Posted by: Gilad Lev-Shamur | December 23, 2009

Tight schedule, partial estimations, major problems.

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“God is in the details”

(Ludwig Mies van der Rohe)

Usually our lab construction projects start with and idea jumping into the head of our customers. They recognize some needs that will justify the growth, and then come to us in order to estimate if it’s feasible, what are the costs and what may be the timeline.

Few years ago, one of our customers, let’s call him Mike (pseudonym); set a meeting with us, telling us he need new labs to support his R&D efforts. The lab set includes several labs which according to him should be equipped with the same machines as an old lab which we build in the past.

Usually, we send these guys (who know what they want) to our draftsman. They sit together and play with blocks on the AutoCAD. They create a conceptual layout (according to the customer vision) which helps all of us focus on the customer demands (this method is appropriate for customers who know what they want. Sometime they do not know and the layout will be created during the design). Then, we take it and start the estimation work, which the customer need urgently  in order to allocate the required budget.

This time Mike was very hurry.

“We are closing our budget for the next half in few days from now. I do not have time to sit and think of my lab layout. You must give me a rough estimation” he said.

“You know it’s a recipe for disaster” I said. “Counting on estimation without clear demands, except for saying it will be the same as the old lab will be foolish”.

“I do not have a choice” he said. “You need to give a number or we will not have a project at all”. 

Now I was in dilemma. I knew the right thing to do is to insist Mike will give me additional data. But knowing the organization, the cycles of budgets approval and understating the importance of these labs to R&D efforts, I gave up.

I took the final costs of the last similar lab project, did some interpolations, multiply, divide and add the ‘gray hair’ factor.  I got a number which Mike did not like. It seems to him too much. He got freeze when I told him it still +/- % estimation.

Nevertheless he did not have time to argue.  We agreed that Mike will go to his managers and try to get some money to start the design works. Few days pass and Mike return with small budget for design. His managers, he told us, gave him green light.

To make this story short, we hired few designers, did some internal design and conduct our design review sessions. What do you think we got?

I think you understand to where I strived…

The total cost estimation given to us by the designers was 170% than the initial budget. What a mess.

In addition, Mike told us we could forget the +/- % (if we could use it, our problems were smaller). The reasons that cause to this gap:

  • Different environments between the current and reference projects.
  • Additional demands

I will not describe you the arguments and tension at that time. We solve it together with our customers:

  • We did pretty good cost estimation work (comparing the initial one…). We had details on every area; on every task and we map the scope additions. This help our customers recognize what has the major impact on the budget.
  • We present them the cost vs. time graph (shown below). With this information they could see exactly when they need to find the funds.

 

At the end the project was completed. Successfully.

Few things to take:

  • Be caution when you use the $/m^2.
  • The -/+ % (allow for change, buffer…), especially the + should be taken seriously. During the design process it can be reduced.
  • You might not like it, but you will face the needs to do such estimations many times. Most of the time the schedule is so tight that you must supply some numbers fast. Just remember to communicate your assumptions and make sure every one understood them.

 

Good Luck!

Gilad 

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