US Cost Updates June, 2012

US CostUpdates

June, 2012

1) Introductions and Intent -- Overview and Understanding

2) US Cost Upgrades –Today – June “Rapid-Response” changes.

US COST UPDATES AGENDA

US COST UPDATES INTRODUCTIONS AND INTENT OVERVIEW AND UNDERSTANDING

Janet Yih – Project Manager for BMO & PMO and Leaderfor the US Cost Project Estimating Program.Leadership to Direct, Lead, and Communicate the Project.

Richard Grogan – Sr. Project Manager for NFS-BIO, SCAL, CoastalUS Cost Subject Matter Expert (SME)The Database Pilot for Data Entry…

Current US Cost Effort:1. Upgrade to current platform version 10.2 from existing 9.1. This is

pending and forthcoming.2. Update the Database from circa 2009 price, structure and POR to

2012. New data, new technology, new prices, new solutions.3. Make the system Easier to Use!!! And More Accurate…

US COST UPDATES TODAY – JUNE “RAPID-RESPONSE” CHANGES.

Rapid-Response Strategy (1):

What –

1. Update Internal Labor Rates: Update to 2012 Price Structures:

1. $86 National & IMG. $75 allocated for Regional, using regional modifiers.

2. PC Prices: PC Unit Prices, Monitor Unit Prices, Mice Unit, and Printer Prices

updated. KP Lexmark ‘standard’ printer price updated.

3. Wireless Assembly: Added $2.52 per square foot assembly prices.

4. Way-Finding: Added directional way-finding assembly.

5. Cable Infrastructure: Added new Clinical Technology outlet type with 8% (0.08) allocation of base infrastructure allocation (not for space plan type estimates).

6. Escalation: Implemented escalation rule of 2% per year. See important slide follow-up. PMs: Major changes in escalation handling!

US COST UPDATES ESCALATION – A NEW AND DIFFERENT PARADIGM

Escalation:What - The use of escalation in the system must be changed.

The US Cost system has NO CONCEPT of ‘NOW’ or project start dates.

There are only item price dates and a project date (end date).

Why - The US Cost system is an estimating system, not a capital planning system. It assumes prices and escalation are managed every year on an on-going basis.

With 2009 prices only, all estimates were escalating from 2009 until the project date (2009, 2010, 2011).

There was no escalation (rules) beyond 2011 in the system.

Who – SME: will update the escalation rules.

How - SME: will update all assemblies in the templates and libraries for the base year of the items and cost structure. Management will ‘see and approve’ escalation based on future years and an approved ‘rate’ per year.

PMs: Manage year of each item and check your work. Use improvements put into templates.

PMs: Understand and use the new structure of escalation.

US COST UPDATES SCREEN CAPTURES OF SAMPLE CASE

1 - Labor Rates: 2012 Based Prices


2 - PC Unit Pricing: PCs, Monitors, and Mice


3 - Wireless 4.x: New Assembly, $/Sq.Ft. Based


4 - Way-Finding – Location Based Signs: New Assembly, $/Sq.Ft. Based


5 – Cable Infrastructure: Clinical Technology Allocation – 8% of Base Amount


6a - Escalation: New Paradigm at the Estimate Level, Life Beyond 2012


6b - Escalation: New Paradigm at the Rule Level, Life Beyond 2012


6c - Escalation: The Big Difference – The Project Date now works.

Due to base year versus project year calculation, the total escalation will vary.

This is not based on project year alone, but from device and labor year to project year.


Sample Estimate: Summary Costs


Sample Estimate: Detailed Costs(1)


Sample Estimate: Detailed Costs(2)

US Cost Updates June, 2012

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