BPG132 Estimating Best Practice Guideline

Company Confidential
BPG 132
Project Estimating Best Practice Guideline
Revision 1 June 2013 1

CONTENTS
1. SCOPE
2. REFERENCES
3. DEFINITIONS
4. RESPONSIBILITIES OF THE COMPILER
5. REVIEWING AN ESTIMATE
6. ESTIMATE CLASSIFICATION SYSTEM
7. PURPOSE OF THE BASIS OF ESTIMATE
8. PROJECT CONTEXT
9. PROJECT SCOPE
10. VALUE ENGINEERING
11. SITE LOCATION
12. PROCESS AND MECHANICAL
13. EQUIPMENT SCOPE
14. CIVIL, STRUCTURAL AND ARCHITECTURAL
15. TRANSPOTATION REQUIREMENTS
16. INSTRUMENT AND ELECTRICAL
17. PROCUREMENT STRATEGY
18. DELIVERABLES
19. PROJECT CONTROLS
20. PROJECT EXECUTION PLAN
21. ESTIMATE PARAMETERS
22. GENERAL RULES - BASIS OF ESTIMATE
23. MAIN PLANT ITEMS
24. CIVIL, STRUCTURAL AND ARCHITECTURAL
25. PIPING SYSTEMS
26. ELECTRICAL EQUIPMENT
27. INSTRUMENTATION
28. CONTROL SYSTEMS
29. HEATING, VENTILATING AND AIR CONDITIONING
30. INSULATION AND PAINTING
31. INSTALLATION
32. COMMISSONING
33. DESIGN COSTS
34. PROCUREMENT
35. PROJECT INDIRECT COSTS
36. START UP
37. ESCALATION
38. CONTINGENCY
39. PROJECT TOTAL
40. SPARES
41. ESTIMATE FORMAT
ATTACHMENTS

1.1 SCOPE
This Best Practice Guideline (BPG) shall be followed when a Class 2 cost estimate is
prepared for CER submission. It will also show how a Class 5 Order of magnitude
estimate can be generated. Class 3 and 4 estimates will be made up of a mixture of
definitive costs and order of magnitude estimated costs with a suitable risk provision.
These guidelines and requirements do not apply to projects related to or involved in

IT or corporate infrastructure, land development, commercial product research &
development, process technology research & development, sales & marketing, or
mergers and acquisitions.
1.2 COST ESTIMATING AND BUDGETING
1.2.1 Description
Cost estimating is the predictive process used to quantify and cost the resources
required by the scope of an investment option, activity, or project. Budgeting is a sub-
process within estimating used for allocating the estimated cost into cost accounts
against which cost performance will be measured and assessed.
Cost estimating is a process used to predict uncertain future costs. In that regard, a
goal of cost estimating is to minimise the uncertainty of the estimate given the level
and quality of scope definition. The outcome of cost estimating ideally includes both
an expected cost and a probabilistic cost distribution.
As a predictive process, historical reference cost data where applicable improve the
reliability of cost estimating. Cost estimating, by providing the basis for budgets, also
shares a goal with cost control of maximizing the probability of the actual cost
outcome being the same as predicted.
The cost estimating process is generally applied during each phase of the asset or
project life cycle as the asset or project scope is defined, modified, and refined. As
the level of scope definition increases, the estimating methods used become more
definitive and produce estimates with increasingly narrow probabilistic cost
distributions. The specific estimating tools and techniques used vary widely
depending upon the life cycle phase, the type of asset or project, and the level of
definition of scope information available. The analysis, development, and
maintenance of estimating tools and techniques are steps that are considered part of
the estimating process.
The cost estimating process is typically performed concurrent to or iteratively with the
asset and project planning and evaluation processes. Because costs are often
dependent on time duration, while resource requirements identified in cost estimating
may affect the schedule, the estimation of the time duration of activities must be
considered concurrently with costs. Iterative approaches are used because outcomes
of a cost estimate often lead to changes in scope or plans. In fact, the estimating
process can be viewed as part of the scope definition process because iterative
trading off between cost and scope cause interaction between the processes.
While some steps of the cost estimating process are mechanistic and conducive to
semi-automation e.g., determinations of quantities by computer-aided design tools,
and so on, estimating is a predictive process for which judgment and experience add
value. Effective cost estimating requires an understanding of the work being planned.
In industries such as engineering and construction, cost estimating is a recognized

discipline because of the specialized knowledge required, however, many individuals

contribute to the performance of the estimating process.
1.2.3 Classification of Cost Estimates
Given the goals of reducing uncertainty in the estimating process and improving
communication of estimate results, it is desirable to establish standard estimate
classifications for the enterprise. The classification system will define the specific
input information needed to produce a desired estimating outcome quality at each
phase of the asset or project life cycle. Classification schemes help define the
requirements for scope definition and they will indicate estimating methodologies
appropriate to that scope definition (AACE Recommend Practices 17R-97 and 18R-
97 provide classification methods).
1.2.4 Plan for Cost Estimating and Budgeting
Initial planning for this process should be integrated with planning for all the other
project control planning processes. Project control planning is typically a phased
process during which the project implementation process is revisited to obtain
incremental authorization and funding at the completion of each phase. Plans for the
process must consider the time, costs, resources, tools, and methods for its
performance during each phase. Roles and responsibilities for each step and
transitions between each phase should be planned as well.
At the start of any phase, the current documented scope basis and defining technical
and contractual deliverables are the key inputs. Based on an assessment of these
inputs, the project team further identifies activities, resources, and tools needed. The
output of the planning step is documentation of the scope of the cost estimating and
budgeting effort as appropriate to the project size and complexity.
In some cases, much, if not all, the cost estimating detail is undertaken by and is the
responsibility of contractors. In those cases, the contractor’s schedule submittals are
inputs to the owner’s process and must be planned in alignment with the execution
strategy and procurement planning.
1.2.5 Quantify Scope Content (Take-off)
The scope definition of an investment or a project is generally described in various

planning and technical documents, databases, or other deliverables. To cost and
price the scope, information in the scope documents must first be quantified in terms
or formats required by the estimating algorithms. For example a construction
estimating algorithm may require the linear meters of pipe as an input. The output of
quantification is referred to as a take-off when the quantities are derived or
developed from a drawing.
1.2.6 Cost the Scope Content
Costing includes a core technique of estimating, which is the translation of quantified

technical and scope planning information into expressions of the resource and
financial investment or expenditure required to implement the plan. The translation is
done with a mathematical algorithm. Costing does not in itself consider business
concerns of how work is to be charged, billed, marked up, or otherwise accounted for
by various stakeholders (cf. pricing and budgeting). Life cycle costing is costing
applied to the entire life cycle of the asset including creation or modification,

operation or use, and decommissioning or retirement to support investment option

development and decision making.
1.2.7 Algorithms and Cost Estimating Relationships
Detailed Estimate A detailed estimate utilises a methodical process of accounting for

each item, task, or activity along with the associated determination of the cost for
each. Costs are typically grouped into the broad categories of field costs and non-
field costs with either of these further divided. This type of estimate is typically
prepared after the process design has been completed (and frozen) and when the
detail design is substantially complete. The project is decomposed into elements at
various levels of detail such that quantities can be determined. At this point detailed
bill of materials are available, major equipment is specified and purchasing quotes
received, material costs and subcontract costs are based on firm pricing agreements
or lump sum bids, and labour costs are based on planned man-hour estimates and
labour rates. The probable highest order of accuracy that can be expected from this
approach is about +/-10 percent.
Unit Cost or Parametric Estimating A semi-quantitative estimating technique that

uses a statistical relationship between historical data and selected variables: For
example, using total linear (LF) feet of pipe multiplied by an experience-based $/LF
value for cost or man-hours/LF to determine work hours. The unit-based factors are
used to calculate an estimate for activity parameters, such as scope, cost, budget,
and duration. This technique can produce high levels of accuracy depending upon
the sophistication and the underlying data utilised and is often used to determine
many of the parameters used in a detailed estimate. The probable highest order of
accuracy that can be expected from this approach is about +/-30 percent.
Factored Estimate A factored estimate is a special case of the unit cost method and
is produced by taking the cost of the major pieces of process equipment, and
multiplying these by "Lang factors" (or similar parameters) to account for costs. The
process installation factors are experience-based and generally account for usual
subcontracted costs, field labour, bulk materials, and general equipment needed for
construction. Corrections must be applied to account for localized conditions,
specialized construction equipment, material upgrades, engineering costs, offsite
facilities, and any other items that may skew the estimate. The accuracy of this type
of estimate depends upon the definition of scope, equipment costs, and known
process factors. The probable highest order of accuracy that can be expected from
this approach is about +/-50 percent.
Analogous Estimating The analogous method compares a new or proposed project

with a similar project completed in the recent past, for which there is accurate cost
and technical data. The similarity between the proposed and “historical” projects
must be sufficiently accurate to serve as a basis for the new project and it is up to the
estimator to make a subjective evaluation of the differences. This method is typically
performed early in the project estimating process. A key disadvantage of the analogy
method is the subjectivity inherent in quantifying the cost variances arising out of
differences in scope, construction strategy, labour/materials pricing, and external
factors. Variances, both internal to the project and external conditions, should be
understood and compensating adjustments made to improve the accuracy and
validity of the estimate. The probable highest order of accuracy that can be expected
from this approach is about +/-100 percent.

The costing step always uses an estimating algorithm or formula. The algorithm
transforms project technical and schedule descriptive information into cost and
resource terms. In its simplest form, an algorithm will appear as:
Cost Resource = Factor x Parameter
where:
Cost Resource = $ (labour, material, total, etc.), or time (labour hours, equipment
rental hours, etc.)
Factor = a unit cost factor in terms of cost resource/parameter unit
Parameter = quantification of a scope item
There are a wide variety of algorithm types. Some algorithms are highly probabilistic
in nature (i.e., the relationships tend to be highly uncertain). These types of
algorithms are often called parametric. These tend to aggregate a broad chunk of
scope and cost into relatively simple algorithms. For example, a parametric algorithm
may estimate the total cost of a building as Total Building Cost = (Gross Floor Area) x
(Cost Per Unit of Floor Area).
Given the wide variety of building types and construction methods, the calculation
above is unlikely to be an accurate predictor of the cost of most buildings. However, it
does not follow that all parametric algorithms are highly uncertain. In this example, if
the building being estimated was of the same design as all of the buildings upon
which the algorithm was derived, then the calculation could be an accurate predictor.
Models are another type of algorithm that tends to be highly probabilistic in nature.
Models are complex algorithms (usually a computer program) designed to replicate
the performance of a process or system. Models that result in cost outputs are often
called cost models. Cost models are particularly well suited for simulation and
optimisation uses. Models are also the primary costing algorithm used for asset
planning.
Other costs tend to be more certain in nature and are often called definitive, detail
unit cost, or line item. These types tend to disaggregate scope and cost into more
clearly defined pieces. For example, a detailed cost may estimate the cost of one
item as follows:
Valve type A installation hours = (Number of valves of type A) x (Hours per valve of
type A)
An overall detailed estimate then re-aggregates the results of a large number of
these types of costs, and taken together, the overall estimate is likely to be an
accurate predictor of the final cost. However, it does not follow that all estimates
based on definitive costs are highly certain. There may be uncertainties in scope
definition, in quantification, in cost database quality, or in other areas that result in an
inaccurate estimate. It should be bourn in mind that the above examples are
somewhat simplistic; algorithm(s) can be as complex and varied as mathematics
allows.
As successive or phased estimates are prepared over the course of a project’s life
cycle, the mix of algorithm/cost type used tends to progress from highly uncertain to
highly certain in nature. However, most estimates will use a mix of types. In
particular, most estimates use probabilistic methods for estimating contingency cost.
1.2.8 Factors and Mark-ups
Basic estimating algorithms are often adjusted by the application of factors to make
the result match the current estimate situation. Factors, as drawn from project history
or a standard database, almost always reflect conditions from past experience that

do not match those in the current estimate situation. The conditions that may vary
from the database basis include time differences, escalation and inflation, exchange
rates, labour rates, labour productivity, jobsite conditions, material mark-ups, location
factors, environmental impacts, and taxes, duties, and fees. Parameters or quantity
measures used reflect preliminary models that do not precisely match actual
technical or schedule conditions. The conditions that may vary from the
measurement basis include waste and spoilage allowance, accuracy of
measurement (take-off) allowance, and specification, function, or content differences.
1.2.9 Simulate and Optimise the Costs
The factors and parameters in an estimating algorithm may have a range of possible
values that could occur, or that could be selected from within the scope. There may
also be alternate algorithms that could be used for estimating. For estimating,
simulation refers to methods that apply alternate factor and parameter combinations,
or apply alternate algorithms so as to produce a distribution of possible outcomes.
Optimisation refers to methods that evaluate trade-offs between inputs, such as

scope elements, so as to minimise or maximise the degree to which some set of
objectives is met. Optimisation commonly uses simulation or mathematical modelling
techniques. Simulations and optimisation are done concurrently with the costing step.
These methods are useful for value analysis and engineering to optimise scope
decisions in terms of cost. They are also useful for evaluating cost risk.
1.2.10 Budget Costs
Budgeting includes allocating the estimated cost of asset or project items into cost
accounts against which cost performance will be measured and assessed. Budgeting
results in a baseline for cost control performance assessment. The cost accounts
used from the chart of accounts must also support the cost accounting process.
Budgets are often time-phased in accordance with the schedule or to address budget
and cash flow constraints. Clearly in comparing actual cost with budget it will be
necessary to collect actual coat against the same Cost Breakdown Structure (CBS)
as that used to compile the budget.
1.2.11 Analyse Cash Flow
To serve as a basis for earned value and other methods of cost control, the budget is
time-phased to determine expected rates of cost accrual and cash disbursement for
each account or group of accounts including capital interest charges. As rates of
investment are often constrained by the enterprise for financial reasons, the estimate
and schedule are generally developed interactively to ensure that financial goals are
achieved. The rate of investment may alternatively examine the rates of incurring
cost (i.e., obligation made to expend) or actual cash disbursement.
1.2.12 Bidding the Cost Estimate
For contractors, the end product of the estimating process may be submission of the
bid or tender to another contractor or owner. A bid is a priced estimate. While the bid
or tender is the final estimating task for the contractor, the bid is generally a cost
input to the overall asset or project estimate.

1.2.13 Review and Document the Estimate
Estimates are typically complex compilations of input from many stakeholders. To

ensure the quality of an estimate a review process is required. The review seeks to
ensure that the estimate reflects the asset or project goals and scope, is suitable for
cost accounting and control purposes, serves the stakeholders’ financial
requirements, and that all parties agree on and understand its content and
probabilistic nature. Prior to the review, the Basis of Estimate (BOE) is documented
to support the review and, after the review, it is updated as needed to support
subsequent change management processes. The estimate should be benchmarked
or validated against or compared to historical experience and/or past estimates of the
enterprise and of competitive enterprises (if available) to check its appropriateness,
competitiveness, and to identify improvement opportunities. Validation should always
be done even if the reviewer also prepared the estimate (although preference should
be given to an independent third party). Validation examines the estimate from a
different perspective and using different metrics than are used in estimate
preparation. A review may require that all or part of the estimate be recycled through
any of the preceding steps of the process.
1.2.14 Develop and Maintain Methods and Tools
The cost estimating process usually uses a wide variety of algorithms, data, software,
forms, and so on. Historical reference cost data, including lessons learned, improve
the reliability of cost estimating because it is a predictive process. Therefore, a key
determinate of estimate output quality is the quality of the databases used.
1.2.15 Cost Estimating Database Development
All estimating algorithms are dependent upon having data such as labour and
material unit rates, indices and factors, equipment costs, and other resource rate and
cost factor information. The type of data that is used in the algorithm to convert scope
quantification input to cost output is specific to the algorithm and estimating
methodology used. Data are also used to support the review and validation process.
The data may be obtained from published sources or they may be developed in-
house. Published sources must be analyzed to determine adjustments needed to
make the data applicable to the enterprise’s situation (e.g., for location, culture,
escalation, etc.).
1.2.16 Cost Estimating Algorithm Development
Estimating methods often require that custom algorithms be developed and

maintained to support the estimating process. These algorithms are commonly based
upon statistical analyses or modelling of historical or other cost information. The
algorithms are needed to convert scope quantification input to appropriate cost
output. For example, if early in design development, the only scope quantification
available for a building is gross floor area, then an algorithm is needed to convert
floor area into total cost; i.e., Total Building Cost = (Gross Floor Area) x (Cost Per
Unit of Floor Area). Cost models are a form of algorithm.
1.2.17 Estimate key performance indicators
Actual Cost to Estimated Cost Ratio (percent). This is a very basic metric that
indicates the relative accuracy of the cost estimates. This measure does not
distinguish between variances introduced through estimating practices, project

management, external influences, or other causes. This metric can be further divided
into sublevel metrics for any of the components that comprise the overall estimate.
Percent Scope Growth This is a very basic metric that measures the cost value of
scope items added after the final estimate was completed relative to the original
scope of work. This measure does not distinguish between items that were added as
optional upgrades from those that were added due to errors and omissions during the
engineering/planning effort.
1.2.18 Inputs to Cost Estimating and Budgeting
1 Scope Definition. The investment option or project scope is defined, and

