Estimating as a Competency in Capital Projects

RT-253 Topic Summary
RT 253


Cost estimating is a critical function for successful capital or maintenance projects, and reliable estimates depend heavily on the competency of cost estimators. Owners depend on accurate data to make business decisions, which can heavily impact the profitability of the company. Architectural / Engineering and Construction firms depend on finely honed numbers to support their ability to provide proposal that both support a competitive position and at the same time minimize downside risk.

Extensive research has identified a potential shortfall of skilled estimators in the near future, mainly due to attrition and the small numbers of recruits’ backfilling these positions. It was further identified that the estimator recruitment process was not effective due to the perceptions or lack of understanding in the market place with regard to career paths available in the field of estimating.

RT-253 performed an extensive survey of industry experts regarding estimates and the role of the estimator in accurate estimating. Several of the key conclusions and recommendations of the research include:

  • The skill, knowledge, and personal traits of a highly skilled estimator are critical factors in the development of accurate estimates.
  • Companies should perform a gap analysis between the current and desired level of their estimating competencies.
  • As the pool of highly skilled estimators becomes more scarce and market condition will encourage poaching of these skill sets, it will be imperative that companies develop methods to retain qualified estimators.
  • Training techniques for current and future estimators must be improved.
  • The industry needs to leverage the experience of the remaining highly skilled estimators to develop training and mentoring programs.
  • There is a need to find and connect with new sources of cost estimators.

Key Findings and Implementation Tools

1 : Shortage of Experienced Estimators

The greatest challenge facing the estimating community over the next several years is the loss of knowledge and experience from highly experienced estimators. A large percentage of experienced estimators are retiring and there is a shortage of qualified cost estimators to replace them. The report focuses on these 6 objectives to help solve this challenge. (RS253-1, p. v)

  • Identifying cost estimating competencies
  • Investigating the gaps between the current and desired level of cost estimating competencies
  • Identifying effective methods to recruit, attract, and retain cost estimators
  • Identifying effective methods and strategies to transfer estimating knowledge and skills
  • Developing plans to educate and train new estimators
  • Identifying career paths for estimators
Reference: (RS253-1)

2 : Cost Estimating Competencies

The competencies of cost estimators can be defined as the cluster of interrelated skills, knowledge, and personal attributes required to perform an estimating job. In this research, a total of 23 were identified as required competencies of cost estimators divided into three categories: skills, knowledge, and personal attributes. Furthermore, these have been subdivided into “Hard” and “Soft” components. Soft skills are difficult to teach or develop. These are generally experienced based. Hard skills are relatively easy to teach and learn. These can be obtained in traditional classroom settings and industry training courses on estimating, project scheduling, and software programs. Interestingly, the vast majority of the competencies have been identified as “Soft.” This clearly shows that it takes years of experience to master the art of estimating. These 23 competencies are presented as a "Classification Hierarchy of Estimating Competencies" in the research. (RS253-1, p. 11) 

Reference: (RS253-1)

3 : Attract and Retain Cost Estimators

Companies should incorporate more effective methods for attracting and retaining cost estimators. Analysis of the survey data in this research shows that the most effective methods for attracting and retaining estimators are the following: (RS253-1, p. 34)

  • Compensation and benefits
  • Emphasis on diversity of work in estimating
  • More recognition of estimating as a profession
Reference: (RS253-1)

4 : Significant Factors Affecting Estimate Accuracy

Extracts from prominent figures in the Estimating field identified some of the most significant factors that impact the accuracy of an estimate: (RR253-11, p. 5)

  1. Project scope definition
  2. Quality of basis of design documents
  3. Project type, size, and location
  4. Estimators experience, skills, and knowledge
  5. Construction knowledge
  6. Market conditions
  7. Time allowed to prepare the estimate

Reference: (RR253-11)

5 : Estimating Competency Assessment and Training

This research developed a tool to help organizations assess each estimator’s competencies and isolate the most critical gaps in his or her skills and knowledge. This data can be used to design cost-effective customized training programs to close the gaps. More details on how to use the tool are shown below under Implementation Tools. (RS253-1, p. 27)

Reference: (RS253-1)

6 : Implementation Tool #1

IR253-2, Estimating Competency Assessment and Training Recommendations  (EsCATR

Is composed of a software tool and a guide for using the tool. The tool is a program for evaluating estimators on the basis of the 23 competencies identified in the research. The tool first rates the competencies and then shows critical gaps in the competencies of estimators. The tool produces 3 key reports:

  • Competency Assessment Report – shows the summary of competency ratings
  • Competency Assessment Results – shows the rating score, along with the gap for each competency
  • Competency Assessment Chart – shows the total performance assessment score and gap based on the competency categories
Reference: (IR253-2)

Key Performance Indicators

Improved profitability, Improved schedule, Improved predictability, Improved productivity

Research Publications

Estimating Competency Assessment and Training Recommendations - IR253-2

Publication Date: 09/2011 Type: Implementation Resource Pages: 26 Status: Tool

Estimating as a Competency in Capital Projects - RS253-1

Publication Date: 09/2011 Type: Research Summary Pages: 36 Status: Supporting Product

Estimating as a Competency in Capital Projects - RR253-11

Publication Date: Type: Research Report Pages: Status:

Presentations from CII Events

Plenary Session - Estimating As A Competency in Capital Projects

Publication Date: 06/2009 Presenter: Number of Slides: 18 Event Code: AC09

Implementation Session - Estimating As A Competency in Capital Projects

Publication Date: 06/2009 Presenter: Number of Slides: 32 Event Code: AC09