Cost of the Engineering in a Project Estimation
If the Conceptual Engineering and/or Basic Engineering of a Project is being quoted together with its Construction, the cost that this type of Engineering has is significant with respect to the estimated value of Construction, and in some cases, it can get to equal or to surpass the value of Construction of the Project.
This is because it is being sold:
A concept or an idea:
For example, to build a house that aesthetically and functionally satisfies the Client.
A process for making a transformation:
For example, the Basic Engineering to separate of the effluents from an Oil Refinery in water and Oil to recycled.
The Basic Engineering to convert kerosene into Aviation Naphtha.
The Basic Engineering to transform Iron Ore into Steel by Direct Reduction of iron ore, etc…
In other words, the idea, the concept, the technique, the creation ultimately surpasses the cost of the action of building.
In any case, when the Professional or the Company providing the Basic Engineering allows it, the Client first acquires the design or the Basic Engineering that suits its requirements and then Tenders the Detail Engineering and the Construction of the Work separately.
In these cases, the value of the Design or Basic Engineering is established by whoever sells it.
Detail Engineering includes manufacturing and/or construction drawings, calculation memories, technical specifications, data sheets, etc., and has a cost that varies according to the type of Project.
To estimate the cost of this Engineering, it is not only necessary to consider the hours of the specialists, designers, draftsmen, etc., but it is also necessary to analyze among other subjects the following:
The degree of exigency of the Contractor as for the form, quality and terms for the delivery and review of the Engineering and plans of end of Work.
For example, the cost increases when the time stipulated by the Employer to review each plan and return it with or without observations is greater than the normal time.
In some Projects, especially in cases of Extensions or Repairs, interference with existing Installations occurs and these must be resolved with a greater expenditure of hours.
When faced with this type of situation, the cost of Detail Engineering, in general, is obtained from its comparison with similar works.
In Tenders in which Detail Engineering has no complications, it is enough to consider the hours of the specialists, designers, draftsmen, etc..,
In other occasions, the Client delivers part or the totality of the Detail Engineering so the valuation is executed according to that circumstance.