information needed to support development of the estimate is provided. The
information needed depends on the desired classification of the estimate at that
phase. (ref AACE Classification guide)
2 Technical Deliverables. The scope definition is supplemented with documents,
databases, and other detailed technical information including contract documents to
support quantification of the scope. These deliverables are the outputs of work
processes e.g., engineering, design, and so on that interface closely with the build
up of costs.
3 Schedule Information. While schedules are usually developed concurrently with
cost estimates, expected schedule durations, constraints, and other schedule data
are inputs to various steps of the estimating process.
4 Work Breakdown Structure (WBS). The WBS provides the overall organization of
project work to be estimated. The Cost Breakdown Structure (CBS) provides the
mechanism for allocating cost to the WBS.
5 Cost Breakdown Structure (CBS). Coding structures that support the work
breakdown development and cost accounting process are provided. Each
stakeholder with cost accounting and cost control responsibilities may have his own
CBS; coordination may require that stakeholders map their accounts with each other
so that cost information can be exchanged. Budgeting allocates estimated costs to
the proper cost accounts. There may also be a separate chart or code of accounts for
cataloguing information in a cost estimating database; this chart may differ from that
used for cost budgeting and accounting.
6 Historical Cost Information. The development and maintenance of cost estimating
tools and data are often, but not always, based on feedback of actual asset and
project cost performance information.
7 Estimate Information. Information from previous estimates for this asset or project
or from other assets or projects as applicable supports the development and
maintenance of cost estimating tools and databases. Examples include parameters
(e.g., ratio of building exterior skin area to gross floor area), factors (e.g., freight cost
as a percentage of material cost), and rates (e.g., labour cost per hour).
1.2.19 Outputs from Cost Estimating and Budgeting
1 Cost Control Baseline. A tabulation of costs in accounts that are formatted for cost
accounting and cost control purposes. For some control methods, the costs are time-
phased by account or group of accounts. As cost performance measures are made,
they are assessed against the cost baseline
2 Resource Requirements. Quantities of resources such as labour, material, and
equipment are outputs of the estimating quantification process and costing
algorithms. The resource requirements are used as a basis for resource planning and
procurement.
3 Cost Information for Analyses. Investment decision making, value analysis and
engineering, risk analysis, and procurement planning all require cost information from

the estimating process as their input. Risk analysis is typically performed

concurrently with estimating. Among other planning and decision-making uses, risk
analysis yields contingency costs used in estimating.
4 Estimate Basis. Because cost estimates are approximations based in varying
degree upon assumptions and interpretations of scope, plans, and objectives,
stakeholders often misunderstand what a cost estimate represents. Communicating
the basis of an estimate reduces misunderstanding, error, and misuse. The estimate
basis generally includes a description of the scope, methodologies, references, and
defining deliverables used, assumptions and exclusions made, and some indication
of the level of risk and uncertainty. In general, the estimate basis (and all estimate
backup) becomes the one deliverable that defines the scope of the project. As such,
the estimate basis is also the basis for change management. After review of the
estimate basis (and all estimate backup) by the project stakeholders, project scope
definition and other inputs may need to be revised to ensure that all objectives have
been achieved (i.e., estimate definition leads to refined scope definition).
5 Refined Scope Development. Results and lessons learned from the estimating
process often lead to modifications and refinements in the requirements, scope
description, implementation plans, and WBS.
6 Refined Plan and Schedule. Results and lessons learned from the estimating
process often lead to modifications in asset or project work plans and schedules. The
estimate and schedule are generally developed concurrently or iteratively.
7 Estimate Information. Information from the estimate supports the development and
maintenance of cost estimating tools and databases. The information may include all
estimate detail data and documentation, factors, rates, and other metrics derived
from the estimate, or any other estimating lessons learned.
2. REFERENCES
2.1 Capx-BPG-12 Best Practice Guideline for Project Risk Management.

2.2 AACE International Recommended Practice No 17R-97 Cost Estimate
Classification
2.3 AACE International Recommended Practice No 18R-97 Cost Estimate
Classification System
2.4 AACE International Recommended Practice No 34R-05 Basis of Estimate
CII Implementation Resource 113-2 v3.2 PDRI – Industrial Projects
3. DEFINITIONS
3.1 For a list of definition please refer to SOP 132
4. RESPONSIBILITIES OF THE COMPILER
4.1 Responsibilities
The Compiler shall ensure that costs associated with all those items and activities
that have a significant bearing on the estimated cost of the proposed project shall be
accurately identified, quantified and incorporated into the cost estimate.
4.2 This BPG has been written to assist the Compiler in identifying items which
should be considered when a cost estimate is prepared.
5. REVIEWING AN ESTIMATE
5.1 In addition to being the keystone document for business analysis and the capital
allocation plan, the project estimate also constitutes the foundation of the cost control
system. Seldom do projects recover from seriously flawed estimates.

5.2 Estimates have two primary components: professional services and total installed
cost (TIC). The two are intertwined. If the professional services estimate to complete
is growing, it is almost certain that the capital costs are also growing. A damaging
mistake is to prepare a change order for the growth in professional services value
without taking the time to trend and communicate the capital costs and field impact.
5.3 Regardless of purpose or timing an estimate must be thoroughly documented
including a description of the scope of work, estimate basis, exclusions, and
assumptions; at the time of each Project Review each subsequent estimate revision
shall be reconciled with the previous version to establish a clear history.
5.4 The estimate reviewer should establish the following during project initiation and
the CER review meeting:
 Alignment with the project Venture Manager on the estimate plan.
o Scope of services and facilities
o Timing and purpose of estimates
o Expectations around estimate confidence limits
o Contingency and the process for drawing on contingency accounts
o Work breakdown structure (get this right from the start – it saves an
enormous amount of aggravation)
o Format
o Estimate basis, exclusions and assumptions
 A clear procedure for communication/transmittal of the estimates. This is
often very sensitive information and all parties must respect confidentiality
and the ramifications of improper or untimely disclosure.
 An objective assessment of the skills required to complete the estimate and a
plan for securing them.
 Verification that the design and procurement schedule supports the estimate
schedule.
 Scheduling of the requisite internal estimate reviews (with sufficient time to do
them thoroughly).
 Documentation of how the estimate supports the Business Case.
 Business and team expectation for Value Engineering (JVEP 11).
This BPG can be used as an aide memoire when reviewing estimates and
particularly when sampling and interrogating an estimate in detail.
6.0 Classification system
6.1 The Cost Estimate Classification System (based on the AACE model) maps the
phases and stages of asset cost estimating together with a generic maturity and
quality matrix. This guideline uses degree of project definition as the primary
characteristic to categorize estimate classes, it defines and correlates the major
characteristics used in classifying cost estimates.
6.2 Use of this guideline will improve communication among all of the stakeholders
who prepare, evaluate, and use project cost estimates. Cost estimates are often
misinterpreted, because they depend on the quality and value of the information
available to prepare cost estimates, the various methods employed during the
estimating process, the accuracy level expected from estimates, and the level of risk
associated with estimates. This classification guideline will help users of project
estimates to avoid misinterpretation of the classes of cost estimates and to avoid
their misapplication and misrepresentation.

6.3 Class designations
The estimate class designations are labelled Class 1, 2, 3, 4, and 5. A Class 5

estimate is based upon the lowest level of project definition, and a Class 1 estimate
is closest to full project definition and maturity. This arbitrary “countdown” approach
considers that estimating is a process whereby successive estimates are prepared
until a final estimate closes the process.
Primary Secondary characteristics

characteristic
Estimate class LEVEL OF EXPECTED PREPARATION
PROJECT END METHODOLOGY ACCURACY METHOD
DEFINITION USUAGE Typical estimating RANGE Typical degree of
Expressed as Typical method Typical variations in effort relative to
% of complete purpose of low & high ranges least cost index of
definition estimate [a] 1 [b]
Class 5 Capacity factored,
(Order of Parametric models, L: -20% to-50%
Magnitude) 0% to 2% Concept judgement or H:+ 30% to +100% 1
Stage Gate 0 Screening analogy
Class 4
(Preliminary) Study or Equipment Factored L:-15% to -30%
Stage Gate 1 1% to 15% Feasibility or Parametric H: +20% to +50% 2 to 4
Models
Class 3
(Early Budget) 10% to 40% Budget Semi-Detailed Unit L: -10% to -20%
Stage gate 2 Authorisation Costs with H: +10% to +30% 3 to 10
or Control Assembly Level
Line Items
Class 2 30% to 70% Control or Detailed Unit L: -5% to -15% 4 to 20

(Budget/Control) Bid/Tender Costs with Forced H: +5% to +20%
Stage Gate 3 (CER) Detailed Take-off
Class 1 50% to Check Detailed Unit Cost L: -3% to -10% 5 to 100

100% Estimate or with Detailed Take- H: +3% to +15%
Bid/Tender off
[a] The state of process technology and availability of applicable reference cost data affect the range markedly. The
+/- value represents typical percentage variation of actual costs from the estimate after application of contingency
(typically at a 50% level of confidence) for given scope.
[b] If the range index value of “1” represents 0.005% of project costs, then an index value of 100 represents 0.5%.
Estimate preparation effort is highly dependent upon the size of the project and the quality of estimating data and
tools.
6.4 Input information
The table below gives a high level indication of the extent and maturity of estimate
input information (deliverables) against the five estimate classification levels. This is
a checklist of basic deliverables found in common practice in the process industries.
The maturity level is an approximation of the degree of completion of the deliverable.
The degree of completion is indicated by the following letters.

 None (blank): development of the deliverable has not begun.
 Started (S): work on the deliverable has begun. Development is typically
limited to sketches, rough outlines, or similar levels of early completion.
 Preliminary (P): work on the deliverable is advanced. Interim, cross-functional
reviews have usually been conducted. Development may be near completion
except for final reviews and approvals.

 Complete (C): the deliverable has been reviewed and approved as

appropriate.
ESTIMATE CLASSIFICATION
General Project Data: CLASS 5 CLASS 4 CLASS 3 CLASS 2 CLASS 1
Project Scope Description General Preliminary Defined Defined Defined
Special condition affecting cost General Preliminary Defined Defined Defined
Execution strategy Preliminary Defined Defined Defined
Plant Production/Facility Capacity Assumed Preliminary Defined Defined Defined
Raw material & product handling & Preliminary Defined Defined
storage
Product purity specifications Defined Defined
Plant Location General Approximate Specific Specific Specific
Soils, grading and Hydrology None Preliminary Defined Defined Defined
Integrated Project Plan None Preliminary Defined Defined Defined
Project Master Schedule None Preliminary Defined Defined Defined
Escalation Strategy None Preliminary Defined Defined Defined
Work Breakdown Structure None Preliminary Defined Defined Defined
Project Code of Accounts None Preliminary Defined Defined Defined
Contracting Strategy Assumed Assumed Preliminary Defined Defined
Engineering Deliverables:
Process design basis S/P P/C C C C
Block Flow Diagrams S/P P/C C C C
Plot Plans S P/C C C
Process Flow Diagrams (PFDs) S/P P/C C C
Utility Flow Diagrams (UFDs) S/P P/C C C
Piping & Instrument Diagrams S P/C C C
(P&IDs)
Heat & Material Balances S P/C C C
Process Equipment data sheets S P C
Process Equipment List S/P P/C C C
Utility Equipment List S/P P/C C C
PHA HS1 C
PHA HS2 C C
PHA PS3 C
Plant Item List P C C
General Specifications & S P/C C C
Datasheets
Equipment design basis S/P P C C
Major Equipment sizes & Materials S/P P C C
Prelim. Equipment specifications S/P P C
(budget quotes on MPIs)
Detailed Equipment specifications C C
(firm quotes on MPIs)
Equipment General Arrangement S P/C C C
Drawings
Assumptions on piping materials S/P P/C C C
Piping general arrangements S/P P/C P P C
Line list S/P P/C P P C
Power source and location S/P S/P P/C C C
Substations – number, size, (spec if S/P P/C C C
reqd)
Electrical One-Line Drawings, S/P P/C C C
lighting and area classification
Spare Parts Listings S/P P C
Electrical layout drawings S P P/C
Electrical specs (Firm quotes) C C
Electrical MTO P C
Instrumentation/Control System S P P/C
Discipline Drawings
Instrument control scheme S/P S/P P/C C C
Instrument & Control valve list S/P S/P P/C C C
Engineered instrument & Control P/C C C
valve. Specs & Data sheets

Loop diagrams complete P/C C

General assumptions for building & S/P P P
structures
Prelim. Building, foundations & P P
structures
Engineered foundations, building & S/P C C
structures
Civil/Structural/Site Discipline S P P/C
Drawings
CSA Bills of Material (firm quotes on S P P/C
pre fabs.)
General fireproofing & Insulation S/P S/P P/C C C
Fire proofing & Insulation specs. & S/P P P
Prelim. quantities
Insulation & fireproofing final P/C C C
quantities
7 PURPOSE OF BASIS OF ESTIMATE
7.1 AACE International’s Total Cost Management (TCM) Framework identifies a

Basis of Estimate BOE) document as a required component of a cost estimate.
7.2 In the TCM Framework, the BOE is characterized as the one deliverable that
defines the scope of the project, and ultimately becomes the basis for change
management. When prepared correctly, any person with capital project experience
can use the BOE to understand and assess the estimate, independent of any other
supporting documentation. A well-written BOE achieves those goals by clearly and
concisely stating the purpose of the estimate being prepared (i.e. cost study, project
options, funding, etc.), the project scope, pricing basis, allowances, assumptions,
exclusions, cost risks and opportunities, and any deviations from standard practices.
In addition the BOE is a documented record of pertinent communications that have
occurred and agreements that have been made between the compiler and other
project stakeholders.
7.3 A well prepared basis of estimate will:
 Document the overall project scope.

 Communicate the estimator’s knowledge of the project by demonstrating an
understanding of scope and schedule as it relates to cost.
 Alert the project team to potential cost risks and opportunities.
 Provide a record of key communications made during estimate preparation.
 Provide a record of all documents used to prepare the estimate.
 Act as a source of support during dispute resolutions.
 Establish the initial baseline for scope, quantities and cost for use in cost
trending throughout the project.
 Provide the historical relationships between estimates throughout the project
lifecycle.
 Facilitate the review and validation of the cost estimate.
7.4 A Basis of Estimate will:

 Be factually complete, but be concise.
 Be able to support your facts and findings.
 Identify estimating team members and their roles.
 Describe the tools, techniques, estimating methodology, and data used to
develop the cost estimate.
 Identify other projects that were referenced or benchmarked during estimate
preparation.
 Be developed concurrently with the cost estimate.

7.5 The BOE establishes the context of the estimate, and supports review and
validation. Qualify any rates or factors that are referenced either in the estimate or
BOE; e.g. production can be expressed as either units/time (linear feet/hour) or
time/units (hours/linear foot). The following describes the suggested topics and
contents included in a typical BOE.
8. PROJECT CONTEXT
8.1 This section identifies the principal activities associated with the selection of the
site, establishing the process, specifying the major equipment, determining site
layout and project times scales - all upon which the cost estimate is based.
8.2 The BOE should be put in context by including an opening statement that re-
iterates a summary of the business objectives and general principles that underpin
the project.
These general principles will determine the features, execution and detailed design of
the plant and project to meet the defined business objectives and to satisfy the
project Business Case, it follows therefore they will have an influence on the cost of
the project which must be reflected in the estimate. The statement should cover the
topics listed below:
8.3 Reliability Philosophy: State measures included to achieve dependable operating

performance from the unit/facility or upgrades implemented by this project. The
statement may include justification of spares required; redundancy to be included in
control, alarm, security, access control systems; extent of provision for production
surge and intermediate storage to allow independent shutdown of portions of the
plant; mechanical and structural integrity standards relating to components (e.g.
metallurgy, seals, types of couplings, bearing selection); identify critical equipment
and measures to be taken to prevent loss due to sabotage or natural disaster. For
renovation and revamp projects state impact on existing operations.
8.4 Maintenance philosophy: State the principles to be included in the design to

maintain operations and availability at the required level. The statement may include
a planned schedule of unit or equipment shutdown frequency and duration;
permanent or temporary access to equipment including lifting equipment for repair in-
situ or removal for workshop repair; maximum weight or size limits for maintenance;
equipment monitoring arrangements to be included; ability of current workforce to
maintain any new or novel items. For renovation and revamp projects state common
spares provisions; compatibility of maintenance regime with existing equipment use;
coordination of the project with planned maintenance projects.
8.5 Operating philosophy: List the design principles that must be included to achieve
the nameplate plant performance such as service factor, on-stream time, availability
etc. Criteria may include level of operator coverage balanced with plant automation;
operating regime e.g. 5 day, day shift, three shift etc.; levels of product segregation
and clean out between batches or runs; unit turndown requirements and capability;
design constraints for routine start up and down; design features to be included to
provide security of material management and product quality control.
8.6 Business Objectives: Reference any features of the business case that will
influence the estimated cost of the project. The statement may include the maximum
budget cost the business can afford for this project; key milestone dates the project
must meet to maintain viability; product quality and regulatory standards that must be

met; plant capacity including on-stream factor, yield, design rates, increase in storage
or throughput, product quality improvement; future expansion considerations
covering reserving space for future phases; guidelines for inclusion in the design of
additional capacity or upgrading of power supplies, structures, storage or other
ancillary systems not required directly for the current project.
Details of the project lifecycle that will influence the selection of critical equipment
and materials; plans for decommissioning and demolition, disposal future use and/or
disposal; design features that may affect environmental sustainability should be
stated.
The business case will define any social issues that may require provisions in the
estimate such as language translations, community relations, labour relations, local
and national government relations any of which may involve time and hence cost to
satisfy enquiries or consultations.
8.7 Technology: The technology proposed for the plant will be identified in the Idea
Form, proven technology involves less risk than novel or experimental technology to
project cost and schedule, a statement should be included to confirm the status of
the technology in respect of novelty, experimental, scale up from bench or pilot study
to commercial scale, Huntsman experience with the process steps. As well as
process technology upgrades state any integration or interface issues with existing
systems or affect on IT systems, special attention should be paid to affects on safety
or security systems.
The Estimate must include costs associated with all those items and activities that
have a significant bearing on the estimated cost of the proposed project costs shall
be accurately identified, quantified and incorporated into the cost estimate. This
section identifies principle factors that contribute to the cost estimate build up.
9. PROJECT SCOPE
9.1 Project Objectives Statement: Ensure that objectives stated in the Idea Form or
Business Case are catered for in the estimate. Project objectives and priorities
should be clear, concise, measureable and specific to the project, specifically the
priority between cost, schedule and quality should be clear so that costing can be
based on sound objectives from the outset. Any overall constraints on the project
should be explicitly stated so that the design and the cost estimate can be correctly
positioned. Typically project objectives may include improved safety, product quality,
product quantity; reduced production or maintenance costs; definitive schedule
milestones; update of technology, improved shut down and start up cycle time, better
operational performance or availability, lower maintenance costs; better product
security.
9.2 Project Design Criteria: Cost will be determined in part by the standards that must
be met in the design of the plant and systems. A definition of the level of design and
procurement detail to be provided by Huntsman will set the cost of in house design
effort.
Define national regulations and standards, local regulations and other local
requirements (such as grants, government aid, local authority fees) that will affect the
cost. This may be especially important with imported equipment from another
country.

