeting Summary Report
Madison, WI and teleconference with La Crosse Office – September 18
Interviewers: Awad Hanna, Gary Whited, & Ryan Menke
What the SW Region uses to prepare the engineer estimates:
The SW creates estimates with historical data from previous bid lettings. They pull hard copies
of recent projects of similar type and search for unit prices by hand. They search for projects of
similar size, location, and county. As an estimator in the SW Region, knowledge of project
history is necessary to be able to find the similar projects.
Estimates are created in an Excel spreadsheet and input directly into Trns*port. A couple staff
personnel use estimator, but don’t rely on the unit prices. A percentage is used for the smaller
items. The La Crosse office has access to Tou’s Excel workbook that was developed by a
project manager in the NW Region. However, they do not use the feature that exports that data
directly into Trns*port. The La Crosse office also uses Bid Express which they highly
recommend. A standard 3% inflation rate is used but selected items were given a more extreme
percentage by Steve Krebs. Neither office has a formal bid review process, but some major
items are looked over.
Standardized SPV item unit prices are found from similar projects. Other special item prices are
determined through manufacturer contact. Mobilization is also estimated using historical data
from similar projects, but a percentage basis is also considered.
New staff in the office is given one on one attention during a walk through of the entire
estimating process. No other training is provided.
What the SW Region finds difficult/does not use:
The Cost Index is not used by the SW Region. They were unaware of its existence, but they
suggest regionalizing the index to make it more plausible. Over or under shooting estimates due
to price volatility is still a major concern. Estimator for the most part is also viewed as an
unnecessary step that does not produce reliable unit prices.
The project managers develop their own estimates, but they are uncomfortable without the
continuing exposure to regular estimating. The 4-6 month time lag from PS&E to let also poses
difficulties due to price volatility and escalation.
Other estimating difficulties include excavation (especially rock), asphalt concrete, and asphaltic
material. The separation of the 2 asphalt components seems unnecessary and makes estimating
more difficult because there are 2 variables with potential variances.

What would help the SW Region:
The SW Region suggests regionalizing the Cost Index. Since there is significant differences
between regions, dividing the Cost Index may make it more accurate and trustworthy.
Mobilization capping may force the right prices at the right times, but there is a concern that
contractors may just take the maximum possible mobilization.
The Lacrosse office does have access to Bid Express and they highly recommend it. Some have
used Bid Express as consultants and believe training and licenses for other DOT offices would
be beneficial. The Madison office would like to explore the possibility of using Bid Express.
Any updates or suggestions for preparing estimates should be put in the FDM. However, the
FDM would need to be kept up to date and distributed. A website with update postings is
suggested.
Other forms of help would be to identify and label the SPV items in order to make the estimating
process easier. It would be beneficial if they could be sorted and tracked in a database for easy
reference.
It was also suggested to attach a general project description to the letting tabs that also provides
more project information that could be displayed using a rating system.
As mentioned before, the La Crosse office uses Tou’s Excel workbook to create estimates. Since
they do not use the export feature that was written into the workbook, training on how to easily
export all the data into Trns*port rather than hand enter every item individually would save them
a significant amount of time.
Other Information:
The SW Region is opposed to centralized estimating because the central staff will not “know”
the projects. They may not fully understand the staging or other unique factors that may be
included in some projects. It also does not seem economical.

SE WisDOT Region Meeting Summary Report
Waukesha, WI - August 30
What the SE Region uses to prepare the engineer estimates:
The SE Region builds their estimates in Trns*port using a personally maintained regional
database. The Microsoft Excel database shows a break down of each project including location,
size, type, age of bid. A range of prices and quantities is displayed as well as a frequency factor
that helps select unit prices. The database is used for estimating change orders and has also been
shared with consultants. Other factors that are considered when estimating are the location of
gravel pits, urban vs. rural setting, night work, and closed/open road construction. Big ticket and
lump sum items are given more attention; where as smaller items are estimated using a
percentage.
Mobilization is also estimated based on the data in the historical database. The type of project
and amount of required staging are also considered.
The historical database also has a separate page that is used for special items. If items are not
found in the database they contact suppliers. Small items are not given much consideration
because they have an insignificant impact on the total estimate.
After estimates are complete a semi-retired employee who maintains the database is sometimes
available to provide a second opinion on some of the items. The staff likes to have their
estimates reviewed, but it is time consuming and is not done as much anymore.
The new staff to the region gain experience through on-the-job training. They work under a
project manager or leader before moving on to estimating. They use the database, but
engineering judgment is still required to produce accurate estimates.
What the SE Region finds difficult/does not use:
The SE Region uses Estimator for initial estimates, but does not use it for the PS&E estimates.
They believe their personal database has better information that can be used to select and tweak
unit prices. Bid Express is also not used.
The Cost Index is not used because the staff was not aware it existed. If it was made available to
them, they would most likely continue not using it because they do not believe it can accurately
project every item. They currently use 3% inflation for every item, but items such as asphalt,
steel, and fuel have been very difficult to estimate. Often the locations of asphalt plants produce
large unit price variations.

