During each phase of an engineering project, the cost estimate becomes more detailed and accurate. The level of accuracy of the cost estimate depends on the phase of the project and the availability of data. Here are typical plus and minus levels of cost estimate accuracy for each project phase:
Project Scoping:
Plus Level: +/- 50%: At the project scoping phase, the cost estimate is usually the least accurate, with a range of +/- 50% being common. The estimate is often based on industry benchmarks, historical data, and high-level assumptions.
Minus Level: +/- 30%: As the project progresses and more information becomes available, the estimate becomes more accurate. The minus level of cost estimate accuracy during project scoping is usually around +/- 30%.
Conceptual Design:
Plus Level: +/- 30%: During the conceptual design phase, the project scope is more defined, and the estimate is usually based on more detailed equipment and system specifications. The plus level of cost estimate accuracy during this phase is typically around +/- 30%.
Minus Level: +/- 20%: With the help of process flow diagrams and equipment specifications, a detailed estimate can be created for the project. The minus level of cost estimate accuracy during this phase is usually around +/- 20%.
Detailed Engineering:
Plus Level: +/- 20%: During the detailed engineering phase, the cost estimate becomes more detailed and accurate. The estimate is based on detailed equipment and system specifications and more accurate pricing information from vendors and contractors. The plus level of cost estimate accuracy during this phase is typically around +/- 20%.
Minus Level: +/- 10%: With a more detailed design and equipment specification, the cost estimate becomes more accurate. The minus level of cost estimate accuracy during this phase is usually around +/- 10%.
Procurement and Construction:
Plus Level: +/- 10%: During the procurement and construction phase, the cost estimate is updated based on the actual costs of the materials and equipment procured, and the actual cost of the construction work completed. The plus level of cost estimate accuracy during this phase is typically around +/- 10%.
Minus Level: +/- 5%: With the actual cost data, the cost estimate becomes more accurate. The minus level of cost estimate accuracy during this phase is usually around +/- 5%.
Commissioning and Start-up:
Plus Level: +/- 5%: During the commissioning and start-up phase, the cost estimate is updated based on any changes or modifications made during the process. The plus level of cost estimate accuracy during this phase is typically around +/- 5%.
Minus Level: +/- 3%: With the project nearing completion, the cost estimate becomes more accurate. The minus level of cost estimate accuracy during this phase is usually around +/- 3%.
It's important to note that these levels of cost estimate accuracy are typical and can vary depending on the project complexity, the availability of data, and the level of detail in the project design. However, they provide a general guideline for the level of accuracy that can be expected during each project phase. Monitoring and updating the cost estimate throughout the project lifecycle is critical to the success of the engineering project, as accurate cost estimates can help ensure the project is delivered on time and within budget.
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