Which codes and standards will/must be used, are substitutes available and
acceptable? Which engineering standards will/must be used, are substitutes
available and acceptable? Are existing documents up to date or will work be required
to update them for Replacement in Kind.
9.3 Site characteristics available vs. required: The estimate must cover the cost of
improvement or upgrade of existing site utilities and support services for the new
plant specifically the capacity of industrial utilities, fire water, cooling water, power,
pipe racks, waste treatment or disposal, rain or storm water containment and
disposal.
Access and transport for equipment and materials during demolition of existing plant,
construction of new plant or import of raw materials or export of product and
maintenance of the new installation.
Confirm type of building to be provided or re-used; will additional plant amenities be

required e.g. rest rooms, change rooms, medical facilities, rescue facilities, food
service.
Confirm new or changes to existing facilities for materials and product transport,
reception and storage.
Include findings from assessment of existing facilities and infrastructure and any
uncertainties that remain to be confirmed, e.g. condition of underground drains not
yet surveyed, integrity of existing structures, piping and pipe bridge/cable way
capacity, condition of required isolation points, location condition and capacity of
electrical systems and components.
9.4 Dismantling and demolition requirements: Confirm the scope of work for
decommissioning and demolition of existing equipment, plant or buildings including
any impact on the schedule and hence time based costs.
Factors that can affect the cost include timing and coordination sequence with
ongoing plant operations, obtaining permits, safety requirements, hazardous
materials, purging or decontamination requirements, access for demolition
equipment, storage of dismantled equipment and materials prior to disposal,
environmental considerations. Define how dismantling and demolition work will be
segregated from ongoing plant operations or new construction work.
The estimate should be underpinned by marked up process flow diagrams, P&IDs

line lists and equipment lists and/or plant arrangement drawings or model snapshots
showing the extent of plant to be removed and made good.
9.5 Lead / Discipline scope of work: The estimate should be underpinned by a

deliverable list from each discipline defining by type and number the documentation
and time based work content required to provide a complete definition of each item in
the Work Breakdown Structure (WBS). Note the sequencing of work to comply with
the project schedule will determine the level and duration of human resource required
and hence when rate for grade is applied the manhour cost to be included can be
calculated. Some staff will be time based e.g. Project manager and costs will depend
on the duration of specific project phases, e.g. construction supervisors will not be
required during design phase.
9.6 Project schedule: A project milestone schedule shall be developed to provide a

basis for estimate. The schedule as a minimum will be developed based on key

milestone dates and will define durations for all of the major phases of the work
including design, procurement, construction, installation, testing, commissioning and
handover. The estimate complier must be able to evaluate cost effect of time on
defined activities and time based activities as well as the cost of planning to produce
and update the schedule. Renovation and revamp projects can be particularly
constrained in terms of time and space and more detailed planning will be required to
underpin the estimate.
10. VALUE ENGINEERING
10.1 Process simplification: Confirm if a structured analysis has been applied to

assess and reduce or remove equipment redundancy, over capacity, excessive
controls or discretionary spares so as to generate the most economical cost solution
for the project.
10.2 Design and material alternatives considered or rejected: Confirm a structured

process has been applied to consider design and material alternatives specifically
preferential engineering, expensive materials of construction, life-cycle analysis of
value for money, discretionary scope items and steps have been taken to justify or
eliminate them.
10.3 Design for constructability analysis: Constructability analysis is the optimum use
of construction knowledge and experience in planning, design, procurement and field
operations to achieve overall project objectives. The process includes examining
design options that minimise construction costs while maintaining standards of
safety, security, quality and schedule. This will result in the development of a
construction sensitive schedule including operations input to include plant operational
needs. Defining major construction methods, e.g. modular fabrication offsite, and
construction requirements for plant layout will affect the cost estimate. Renovation
and revamp projects should aim to minimise shutdown and turn round work or work
in hot or hazardous environment.
11. SITE LOCATION
11.1 The geographical location must be confirmed and documented the estimate
must be underpinned by site details including:
Land availability; site access including local area infrastructure; prevailing weather
and climatic conditions; local environmental constraints; social and political issues.
Confirm seismic activity local to the plant to assess cost of seismic analysis.
Renovation and revamp projects may require change of use permits.
Freezing – is frost protection required?
Sunshine - air conditioning, shielding, effect on construction.
Humidity - effects on accommodation and sensitivity of equipment.
Wind - types of structure, methods of construction.
Rain – cover & shelters, gullies, storm drains, disposal of surface water.
Snow - ability to clear away or operate in snow bound conditions.

Construction - restrictions caused by severe winters, monsoons etc.
Regulatory restrictions – Local or National regulations and ordnances that must be

complied with (see 11.4)
11.2 Surveys and soil tests
The estimate shall be supported by sufficient survey and soil data to confirm what
preparations must be made to make the proposed site suitable for construction to
ensure unforeseen costs have been minimised.
Data will include:
Site datum and preparation:

- topography map
- site grading if required
- top soil removal and disposition
- spoil removal and disposal
- site fill and importation of hardcore
- site final elevation
- benchmark coordinate and elevation control
Site description:
- terrain
- existing structures
- spoil removal and disposal
- areas of hazardous waste
Allowable load bearing capacity of the ground, the need for:

- piled foundations
- soil survey
- test piles.
Water table - effects on foundations and construction excavations

- Soil percolation rate and conductivity
- Ground water flow rates, direction and downstream use
- Existing water courses
Re-grading, landscaping, surface finishing, soil treatment, soil replacement.
11.3 Environmental assessment
Confirm the need for an Environmental Impact Statement and the implications for the
project shall be stated to evaluate issues that may impact the cost estimate or delay
the project.
Protection of the environment together with any associated costs shall be accounted
for which may require permanent provision and/or temporary facilities during
construction; this will include protection of plant, equipment and buildings from
corrosive chemicals, insects, vermin and fungus (tropics).
The effect of the project on the environment may include such characteristics as
protection of air quality, restriction on emissions, location of areas of environmental
or scientific interest, proximity of local residential areas, archaeology, endangered
species, erosion or sediment control.

11.4 Permit requirements
A permitting plan for the plant must be in place to support the estimate. Local,
province or governmental permits necessary to construct and operate the unit or
facility shall be identified which may include construction, building, occupancy,
change of use, connections to local transport networks, fire regulation. Renovation
and revamp projects may involve “grandfather” requirements.
11.5 Utility sources with supply conditions
The estimate will require confirmation of extent of work required to provide supply of
utilities required to operate the unit/facility.
A schedule defining the means of meeting supply conditions such as temperature,

pressure and quality typically for potable water, cooling water, fire water, sewers,
instrument air, plant air, industrial gasses, steam, condensate and power.
11.6 Fire protection and safety considerations
A list of fire and safety provisions including eye wash stations, deluge showers, fire
monitors and hydrants, foam, evacuation plan, wind direction and speed indicators,
detection and alarm systems, medical facilities. Renovation and revamp projects may
require interruption to any existing safety systems and contingency measures that
will be required.
12 PROCESSES AND MECHANICAL
12.1 Process Flow Diagrams (to include Utility and Material Flow Diagrams)
The Compiler shall ensure that the process route has been established and that it is
firm. In particular the Compiler must ensure that the flowsheets are developed and
approved prior to the preparation of the cost estimate and that the following
information is available:
- all process plant identified

- flow of materials to and from the major equipment items
- primary control loops for the major equipment items
- heat balance and mass balance completed
- equipment sizes calculated
- all process lines identified and sized
- requirements for start-up and shut-down considered.
Service requirements shall be identified from the heat and mass balance calculations
for the process and service plant items, sized after taking into account any spare
capacity required.
The flowsheets are also fundamental to the execution of Hazard and Operability
Studies 1, 2 and 3. Timing and extent of HAZOP or Safety Assessment should be
defined as key milestones in the project programme.
Estimates for renovation and revamp projects may be based on marked up copies of
existing drawings to show scope of work; such mark ups must be verified by process

group for use in estimate preparation which will signify that only minimal development
will be required during project execution.
12.2 Piping and Instrument Diagrams (P&IDs)
The Compiler shall ensure that the P&IDs for the main process, services and off-sites
have been developed in sufficient detail to be representative of the equipment, its
interconnection and the control philosophy.
To adequately support the estimate the Compiler shall confirm that the P & IDs show:
- all Main Plant Items

- standby equipment
- drives
- the relative position of equipment
- equipment required to be installed below grade
- all pipes (sized)
- piping speciality items (in-line equipment)
- services
- instrumentation
- all control and measurement requirements
- all control valve requirements
- electrical interlocks
- tie-in points
existing drawings to show scope of work; such mark ups must be verified by process
group for use in estimate preparation which will signify that only minimal development
will be required during project execution.
Incomplete information on P&IDs is frequently identified as source of project cost

growth it is important that the estimate compiler understands the level of
completeness and the quality of the information presented. Other than Replacement
in Kind projects it is unlikely that P&IDs will be completely defined in the Detailed
Scope Phase, however, to support the estimating accuracy required for CER
approval P&IDs should be at ‘Issued for Design’ status. If the P&IDs cannot be
produced at this status the Estimate Compiler must make provision in the project risk
analysis for perceived deficiencies.
12.3 The status of technical/engineering deliverables will be classified as:
Preliminary: Documents complete with work input by the originator and may have
been circulated to other disciplines for comment.
Issued for approval: Documents signed checked and approved by the originating
discipline and issued to the design authority, regulator or client group for review and
comment and ultimately for approval. Critical information is complete
Issued for Hazard Study: Documents signed checked and approved by the
originating discipline and issued for use in the Hazard Study review. It is noted that
the Hazard Study chairman may elect to include documents with a lesser status in
the review at his discretion.
Issued for Design: Documents signed checked and approved by the originating
discipline and approved by the design authority, regulator or client group. Comment

from the safety review have been incorporated. It is recognised that minor details
may be incomplete but these will be highlighted on the documents. Generally these
documents will only require the addition of final details from the vendor or
subcontractor before they can be issued at ‘Issued for Construction’ status.
Issued for Construction: Documents complete with final vendor or subcontractor

details and fully signed off for final fabrication, construction and installation. It is
recognised that minor details may be incomplete but these will be highlighted on the
documents.
As Built: Documents marked up at the jobsite with what are expected to be minor
adjustments and originals brought up to date to provide the asset record.
12.4 Component and material take offs
The Compiler shall also confirm that the P & IDs have been sufficiently developed to
enable the preparation of:
- a valve take off

- a line list (size, outline specification and length)
- a piping speciality items (in-line equipment) take off e.g. steam traps,
strainers)
- an instrument schedule.
12.5 Process Safety Management
Refer to Huntsman Standard Operating Procedure ‘Process Hazard Analysis PS-

002’.
The estimate Compiler shall confirm the stage at which the project documents have
been subject of the Safety Assessment or Process Hazard Analysis study. Where
such assessments or reviews are incomplete sufficient allowance should be made in
the costs to cater for additional safety measures that may be required as a result of
PHA studies.
The Compiler shall ensure that HS1, HS2 and HS3 based on approved flowsheets,
have been completed and that the effect of any actions resulting from these Hazard
Studies has been incorporated into the cost estimate.
12.6 Utility Flow Diagrams, Material Flow Diagrams, (UFDs, MFDs)
UFDs are similar in nature to P&IDs in that they show utility equipment and pipelines
from generation of supply to user points. The drawings are generally laid out in a
manner to represent the geographical layout of the plant to ensure pipelines are
accurately sized to service the various consumers. MFDs show the flow of solid
materials and the mechanical handling equipment, conveyors, storage bins, feeders,
bin gates, flow restrictors etc. to move materials round the process.
Both UFDS and MFDs are evaluated using the same issue process as P&IDs and
the status should be treated as a guide to the quality of the information for use in
compiling the estimate and assessing accuracy of costs to be included.

12.7 Specifications and data sheets
The Compiler shall confirm that the process specification is firm and process data
sheets have been prepared for all the MPIs including those for services and offsites
to be included in the scope of the project.
Specifications and datasheets should include sufficient information to define the

design, performance, materials of construction, manufacturing details, and code
requirements.
Specifications and datasheets will typically include:

- type of equipment i.e. pump, heat exchanger, pressure vessel etc.
- duty e.g. design flow rate, pressure, temperature, materials of
construction, connection details, power consumption, drive size,
design code, test conditions,
- protective coatings
- insulation
- heat tracing
- special requirements
existing documents to show scope of work; such mark ups must be verified by the
originating group for use in estimate preparation which will signify that only minimal
development will be required during project execution.
12.8 Piping system requirements
Design department shall confirm the standards, methodology and record

documentation required to support the design of piping systems including stress
analysis and determination of imposed loads.
Piping system specifications will typically include:

- pipe specification index
- design codes
- piping specifications, design pressure and temperature, materials of
construction
- corrosion allowance
- cyclic conditions
- stress analysis, pipe wall stress, anchor points, imposed loads, spring
supports etc.
- pulsation
- seismic analysis
development will be required during project execution. Existing systems should be
checked to verify condition of the pipe wall thickness, erosion suffered, condition of
supports and hangars, capacity of pipe bridges, if existing lines that are to be
modified will require stress analysis, ensure lines are functioning, available and
active.

12.9 Plot plan
The plot plan will show the location of new plant in relation to surrounding plant or
offsite areas and shall be complete with sufficient detail to ensure the estimate
compiler will have a sound basis for the estimate. This layout may be in the form of a
drawing or 3D model
It will typically include:

- plot grid system with coordinates
- plant space allocation and unit limits
- process plant and process structures
- office and laboratory accommodation
- control rooms/switch rooms/equipment rooms
- ponds
- tank farms
- gates, fences, access points with barriers, gate house
- roads and access ways
- maintenance access
- parking facilities
- rail facilities
- buildings
- pipe bridges, pipe trenches/racks
- loading and unloading areas, include turning circles
- lay down areas
- green space
- construction areas
- temporary facilities
- temporary access
12.10 Mechanical Equipment List (MEL)
The mechanical Equipment list shall identify all mechanical equipment by tag number
to ensure the estimate compiler has a complete scope of work when establishing
costs for the project. The list should include mobile equipment required as part of
plant operations e.g. fork lift trucks, mechanical shovels, cranes (mobile or
overhead), and site transport vehicles.
The MEL will typically contain summary information such as:

- equipment type
- number working, number standby
- duty, operating conditions
- main material of construction (fluid contact)
- power consumption
- insulation and painting required yes/no
- overall size and weight
- purchased new – vendor/subcontractor
- existing re-used, - modified, relocated, refurbished, dismantled

12.11 Line list
The pipe line list designates pipelines to be included in the scope of work this will be
used as the basis for the pipe material take off which will in turn be used to calculate
piping costs.
Typically the line list will include:

- a unique number for each pipeline
- line size
- pipe specification
- origin and termination connections
- design conditions
- test requirements
- insulation and surface coating requirements
- P&ID reference
- detail drawing reference
12.12 Tie in list also known as termination point schedule
All tie-ins or fluid supply terminations shall be listed so that cost of making
connections can be included in the estimate.
Typically the list will include:

- the unique number of each pipeline
- applicable pipe specification
- isolation type if required
- location either by grid reference or ‘Northing and Easting’, elevation
and orientation
- reference drawing number
- type of tie in e.g. hot tap, cold cut, cut and weld
- insulation removal and replacement
- decontamination before work can begin
- plant shut down permitting and isolation requirements
12.13 Piping speciality items list (inline equipment)
This list summarises pipe line speciality items, such as in line filters, flexible hoses,
bellows, steam traps, air line lubricators etc.