High mobilization bids have impacted the unit prices of other items in the historical database. A
poor understanding of how projects are staged has also made estimating difficult.
The 5 to 6 months between estimate submission and letting has also posed a challenge for items
with fluctuating prices.
What would help the SE Region:
The SE Region would like to have a summary report prepared by the central office that addresses
the bid difference issues. They also suggest having a regional person that reviews all estimates.
Furthermore, capping mobilization would help produce better unit prices for the other bid items.
Training guidance on how to use and from what point to apply the Cost Index as well as a report
that displays the pricing trends for major items would help the SE determine if they should use
the index.
A tool is needed that lays out the estimating process in steps. For the SE Region this process
would ideally involve computer training. A list of things to consider for each item and lessons
learned would be beneficial.
Lastly, after this research study is completed, the SE Region would like us to go back to each of
the regions and report our findings.

Appendix E
State Interviews

State: Missouri
Date: 09/25/06 by phone
Interviewee: Travis Koestner
The MoDOT has 10 districts that perform preliminary estimates and PS&E estimates. The
districts use software called “ESTIMATE 2000” that relates prices back to other jobs for
analyzing current projects. The preliminary estimates are then submitted to the central office
where they are refined for the final estimate. The major items such as grading and paving are
estimated on a cost basis using a commercial software package called OMAN Systems. The
remaining minor items are estimated on a historical basis. The OMAN product they use is called
Bid Tabs Pro. It is easy to query bid items but it is costly which is why it is only used by the
central office. The software is versatile by allowing the users to develop their own estimating
worksheets. They do not use Estimator or Bid Express
There is a separate division in the central office that does only the bridge projects. They use both
a historical and cost estimating approach. MO also uses consultants for estimates, but central
office still reviews and adjusts the final estimates.
A state wide Cost Index is not used, but they do have an index for fuel costs and for asphalt
binder. Since projects are estimated years before they are let, an increase of 2-4% is used each
year.
There are concerns about the time between the final estimate and time of letting. They tend to
reject and relet projects to get better prices - on average 1-3 projects per month. In the past year
over 50 projects were relet. During relet contractor input on design and construction is also
considered.
Mobilization is estimated on a cost basis. Estimators look to see which items are subcontracted
out and the typical mobilization cost is between 4% and 10%.

State: Georgia
Interviewee: Gene McKissick
Georgia has 7 districts that create preliminary estimates. They use cost based estimating for the
big ticket items. The estimates are then sent to the central office to be refined using the 80-20
rule. The 20% of items are estimated on historical basis. Earthwork is estimated by lump sum.
The designers develop their own estimates and they feel their estimate is accurate. Therefore,
they relet an average of 25% of projects each year.
The commercial product, OMAN Systems bid tab data, is highly recommend for historical
estimating. They also use Bid Express. Bridges are estimated in central office only that is in a
separate office. All training of new employees is on the job following a mentor.
Georgia does track a Cost Index; however, it is not used for estimating. Consultants are also not
used.
Mobilization is bid as a percent of the total contract cost and overhead and profit are distributed
across every item. Once estimates are complete they are submitted to an Estimating Committee
that reviews estimates and bids and then provides recommendations for changes if necessary.

State: Iowa
Interviewee: Roger Bierbaum
The state of Iowa does all of their estimating in their central office. The regions generate
quantities from the plans and then five personnel in the central office develop the estimates. The
central office team of estimators is comprised of senior level technicians so there is a low
turnover.
They let $500 million annually with 800 contracts. Their philosophy is to let more, smaller
projects because they believe they will get more competitive bidding.
One person in central office is designated to create new bid items to ensure consistency is
maintained. They use Trns*port to create estimates directly in PES. Their estimates are based
on 100% historical data. They only adjust 10% of computer generate unit costs and don’t spent a
lot of time developing their estimates. Some personnel use Bid Express to find additional
historical data.
Their success rate is better than 50% within +/- 10%. The rule of thumb they follow when
creating estimates is to estimate for the Third lowest bidder. Bids are reviewed after letting and
they are infrequently rejected.
Mobilization payouts are staged, but if mobilization is bid more than 10% of the total contract
price, it is paid out at end of project in lump sum only. Average mobilization bids are around 5%
of the total cost.

