ABSTRACT
Management is concerned with delivering a project within established cost, quality and schedule goals. Previous papers have addressed management elements including tools necessary to be more responsive to the owner’s requirements. This paper builds on those papers and focuses on one major parameter – how to reliably estimate the probable cost range of complex projects considering risk and variability implicit in future events – since reliable cost estimates are necessary to deliver projects within acceptable cost limits. A new cost estimating process, incorporating risk and variability, has been developed for the highway megaprojects of the Washington State Department of Transportation and is described in this paper. The method has been well received and shows promise to substantially improve cost estimating performance as well as to lead to better risk management plans for complex infrastructure projects.