- the unique tag number of each item
- equipment type

- duty
- applicable pipe specification
- main material of construction
- P&ID reference
- number required
- purchased new – vendor/subcontractor details
- vendor name and drawing/datasheet reference
12.14 Instrument index
A list of the instruments to be included in the scope of work shall be provided.

- instrument type
- function and service
- materials of construction, note an special or exotic materials that will
increase costs
- P&ID reference
- Line number
- number required
- purchased new – vendor/subcontractor details
- vendor name and drawing/datasheet reference
13 EQUIPMENT SCOPE
13.1 Equipment status
The compiler of the estimate will need to know the status of the equipment included
in the scope of work to correctly estimate the cost to be included.
An equipment status summary shall be compiled to provide the estimate compiler

with a basis for judgement of the quality of costs provided by others.
Typically the summary will include:

- equipment name
- specification or datasheet reference
- number working, number standby
- stage i.e. specified, enquired for, bid tabbed
- quoted prices include full range of pricing
- quoted delivery and offloading charges
- indication of likely supplier

- spares required, included or excluded
Estimates for renovation and revamp projects may include items that are re-used the
responsible department must provide the estimate compiler with sufficient information
on refurbishment costs preferably underpinned by a subcontractor quotation for the
work that will be required including costs for removal transport to an offsite workshop
return and re-installation if the work cannot be carried out in-situ. Consideration shall
be given to supply of ancillaries such a scaffolding, temporary supports, transport
cradles etc. required for these operations.
13.2 Equipment location drawings, (also known as General arrangements, plant

layout drawings) the location arrangements may be defined as part of a 3D model.
Equipment locations are required to estimate the installation effort required,

scaffolding, cranage and lifting etc. These items may not be estimated directly by the
estimate compiler, however, such details shall be provided to the compiler for
information and to cross check completeness.
The Compiler shall ensure that the process plant arrangement drawings have been
prepared and that the relative positions of all MPls are shown.
In particular the Compiler shall ensure that floor plans and elevations showing the
locations and relative elevations of all MPls have been prepared and that access,
walkways, stairwells, platforms and emergency egress have all been taken into
account.
13.3 Equipment utility requirements
A tabulated list of utility requirements of all equipment items and process steps
including general services such as plant wash down, plant air and purging gasses
required for maintenance, will be required to underpin the estimate.
The list should identify pressure, temperature and quantity of :

- Plant air
- Instrument air
- Vacuum
- Plant water
- Chilled water
- Hot water
- Raw water
- Process water (filtered, de-gassified, demineralised)
- Potable water
These items may not be estimated directly by the estimate compiler, however, such
details shall be provided for information and to cross check completeness.
"Offsites" - that is auxiliary equipment and services located outside the battery limits
of the process plant shall be taken into account as shall "utilities" - that is permanent
equipment installed in a building or works which is distinct from the main process

plant. The Compiler shall ensure that all offsites and existing site services and
utilities, where utilised, are adequate in both capacity and distribution.
14 CIVIL, STRUCTURAL AND ARCHITECTURAL
14.1 Civil/Structural requirements
Civil structural details should be developed to ‘Issued for Design’ status, in general
costs will be obtained from subcontractors, however, to ensure the level of accuracy
to underpin a sanction grade estimate the design should be developed to include:
- materials of construction
- structural drawings
- pipe racks and major supports
- layouts of grade, paving, foundations, bunds, concrete tanks
- piling
- dikes
- underground piping, trenches, interruptions and manways,
- corrosion control, fire protection
- details of existing works underground
- enclosures
- future expansion considerations
development will be required during project execution. Estimates shall take into
account the condition of existing structures i.e. foundations, load bearing capacity,
proximity to areas that need new piles, underground interference.
14.2 Architectural requirements
The estimate compiler shall confirm that requirements for buildings and associated
services such as workshops, amenity buildings, gatehouses, fire station, offices,
laboratories and so forth, have been determined and appropriate provisions have
been made. These items may not be estimated directly by the estimate compiler,
however, such details shall be provided for information and to cross check
completeness.
Building requirement details should include:

- building use, location and orientation
- space use programme
- service and storage requirements
- design aesthetics, crime prevention through environmental design
- sustainability
- materials of construction
- interior finishes
- fire resistance, escape routes, fireman provisions
- fire detection, alarm and fire fighting systems, hydrants, dry riser,
deluge systems
- industrial ventilation, emission control
- ‘safe haven’ requirements
- noise control
- lighting
- small power requirements
- voice and data communications

- indoor design conditions

- accessibility standards
development will be required during project execution. Estimates shall take into
account the condition of existing structures and any effect on design assumptions
made in the original design, potential re-use of existing equipment fixtures and
systems. Where re-use and/or refurbishment are required work to make the
necessary transition shall be included in the estimated costs.
15. TRANSPORTATION REQUIREMENTS
15.1 A coordinated plant transportation specification is required to plan the

movement of people, materials and equipment during normal operations,
maintenance and construction. Special attention will be required for large loads.
15.2 Estimates for renovation and revamp projects must take into to account
coordination with ongoing production operations to avoid conflicts.
15.3 These items may not be estimated directly by the estimate compiler, however,
such details shall be provided for information and to cross check completeness.
16 INSTRUMENT AND ELECTRICAL
16.1 Control philosophy
The control philosophy describes the general nature of the process and identifies
overall control systems hardware, software, simulation and testing requirements.
The documentation should define mode of operation, i.e. continuous or batch,

redundancy requirements, classification of interlocks, manual or automatic controls,
alarm conditions, on/off controls, block diagrams, emergency shut down.
16.2 Logic diagrams
Logic diagrams should be developed to depict interlocks and sequencing for start up,
operation, alarm and shut down of equipment and processes.
16.3 Electrical area classification
Electrical area classification shall be marked on the plot plan, whilst the special
requirements for electrical equipment will be shown on the individual components

and electrical items and these requirements will be reflected in the quoted prices
passed to the estimate compiler details of area classification shall be provided for
16.4 Substation requirements and power sources identified
Substation requirements shall be documented to specify:

- number of substation required
- electrical equipment rating
- electrical equipment specifications
- infrastructure required for each substation (building type, environment
control, fencing, barriers, access, lighting)
- power sources - location, voltage, available power
- electrical ratings and routes of power feeds form source to project
substations
- emergency generators, in-plant generation
- temporary construction power sources
- new equipment and systems are compatible with industrial
environment and existing systems
Estimates shall take into account:

- the impact on existing equipment and new equipment selection, e.g.
short circuit ratings,
- field verify condition of isolation point
- sequencing of tie-ins with production planning to ensure safety and
continuity of ongoing operations
- permitting for tie-ins
16.5 Electrical Single Line Diagrams (SLDs)
SLDs indicates the components, devices or parts of an electrical power distribution

system the diagram will portray the major system layout from public utility company
incoming transmission line to the motor starter bus. Depending on the size of the
electrical system the SLD may include several levels of distribution:
- incoming utility with owner substation/distribution to high and medium
voltage motors and substations
- unit substations and switchgear
- motor control centres with distribution to motors, lighting panels, small
power distribution

16.6 Electrical specifications
Specifications for electrical systems and equipment should be developed to ‘Issued

for Design’ status to underpin a sanction grade estimate.
Details to be included:
- distributed control systems (DCS)
- instrument data sheet
- motor control and transformers
- power and control components
- power and control wiring
- cathodic protection
- lightning protection
- security systems
- earthing, grounding
- electrical trace
- installation standards
- civil requirements for electrical installation; special slabs for foundations
- protection warning for underground cables
- concrete embedded conduit
17 PROCUREMENT STRATEGIES
17.1 Identify long lead items/critical items and materials
Identify engineered items with lead time that will impact the detailed engineering
because of receipt of vendor information or impact the construction schedule
because of long lead times.
Identification of long delivery times and critical materials is especially important for
renovation and revamp projects where plant shutdown may be involved. Delivery
dates must be identified to support preparations and pre-shut down activities all of
which may attract premium rates to be included in the costs.
Critical items may be considered for inclusion in the risk assessment to make
provision for lateness and consequent delay.
17.2 Procurement procedures and plans
Project specific guidelines shall be available to inform the estimate in respect of

procurement, expediting, delivery, testing, inspection, pre-fabrication, modularisation
to ensure costs included are comprehensive and complete.
The procurement strategy should include:

- use of approved pre-qualified vendors
- HSE responsibilities
- approval of vendors and bids
- payment terms and conditions
- guidelines for single source bids
- division of responsibilities for source and shop inspection

- management of defects and concession requests

- responsibility for defects and making good
- division of responsibility for transport, unloading and lifting into place
- insurance
- progress reporting requirements
- provision of spares
- foreign exchange provision and planning
development will be required during project execution. Procedures for procurement of
services repair, refurbishment, and relocation of existing equipment. Re-use of
equipment may require retrofit kits to adapt non-standard connections and obsolete
equipment for re-use, such requirements will have a cost implication and should be
included in the advice to the estimate compiler.
17.3 Procurement responsibility matrix
A procurement responsibility matrix will confirm to the estimate compiler which costs
should be included in which element of the estimate. The matrix should show who is
responsible for:
- engineering and design
- supply of fully engineered equipment
- provision of documentation including operating and maintenance
manuals
- inspection and testing
- repair of defects
- transport, delivery and offloading
- lifting into place
- installation supervision
- commissioning
- performance guarantees
- provision of spares
Renovation and revamp projects that re-use existing equipment may require
subcontractor support to confirm design is suitable for the proposed duty if different
from the original, refurbishment or upgrade of the equipment and support during
installation, commissioning and start up.
18 DELIVERABLES
18.1 CAD/3D model requirements
The estimate compiler should be advised of the extent of CAD and 3D modelling
proposed for the detailed design so that costs for IT support system can be included
in the estimate. Depending on the charging model the project may accrue costs for:
- software licences
- server or network usage
- conversion of subcontractor file formats to match Huntsman standards
- IT maintenance charges

18.2 Deliverables defined
The disciplines involved in the project as part of the build up of their own design costs
should prepare a list of deliverables to be generated for the project. This list may not
be used directly by the estimate compiler but shall be provided for information and to
cross check completeness.
Note Technical Deliverables are those documents that inform the design of the plant
or specify some aspect of construction or project execution; they can generally be
readily identified because they are subject to revision control.
The list should be provided in full and will include forecast numbers of:
- drawings, PFDs, UFDs MFDs, P&IDs, SLDs, layouts, arrangements,
detail or fabrication details
- specifications
- datasheets
- technical reports
- equipment lists, line lists, pipeline specials list
- calculations
- EHS records
- MTO, BOM, schedules and lists
- project schedule/programme
The manhours to produce the listed deliverables will be reflected in the individual
discipline manhour estimates passed to the estimate compiler the deliverable list
shall be provided for information and to cross check completeness. The format(s) in
which final deliverables are to be produced should be defined so that any
requirements outside the normal provision from vendors or subcontractors can be
costed and included.
18.3 Document distribution matrix
A document distribution matrix, which may be adapted from a site standard matrix,
shall be prepared that identifies who will prepare, who shall receive copies, who will
check, who will approve, who will review documents and correspondence produced
for the project.
This list may not be used directly by the estimate compiler but shall be provided for
19 PROJECT CONTROL
19.1 Project control requirements
The estimate shall include provisions for planning, cost control and estimating effort
required to support the project.
Project controls must support:

- production, updating and issue of project programmes
- production of project cost reports
- change control
- progress measurement and reporting
- cash flow management

The estimate compiler shall ensure that a project programme, in weeks, has been
prepared which identifies the project time scales and indicates the design,
procurement, construction and commissioning periods together with the following
major milestone events:
- sanction date
- placement dates for major contracts
- ordering dates for major critical long delivery plant
- statutory approvals
Any change to Huntsman standard project control procedures must be noted to the
estimate compiler where a change to the project costs is involved.
19.2 Project accounting requirements
Any project specific accounting requirements other than Huntsman standard

procedures applicable to the project shall be advised where a change to project costs
will be involved.
19.3 Risk analysis
All projects shall have a risk analysis performed and the outcome included in the
estimate as a clearly identified risk provision. The estimate must detail a risk draw
down plan by project phase. Costs are to be included in the estimate to cover
periodic updates of the risk assessment. (Refer to SOP 111 Project Risk
management, BPG111 – Project Risk Management).
20 PROJECT EXECUTION PLAN
20.1 The Project Execution plan (PEP) shall be prepared using the template in
attachment SOP 100-08 Project Execution Plan.
The PEP shall as a minimum contain sections that describe project:

1 Safety and environmental
2 Project overview
Project objectives
Project organisation and responsibilities
Project scope
Project schedule key milestones
Estimate cost/Project budget
Unique or unusual project controls requirements
Unique or unusual security arrangements
Unique or unusual regulatory arrangements
Cost estimate class
Project risk summary
Document distribution
3 Engineering plan
Engineering scope definition (Work Breakdown)
Basis of design
Deliverable list by discipline
Milestone deliverable schedule
Work hour or cost budget by discipline
Management of Change (MOC) requirements
Unique or unusual technical or engineering requirements and how they will be
addressed
Design audit plan

4 Procurement plan
Contract Plan
Define procurement schedule
Responsibilities and interfaces
5 Quality Plan
Inspection requirements
Quality documents required
Project audits
6 Construction plan
Construction organisation
Constructability review
Subcontract plans
Temporary facilities and special lift plan
7 Commissioning plan
Commissioning and start up organisation and responsibilities
Operator training
8 Project close out
Close out documentation
Post event review
This document will provide the estimate compiler with a comprehensive summary of
the means by which the project will be realised.
21 ESTIMATE PARAMETERS
21.1 Reference AACE recommended practice No 18R-97
Estimates are characterised by the level of project definition and the use to which the
estimate will be put.
The tables give the parameters by which estimates are characterised:
CLASS 5 ESTIMATE
Description: Estimating Methods Used:
Class 5 estimates are generally prepared based on very Class 5 estimates virtually always use stochastic
limited information, and subsequently have wide estimating methods such as cost/capacity curves and
accuracy ranges. As such, some companies and factors, scale of operations factors, Lang factors, Hand
organizations have elected to determine that due to the factors, Chilton factors, Peters-Timmerhaus factors,
inherent inaccuracies, such estimates cannot be Guthrie factors, and other parametric and modelling
classified in a conventional and systemic manner. Class techniques.
5 estimates, due to the requirements of end use, may be Expected Accuracy Range:
prepared within a very limited amount of time and with Typical accuracy ranges for Class 5 estimates are - 20%
little effort expended— sometimes requiring less than an to -50% on the low side, and +30% to +100% on the high
hour to prepare. Often, little more than proposed plant side, depending on the technological complexity of the
type, location, and capacity are known at the time of project, appropriate reference information, and the
estimate preparation. inclusion of an appropriate contingency determination.
Level of Project Definition Required: Ranges could exceed those shown in unusual
0% to 2% of full project definition. circumstances.
End Usage: Effort to Prepare (for US$20MM project):
Class 5 estimates are prepared for any number of As little as 1 hour or less to perhaps more than 200
strategic business planning purposes, such as but not hours, depending on the project and the estimating
limited to market studies, assessment of initial viability, methodology used.
evaluation of alternate schemes, project screening, ANSI Standard Reference Z94.2-1989 Name:
project location studies, evaluation of resource needs Order of magnitude estimate (typically -30% to +50%).
and budgeting, long range capital planning, etc.

CLASS 4 ESTIMATE
Class 4 estimates are generally prepared based on Class 4 estimates virtually always use stochastic
limited information and subsequently have fairly wide estimating methods such as equipment factors, Lang
accuracy ranges. They are typically used for project factors, Hand factors, Chilton factors, Peters-
screening, determination of feasibility, concept Timmerhaus factors, Guthrie factors, the Miller method,
evaluation, and preliminary budget approval. Typically, gross unit costs/ratios, and other parametric and
engineering is from 1% to 15% complete, and would modelling techniques.
comprise at a minimum the following: plant capacity, Expected Accuracy Range:
block schematics, indicated layout, process flow Typical accuracy ranges for Class 4 estimates are -15%
diagrams (PFDs) for main process systems, and to -30% on the low side, and +20% to +50% on the high
preliminary engineered process and utility equipment side, depending on the technological complexity of the
lists. project, appropriate reference information, and the
Level of Project Definition Required: inclusion of an appropriate contingency determination.
1% to 15% of full project definition. Ranges could exceed those shown in unusual
End Usage: circumstances.
Class 4 estimates are prepared for a number of Effort to Prepare (for US$20MM project):
purposes, such as but not limited to, detailed strategic Typically, as little as 20 hours or less to perhaps more
planning, business development, project screening at than 300 hours, depending on the project and the
more developed stages, alternative scheme analysis, estimating methodology used.
confirmation of economic and/or technical feasibility, and ANSI Standard Reference Z94.2-1989 Name:
preliminary budget approval or approval to proceed to Budget estimate (typically -15% to + 30%).
next stage
CLASS 3 ESTIMATE
Description: Estimating method used:
Class 3 estimates are generally prepared to form the Class 3 estimates usually involve more deterministic
basis for budget authorization, appropriation, and/or estimating methods than stochastic methods. They
funding. As such, they typically form the initial control usually involve a high degree of unit cost line items,
estimate against which all actual costs and resources will although these may be at an assembly level of detail
be monitored. rather than individual components. Factoring and other
Typically, engineering is from 10% to 40% complete, and stochastic methods may be used to estimate less-
would comprise at a minimum the following: process flow significant areas of the project.
diagrams, utility flow diagrams, preliminary piping and Expected Accuracy Range:
instrument diagrams, plot plan, developed layout Typical accuracy ranges for Class 3 estimates are -10%
drawings, and essentially complete engineered process to -20% on the low side, and +10% to +30% on the high
and utility equipment lists. side, depending on the technological complexity of the
Level of Project Definition Required: project, appropriate reference information, and the
10% to 40% of full project definition. inclusion of an appropriate contingency determination.
End Usage: Ranges could exceed those shown in unusual
Class 3 estimates are typically prepared to support full circumstances.
project funding requests, and become the first of the Effort to Prepare (for US$20MM project):
project phase “control estimates” against which all actual Typically, as little as 150 hours or less to perhaps more
costs and resources will be monitored for variations to than 1,500 hours, depending on the project and the
the budget. They are used as the project budget until estimating methodology used.
replaced by more detailed estimates. In many owner ANSI Standard Reference Z94.2-1989 Name:
organizations, a Class 3 estimate may be the last Budget estimate (typically -15% to + 30%).
estimate required and could well form the only basis for
cost/schedule control.