State: Minnesota
Interviewee: Nancy Sannes
In Minnesota, the districts develop initial estimates and they are refined and finalized by a
centralized estimating group. The centralized group is comprised of three full time individuals
that use cost based estimating for the major items. The remaining minor items are estimated
using historical data. Estimating training is basically on the job training.
Estimates are developed using the cost sheets in Trns*port CES. Labor rates are updated yearly
and they do not use Estimator. Minnesota believes that using cost based method is easier to
evaluate bids and adjust for inflation. The centralized group is also more informed on current
construction prices. On average they spend between 4 hours and 2 weeks estimating each project
depending on the size and complexity.
Mobilization is estimated based on staging, necessary facilities, and project size. It is estimated
historically and is usually around 3% - 4% of the total project cost. They are experiencing a rise
to around 5%. If mobilization is bid above 5%, contractors do not receive the money upfront,
and receive mobilization payout after 80% of the project is complete.
Bid Express is not used for estimating, but the system is used for bidding.
A Cost Index is used to adjust for inflation, especially for multi-year projects. The items
included in the index are: excavation, reinforcing steel, structural steel, bituminous pavement,
concrete pavement, and structural concrete.
The districts are involved in a bid review process where recommendations are accepted. The
review process is used to look for risks and identify unbalanced bids.
Annual letting totals between $200 and $225 million. Bid rejection average 4 or 5 projects every
year due to materially unbalanced bids.

Appendix F
Consultant Interviews

Firm: A
Interviewer: Gary Whited
The firm is aware of the WisDOT Construction Cost Index and they also track the ARTBA Cost
Index to get a sense of construction cost trends. They do use these indexes to bring the historical
unit prices they get from bid tabs into today’s dollars.
Their process is to first look at the statewide average prices, then look at the bid prices from
similar projects statewide. They look at the three low bidder’s prices, not just the low bid
because those sometimes can have games being played.
They depend upon their experienced project managers to know of or remember similar projects
to the one they are currently working on. They then request the bid tabs from WisDOT for those
projects or go to the WTBA web site.
It is then a hand search process to look at unit prices from all of these and determine a valid unit
price for the estimate.
They spend 80% of their time on 20% of the items – i.e. really focus on the big ticket items.
They also spend time on the special items where there may not be bid history. When there is no
bid history they will put together their own estimate using a cost basis trying to estimate
productivity, labor, materials, and equipment costs. Similar they feel to how a contractor would
do it.
They estimate mobilization based upon a percentage of the total project cost. Different
percentages are used for different types of projects.
In New Mexico, where they have worked, that state used a capped mobilization because it gave a
better reflection of unit prices. New Mexico has done it both ways (bidding actual with a cap
and a set percentage) but have settled upon just setting a fixed percentage. Their experience is
that they liked the capped bid for mobilization.
They do use Estimator to get the statewide average unit price. They do not use Bid Express.
They rely heavily on the experience of their project engineers to know of similar projects and
then request the bid tabs. This works well and they do not have problems getting the bid tabs.
They have developed a series of spread sheets to assist their project engineers in preparing the
estimate. They have a person who keeps these spreadsheets up and reviews them with the
project managers for any changes before they start estimating a project. He is the “go to guy” for
the estimating questions.
Estimates are reviewed by senior level people in the firm before they are submitted to WisDOT.

The biggest problem for them is estimating earthwork. In SE Wisconsin prices are so dependent
upon waste site availability and its location. Same for borrow. Location can add trucking costs.
For bigger rural jobs they will prepare a cost based estimate for earthwork looking at labor,
equipment, haul distances, etc.
The biggest item affecting cost estimating accuracy in their opinion is devoting the appropriate
amount of time to it and thinking through the issues. You can’t just throw it together at the end.
They have concerns about creating too easy of a data base to use as it can take away from
thinking through the issues that will affect the estimate.

Firm: B
They were unaware of the WisDOT Construction Cost Index. As managers of the local program
they used to submit data on quantities and bid prices to the Department, but they did not know
what for. They do not use any Cost Index. They try very hard not to use historical bid data more
than a year old. If, as a last resort, they have no other data available they will take older data and
inflate it at 2 – 3% per year.
They do not do any cost bases estimating. Everything they do is based upon historical prices.
They do have someone who downloads the WisDOT bid tab information monthly and they put it
on a data base and make it available firm wide for project teams to use. All bridge estimates are
done by the Bridge Group and fed to the Roadway group for incorporation into the final
estimate. The Bridge Group keeps hard copy of bid tabs of bridges that are of interest to them
for use in future estimating.
They first identify similar projects to the one they are working on. Most important is to find
projects with similar quantities then in a similar location. They try and find 3 or 4 projects
(enough that they are comfortable in the price) and then enter the bid data on a spread sheet to
come up with a unit price for their project.
To help identify similar projects they go back and review old monthly ads and the project
descriptors.
They do make use of Estimator. They will use it at about the 60% design stage to come up with
a preliminary unit price for the items. They were complementary of the system and felt the data
was fairly good now that it was updated quarterly. They noted it was cumbersome to use and
generated lots of paper. Some in the firm continued to use Estimator throughout the process and
updated quantities & prices in that system. Other designers tended to build the estimate on a
spread sheet and then enter it into Estimator at the end.
The Bridge group uses Estimator, but is cautioned that smaller jobs are not going to get the same
prices as shown in Estimator. They also have a “validation program” for bridges that they use on
the local program. Input bridge length, width, number of abutments, etc. and it then calculates
quantities and a total price. They have good luck with this and it is fairly close. It is a good
starting point for the engineer as they start the design process. They forwarded a copy of the
spreadsheet. [GCW: This might be a good concept to try and develop where a simple spread
sheet could give an estimate to validate the final cost estimate or quantity. WisPav used to do
something similar for pavements.] It also identifies typical bid items used on a bridge project.

