Construction Cost Estimation in Greece: Sustainable Promotion of An Unknown Discipline

1st International AACE Greek Conference
Construction Cost Estimation in Greece:

Sustainable promotion of an unknown discipline
D. Touliatos - Athens 10.05.2018
With 7,000 members in 100 countries, AACE International has been serving
the total cost management community since 1956.
The legal name since 1992 is AACE International. In 1956 the organization
was established as the American Association of Cost Engineers. While you
may have seen that “AACE” stands for the Association for the Advancement
of Cost Engineering, this is only a statement that encompasses the work of
the Association, not a legal name.
The AACE Greece Section was established in 2018, as part of the AACE
European expansion and aims to introduce and promote the AACE
knowledge and practises in the local market
Dimosthenis Touliatos is Civil Engineer graduate from the National Technical

University of Athens (NTUA) with a post-graduate Magister Diploma from the
Karlsruhe University (TH), Institut of Construction Equipment and
Construction Management. He has 40 years of experience in the field of
construction project management, cost estimating planning and scheduling,
quality assurance and construction project controlling. The last 30 years he is
member of the staff of the Department of Construction Engineering and
Management of the School of Civil Engineering at the NTUA, as Research
Fellow and Teaching Assistant. As Technical Advisor of the Greek
Contractors Association (SATE) he is animating the initiatives to reform and
improve the construction cost estimating practices in Greece and he
participates to a working group created recently by the Min. of Infrastructures
and Transport for this purpose.
Construction Cost Estimation in Greece: Sustainable promotion of an unknown discipline
1. Pre-tender estimating practice (Unit Price Contracts)

An example
2. The Greek Pricing Regulation: Schedule of Standard
Items of Works for PW (Descriptions and Unit Prices)
(last upd 17.05. 2017)
3. Tendering by discount against the Pre-tender Estimate.
Award to the lowest bid (highest discount)
4. A formula for a sustainable change
The contribution of AACE
10/05/2018 D.Touliatos 2
RIBA Work Stages - Plan of Work 2013 RICS Cost Planning Stages OGC Gateways
(applicable to projects)
Προεκτίμηση Δαπάνης
The RICS typical

stages for cost
estimating , Εκτίμηση Δαπάνης
cost planning
and tender
Προϋπολογισμός
document Μελέτης
preparation,
with the
associate Gate Προϋπολογισμός
Reviews Δημοπράτησης
and the Pre-tender estimating
corresponding
RIBA
Project Προϋπολογισμός Προσφοράς
Development
Stages
Τελική Δαπάνη
Έργου
A typical Greek pre-tender estimating

example
U.M. Quantities Unit Prices
A typical Greek pre-tender estimating example (cont)
U.M. Quantities Unit Prices
Mark-up for Overheads & Profit
Contingencies
Design Fees
Provisional sum for Price Escalation
V.A.T.
Main remarks on the pre-tender estimating practice

1. There is no a standard methodology for the preparation of the BoQs (e.g. NRM).
2. Preparation and validation are done by the Awarding Service without the involvement of the
Designer, or of a Cost Consultant or of a Quantity Surveyor.
3. Prescribed items and Unit Rates are mandatory and defined by Ministerial Decision (see
Pricing Regulation discussed later). Unit Rates are not broken down in to labor, material
and plant.
4. There is neither Gate Review against earlier cost estimates nor a Cost Planning approach
with a progressive development in detail and accuracy.
5. There is no obligation to associate the estimate with risk evaluations or uncertainty limits.
6. The Unit Rates do not include Overheads and Profit. They represent direct cost. A
mandatory markup of 18% for Overheads & Profit is applied at the bottom line, without
taking in consideration the nature and the importance of the Project.
7. There is no work section with items for preliminaries such as mobilisation and
demobilisation, temporary works, accommodation etc. The corresponding costs are
supposed to be covered by the 18%.
8. The unit prices of the pre-tender estimate are an upper limit (mandatory ceiling) for the
tender prices.
2. The Greek Pricing Regulation:

Schedule of Standard Items
of Works for PW
(Descriptions and Unit Prices)
(last upd 17.05. 2017)
The Official Government Gazette
https://www.ggde.gr/index.php?option=com_k2&view=item&id=96
4:περιγραφικά-τιμολόγια-έργων-σε-επεξεργάσιμη-μορφή-
2017&Itemid=326
The main Work Categories

covered by the Price Regulation
Hydraulic Works (2181)
Road Works (463)
Building Works (998)*

Port and Harbor Works (112)
E&M Works
for Infrastructures
(232)
Landscaping Works (1004)
#.1: Detailed Items Description (#) The total nb of priced Items

#.2: Schedule of Unit Prices (direct cost) * Building Services are not covered
An extract from the Greek Price Regulation

Road Works
Range of the Total Value of the Project (€)
Short Descriptions
with Unit Rates (€)
Detailed
Descriptions
Main remarks on the Greek Pricing Regulation