CLASS 2 ESTIMATE
Class 2 estimates are generally prepared to form a Class 2 estimates always involve a high degree of
detailed control baseline against which all project work is deterministic estimating methods. Class 2 estimates are
monitored in terms of cost and progress control. For prepared in great detail, and often involve tens of
contractors, this class of estimate is often used as the thousands of unit cost line items. For those areas of the
“bid” estimate to establish contract value. Typically, project still undefined, an assumed level of detail takeoff
engineering is from 30% to 70% complete, and would (forced detail) may be developed to use as line items in
comprise at a minimum the following: process flow the estimate instead of relying on factoring methods.
diagrams, utility flow diagrams, piping and instrument Expected Accuracy Range:
diagrams, heat and material balances, final plot plan, Typical accuracy ranges for Class 2 estimates are -5% to
final layout drawings, complete engineered process and -15% on the low side, and +5% to +20% on the high
utility equipment lists, single line diagrams for electrical, side, depending on the technological complexity of the
electrical equipment and motor schedules, vendor project, appropriate reference information, and the
quotations, detailed project execution plans, resourcing inclusion of an appropriate contingency determination.
and work force plans, etc. Ranges could exceed those shown in unusual
Level of Project Definition Required: circumstances.
30% to 70% of full project definition. Effort to Prepare (for US$20MM project):
End Usage: Typically, as little as 300 hours or less to perhaps more
Class 2 estimates are typically prepared as the detailed than 3,000 hours, depending on the project and the
control baseline against which all actual costs and estimating methodology used. Bid estimates typically
resources will now be monitored for variations to the require more effort than estimates used for funding or
budget, and form a part of the change/variation control control purposes.
program. ANSI Standard Reference Z94.2-1989 Name:
Definitive estimate (typically -5% to + 15%).
CLASS 1 ESTIMATE
Class 1 estimates are generally prepared for discrete Class 1 estimates involve the highest degree of
parts or sections of the total project rather than deterministic estimating methods, and require a great
generating this level of detail for the entire project. The amount of effort. Class 1 estimates are prepared in great
parts of the project estimated at this level of detail will detail, and thus are usually performed on only the most
typically be used by subcontractors for bids, or by important or critical areas of the project. All items in the
owners for check estimates. estimate are usually unit cost line items based on actual
The updated estimate is often referred to as the current design quantities.
control estimate and becomes the new baseline for Expected Accuracy Range:
cost/schedule control of the project. Class 1 estimates Typical accuracy ranges for Class 1 estimates are -3% to
may be prepared for parts of the project to comprise a -10% on the low side, and +3% to +15% on the high
fair price estimate or bid check estimate to compare side, depending on the technological complexity of the
against a contractor’s bid estimate, or to evaluate/dispute project, appropriate reference information, and the
claims. inclusion of an appropriate contingency determination.
Typically, engineering is from 50% to 100% complete, Ranges could exceed those shown in unusual
and would comprise virtually all engineering and design circumstances.
documentation of the project, and complete project Effort to Prepare (for US$20MM project):
execution and commissioning plans. Class 1 estimates require the most effort to create, and
Level of Project Definition Required: as such are generally developed for only selected areas
50% to 100% of full project definition. of the project, or for bidding purposes. A complete Class
End Usage: 1 estimate may involve as little as 600 hours or less, to
Class 1 estimates are typically prepared to form a perhaps more than 6,000 hours, depending on the
current control estimate to be used as the final control project and the estimating methodology used. Bid
baseline against which all actual costs and resources will estimates typically require more effort than estimates
now be monitored for variations to the budget, and form used for funding or control purposes.
a part of the change/variation control program. They may ANSI Standard Reference Z94.2 Name:
be used to evaluate bid checking, to support Definitive estimate (typically -5% to + 15%).
vendor/contractor negotiations, or for claim evaluations
and dispute resolution

22 BASIS OF ESTIMATE – GENERAL RULES
22.1 This section describes the methods of cost determination to be applied when
undertaking the preparation of a cost estimate.
The Compiler shall ensure that all the associated costs which are relevant to his
project are summarised and incorporated into the cost estimate.
This guideline will address each element of an estimate in turn, the guideline will
define two estimating methods for each element:
 how costs for a Class 2 Sanction estimate should be developed to achieve
the level of accuracy required (Typical accuracy ranges for Class 2 estimates
are -5% to -15% on the low side, and +5% to +20% on the high side)
 how order of magnitude costs should be developed when a class 5 estimate
is required. (Typical accuracy ranges for Class 5 estimates are - 20% to -50%
on the low side, and +30% to +100% on the high side)
22.2 Where a class 4 estimate is required these will be generated by the inclusion of
some class 2 type data and some class 5 type estimates. That is to say that some
individual elements will be based on up to date quotes but more will be based on in
house cost records or calculated on a factorial basis.
22.3 All data and calculations used in the preparation of the estimate shall be
retained in the project file for future reference. The result of the estimating process
i.e. the cost for the project is clearly important, however, of equal importance is the
information on which the each of the estimated cost elements is based. It is this
‘basis of estimate’ that will determine the overall accuracy of the estimate but will also
highlight potential risks to the project delivering its outturn cost in line with the
estimated cost.
22.4 Because of time pressure it is likely that the costs will be built up using a
combination of in-house cost data and external quotations and information. In-house
data should only be used for significant cost items when it is known to be valid e.g.
achieved costs for recently purchased identical or similar equipment; where this is
not the case and quotes are out of date or cover only part of the required scope then
clearly a risk of exceeding the estimate cost will arise.
22.5 Costs associated with sections 24 Civil, Structural and Architectural ; 25. Piping;
26. Electrics and 27 Instruments may be estimated by preparing bills of quantity and
applying unit costs/rates which are known to be valid for the project location.
22.6 Works means the whole of the work to be executed in accordance with the
Contract.
22.7 Estimates may include a Prime Cost Sum (PC Sum) which is sum provided for
work or for costs which cannot be entirely foreseen, defined or detailed at the time of
estimate and which shall be the subject of a subsequent instruction once
requirements are established. A Prime Cost Sum means a sum provided for work or
services to be executed by a Nominated Sub-Contractor, or for materials or goods to
be obtained from a Nominated Supplier. Prime Cost sums are declared to the client
after mutual agreement that insufficient information is available to generate a better
estimate.
22.8 Supply shall be deemed to include the procurement or provision from stock to
specified requirements, expediting, inspecting, packing and protecting, haulage,

storage, delivery to place of fabrication or erection and for all directly associated
costs.
22.9 Fabricate, or Fabrication, shall be deemed to include taking delivery, off-loading,

checking, sorting and the acceptance of materials and components into Fabricator's
control, the preparation of any necessary fabrication sketches and calculations,
temporary/trial fit up, alignment, packaging of the finished fabrications, storing,
loading and haulage to place of erection or other specified location.
22.10 Erect, Erection, Install, Installation or Fixing of materials, fabrications,

assemblies, spools, components, plant, equipment and the like shall each be
deemed to include taking delivery, off-loading, checking, sorting, storing, loading and
haulage to place of erection, hoisting, provision and use of temporary supports and
bracings, temporary/trial erection, fixing and securing into final position.
22.11 Datum shall mean the nominated prime surface of the ground or structure
identified on the drawings. Working at heights or depths shall be stated relative to
datum.
22.12 Free Issue Materials are items supplied to the Contractor, purchased by others
for incorporation into the Works.
22.13 Alteration work or work in or to existing structures or installations shall each be

defined stating the location of the work and the ownership of any existing materials to
be removed. The operational condition of the plant at the time of the work shall be
stated, together with a description of any chemical hazard or contamination likely to
be encountered. Treatment or transfer to special disposal areas shall be detailed.
22.14 All work required to be carried out in hazardous conditions, with the use of
hazard-proof plant or otherwise to comply with special requirements shall be defined.
Work to be carried out in or under water shall be so described, stating whether canal,
river or sea water and, where applicable, the mean spring tide levels of high and low
water.
22.15 Where restrictions are encountered requiring Work Permit authorisation, this
shall be stated and a copy of the procedures included with the basis of estimate
documentation.
22.16 Where the Works are required to be carried out off site at a fabricator's yard or
other facility, this shall be stated, complete with delivery and loading/unloading
responsibilities. Where dismantling and/or re-fixing are specifically required, this
shall be described under a separate heading.
22.17 General arrangement drawings, piping and instrument diagrams, foundation,

structure and underground service drawings, schedules and other relevant design
information indicating the scope, location and type of work to be carried out shall,
where available, accompany the quantities or schedules. (see paragraph 6.4 for
minimum requirements).
22.18 Where the Contractor is required to carry out any engineering design and
drawing work this shall be stated. The extent of the work and responsibility for the
same shall be defined.

22.19 In the absence of adequate Specification information, descriptions on the

drawings or within Bills of Quantities, Schedules of Rates and the like shall be
amplified to comply with the requirements of this document.
22.20 Unless specifically required herein, temporary work shall not be measured but
shall be deemed to be included within the item to which it applies.
22.21 Where materials are to be supplied as free issue, this shall be stated together
with details of:
 Point of delivery or collection and responsibility for handling, together with a
schedule of delivery key dates.
 Material test certificates and identification.
 Methods of protection, storage and associated preparatory work such as
degreasing and cleaning.
 Condition of steelwork and pipework connections.
 Responsibility for reconciliation and storage of material whilst in the care of
the Contractor and return of surplus and scrap.
22.22 The following shall be deemed to be included in an item unless otherwise

stated:
 Labour and all costs in connection with the item
 Use of construction plant and tools
 Materials and all costs in connection with the item
 Allowance for waste
 Consumable stores, including jointing materials (but excluding gaskets and
bolts, nuts and washers for external connections), welding rods, water and
power, fuel and the like and all costs in connection therewith
 Test certificates, mill certificates, identification and general inspection
requirements
 Welder qualification testing and welding procedure approval. The
responsibility for the supply of testing materials shall be stated
 Establishment and overhead charges
 Temporary works
 Templates.
 Return of empty containers.
 Clearing away rubbish.
22.23 Special attendance of Nominated Sub-Contractors to the site shall be defined

as a specific item in each case, giving particulars of the requirement such as
unloading, storing, hoisting and placing in position, providing special scaffolding,
weather protection and environmental control, power, or any other services not
included under general attendance.
22.24 General attendance of nominated sub-contractors shall be defined in each

case and shall, unless stated otherwise, be deemed to include:
 Allowing use of standing scaffolding, mess-rooms, sanitary accommodation
and welfare facilities provided by others
 Providing space for office accommodation and for storage of plant and
materials.
 Providing light and water at a cost to the sub-contractor to be agreed
 Clearing away his own rubbish
 Making good construction facilities under his control

23. MAIN PLANT ITEMS (MPI) - (including packaged plant)
Requirements for Class 2 Sanction grade estimate.
23.1 All Plant Items shall be identified and the equipment costs associated with each
item shall be stated using up to date quotations obtained for all items through
Procurement Department.
23.2 Quotations validity should be fixed or firm for the period likely to elapse between
generating the estimate and placement of order. Where this is not practical an
allowance shall be added to cover cost of escalation between the dates.
23.2 Quotations shall be based on good quality engineering documentation which
should be at ‘Approved for Design’ status.
23.3 Quotations shall make clear:
 What items of equipment are to be included in the scope of supply, including
motors and couplings, holding down bolts, temporary lifting frames, fixed
ladders, built in control equipment, operating consumables to be included e.g.
filter media
 What painting and protection shall be applied before shipment
 What level of packing and protection is required for shipment
 Who is responsible for loading and unloading on delivery
 What documentation shall be supplied by the vendor and what right of
approval Huntsman will exercise
 If the format of Operating and Maintenance manuals to meet Huntsman
standards are required rather than the vendors standard
 What testing and inspection will apply and how much Huntsman want to
witness
 What spares will be supplied with the main delivery and what will be supplied
later
 Will the subcontractors staff be required for commissioning
 What delivery periods have been quoted
 What liabilities are to apply to the vendor and when they will be discharged
23.4 It is probable that at least three quotations for each equipment item will have
been obtained and once quotes have been equalised and assessed both technically
and commercially a decision must be made on which is likely to be the successful
vendor, it is this cost that will be included in the estimate.
Class 5 Estimate – order of magnitude
23.5 Where an order of magnitude estimates is required to support an Idea Form

submission historical information in the form of out of date quotations or original
purchase orders for equipment which is Replacement in Kind may be used provided
they can be properly escalated to present day prices.
23.6 Where a budget quotation has been obtained to support an estimate every effort
should be made to obtain it through procurement department. Generally budget
quotations are likely to include the minimum scope of supply in response to a set of
less detailed enquiry documents. Where a budget quote does not contain sufficient
detail either because the vendor needs to do detailed design and will not do so
without an order or the quotation is deficient, allowances should be made to cover
such items as listed in 23.3 above.
23.7 Telephone budget quotes or updates to existing quotes should only be used
where time pressure does not allow formal or budget quotes. They may be used
provided they are obtained from trusted suppliers of many years standing and should

be backed up by written quotes as soon as practical. Such quotes should be

escalated to include any for the items listed in 23.3 as are applicable to the vendor
scope of supply.
23.8 Where it is not possible to obtain quotations of any kind, parametric methods
may be used for standard fabricated equipment. In this case costs may be based on
estimated weight multiplied by a cost factor or by scaling up from some other
parameter e.g. flow rate. Adjustments for materials of construction should be factored
in and allowances made for supplementary items as discussed in 23.3 above.
23.9 It is acknowledged that this kind of estimate cannot be interrogated in detail nor
are they suitable for use as Base Estimates on which to apply change management.
24 CIVILS, STRUCURAL AND ACHITECTURAL (CS&A)
Requirements for Class 2 sanction grade estimate.
24.1 The compiler shall ensure that all CS&A costs include provision of, delivery to
and offloading; sorting, storage and inspection and acceptance of all materials to the
jobsite. Construction shall include provision of labour and plant to install and fix
materials including any temporary provision that may be necessary. Prices shall
include any consumables including fuel required for the execution of the works. It is
assumed that temporary utilities will be provided by Huntsman subject to agreement.
24.2 Quotations validity should be fixed or firm for the period likely to elapse between
generating the estimate and placement of order. Where this is not practical an
allowance shall be added to cover cost of escalation between the dates.
24.3 Quotations shall be based on good quality CS&A documentation which itself
should be generated from ‘Approved for Design’ status engineering drawings and
schedules.
24.4 Site preparation and finishing: The costs for site preparation, levelling,
excavation and removal of spoil shall be based on priced Bills of Material. The Bill of
Material may be generated in house or by a specialist CS&A contractor.
24.5 Site preparation costs may include: Trial pits and trenches, Light cable
percussion boreholes, rotary drilled boreholes, samples, site tests and observations,
instrumental observations, laboratory tests, professional services. Geotechnical and
speciality Processes: Drilling grout holes through materials other than rock, Drilling
grout holes through materials including rock, Driving injection piles for grout holes,
Grout holes, Grout materials and injection, Diaphragm walls, Grout anchorages,
Sand, Band and wick drains. Demolition and Site Clearance: General Clearance,
Remove trees, stumps and back fill holes, building removal, other structures,
Pipelines (300mm+) & supports, Removal of asbestos or other hazardous material or
contamination.
24.6 Earthworks: excavation by dredging, excavation for cuttings, excavation for

foundations, general excavations, disposal of spoil, excavation ancillaries, filling,
filling ancillaries, landscaping, costs shall be based on Bills of Material and up to date
rates.
24.7 Piling: The piling requirements shall be determined, based upon the calculated
loads and the soil load bearing capacity, and the associated costs estimated. Pile

type, size and number required shall be identified. Pricing shall include supply
delivery and driving into position including the provision of pile drivers and labour.
Piling types vary and costs must reflect the type required for the project: bored cast in
place concrete piles, driven cast in place concrete piles, preformed concrete piles,
preformed pre-stressed concrete piles, preformed concrete sheet piles, timber piles,
isolated steel piles, interlocking steel pipes. Piling Ancillaries: Cast in place concrete
piles, pre-boring, back fill, casings, Cast in place concrete piles reinforcement,
isolated piles pre-boring, backfill extensions, interlocking steel piles, pre bore, jetting,
extensions, cut off surplus, prep heads, obstructions, pile tests.
24.8 Foundations: Preliminary sketches shall be prepared to quantify the site

foundations, including pile caps, ground beams and floor slabs. Reinforcement where
required shall be specified, quantified and priced.
Costs for foundation work may include: provision of concrete – standard mix,
designed mix, prescribed mix, placing of concrete. Concrete ancillaries: formwork
rough finish, formwork fair finish, formwork other stated finish, formwork stated
surface features, reinforcement, joints, post tensioned pre-stressing, concrete
accessories. Pre cast concrete: beams, pre-stressed pre-tensioned beams, pre-
stressed post tensioned beams, columns, slabs, segmental Units, units for subways
culverts and ducts, copings, sills and weir blocks
24.9 Drains, sewers, effluent lines and pits, lagoons and reservoirs: The types,
routing and dimensions of drain, sewer and effluent lines shall be established. A full
engineering study shall be made of any reservoir, lagoon or effluent pit.
Underground piping can be engineered in a variety of materials, costs should include

the pipe fittings and supports necessary to complete the systems. Pipework – pipes
Clay pipe and fittings, Concrete pipe and fittings, Iron pipe and fittings, Steel pipe and
fittings, PVC pipe and fittings, GRP pipe and fittings, HDPE pipe and fittings, MDPE
pipe and fittings, valves and penstocks. Manholes and Pipework ancillaries,
manholes, other chambers, gullies, french drains, Rubble drains, Ditches and
Trenches, ducts and metal culverts, crossings, reinstatement, other pipework
ancillaries. Costing shall be made on preliminary Bills of Material and up to date unit
rates.
Underground piping will generally be laid in trenches cut specifically for the purpose
these costs must be taken into account. Pipework – supports, protection, ancillaries
to laying and excavation: Extras to excavation & back filling, special pipelaying
methods, beds, haunches, surrounds, wrapping and Lagging, concrete stools and
thrust blocks, isolated pipe supports.
24.10 Roads: The routes, widths and construction of roads shall be established.
Costs of roadways should include: Roads and Paving, sub bases, flexible road bases
and surfacing granular material specification, sub bases, flexible road bases and
surfacing macadam, sub bases, flexible road bases and surfacing asphalt, concrete
pavement, joints in concrete pavement, kerbs channels and edgings, light duty
paving, ancillaries, signs, markings and studs.
24.11 Concrete structures: Preliminary designs shall be completed to quantify

reinforced concrete structures.