Each design team and Project Manager builds their own estimate. They have a QC/QA process
where a peer reviews the total package, including the estimate - most likely a senior level person
in the firm. They stress the importance of the estimate and spend a lot of time developing it.
They do not have any manuals or “how to” guides for the firm. They train new employees by
mentoring and on the job training.
For quantities: at the 30% stage they try and estimate the quantities for the major quantities that
will impact cost. This is never more than a dozen items but always includes: earthwork,
structures, pavement, and base course. At this point they use a lot of cost/mile or a % of
construction cost for items. At the 60% stage they refine the quantity numbers they already have
and then add more items like drainage (number of pipes, etc). This continues to the 90% stage
where traffic control and other items get put in.
For Roadway they feel earthwork is the hardest to estimate. Quantities they can nail down but
never seem to know about the bid price. Concrete pavement unit prices can very a great deal and
are a problem. For the Bridge Group, it is mobilization and other lump sum items like removal
of structures. They feel contractors are putting more and more items and risk into the
mobilization.
For mobilization they try and find a similar project and use a similar as-bid percentage, then they
modify based upon project conditions. They don’t spend a lot of time on this as it is so variable
and just not worth it. They felt capping mobilization would help them estimate it and might keep
contractors from putting money here when they know a quantity bust has occurred on the plan.
Correctly estimating the cost for items with small quantities is another problem area, but they
have little impact on the total bid.
They do not use Bid Express.
They have observed that prices do vary depending upon the time of year let. Lowest prices tend
to be for projects let between Dec. and March. They will make adjustments in their estimate for
the time of year the project will be let.
They would like to see a bid tab data base that is more global (i.e. would contain multiple years
of bid data) and have more search capabilities. They also suggested that WisDOT classify
projects on the bid tabs. Possibly an alphanumeric code: A= Large Urban PCC paving job,
B=Large Rural Grading, etc. This would help them filter out the bid tabs they did not need to
look at. Right now it is rather time consuming to find comparable projects.
They also spend a lot of time going back and reviewing the bid prices vs. what they used in the
estimate. It helps them keep up on the trends and improve.

Firm: C
They are not aware of a WisDOT Construction Index and they do not use any other Cost Index
or inflation factor to adjust historical cost data to current dollars. They prefer to use historical
bid data that is no more than 3 or 4 months old.
This firm does not estimate using a cost base approach and exclusively use historical bid data to
develop their estimates.
They use to print out bid tabs and keep a hard copy for reference, now individual project leaders
might keep hard copies of their own projects but they mostly rely upon the WisDOT statewide
bid tabs for their information. They are in a PDF format that allows them to search by items.
They do not have or keep their own data base for bid information.
The majority of their project leaders develop their estimates using Microsoft Access. They tend
to start putting together the list of bid items when the plan is 50% complete. When they are done
with the estimate they then give it to one person who keys the information into Estimator.
Reasons for this are: a) due to expense they only have one license, b) Estimator is hard to learn
and you need up-front knowledge to use while Access is easy, and c) it provides a check if the
bottom line from Estimator matches the totals from the original Access tabulation.
They do rely on Estimator however to give them a starting point or first step for the cost of an
item. They then search the statewide bid tab data base using the item number trying to find
prices where the quantities are similar to the project being worked on; they refine this by looking
at projects in the geographical area the project is in. Finally they adjust the unit price as needed
based upon the characteristics of their project.
Estimates are reviewed as part of a QC process where senior people in the firm review the
estimates before being sent. The amount of review tends to be dependent upon the experience
level of the project leader. The review focuses on the major items of work.
They do not use Bid Express.
The hardest thing they find to estimate is mobilization. They tend to assign a percentage (2 –
3%) of the total project cost to mobilization and then adjust up if there are numerous stages.
However, they feel they have been missing mobilization badly recently. They believe there is
merit to having a capped mobilization. It would make it easier for them and more likely to get
the real price of the unit items that way.
A big help to them would be a more searchable data base where it would be easier to identify
projects with similar quantities and in the same geographical areas. Particularly useful would be

better descriptions of the projects so they could get a sense of how the project was built and
restraints so they could judge if the bid prices were applicable to their project.
Also, they suggested having a more refined statewide average unit price listing. This listing
could be done by geographical region, or rural vs. urban, or bridge vs. roadway, etc.
Another helpful feature would be a brief summary of unique situations by counties. For
example, if no base course material is available in a county, having that identified would help
them to know to adjust prices since they work statewide and are not that familiar with every
situation.
They did not feel a refined Cost Index would be helpful in preparing the PS&E estimate but it
might be more useful when developing the scoping or preliminary design estimate.

