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Engineering | Architecture | Design-Build | Surveying | GeoSpatial Solutions
World Bio Congress
Capital Cost Estimating
Presented By:
Dr. Alan Propp, P.E.
07/21/15
Merrick Fast Facts
Headquartered in Greenwood Village, CO
International engineering, architecture, design-build, surveying & geospatial solutions firm
Founded in 1955
Employee owned; $120 Million
16 offices (12 in US; 2 in Mexico; 1 in Canada, 1 in the U.K.)
55+ LEED Accredited Professionals
Overview
Good capital expenditure (Capex) estimates are crucial
100% of our clients underestimate the capex of their projects.
Capex estimating requires engineering
Merrick adheres to the approach of the Association for the Advancement of Cost Estimating (AACE)
AACE Guidelines
AACE categorizes capex estimates into five classes, 5 through 1, from lowest to highest fidelity
Class 5: concept screening
Level of project definition: 0- 2%
Methodology: Capacity factored, parametric models, judgement or analogy
Degree of accuracy: - 30 to +100%
AACE Guidelines
Class 4: study or feasibility
Level of project definition: 1-15% (FEL 2)
Methodology: Aspen Capital Cost Estimator
Degree of accuracy: -30 to +50%
AACE Guidelines
Class 3: budget authorization
Level of project definition: 10-40% (FEL 3)
Methodology: Preliminary unit costs and line diagrams
Degree of accuracy: -20 to +30%
AACE Guidelines
Class 2: control or bid/tender
Level of project definition: 30-70% (FEL 3+)
Methodology: Detailed unit costs and forced detailed take offs.
Degree of accuracy: -15 to +20%
AACE Guidelines
Class 1: check estimate or bid/tender
Level of project definition: 30-70% (detailed design)
Methodology: Detailed unit costs and forced detailed take offs.
Degree of accuracy: -10 to +15%
AACE guidelines have engineering deliverables list associated with each cost estimate class.
Rules of Thumb
Estimate equipment costs, then multiply by 3 to 5 to get the total installed cost (TIC)
Can get a rough idea of scale up cost using the following formula:
X = Y*(x/y).6
Where: X is the scaled capital cost
Y is known capital cost
x is the new plant capacity
y is the known plant capacity
Example
X = Y*(x/y).6
Where: X is the scaled capital cost
Y is $20 million
x is 25 million gallons per year
y is 1 million gallons per year
X = $20 million*(25/1).6 = $138 million
Aspen Capital Cost Estimator
Merrick employs Aspen CCE to quickly and inexpensively arrive at Class 4 estimates.
Aspen CCE is usually used based on an Aspen process model, but can be used without one.
It is very comprehensive and is updated once per year.
Each Equipment Item has a Default P&ID
Example Reactor
Plant Bulk Components
Utility headers/stations
Additional pipe racks
Firewater system
Additional Electrical/
Instrumentation Bulks
Ladders/Platforms
Perimeter lighting
Security Systems
Alarm Systems
Steel Structures
Thank You
Contact info:
Dr. Alan Propp, P.E.
Merrick & Company
720-346-4882