Costs for concrete structures may include: provision of concrete – standard mix,
designed mix, prescribed mix, placing of concrete. Concrete Ancillaries: formwork
rough finish, formwork fair finish, formwork other stated finish, formwork stated
surface features, reinforcement, joints, post tensioned pre-stressing, concrete
accessories. Pre Cast Concrete: beams, pre-stressed pre-tensioned beams, pre-
stressed post tensioned beams, columns, slabs, segmental units.
24.12 Buildings: The sizes of process and non-process buildings shall be agreed and
the type of construction shall be stated. Any special flooring requirements for loading
or service shall be taken into account. The building will be shown on a study general
arrangement drawing. The type and extent of heating/ air conditioning shall be
established. The feasibility of any future extension shall be considered and any cost
implications shall be incorporated into the estimate. The requirements for roofing,
cladding, glazing, ventilation and rainwater shall be determined.
Building construction must be established to enable accurate pricing: Brickwork,

Block work, and masonry, common brickwork, facing brickwork, engineering
brickwork, lightweight block work, dense concrete block work, artificial stone block
work, ashlar masonry, rubble masonry. Water proofing: damp proofing, tanking,
roofing, protective layers, sprayed or brushed waterproofing. Building finishes and
services: carpentry & joinery, insulation, windows, doors and glazing, surface
finishes, piped building services, ducted building services, cabled building services.
24.13 Structural steelwork: A general arrangement drawing shall be prepared

showing nominal sizes, type of flooring and loadings. A take off of the structural
steelwork shall be made and the tonnage of steel shall be determined. Pipebridge
general arrangements shall be prepared and details of loading shall be shown. The
painting and protection philosophy and specification shall be established.
Structural steel is classified: heavy structures, medium Structures, light Structures,

platform and flooring, stairs ladders & hand railing, architectural Items, surface
treatment
Requirements for Class 5 Estimate – Order of Magnitude
24.14 Where it is not possible or practical to obtain quoted prices from a Civil
contractor in-house estimates may be based on factorial methods using the best
quantification available to the project.
24.15 Order of Magnitude estimates may be based on parametric scaling using a key
parameter such as floor area or based on a similar construction on adjacent plant
plot where information or time pressures prevent the most approximate
quantification.
24.16 It is acknowledged that this kind of estimate cannot be interrogated in detail

nor are they suitable for use as Base Estimates on which to apply change
management.
25. PIPING SYSTEMS
25.1 Pipe Material Take Off (MTO): A piping MTO, which details length, bore and
material, shall be prepared and costs shall be determined based upon approved
piping specifications. Piping can be classified general pipework, jacketed pipework,

tracing - carbon steel and copper, lined pipework, coating and wrapping for corrosion
protection, modification or refurbishment work to existing piping.
Supply of materials shall be determined:

 Pipework with materials supplied as free issue to the installation contractor.
 Pipework with materials of the installation contractor's own supply.
 Pipework with materials obtained from a nominated supplier or fabricator.
Any special requirements or other essential particulars should be specified, e.g. the
extent of protection before and after installation or fabrication, including requirements
for touching and up and making good, the extent and method of any internal cleaning
prior to commissioning. Fabrication specifically required on site or off site. Pipework
generally shall be classified according to nominal size and given separately by
specification and material. Pipe wall thicknesses shall be in accordance with the
given pipe schedule references. Where the Specification requires different types of
welding these should be given under separate headings.
25.2 Valve and pipeline fitting take off: A valve and pipeline fitting take off, which
details size and type, shall be prepared and associated costs shall be determined.
The Material Take Off shall include all pipe, fittings, flanges, nuts, bolts and gaskets.
The Piping MTO shall account for valves and specialised items of inline equipment
such as filters, hoses, expansion joints etc.
25.3 Pipework ancillaries: The costs of pipe supports, erection, tagging, marking and
testing shall be included. Pipe supports, hangers and the like generally descriptions
shall include the method of fixing to the parent structure and details of any finishing
treatment required, including galvanising, shot blasting, painting and the like. All
cutting, drilling, welding, bolting to fix supports shall be deemed to be included.
Where appropriate, reference to any proprietary standard or detail drawing shall be
given in the description.
25.4 Testing: Non-destructive testing shall be defined and given under separate
headings such as gamma ray, X-Ray, ultrasonic, dye penetration, magnetic particle
inspection etc. Testing specification for pipework shall include:
 Testing items shall be deemed to include all necessary cutting, jointing and
the like, temporary removal and replacement of in-line equipment and
instruments, blanking off ends and temporary works associated with testing
 Provision of equipment and completion of test records.
 Responsibility for the supply of replacement gaskets, bolts and the like shall
be stated.
The location at which testing is to be carried out shall be given under appropriate
headings:
 In Fabrication Shop stating whether on site or off site.
 On site in final position, including sectional testing.
 The responsibility for the provision of test medium (water, air, nitrogen) shall
be stated together with details of any charges, storage provisions, drain off,
disposal and the like.
 Testing of fabricated spool pieces shall be enumerated stating the nominal
size of the dominant pipe.
Line testing of pipework shall be measured in metres measured overall stating the
nominal size of the dominant pipe.
25.5 Pipeline identification shall be defined stating the materials to be used, weld
tags, valve or equipment tags, banded colour coding and flow indicator arrows.

Pickling of pipework shall specified stating the chemical process, nominal size and
lengths of pipework to be treated.
25.6 Where it is not possible or practical to obtain quoted prices from a Piping or
Mechanical installation contractor in-house estimates may be based on factorial
methods using the best quantification available to the project.
25.7 Order of Magnitude estimates may be based on a similar construction on

adjacent plant plot where information or time pressures prevent the most
approximate quantification. Such estimates shall be escalated to account for the
effects of inflation as appropriate.
26. ELECTRICAL EQUIPMENT
26.1 Electrical equipment costs to include, distribution equipment, motor control

equipment, rotating machines, lighting and services, communication equipment such
as telephones, fire alarms and site communication systems, miscellaneous
equipment, electrical package plant. The principal cable sizes, cable routes and
cable lengths shall be identified and costed. Switchgear, distribution gear and
equipment including prefabricated switchboards, isolator switches, switch fuses,
distribution boards, starters, busbar chambers, motors, fans, batteries, rectifiers,
feeder pillars, meters and the like shall each be enumerated stating the rated
capacity and size. Forming openings in trunking together with any bushing material
shall be deemed to be included. Openings formed prior to delivery and pre-drilled
gland plates shall be given in the description.
26.2 The requirements for standby generation and uninterruptible power supply
systems shall be identified and costed. The sizes and general requirements for sub-
stations, switchrooms and generator rooms shall be established. Pylons, poles and
the like together with their supporting brackets shall each be enumerated stating the
size, method of fixing and the nature of the structure. Lamp standards shall be
enumerated stating the size and method of fixing. Boring or excavating holes for
poles and stays shall be deemed to be included. Catenaries shall be enumerated
stating the type and the size. Eye-bolts, shackles and straining screws shall be given
in the description stating the method of fixing. Cable Trenches - Sand for bedding
cables in trenches, preformed ducts and draw pits shall be given in cubic metres
stating the depth of sand and whether laid in one or more layers under and over
cables. Disposal of any displaced excavated material shall be deemed to be
included. Cable tiles, marker tapes and the like shall be specified including type and
size. Route markers shall be enumerated. Any concrete surrounds shall be given in
the description. Excavating shall be deemed to be included.
26.3 Lighting and small power requirements shall be included in the estimate.
Accessories including luminaries, switches, socket outlets, thermostats, bell pushes,
signal indicating units, stop/start push buttons and the like shall be included. Lighting
shall include associated items, such as boxes, connector blocks, cable and conduit
pendants stating the length of suspension, earthing tails, reflectors, shades,
lampholders, lamps and the like. Auxiliary fittings including clocks, telephones, alarm

bells, loudspeakers and the like should be defined specifically unless supplied other
than through the project.
26.4 Any requirements for hazardous area equipment shall be identified and costs
included.
26.5 Conduit, trunking, trays and ladder rack and any proprietary fittings to make
these systems complete shall be included. Cable fixings including saddles, cleats,
clips, hangers and the like shall be deemed to be included with racking systems
unless stated otherwise. Sundry items which may be included depending on project
specification include Discs and labels for the identification of fittings and equipment
shall be enumerated. Alternatively discs and labels may be given in the description of
the items to which they refer. Repeated markings on cables shall be given in the
description of the cable stating the spacing. Equipment ancillaries to be handed to
employer including loose keys, ancillaries, tools, spares, warning notices, shock
treatment cards and the like shall be included.
26.6 Where it is not possible or practical to obtain quoted prices from an Electrical
installation contractor in-house estimates may be based on factorial methods using
the best quantification available to the project.

27 INSTRUMENTATION
27.1 Instrumentation costs to include procurement of instrumentation for flow

measurement, pressure measurement, temperature measurement, level
measurement, analysis, control valves.
27.2 Instrument cabling, cable tray and in-line equipment types and sizes shall be
identified. Instrument pipework descriptions shall include particulars of final location
as follows: on arm or hanger, cable tray, ladder rack or other surfaces conduits or in
trunking, wrapped around pipework.
27.3 Packaged plant instrumentation shall be clearly identified. The suitability of and
interface with the packaged plant instrumentation shall be established.
27.4 The calibration and checking of instruments including certification before and
after installation shall each be included stating the type of instrument. Discs and
labels for the identification of instruments and instrument equipment shall be
enumerated. Alternatively discs and labels may be included with the items to which
they refer.

27.5 Instrument ancillaries such as air-pressure reducing/filter sets and voltage

stabilising units shall each be included. Instrument piping systems shall be supplied
complete with valves, filters and drains as required.
27.6 Functional testing of instrument systems and checking of alarms, trips and
interlocks shall be described and included in the cost. The provision of instrument air
where required for functional testing shall be defined and the supplier identified. The
provision of associated reports and certificates, including those of any test equipment
being provided shall be identified. Commissioning of the completed installation shall
be included unless included in the overall commissioning plan.
27.7 Where it is not possible or practical to obtain quoted prices from an

Electrical/Instrument installation contractor in-house estimates may be based on
factorial methods using the best quantification available to the project.

28 CONTROL SYSTEMS
28.1 Control Equipment costs to include, hardware and standard software, functional
specification, application software and development aids, power supply units,
consultancy – licence fees, training and test equipment, operator interface, process
automation, control and automation package plant.
28.2 Costs for interfacing or restoring links to the existing plant control system where
only minor changes are required to the plant.
28.3 Where it is not possible or practical to obtain quoted prices from a Control
designer/installation contractor in-house estimates may be based on factorial


29 HEATING, VENTILATING AND AIR CONDITIONING (HVAC)
29.1 HVAC equipment shall include space heating equipment, Ventilation Equipment,
Air Conditioning Equipment, Ancillaries.
29.2 Ductwork shall include duct fabrications, expansion joints, grilles, access doors
and panels, inline equipment, control dampers, fire dampers, bracing steel work. Wall
sleeves and packing shall be included in the cost of ductwork.
29.3 Fan units, filters, heating and cooling coils shall be supplied complete and shall
include local control equipment unless specified as part of the overall plant control
system.
29.4 Fireman’s control of fans and dampers shall be included as specified in the
safety documentation.
29.5 Where it is not possible or practical to obtain quoted prices from a Control
designer/installation contractor in-house estimates may be based on factorial

30. INSULATION AND PAINTING
30.1 Insulation
This Section applies to all types of insulation to pipework, ductwork, vessels,

equipment and machinery.
Items within this Section shall, unless otherwise stated, be deemed to include:
 Insulation materials and cladding
 Removable covers or boxes
 Fixings and adhesives.
 Forming laps, welts, cut outs, recesses and the like.
 Pointing, sealing, towelling smooth, chamfered and sealed edges and similar
operations.
 Working around supports, small drains, vents or similar obstructions.
Each classification of insulation shall be divided to distinguish between:

 Insulation with materials supplied as free issue to the Contractor.
 Insulation with materials of the Contractor's own supply.
 Insulation with materials obtained from a Nominated Supplier or Fabricator.

Any Special requirements or other essential particulars should be stated such as:
 Protection before and after insulation.
 Cleaning, painting or wrapping to surfaces prior to application.
 Fabrication of insulation materials or cladding specifically required off site.
Insulation and trace heating requirements shall be identified and cost estimates shall
be made. Ensure that field run small bore pipework includes any fabrication costs.
30.2 Where it is not possible or practical to obtain quoted prices from an Insulation
installation contractor in-house estimates may be based on factorial methods using
the best quantification available to the project.

30.5 Painting
This section applies to painting, linings, fireproofing and other protective coverings,
factory treatment, including shot blasting, galvanising and painting before delivery
shall be specified.
Painting/coating specifications shall be agreed for each plant area and a cost
estimate shall be made to paint or coat, to the appropriate standard, all plant items,
piping and steelwork not supplied ready painted.
Specifications shall include particulars of the following:

 Materials.
 Thickness and/or number of applications.
 Surface finish.
 Nature of background.
 Any background preparation.
 Method of application.
 Method of fixing to background.
 Laps, jointing and pointing.
 Preparation of pre-applied coating and background to receive on site coatings
 Special requirements associated with method of application.
 Tests required of materials or finished work.
 Where special protection in excess of masking dials, instruments and the like
is required, this shall be defined.
Work should be grouped according to specification under an appropriate heading.

 Protective coverings with materials supplied as free issue to the Contractor.
 Protective coverings with materials of the Contractor's own supply.
Work should be classified under the following sub-headings:

 Inside work which shall be deemed to include any work protected from the
weather both in internal and external locations.
 Outside work which shall be deemed to include all work exposed to the
weather.
30.6 Where it is not possible or practical to obtain quoted prices from a Painting

31. INSTALLATION
31.1 Third party costs associated with installation of main plant items should account
for the following.
Site Establishment to include: accommodation for staff and labour, furniture,

telecommunications, computer equipment and IT links, reprographics, office
consumables, site security, first aid and medical. These facilities should be provided
by the contractor for his own use or an agreement on the use of Huntsman facilities
should be in place with liabilities and costs clearly identified.
Temporary Works to include: site establishment area preparation, construction

utilities, temporary access works, scaffolding, dismantling and disposal or re-use of
spoil, set up for testing and commissioning and dismantling of same, provision of test
blanks temporary drains and vents, provision of consumables, fuels.
Provision of construction equipment and small tools to include: hired construction

equipment, project owned construction equipment, third party owned and operated
equipment, personnel vehicles for site use. Where significant construction work at
height is anticipated a scaffolding strategy will be required
31.2 Construction services to include: Construction site maintenance and house

keeping during the construction period, site clean up.
Construction supervision to include: local staff, third party staff, specialist services.
Construction labour to include: direct hire, third party labour, specialist services.
31.3 Structural Steel Installation to include: erection and fixing of prefabricated

structures, structure fabrication, erection and fixing, platform, flooring erection and
fixing, stair and handrail erection and fixing, pipe rack erection and fixing, scaffolding
specifically for structures, structural rectification work.