Appendix G
Standardized Estimating Procedures
for
Developing the PS&E Estimate at WisDOT

Standardized Estimating Procedures for Developing the PS&E Estimate at WisDOT
1. Review plans to identify project staging
2. Identify and note unique aspects of the project
3. Determine if Common Excavation has ASP5 fuel cost adjustment provision (FDM 19-15-90)
4. Complete Construction Risk Identification Form (See Appendix K)
5. Follow FDM procedures for uploading project information and quantities into Trns*port Estimator (FDM
procedures begin at Section 19-5-1)
6. Generate statistical unit prices for all items in Estimator
7. Identify large cost items and other items that can significantly impact project cost (80-20 Rule)
8. In Estimator, adjust the unit prices of items that are large cost, can have significant impact, and are
common SPV using one or a combination of the following:
a. Estimator Procedures for updating unit prices (Appendix H)
b. Commercial historical database (i.e. Bid Express – Appendix I)
i. Search for unit prices by item name, item number, project ID
ii. Develop unit prices from projects with similar characteristics (adjust for inflation)
c. PDF Bid Tabs from central office in Adobe Acrobat
i. Download files from Central Office
ii. Identify several recent projects with characteristics/staging that is similar to current project
iii. Use search function to identify unit prices of items in selected projects
1. Search by item name, item number, etc.
2. Note quantities of items
iv. Develop unit prices base on data gathered (adjust for inflation)
9. Identify the SPV items that may not have sufficient historical bid tab data and assign a unit price based on
similarly used items in the bid tabs or develop a cost-based unit price where material, labor, and equipment
cost are estimated based on production rates.
10. Make additional price adjustments in Estimator:
a. For common excavation by using historical projects that include (or do not include) the ASP5 fuel
cost adjustment provision
b. Based on cost trend reports generated by the Statewide Bureau Estimator
c. To account for staging and differing earthwork conditions
11. Review estimate for accuracy and make adjustments that appropriately recognize the risks identified in the
Construction Risk Identification Form
12. Submit estimate to the Statewide Bureau Estimator for final review if estimate is for a high cost or major
project
13. Export estimate from Trns*port Estimator to Trns*port PES following the procedures in the FDM

Appendix H
Trns*port Estimator Procedures for Updating Unit Prices

Trns*port Estimator Procedures for updating unit prices
The WisDOT Facilities Development Manual (FDM) currently contains basic procedures on
how to use the Estimator Software in sections 19-5-1 though 19-5-55. The additional procedures
listed below are supplementary to the FDM procedures and contain the basic steps required to
view and understand the software generated unit prices. These procedures should be followed in
order to manually update unit prices of the more important bid items.
The procedures currently available in the FDM and the procedures listed below are not
comprehensive. More detailed explanations and additional features are also available in the
Estimator Training Guide and the Estimator Users Guide.

Trns*port Estimator Procedures for updating unit prices
1. After following the procedures available in the FDM from sections 19-5-1 though section 19-
5-25 (before printing), the Estimate View of your project should look like the sample project
in Figure A.
Figure A
2. The unit prices generated by the software are derived from the information in the Project
Header as shown in Figure B.
Figure B

3. Selecting an item in the Bid Tree View displays information about the item, including the
price source. See Figure C. The sample project selected item 305.0110 - Base Aggregate
Dense ¾ Inch that uses bid regression as the price source.
Figure C
4. Clicking the + sign next to the bid item in the tree view allows you to select the Bid History
Regression information as shown in Figure D.
Figure D

5. On the Bid Regression page, the Information box provides the user with details about the
regression model selection as seen in Figure E. Item 305.0110 has 8 possible models, of
which 4 are feasible. Model 5 is selected as the best.
Figure E
6. The graph below the Bid Regression page shows the price quantity relationship of the best
model, model 5 (Figure F). Unit price volatility can be determined from the graphical
relationship. The user can view how changes in the quantity affect the unit price. Right
clicking on a desired quantity will display the associated price that would be generated by the
software.
Figure F

7. In order to see the other models that are available for a bid item, select View from the top
tool bar and select current catalog. The catalog page is displayed in Figure G.
Figure G
8. Expanding the Standard Item Catalog in the tree view list seen in Figure G allows the user to
select the desired bid item. Clicking on item 305.0110 shows information about the 8 models
that were mentioned on the Bid Regression page (Figure H)
Figure H

9. If the user changes the model predictor variables found in the Project Header, the software
generated unit prices will change accordingly. Figure I depicts several of the models for item
305.0110 of the sample project.
Figure I
10. If the user wished to manually change the unit price of a bid item they can select the item in
the tree view (From the Estimate View - Figure C) and key in a new unit price. After hitting
tab, the Price Source box should change to Ad hoc. See Figures J & K.
Figure J

Figure K
11. After the unit prices of the bid items have been updated manually. Select Edit from the tool
bar menu and click on Update Price Information (Figure L). Then select Restart and the
Estimate Cost that can be seen in Figure A will update for the adjusted prices.
Figure L
12. After the Estimate Cost has been updated the FDM procedures for printing (19-5-25) and
uploading to Trns*port PES (19-5-30) can be followed.

