Print this page Better Proposals Using
Basis of Estimates (BOE)
Course Outline
A major cause of cost and schedule overruns in projects is the poor accuracy and quality of the technical and cost proposals submitted in an attempt to win a contract. The tool to help avoiding this is the Basis of Estimate (BOE). The purpose of a BOE is threefold.
1) It tells you what tasks you are supposed to bid in accordance with Request for Proposal (RFP) or specification guidelines;
2) It tells you how much you actually bid for these tasks and why; and
3) To note any special conditions, circumstances or assumptions made that would affect the bid.
This course is divided into 13 sections each addressing one of the following topics:
Section 1 - Introduction
Section 2 – Basis of Estimate Definition
Section 3 – What is the Purpose of the BOEs?
Section 4 – Reasons to Use BOEs
Section 5 - Work Breakdown Structures (WBS)
Section 6 - Task Descriptions
Section 7 – Methods of Estimating
Section 8 – Evaluating and Mitigating Risk
Section 9 – Management Reserve
Section 10 – Detailed Example of Using BOEs in a proposal
Section 11 – Conclusions from Example
Section 12 – Overall Conclusions from Course
Section 13 – References and Resources
This course includes
a multiple choice quiz at the end,
Learning Objective
This course will allow the student to:
- Become familiar with Terms used in the bid and proposal process;
- Have an introduction to Work Breakdown Structures;
- Be given a review of Task Descriptions as a method of communicating requirements;
- Have an introduction to Basis of Estimates and their value in both proposals and projects;
- Have a brief introduction to Microsoft Project and general scheduling techniques;
- Have an introduction to Compliance Matrices; and
- Be given an overall explanation or review of the Bid process.
Intended Audience
This course is intended for Architects and Engineers that want to improve their ability to prepare and submit valid cost proposals that are fully documented. This will not only ensure accurate cost estimates, but will aid in substantiating the amount bid during contract negotiations. It will also serve as a review of the cradle to grave bid and proposal process. This course will also be of help to Engineers serving on a Program Manager role during proposals.
Benefit to Attendees
This course will benefit anyone involved in the bid and proposal process in order to win business from customers. It gives theories of process steps and gives a detailed example of using Basis of Estimates during a typical proposal bid effort. It shows how mistakes or omissions can be avoided and how results can be effectively reviewed and optimized to produce a competitive bid.
Course Introduction
A major cause of cost and schedule overruns in projects is the poor accuracy and quality of the technical and cost proposals submitted in an attempt to win a contract. Typically proposals are part time efforts by teams of busy technical personnel, who barely have time to finish and submit the proposal. The basis for the time and material estimates included in the proposal are usually vague recollections or wild guesses. Since the proposal tasks are also often ill defined, things get left out and the scope of the job falls short, leading to cost overruns and late programs. Conversely sometimes the efforts are overestimated leading to a high price and a losing bid. The solution to this dilemma is to focus on previous performance, similar programs and accurate grass root estimates. The tool to utilize in this effort is called the Basis of Estimate.
Course Content
In this lesson, you are required to download and study the following course content in PDF format:
Better Proposals Using Basis of Estimates (BOE)
Please click on
the above underlined hypertext to view, download or print the document for your
study. Because of the large file size, we recommend that you first save the
file to your computer by right clicking the mouse and choosing "Save Target
As ...", and then open the file in Adobe Acrobat Reader. If you still experience
any difficulty in downloading or opening this file, you may need to close some
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Course Summary
Using Basis of Estimates to Optimize and Validate Cost Proposals presents an overall process for preparing, reviewing and submitting accurate cost proposals. It shows that using Basis of Estimate Sheets to ensure estimate inputs are accurate to the program requirements and do not include unnecessary efforts or “padding” or omissions in effort. It also covers all the steps required to follow to define, gather and “scrub” the bid inputs to yield an optimum and competitive bid.
Quiz
Once you finish studying the above course content, you need to take a quiz to obtain the PDH credits.
DISCLAIMER: The materials contained in the online course are not intended as a representation or warranty on the part of PDH Center or any other person/organization named herein. The materials are for general information only. They are not a substitute for competent professional advice. Application of this information to a specific project should be reviewed by a registered architect and/or professional engineer/surveyor. Anyone making use of the information set forth herein does so at their own risk and assumes any and all resulting liability arising therefrom.