31.4 Plant Equipment Installation to include: placement and fixing of process

equipment items, placement and fixing of mechanical equipment items, placement
and fixing of equipment module, scaffolding specifically for equipment, rectification
work.
31.5 Piping fabrication and installation to include: fabricate pipe work, lift, fit, weld
and make joints, flush, pickle and pig, testing, support fabrication and installation,
scaffolding specific to piping, rectification work.
31.6 Electrical, Instrument and Control installation to include: cable and other
installation materials, transport EI&C equipment on site, fit, assemble and fix, make
connections, testing, scaffolding specific to EI&C equipment, rectification work.
31.7 Heating, Ventilation and Air Conditioning Installation to include: heating

equipment installation, ventilation equipment Installation, air conditioning equipment
installation.
31.8 Safety Equipment Installation to include: fire fighting equipment installation, first
Aid Equipment Installation, radiological safety equipment Installation, biological
Safety Equipment Installation.
31.9 Where it is not possible or practical to obtain quoted prices from an Installation

31.11 It is acknowledged that this kind of estimate cannot be interrogated in detail

nor are they suitable for use as Base Estimates on which to apply change
management.
32 COMMISSIONING
30.1 Commissioning will often be carried out using the site establishment that was in
place for the construction and installation phase and whilst the cost of preliminaries
to place and set up the site establishment will not be required the fixed hire and
running costs will still be chargeable.
32.2 Commissioning may require temporary works to support the static and running
tests this may involve temporary scaffolding over and above that required for
construction and installation. Note construction scaffolding should be taken off hire
and removed at the first opportunity to reduce ongoing hire charges.
32.3 Costs for test equipment, tools and labour to install test and commissioning
equipment should be included.

32.4 Specialist third party supervision from suppliers of major items of equipment
may be required also the cost of preparing project specific Operating and
Maintenance manuals may be charged extra.
32.5 The cost of test materials either stimulant or stock form the plant should be
included and the cost of consumables required during commissioning should be
added.
32.6 Training of operators, reliability and maintenance staff should be included in the
estimate; this may require the services of an external trainer/instructor but will always
require operations staff from the plant whose time must be included.
32.7 Where it is not possible or practical to obtain quoted prices from an Installation

33. DESIGN COSTS (internal and external)
33.1 The resources requirements and costing rates shall be established for each
discipline including general management (Venture Managers). These shall include
staff costs, travel, hotel accommodation and other expenses. Manhour estimates will
generally be based on the agreed deliverable lists from each engineering discipline,
some costs will be time based as defined in the discipline estimating guideline.
Costing rates will be adjusted to suit local site conditions but should include
employment costs and overhead.
33.2 Disciplines to be accounted for may vary according to the local site organisation
however they should generally include:
Management: General Management, Project Management.

Technical: Project Engineering, Process Engineering, Safety Engineering,
Commissioning Engineering home office
Engineering disciplines: Mechanical, Vessels, Civil, Structural, Piping, Electrical,
Instrument and Control, Construction home office.
Project Support: Planning, Estimating, Cost Control, Quality Assurance, Inspection,
Procurement, Expediting, Legal/Commercial.
Project Services: Document Control, Computer Services, Secretarial
Operations Support: Accounts, Human Resources, Reprographics, Trainees, Home
office site services, (note these disciplines may be part of overhead rather than
charging to project depending on local site practice).
Supervision of installation (at site): Management, Construction Management,
Engineering support, Project support, Project services, Operations support.

Commissioning engineering and training (at site): Management, Project

Management, Engineering, Project support, Project services, Operations support.
33.3 Other costs that must be accounted for associated with staff costs include:
Travel and subsistence: In country travel, Overseas travel, Subsistence allowance,
Subsistence expenses.
Head office expense: Head office accommodation, Head office computer costs, Head
office reprographics, Head office stationary, Head office telecommunications, CAD
charges, Translations. (It is likely that all of these items will be included in the
overhead).
Fees and royalties (project specific)
32.7 Where it is not possible or practical to obtain costs based on manhour estimates
from the individual disciplines estimates may be based on factorial methods using the
best quantification available to the project.
32.8 Order of Magnitude estimates may be based on a project of similar magnitude

and complexity where information or time pressures prevent the most approximate
quantification. Such estimates shall be escalated to account for the effects of inflation
as appropriate.
34 PROCUREMENT
34.1 The costs of procurement are generally accounted for in the Design costs,
however from time to time a subcontractor may require development fees for a
Huntsman specific design it may be advantageous to account for these separately.
35 PROJECT INDIRECT COSTS
35.1 Project indirect costs shall be considered as those costs which are not part of
the permanent installation.
35.2 Any such costs shall be taken into account, particular attention being given to:
- land purchase
- local authority fees
- forward buying of currency
- licence fees
- inspection of existing plant pre-project
- pre-sanction costs
- project auditing and report analysis
35.3 Pre-sanction costs including all costs associated with design and pilot plant
trials are included under this heading, together with the cost of the site survey and
the soil survey.

36. START-UP
36.1 Start-up allowances shall be identified and agreed with the operating company.
(Reasonable provision shall be made for rectification work during start-up.) These
should be included in the capital expenditure proposal but may also form part of the
estimate.
37. ESCALATION
37.1 Escalation shall take into account inflation rises during the expected project
programme and also those during the period between the preparation of the estimate
and sanction by the Board. Due regard shall be given to the following:
- national trends over the duration of the project
- local versus national labour award determinations
- any fixed price quotations.
38. CONTINGENCY
38.1 The contingency allowance is calculated based on the identified and quantified
Risk Register and/or the use of a fixed percentage of the TIC where there has been
insufficient work to generate a risk assessment.
39. PROJECT TOTAL
39.1 The Compiler shall satisfy himself that all the estimated costs are incorporated
into the "Project Total" figure.
40. SPARES
40.1 The Compiler shall ensure that an allowance for spares is shown separately in
the cost estimate and that:
- the requirements for spares has been discussed and agreed with the
operating maintenance and reliability staff
- the commissioning spares requirements together with those for 2 years
operation (typically) have been included in the cost estimate.
41. ESTIMATE FORMAT
41.1 The estimate shall present the estimate in a standard format attachment No. 1
shows the summary sheet. The cost categories are the same as those in the
Huntsman cost collection systems, e.g. timecard, accounts etc.
41.2 A detailed estimate build up shall be presented using the back up sheets in
standard form, see attachment No2.

ATTACHMENTS
No.1 Estimate summary

No.2 Detailed estimate – example
No 3 Loaded Rates
No 4 Cost relationships – Lang Factors

Attachment No 1
Estimate summary
Title
Location CA/GM/HV/SC/TK/UM
Project NN/XXXXX Breakdown 400XXXX
DESIGNATION Cost Code Activity Budget
ASSET NN/XXXXX.01.01 0€
MPI's NN/XXXXX.01.01.01 0€
MPI's 400XXXX 0030
Tools 400XXXX 0121
Engineering NN/XXXXX.01.01.02 0€
Design - Huntsman NN/XXXXX.01.01.02.01 0€
Design 400XXXX 0140
Engineering 400XXXX 0200
Design - External NN/XXXXX.01.01.02.02 0€
Design - External 400XXXX 0270
Construction Supervision - Huntsman NN/XXXXX.01.01.02.03 0€
Construction Supervision - Huntsman 400XXXX 0280
Construction Supervision - External NN/XXXXX.01.01.02.04 0€
Construction Supervision - External 400XXXX 0290
Construction NN/XXXXX.01.01.03 0€
Civils NN/XXXXX.01.01.03.01 0€
Civils 400XXXX 0310
Structural Steelwork NN/XXXXX.01.01.03.02 0€
Structural Steelwork 400XXXX 0370
Piping & Valves NN/XXXXX.01.01.03.03 0€
Piping & Valves 400XXXX 0440
Insulation & Painting NN/XXXXX.01.01.03.04 0€
Insulation & Painting 400XXXX 0490
Erection of MPIs NN/XXXXX.01.01.03.05 0€
Erection of MPIs 400XXXX 0520
Electrical NN/XXXXX.01.01.03.06 0€
Electrical 400XXXX 0540
Instrumentation NN/XXXXX.01.01.03.07 0€
Instrumentation 400XXXX 0620
Construction Indirects NN/XXXXX.01.01.03.08 0€
Construction Indirects - General 400XXXX 0720
Software 400XXXX 0721
Computer Hardware 400XXXX 0722
Office establishment 400XXXX 0723
Means of transport (vehicles) 400XXXX 0724
Handling Equipment (forklift truck) 400XXXX 0725
Laboratory Equipment 400XXXX 0726
Indirect Costs NN/XXXXX.01.01.04 0€
Contingency NN/XXXXX.01.01.04.02 0€
Contingency ( Imprévus ) 400XXXX 0780
Un-installed Spares NN/XXXXX.01.01.04.03 0€
Un-installed Spares 400XXXX 0790
Commissioning & Startup NN/XXXXX.01.01.04.04 0€

Commissioning & Startup 400XXXX 0800
Pre Sanction Costs NN/XXXXX.01.01.05 0€
Pre Sanction Costs 400XXXX 0820

Attachment No 2
Detailed estimate



Loaded rates
See attachment, note these are composite rates and cannot be interrogated in depth
they are designed to give an order of magnitude cost to underpin a class 5 estimate
and should be used with extreme caution in any other context.
Prices may be taken as correct at a base date of January 2013 and for United
Kingdom supply, costs should be adjusted to take account of date of estimate and
escalation included and any site specific costing information available.

COUNT MODEL
DESCRIPTION Equipment Piping Electrical Instruments I/O
No of Instruments
No of Lines per Total No of Drives per per Equipment Total No of I / O per Total I / O
Equipment Type Total No Of Lines Meterage Equipment Type Total Drives Type Instruments Equipment Type Count
(No) (No) (No) (m) (No) (No) (No) (No) (No) (No)
VESSELS
PRESSURE VESSELS.......
COMPLEX VESSELS (Jktd/Internal etc) - 15 - - - - 17 - - -
BASIC VESSELS (No Internals) - 12 - - - - 7 - - -
SPHERES - 6 - - - - 7 - - -
SPECIAL VESSELS (Fermenter,Reactor Etc) - 50 - - - - 23 - - -
COLUMNS (Single Diameter) - 20 - - - - 10 - - -
COLUMNS (Multi Diameter) - 25 - - - - 23 - - -
DRIERS (Static) - 7 - - - - 2 - - -
NON-PRESSURE VESSELS....... - - - - - -
TANKS (Site Built/Plate Small) - 6 - - - - 2 - - -
ATMOS VESSELS (Non-Pressure Vessels) - 6 - - - - 2 - - -
SILOS - 5 - - - - 2 - - -
BINS & HOPPERS - 5 - - - - 2 - - -
OTHER VESSSEL/EQUIP........ - - - - - -
PROPRIETARY (Glass,Plastic,GLCS Vessels) - 6 - - - - 2 - - -
PROPRIETARY (GLCS Reactors incl Agit.) - 15 - - 1 - 17 - - -
STACKS - 4 - - - - 2 - - -
AGITATORS - - - - 1 - 1 - - -
PORTABLE VESSELS - - - - - - - - - -
EXISTING VESSELS - - - - - - - - - -
CIVIL VESSELS (Sumps/Pits,Etc) - 4 - - - - 2 - - -
HEAT EXCHANGERS - - - - - -
HEAT EXCHANGERS (Shell & Tube) - 7 - - - - 8 - - -
AIR COOLERS (Fin/Fan Coolers) - 6 - - 2 - 9 - - -
STEAM GENERATORS (Waste Heat) - 6 - - 1 - 14 - - -
COOLING TOWERS - 6 - - 2 - 20 - - -
PROPRIETARY (Plate,Graph,D.Pipe) - 7 - - - - 2 - - -
STEAM JET HEATERS - 6 - - - - 2 - - -
ELECTRIC HEAT EXCHANGERS - 4 - - 1 - 2 - - -
CONDENSERS,HUMIDIFIERS - 4 - - - - 2 - - -
EXISTING EXCHANGE EQUIPMENT - - - - - - - - - -
FIRED HEATERS........ - - - - - -
FIRED HEATERS - 7 - - - - 14 - - -
BURNERS - 6 - - - - 10 - - -
FLARES - 6 - - - - 20 - - -
THERMAL OXIDISERS - 6 - - - - 14 - - -
OVENS & KILNS - 6 - - 1 - 14 - - -
FURNACES - 6 - - - - 14 - - -
STEAM BOILERS - PACKAGE - 10 - - 1 - 7 - - -
INCINERATORS - PACKAGE - 10 - - 1 - 5 - - -
MACHINES - - - - - -
PUMPS - 4 - - 1 - 3 - - -
COMPRESSORS - Air - 8 - - 1 - 8 - - -
COMPRESSORS - Gas - 14 - - 2 - 25 - - -
FANS & BLOWERS - 4 - - 1 - 1 - - -
VACUUM PUMPS - 4 - - 1 - 8 - - -
TURBINES - 4 - - - - 25 - - -
EJECTORS & EDUCTORS - 3 - - - - 1 - - -
DRIERS - 7 - - 1 - 7 - - -
FILTERS - Static (Cart,Strain,Panel) - 4 - - - - 2 - - -
DUST COLLECTORS - 5 - - 1 - 1 - - -
SEPARATORS-Moving (Centrif,Filters) - 10 - - 1 - 7 - - -
MILLS & GRINDERS - 7 - - 1 - 12 - - -
MIXERS & BLENDERS - 7 - - 1 - 5 - - -
CONVEYORS & CONVEYING EQUIP - 5 - - 1 - 5 - - -
MATERIAL'S HANDLING EQUIP. - - - - 1 - 1 - - -
WEIGHING EQUIPMENT - - - - 1 - 1 - - -
FEEDERS - 2 - - 1 - 1 - - -
EVAPORATORS - 7 - - 1 - 7 - - -
SEC PRODUCTION EQUIP (Fill,Weigh,etc) - 5 - - 1 - 5 - - -
SEC PRODUCTION EQUIP (Label,etc) - - - - 1 - 5 - - -
PORTABLES - - - - - - - - - -
EXISTING - - - - - - - - - -
MINOR EQUIPMENT - - - - - - -
LIFTING EQUIP (Cranes,Hoist) - - - - 1 - - - - -
DIVERTER VALVES - - - - - - 1 - - -
LAB,W'SHOP,MAINT'N. EQUIP - - - - - - - - - -
PACKAGES - - - - - -
PACKAGES - Process - 15 - - 2 - 10 - - -
PACKAGES - Utility - 7 - - 1 - 5 - - -
PACKAGES - Supply & Install - 10 - - 2 - 5 - - -
LARGE PROPRIETARY MACH,SYSTEMS,LINES - 20 - - 8 - 10 - - -
BUILDING SERVICES - - - - - -
HVAC SYSTEMS (Sub-Contract) - 4 - - 1 - 1 - - -
FIRE PROTECTION (Sub-Contract) - 4 - - 1 - 1 - - -
TOTALS - - - - - -
Engineering Man-hours
Typical Man-Hours
Cost Code Discipline Key Drivers Sub-Total Hrs "Use" Process Metals Water Energy
9100 Engineering Management

9110 Process Engineering No Of Equipment Designs - - 50 30…50 30…50 30…50 40…60
9121 Civil Engineering No Of Drawings @ 0.5 Per Equipment Item - - 80 60…90 60…90 60…90 60…90
9122 Structural Engineering No Of Drawings @ 0.5 Per Equipment Item - - 80 60…90 60…90 60…90 60…90
9130 Mechanical & HVAC No Of Equipment Designs - - 70 40…80 40…80 40…80 40…80
9140 Piping No Of Lines - - 30 15…35 10…20 10…20 15…35
9150 Electrical No Of Drives - - 50 40…60 40…60 40…60 40…60
9161 Instrumentation No Of Instruments - - 20 15…25 10…20 10…20 15…25
9162 Systems No Of I/O - - 2 1.5…2.0 1.0…1.5 1.5…2.0 1.5…2.5
Total Engineering Man-hours - 70%
Project Office Man-hours - 20%
9210 Project Management 10% -

9220 Project Engineering 20% -
9230 Project Control 5% -
9240 Cost Control 10% -
9250 Planning 15% -
9260 Estimating & Risk 3% -
9270 Project Accounts 2% -
9280 Project Secretarial / Clerical 10% -
9191 Document Control 20% -
9570 Quality Assurance 5% -
Procurement & Home Office Construction - 10%
9310 Purchasing 30% -

9320 Expediting 30% -
9450 Sub-Contracts 20% -
9410 Construction Management & Safety 20% -
Field Construction - 25%
9210 Project Management 20% -

9230 Project Control 10% -
9430 Field Engineers 10% -
9450 Sub-Contracts 15% -
9410 Construction Management & Safety 5% -
9420 Construction Supervision 30% -
9280 Project Secretarial / Clerical 5% -
9191 Document Control 5% -
Total Project Hours -