Appendix I
Bid Express Procedures for Selecting Unit Prices

Bid Express Procedures for Selecting Unit Prices
Bid Express is a commercially available product that makes past WisDOT bid tab data available
in a searchable, electronic database. Unit price information and ranges can be viewed in order to
estimate unit prices for future projects. In order to use the database, a user name and ID can be
obtained by contacting the Bureau of Project Development Supervisor. The procedures listed
below contain simplified search procedures and are not comprehensive.
1. The database is web-based and can be accessed through the internet at www.bidx.com. See
Figure A.
Figure A
2. Enter the site using the assigned User ID and Password.
3. Select the state for which you want to view past bid tabs by using the drop down menu or
by clicking on the map. Data is only available for the darkened states. For WisDOT
projects select Wisconsin. See also Figure A.

4. After selecting a State, five tabs will be visible across the top of the page as shown in Figure
B. The “Lettings,” “Bid Tab Analysis” and “Search” tabs are detailed in steps 5, 6, and 7
respectively.
Figure B
5. The “Lettings” Tab can be selected as shown in Figure C to view the bid items of a specific
project. The Contract ID number of the desired project must be known to use this tab.
Figure C

5.1 Locate the project by selecting the appropriate letting date as it would appear in Figure D.
Figure D
5.2 The Contract ID numbers and other project information for the April 10th, 2007 letting
appear in Figure E.
Figure E
5.3 Selecting the Contract ID of the desired project will display all the items and unit prices
from the winning bid.

6. The most comprehensive way to search for unit prices is to use the “Bid Tab Analysis” tab
as shown in Figure F. Search for a bid item using any part of the item number or
description and select the desired range of dates.
Figure F
6.1 For example, if “Aggregate” is searched for, from November 14th, 2006 to March 13th,
2007, a list of all items containing the word Aggregate will be listed with the average, high,
and low bid prices. See Figure G.
Figure G

6.2 Selecting the “+” sign under the desired item number (Ex: item 305.0110 in Figure G)
displays the quantity bid in addition to the average, high, and low unit price bid for each
contract as shown in Figure H.
Figure H
6.3 Selecting a contract from the list in Figure H and clicking the “+” sign next to the desired
bid item (305.0110) displays the average, low, and high unit prices for each contactor that
bid on the selected item. See Figure I.
Figure I

7. The “Search” tab can also be used to find and display search results that are similar to those
found in the other “Lettings” and “Bid Tab Analysis” tabs. See Figure J for search options.
Figure J
8. Unit prices to develop new estimates should be determined based on the average, high, and
low prices of recently bid projects. Location and type of project may also impact unit
prices, so projects that are reasonably similar or close to the new project should be selected.
The contractors that will be bidding on the project should also be considered when
developing the estimate based on their past bidding history.

9. After unit prices are determined for the desired items, logout of the website by clicking on
the My Bidx icon in the upper right hand corner of the screen and selecting the Logout
option. See Figure K.
Figure K

Appendix J
Cost Index and Price Trends Example Report Format

Cost Index and Price Trends Example Report Format
The following Cost Index and Price Trends Report is to be used as an example for formatting
purposes only. The data and statistics used in these example plots are arbitrary and should not be
used.

WisDOT Price Trend Example Report for the Month of April
WisDOT Price Index
240
220
200
180
Price Index
160
140
120
100
80
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
Fuel Asphalt Pavement

4.50 30.00
4.00 25.00
3.50
20.00
Unit Price
3.00
Unit Price
2.50 15.00
2.00
10.00
1.50
1.00 5.00
0.50
0.00
0.00 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 200 2001 200 200 200 200 200 200
199 1991 199 199
0 2 3
199 1995 199 1997 199 199 200 200 200 200 200 200 200 200
4 6 8 9 0 1 2 3 4 5 6 7
JFMAMJJASONDJFMA 0 2 3 4 5 6 7 JFMAMJJASONDJFMA
2006 2007 2006 Month 2007
Month
Fuel is up 100% compared to April 2006 Asphalt is up 12% compared to April 2006
Concrete Pavement Structural Concete

24.00 350.00
330.00
22.00
310.00
20.00 290.00
Unit Price
Unit Price
18.00 270.00
250.00
16.00 230.00
14.00 210.00
190.00
12.00 170.00
10.00 150.00 199 1991 199 199 199 199 199 199 199 199 200 200 200 200 200 200 200 200
199 1991 199 199 199 1995 199 1997 199 199 200 200 200 200 200 200 200 200
JFMAMJJASONDJFMA
0 2 3 4 6 8 9 0 1 2 3 4 5 6 7
JFMAMJJASONDJFMA
0 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7
2006 Month 2007 2006 Month

2007
Concrete is up 5% compared to April 2006 Str. Conc. is up 7% compared to April 2006

Reinforcing Steel Structural Steel
1.80
0.80 1.60
0.70 1.40
0.60 1.20
Unit Price
Unit Price
0.50 1.00
0.40 0.80
0.30 0.60
0.20 0.40
0.10 0.20
0.00 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 200 2001 200 200 200 200 200 200 0.00
JFMAMJJASONDJFMA 0 2 3 4 5 6 7
JFMAMJJASONDJFMA
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 200 2001 200
0 2
200
3
200 2005 200 2007
4 6
2006 Month 2007 2006 Month 2007

Rnf Steel is up 15% compared to April 2006 Str. Steel is up 25% compared to April 2006
Crushed Aggregate Base

Course
210.00
190.00
170.00
Unit Price
150.00
130.00
110.00
90.00
70.00
50.00
JFMAMJJASONDJFMA
19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07
2006 Month
2007
Crushed Agg is up 2% compared to April 2006

Appendix K

The Construction Risk Identification Form on the following page is to be used by WisDOT
estimators to help them identify potential sources of project cost escalation. The form is to be
filled out from the designer’s perspective and should be completed prior to starting the estimate.
The form is filled out by reviewing each general issue item (other project-specific items should
be added if needed) and determining the impact the issue would have on the project cost or
schedule should it occur. It can have a significant (S) or minimal (M) impact, or not be
applicable (NA) to the project. Next, an assessment is made as to the likelihood of that issue
occurring on the project. A number from 1 – 5 (1 Not likely – 5 Very likely) is assigned.
Identifying construction risks early in the estimating process will help estimators adjust prices
accordingly. For example, if the presence of groundwater will have a significant impact on a
project and there is a high likelihood of it occurring on the project, earthwork prices should be
adjusted higher. If there are a large number of risk items that will have minimal impact but are
likely or very likely to occur, the overall cost of the project should be increased. This can be
done by increasing the unit costs of items most closely associated with the risk items or by
increasing the mobilization item.

(Construction issues that can impact cost)
Version 3 03/30/07
Significant or Likelihood of
Minimal Impact Occurrence
None
Very
Project Personnel and Coordination S M NA
Numerous or specialty subcontractors required 1 2 3 4 5
Conflicting construction operations 1 2 3 4 5
Significant 3rd Party involvement 1 2 3 4 5
Utility Disruption S M NA
Unknown or unanticipated discovery of utilities 1 2 3 4 5
Relocation of utilities in work zone 1 2 3 4 5
Coordination of work activities with utilities 1 2 3 4 5
Differing Site Conditions S M NA
Unsuitable subgrade material 1 2 3 4 5
Groundwater 1 2 3 4 5
Hazardous materials 1 2 3 4 5
Man-made buried objects 1 2 3 4 5
Unstable slopes or excavations 1 2 3 4 5
Archeology sites 1 2 3 4 5
Site Conditions S M NA
Inadequate staging areas 1 2 3 4 5
Erosion and sediment control 1 2 3 4 5
Disruption to local traffic and business operations 1 2 3 4 5
Complex traffic control plan 1 2 3 4 5
Noise, vibration, and dust impacts on adjacent properties 1 2 3 4 5
Detours, Haul Roads & Repair 1 2 3 4 5
Schedule and Operations S M NA
Interim completion dates 1 2 3 4 5
Penalties/Lane Rentals 1 2 3 4 5
Staging and sequencing 1 2 3 4 5
Lane Rental Items 1 2 3 4 5
Waste and/or borrow sites 1 2 3 4 5
Shortages or delayed delivery of materials 1 2 3 4 5
Expedited schedules or night/week-end work 1 2 3 4 5
Extreme weather conditions or seasonal effects 1 2 3 4 5
Design and Contractual Issues S M NA
Sensitive environmental features 1 2 3 4 5
Unique special provisions 1 2 3 4 5
Document submittal, review and approval 1 2 3 4 5
Need for permits 1 2 3 4 5
QMP Specifications & certifications 1 2 3 4 5
Warranty provisions 1 2 3 4 5
DBE involvement 1 2 3 4 5
Project Completion S M NA
Closeout 1 2 3 4 5
Inspection 1 2 3 4 5
Additional Issues S M NA
1 2 3 4 5
1 2 3 4 5