PIPING LOADED RATES
DESCRIPTION NB Material Shop Fabrication Installation Supply Weld Lagging Painting
Proc & Incidence
or Supply nett Gross Cost nett Gross Cost Install Mhrs
(mm) Track (£ / m) (mhrs / m) (mhrs / m) (£ / m) (mhrs / m) (mhrs / m) (£ / m) (£ / m) (mhrs / m) (Weld / m) (£ / m) (£ / m)
Carbon Steel
Carbon Steel Seamless Sch 80 25 P £ 21 1.31 1.31 £ 72 2.58 2.97 £ 163 £ 256 4.28 1.55 59.74 £ 10
Carbon Steel Seamless Std Wt 300 P £ 236 4.31 4.31 £ 237 6.16 7.08 £ 390 £ 863 11.40 1.01 136.29 £ 45
Carbon Steel Seamless Sch 80 25 T £ 15 0.36 0.36 £ 20 2.10 2.41 £ 133 £ 167 2.77 0.57 48.14 £ 10
Carbon Steel Seamless Std Wt 300 T £ 125 1.83 1.83 £ 100 4.87 5.60 £ 308 £ 533 7.42 0.57 118.61 £ 45
Stainless Steel
Stainless Steel 304L Seamless Sch 40S 25 P £ 47 1.47 1.47 £ 81 2.70 3.10 £ 170 £ 299 4.57 1.55 59.74 N/A
Stainless Steel 304L Welded Sch 10S 50 P £ 69 2.43 2.43 £ 134 3.01 3.46 £ 190 £ 393 5.89 1.55 64.69 N/A
Stainless Steel 304L Welded Sch 10S 250 P £ 583 4.42 4.42 £ 243 5.70 6.55 £ 360 £ 1,187 10.97 1.01 110.89 N/A
Stainless Steel 304L Seamless Sch 40S 25 T £ 30 0.41 0.41 £ 22 2.18 2.51 £ 138 £ 190 2.91 0.57 48.14 N/A
Stainless Steel 304L Welded Sch 10S 50 T £ 37 0.67 0.67 £ 37 2.30 2.64 £ 145 £ 219 3.31 0.57 52.13 N/A
Stainless Steel 316L Welded Sch 10S 300 P £ 1,016 5.09 5.09 £ 280 6.48 7.46 £ 410 £ 1,706 12.54 1.01 136.29 N/A
ELECTRICAL
Description Supply Unit
& Install
(£)
415V MCC 10,500 Per Tier

415V MCC Starter Refurbishment 800 Per Starter Compartment
3.3kV Switchboard 16,600 Per Section
11kV Switchboard 28,000 Per Section
Power Cable < 7.5Kw 10 3 Core 4mm2 XLPE SWA PVC - Cost per metre
Power Cable > 7.5Kw < 22 Kw 10 3 Core 16mm2 XLPE SWA PVC - Cost per metre
Power Cable > 22Kw < 50 Kw 20 3 Core 50mm2 XLPE SWA PVC - Cost per metre
Power Cable > 50Kw < 132 Kw 30 3 Core 95mm2 XLPE SWA PVC - Cost per metre
Power Cable > 132 Kw < 200kW 415V 60 3 Core 185mm2 XLPE SWA PVC - Cost per metre
Power Cable > 132 Kw < 200kW 3.3kV 20 3.3 Kv Cable 3 Core 16mm2 - Cost per metre
Power Cable > 500 Kw < 750kW 11kV 30 11Kv Cable 3 Core 25mm2 - Cost per metre
Power Cable > 750 Kw < 1000kW 11kV 30 11Kv Cable 3 Core 25mm2 - Cost per metre
Power Cable 3000kW 11kV 50 11Kv Cable 3 Core 70mm2 - Cost per metre
Power Cable 4000kW 11kV 60 11Kv Cable 3 Core 95mm2 - Cost per metre
Gland & Terminate < 7.5Kw 50 3 Core 4mm2 XLPE SWA PVC - Cost per cable end
Gland & Terminate > 7.5Kw < 22 Kw 70 3 Core 16mm2 XLPE SWA PVC - Cost per cable end
Gland & Terminate > 22Kw < 50 Kw 80 3 Core 50mm2 XLPE SWA PVC - Cost per cable end
Gland & Terminate > 50Kw < 132 Kw 110 3 Core 95mm2 XLPE SWA PVC - Cost per cable end
Gland & Terminate > 132kW < 200Kw 415V 150 3 Core 185mm2 XLPE SWA PVC - Cost per cable end
Gland & Terminate > 132Kw < 200kW 3.3kV 160 3.3 Kv Cable 3 Core 16mm2 - Cost per metre
Gland & Terminate > 500Kw < 750kW 11kV 690 11 Kv Cable 3 Core 25mm2 - Cost per cable end
Gland & Terminate > 750Kw < 1000kW 11kV 690 11 Kv Cable 3 Core 25mm2 - Cost per cable end
Gland & Terminate 3000kW 11kV 870 11Kv Cable 3 Core 70mm2 - Cost per cable end
Gland & Terminate 4000kW 11kV 1,030 11 Kv Cable 3 Core 95mm2 - Cost per cable end
Control Cable 10 4 Core 2.5mm2 XLPE SWA PVC - Cost per metre
Gland & Terminate Control Cable 50 4 Core 2.5mm2 XLPE SWA PVC - Cost per cable end
Start / Stop Station 280 Per Station
50mm Galvanised Tray 20 Per Metre (Including Fittings)
150mm Galvanised Ladder Rack 60 Per Metre (Including Fittings)
Unistrut 40 Per Metre
Earthing 250 Per Major Equipment Item
Small Power & Lighting 40 Per m2
Electrical Tracing 40 Per Metre (Includes Control Panels / Tape / JB's etc..
Cable Trench - Hand Dig 40 Per m3
Cable Trench - Machine Dig 30 Per m3
Sand Out Trench 30 Per m3
Lay Concrete Cable Tiles 10 Each 914mm Long x 152mm Wide
Lay Cable Warning Marker Tape 2 Per m
Cable Route Marker Concrete 50 Each 760mm High x 150 Wide
Typical Cost per Drive Drive Size (3ph 415V)

> 7.5 kW < > 22 kW < > 50 kW < > 132kW
< 7.5 kW 22 kW 50 kW 132 kW < 200 kW
Cost Per Drive 1,985 2,670 3,653 4,832 7,713
Typical Cost per Drive Drive Size (3ph 3.3kV)

> 132 kW > 200 kW < > 350 kW <
< 200 kW 350 kW 500 kW
Cost Per Drive 3,833 4,131 4,271
Typical Cost per Drive Drive Size (3ph 11kV)

> 500 kW < > 750 kW
750 kW < 1000 kW 3000kW 4000kW
Cost Per Drive 5,775 5,775 8,727 9,993
INSTRUMENTS & CONTROL
INSTRUMENTS
Instrument count can be ascertained from either P&ID's or "count model"
Instrument costs to be based upon the instrument count @ £1,500 Per instrument
Bulks Factored at between 30 & 50 percent of the tagged instrumentation

Dependant upon :
Tray Routes - Existing or Local Only / Galvanised or Stainless
Zone 2 Instrumentation
Etc ………..
Installation costs factored at between 20 & 30 percent of the total material costs.
Example:
Instrument Count 100 No Instruments @ £ 1,500 per instrument £ 150,000
Bulk Materials 40% Of Tagged Instrumentation £ 60,000
Installation Costs 25% Of Supply Costs £ 52,500
Total Cost £ 262,500
CONTROL SYSTEMS
Allow between £350 & £500 per I / O traditionally circa 30% of the instrument subcontract.
CIVILS
PRECAST PILES
Description Driven Cost
Length Per Pile
(M) (Each)
Pile Section 200mm Square or 0.04m2 Area
Driven Pile 10 430
Driven Pile 15 590
Driven Pile 20 750
Driven Pile 10 490
Driven Pile 15 670
Driven Pile 20 860
Driven Pile 10 660
Driven Pile 15 940
Driven Pile 20 1,210
CONTINUOUS FLIGHT AUGER (CFA) PILES

Description Driven Cost
Length Per Pile
(M) (Each)
Pile Section 300mm dia
Bored Pile 10 440
Bored Pile 15 600
Bored Pile 20 760
Bored Pile 10 510
Bored Pile 15 710
Bored Pile 20 900
Bored Pile 10 600
Bored Pile 15 830
Bored Pile 20 1,060
Bored Pile 10 700
Bored Pile 15 980
Bored Pile 20 1,260
Bored Pile 10 950
Bored Pile 15 1,350
Bored Pile 20 1,740
MAIN FOUNDATIONS & CIVIL STRUCTURES

Composite
Description Rate
(£ / M3)
Foundations less than 5M3 650

Foundations between 5M3 & 10M3 590
Foundations between 10M3 & above 470
Slabs 290
Mats less than 2M thick 290
Structures 770
Sumps & Drains 1,410
Pits & Basins - Medium 760
Pits & Basins - Large 600
Duct Encasement 460
Notes:
1) For "High Yield" Rebar increase totals as below:
Large Pits & Mats 12.5%
Foundations > 10m3 7.50%
Structures 7.50%
Medium Pits 7.50%
All Others 2.50%
CIVILS
MISCELLANEOUS
Description Rate Unit
(£)
Roads & Paving
Bitumen Roads 90 m2
Concrete Roads (150mm) 87 m2
Paving (100mm) 43 m2
Drainage
Site Drainage 19.00 m2
Fire Proofing
Fire Proofing - 1 hour Protection 43.00 m2
BUILDINGS
Description Rate Unit
(£)
Substructure:
Foundations / Slabs / Piles See Civils
Frame
Steel Frame See Steelwork
External Walls
Brickwork One Brick Thick 150 m2
Blockwork Dense Aggegate 140mm Thick 50 m2
Reinforced Concrete Walling 150mm Thick 250 m2
PVF2 Coated Galvanised Steel Profiled Cladding Including: 70 m2
Steel Rails & Insulation
Roof
Reinforced Concrete Suspended Slab Including: 185 m2
"Holorib" Permanent Steel Shuttering / Protected Steel Frame
PVF2 Coated Galvalvanised Steel Profiled Cladding Including: 60 m2
Steel Purlins, Single Skinned, Insulation, Metal Inner Lining
Internal Walls
Metal Stud & Plasterboard Partion Including: 70 m2
30 min Fire Resistant - 13mm Board Each Side
Brickwork / Blockwork / Reinforced Concrete See External Walls
Plasterboard Including: 20 m2
Metal Channels
Windows & Doors
Hardwood Double Glazed Windows 680 m2
UPVC Double Glazed Windows / External Doors 930 m2
Steel Single External Door Including: 1,110 No
Frame, Ironmongery, Powder Coated Finish
Steel Single External Security Door Including: 1,360 No
Frame, Ironmongery, Powder Coated Finish
Roller Shutter Doors - Manual 150 m2
Roller Shutter Doors - Electric 250 m2
Floor Finishes
Latex Cement Screeds 10 m2
Rubber Latex Non Slip Solution & Epoxy Sealant 70 m2
Cement & Sand - 50mm Thick 20 m2
Epoxy Floor Finish - 5…6mm Thick 60 m2
Vinyl Floor Tiles 40 m2
Floor Tiles 70 m2
Acid Resistant Tyling 150 m2
Ceiling, and Wall Finishes
Plaster 20 m2
Emulsion Paint 10 m2
Suspended Ceiling Egg-crate 50 m2
Suspended Ceiling Metal Tray 60 m2
Suspended Ceiling Plasterboard 30 m2
Ceramic Tile Finish to walls 70 m2
Miscellaneous
Gutters 30 m
Rain Water Pipe 30 m
Clock Installation 1 m2
Security Alarm 4 m2
Telephone System 2 m2
PA System 15 m2
CCTV 6 m2
Fire Fighting Loose Equipment 1 m2
Fire Fighting Smoke Detectors / Alarms 10 m2
Fire Fighting Hose Reels / Dry Risers / Extinguishers 10 m2
Fire Fighting Single Level Sprinkler, Alarms & Smoke Detectors 20 m2
Lightening Protection 2 m2
HVAC Office - 4 Pipe Fan Coil for Office upto 3000m2 220 m2
Mechanical Ventilation Refer to Spons (Treat with Care) 100 m2
GALVANISED STEELWORK - UNIT RATES
Supply, Fab &
Description Unit install
(£)
Heavy Steel Te 2,970
Medium Steel Te 3,340
Light Steel Te 3,710
Portal Frame Building Te 3,340
Stairs & Landings Te 4,080
Chequer Plate m2 250
Open Mesh Grating m2 150
Handrailing m 110
Kick Plates m 20
Ladders m 220
Stair Tread No 50
Safety Gate No 310
Major Equipment Support Structure Te 3,560
Service Support Structure > 10m 4,610
Service Support Structure < 10m Te 5,180
Circular Vessel Platform Te 5,650
Rectangular Platform Te 5,940
Floor Framing Te 4,430
Piperacks Te 3,440
Walkways Te 5,260
Trussed Sections Te 3,600
Sump / Pit Covers Te 5,040
Trussed Towers Te 3,540

Cost relationships – factorised estimates
The factors detailed below are to be used for guidance only and can be used to
generate a class 5, Order of Magnitude, estimate or to provide a check for class 4
and 3 estimates. The relationship between equipment supply cost and supply of bulk
material is specifically dependent on the mix between standard process plant
equipment and package plant.
Package plant is defined a pre-fabricated, often skid mounted, assembly of

equipment supplied complete with integral piping, cabling and instrumentation ready
for transport to site and simple hook up to utilities and power as opposed to individual
items of equipment that need to be piped and cabled in-situ.
The ratio between bulk supply cost and the installation cost is more representative;
however, if the cost of equipment is inflated due to the need for exotic materials of
construction as opposed to quantity then a lower percentage would be appropriate
for installation cost percentage.
Process Package Dry Materials

Plant Plant Plant
Material costs
Equipment 100% 100% 100%
Piping 25% 3.5% 10% % of equip. supply
Electrical 17% 5.5% 30% % of equip. supply
Instruments 30% 3% 4% % of equip. supply
Control 15% 5% included % of equip. supply
Sub-Contracts
CS&A 30% 5% 20% % of TIC
Painting 2% 0.5% 1% % equip & piping supply
costs
Insulation 7% 1.5% 0.5% % equip & piping supply
costs
Equip. install 4% 5% 10% % of equip. supply
Piping fab. & 200% 200% 175% % of Piping supply
erect*
Electrical install 50% 50% 50% % of Electrical supply
Instrument install 40% 40% 40% % of instrument supply
Other
EPCM 18 to 20% 10 to 12% 10 to 12% % of TIC
Commissioning 2.5 to 5% 1.5 to 2.5% 2.5 to 5% % of TIC
Scaffold 7.5% 5% 3% % of total sub contracts
Heavy lift 2.5% 2.5% 10% % of total sub contracts
Site 2.5% 3.5% 5% % of total sub contracts
establishment**
Lang factor 4.5 1.9 3.5 Multiple of equipment supply

cost

BPG132 Estimating Best Practice Guideline

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Project Estimating Best Practice Guideline

Revision 1 June 2013 1

Revision 1 June 2013 2

These guidelines and requirements do not apply to projects related to or involved in

1.2 COST ESTIMATING AND BUDGETING

Revision 1 June 2013 3

discipline because of the specialized knowledge required, however, many individuals

1.2.3 Classification of Cost Estimates

1.2.4 Plan for Cost Estimating and Budgeting

1.2.5 Quantify Scope Content (Take-off)

The scope definition of an investment or a project is generally described in various

1.2.6 Cost the Scope Content

Costing includes a core technique of estimating, which is the translation of quantified

Revision 1 June 2013 4

operation or use, and decommissioning or retirement to support investment option

1.2.7 Algorithms and Cost Estimating Relationships

Detailed Estimate A detailed estimate utilises a methodical process of accounting for

Unit Cost or Parametric Estimating A semi-quantitative estimating technique that

Analogous Estimating The analogous method compares a new or proposed project

Revision 1 June 2013 5

1.2.8 Factors and Mark-ups

Revision 1 June 2013 6

1.2.9 Simulate and Optimise the Costs

Optimisation refers to methods that evaluate trade-offs between inputs, such as

1.2.10 Budget Costs

1.2.11 Analyse Cash Flow

1.2.12 Bidding the Cost Estimate

Revision 1 June 2013 7

1.2.13 Review and Document the Estimate

Estimates are typically complex compilations of input from many stakeholders. To

1.2.14 Develop and Maintain Methods and Tools

1.2.15 Cost Estimating Database Development

1.2.16 Cost Estimating Algorithm Development

Estimating methods often require that custom algorithms be developed and

1.2.17 Estimate key performance indicators

Revision 1 June 2013 8

1.2.18 Inputs to Cost Estimating and Budgeting

1 Scope Definition. The investment option or project scope is defined, and

1.2.19 Outputs from Cost Estimating and Budgeting

Revision 1 June 2013 9

the estimating process as their input. Risk analysis is typically performed

2.1 Capx-BPG-12 Best Practice Guideline for Project Risk Management.

3.1 For a list of definition please refer to SOP 132

4. RESPONSIBILITIES OF THE COMPILER

Revision 1 June 2013 10

6.0 Classification system

Revision 1 June 2013 11

6.3 Class designations

The estimate class designations are labelled Class 1, 2, 3, 4, and 5. A Class 5

Primary Secondary characteristics

Class 2 30% to 70% Control or Detailed Unit L: -5% to -15% 4 to 20

Class 1 50% to Check Detailed Unit Cost L: -3% to -10% 5 to 100

6.4 Input information

The degree of completion is indicated by the following letters.

Revision 1 June 2013 12

 Complete (C): the deliverable has been reviewed and approved as

Revision 1 June 2013 13

Loop diagrams complete P/C C

7 PURPOSE OF BASIS OF ESTIMATE

7.1 AACE International’s Total Cost Management (TCM) Framework identifies a

7.3 A well prepared basis of estimate will:

 Document the overall project scope.