About Us:
The Construction and Materials Support Center (CMSC) is housed in the Department of Civil
and Environmental Engineering on the University of Wisconsin-Madison campus. The CMSC
was formed in partnership with the Wisconsin Department of Transportation (WisDOT) to focus
on implementing research findings within the department and other local, state, and federal
transportation agencies. In addition, the CMSC functions as a service and applied research group
to deliver timely solutions to construction management and materials engineering problems for a
variety of organizations. The mission of the Center is to develop research implementation
strategies and tools to help WisDOT, public agencies, and industry rapidly implement new and
relevant technologies throughout the project development process. The Center draws upon
university expertise to collaborate with department personnel and the private sector to find
solutions to problems, minimize delays to construction, and improve the quality and efficiency in
which materials are used throughout the construction process. Emphases areas for the Center
are:
• Accelerated construction techniques
• Construction project management
• Innovative project delivery processes
• Materials performance and production
The Center is staffed to conduct research, develop tools and techniques to enhance project cost-
control and minimize scheduling delays in project construction, identify methods and processes
to accelerate project delivery and construction activities, create strategies for departments of
transportation and others to implement new techniques and technologies, assess new construction
materials and create project specifications.
Services include training staff on new techniques and processes, developing application guidance
tools for inclusion in manuals, and holding workshops and seminars. Academic staff
incorporates the field applications and lessons learned into undergraduate and graduate level
engineering courses taught at the UW-Madison.
CONTACT INFORMATION
Awad S. Hanna, Ph.D., P.E. Gary C. Whited, P.E.

CMSC Director & CEE Professor CMSC Program Manager
UW-Madison, CEE Department UW-Madison, CEE Department
1415 Engineering Drive 1415 Engineering Drive
Madison, WI 53706 Madison, WI 53706
Phone: 608-263-8903 Phone: 608-262-7243
E-mail: hanna@engr.wisc.edu E-mail: whited@engr.wisc.edu

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Improved Construction Cost

WisDOT Project ID: 0657-45-12

Submitted to the Wisconsin Department of Transportation

Dr. Awad S. Hanna, PhD, PE

Construction and Materials Support Center

Construction Materials & Support Center 2

Construction Materials & Support Center 3

List of Tables ................................................................................................................................. 6

SECTION 1 – PS&E ESTIMATE BACKGROUND ................................................................ 7

SECTION 2 – PROBLEM STATEMENT ................................................................................. 8

SECTION 3 – PROJECT SCOPE .............................................................................................. 9

SECTION 4 – STATEMENT OF WORK................................................................................ 10

SECTION 5 – RESEARCH DATA........................................................................................... 12

5.1 The Construction Cost Index........................................................................................... 14

5.3 Project Types & Time of Year......................................................................................... 26

SECTION 6 - INTERVIEWS .................................................................................................... 29

6.1 Regional Interviews .......................................................................................................... 29

Construction Materials & Support Center 4

7.1 Estimating Process ............................................................................................................ 38

Appendix A - Bids Compared To Estimates 2000 - 2005 ........................................................ 46

Appendix B – Mobilization Plots 2000 - 2005........................................................................... 50

Appendix C – Project Work Type Codes ................................................................................. 55

Appendix D – Regional Interviews............................................................................................ 57

Appendix E – State Interviews .................................................................................................. 69

Appendix F – Consultant Interviews ........................................................................................ 74

Appendix G – Standardized Estimating Procedures............................................................... 81

Appendix H – Trns*port Estimator Procedures for Updating Unit Prices........................... 83

Appendix I – Bid Express Procedures for Selecting Unit Prices............................................ 91

Appendix J – Cost Index and Price Trends Example Report Format................................... 99

Appendix K – Construction Risk Identification Form.......................................................... 103

About Us: CMSC ...................................................................................................................... 106

Construction Materials & Support Center 5

Figure 1 – A summary of bids compared to estimates from 2000-2005 ...................................... 13

Table 1- WisDOT Construction Cost Index Items ....................................................................... 15

Construction Materials & Support Center 6

projects are added or deleted from the letting schedule.

crucial decisions regarding the project bids, including:

• Correctness and suitability of the low bid

• Level of competition within all the bids received

• Determination if detrimental unbalancing has occurred within the low bid

• Appropriateness of a bid in single bid situations

Construction Materials & Support Center 7

SECTION 2 – PROBLEM STATEMENT

Proposal Management Group and the Region’s project development personnel.

understanding of the importance of the PS&E Estimate.

Construction Materials & Support Center 8

SECTION 3 – PROJECT SCOPE

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This project involved seven distinct tasks.

Task 1. Project Management

meetings were held over the course of the study.

two years to determine:

with WisDOT to determine five states to be interviewed.

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a Trns*port Training Class for one CMSC staff person.

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items for today’s construction activities.

report will be published by CMSC with up to 10 copies delivered to the Department.

SECTION 5 – RESEARCH DATA