1. Unit Rates represent direct cost. They apply for the pre-tender estimate of all the PW, overall Greece.
There is no factors for local adjustments. The usage of other price books or data bases is not allowed.
2. The Unit Rates do not result from and are not associated to a detailed breakdown of the cost elements
(labor, materials, equipment). Crew mix and productivity are not detailed.
3. The prices are updated by the by the Min.of PW with a non-systematic and non-transparent way.
Recent upds: 2009/05, 2013/06 and 2017/05 with the same prices from 2013 !.
4. There is no-alignment with a standard classification system (e.g. Uniclass, Uniformat, etc). A different
codification system is used for each one of the 6 main Work Categories.
5. The itemization is not exhaustive. The total nb of items is about 5.000 covering a very limited
collection of works. There are not items for preliminaries at all, neither for building services.
6. It is explicitly stated that the defined rates do not cover the extra cost resulting from obligations
concerning the handling of construction waste (recycling).
7. The obligation resulting from the EU Directive 2015/1535/EE (laying down a procedure for the provision of
information in the field of technical regulations etc) is not respected. The Price Regulation was never
communicated as draft to the EC/CEN for prior approval.
8. The last 10 years the permanent revendication of the Designers and Contractors Associations is the
replacement of the Pricing Regulation by a dynamic, comprehensive, web-based price-book, full
documented and transparent, with factors for local adjustments, in alignment with similar European
and International best practices.
A collection of Price Books in the UK
An extract from the Griffiths Price Book
An extract from the Laxton’s Price Book
The German Web-Based Price Data Base

with over 1.000.000 items covering 77
work sections. Monthly updated.
The most comprehensive in Europe.
The BIM extension of the German

Web-Based Price Data Base
http://www.dbd-bim.de/
The US RSMeans Price Data Base

and Cost Data Collection
The Trimble-TradeService
MEP Pricing Databases
http://www.tradeservice.com/products/pricing-books
TRA-SER is pricing software that allows users to easily import up-to-date pricing data and product
information right into most major estimating systems.
Electrical Database:
• An electrical pricing database with 2 million items from over 650 manufacturers
Mechanical Database:
• A plumbing/mechanical pricing database with 2.1 million items from over 720 manufacturers
3. Tendering by discount against the Pre-tender Estimate.

Award to the lowest bid (highest discount)
Discounts offered against the estimate presented above in section 1
Work Sections of the Estimate and estimated value
The lowest Bidder The highest Bidder

Discounts offered by Work Section Sub-Total
Mark-up for Overheads

& Profit
Contingencies
the average
Design Fees discount
Provisional sum for Price Escalation
V.A.T.
Main remarks on the tendering process

1. Negative discounts are not acceptable.
2. There is a considerable difference between the tender prices and the prices of the pre-tender
estimate. Currently the average discount range varies from 60% to 75%.
3. There is no obligation to submit with the tender a detailed breakdown of the total offered
amount (a detailed bottom-up cost analysis of the contractor's proposal) in term of direct
costs (labor, materials, equipment, subcontractors), site installations and site works, mark-
ups for general expenses and profit, based on the detailed resources required to perform the
work, on production rates and crew mix.
4. There is no a formal procedure and methodology for the identification and examination of
the Abnormally Low Tenders (ALTs).
4. A formula for a sustainable change.

The contribution of AACE
The Business Case:

Establishment of a permanent viable Agency
for the development, implementation and operation of
The National Master Technical Specifications Library
(for buildings and public works)
And
The National Cost Estimating System
(methodologies, data bases and tools)
The Services we need to procure:

• Technical assistance, technology transfer and support during operation.
• Provision of consultancy services for technology and data bases transfer, taking
into account the local conditions.
• Setting up regulatory framework and standards.
• Setting up a commercial partnership for the operation and the management of a
local Agency for the dissemination, everyday use, maintenance and updating of
the National Cost Estimating System.
Outline of the System Components (non-exhaustive)

1. CONCEPTUAL ESTIMATION AND BUDGETING AT 3. BIDDING PHASE – CONSTRUCTION
THE DESIGN PHASE DOCUMENTATION
• Methodology and Specifications for Project Budgeting and • Methodology and Basic Principles for Bid Estimates
Cost Estimating (Body of Knowledge of Estimating • Relevant Data Bases
Practice, TCM Framework). • Price Variation Formulas
• Relevant Data Bases (price books). • Checking procedures for Very High or Very Low Bids
• Standard Work Items & Standard Price Schedules • Bid evaluation – Bid price documentation – Comparative
analysis
• Activity based estimating with standard methodologies and
rules for all the cost estimation elements (Quantity Take-off, • Web-Based Tools and Software
Rules of Measurement, Labor Hours, Crew Output, Labor • 4D/5D BIM
Rates, Material Prices, Equipment Costs, Subcontractor
Costs, Indirect Costs, Mark-Ups) 4. COST MONITORING AND CONTROL DURING
• Designer’s Performance Bond on the Final Cost CONSTRUCTION
• Web-Based Tools and Software • Methodology and Basic Principles for Project Controls
• Collection and processing of cost historical data
• 5D BIM Cost Estimation
• Cost Overruns and Price Variation Formula
• Web-Based Tools and Software
2. DEVELOPMENT OF THE NATIONAL MASTER
TECHNICAL SPECIFICATIONS LIBRARY
5. BUILD-UP OF HISTORICAL COST DATA AND
• For building projects BIDDING PRICES DATA BASE
• For infrastructure projects (public works) • Setting up a Greek Construction Market Price Observatory
• For transportation and energy facilities, etc for Labor Rates, Material Prices, Equipment Costs
• Cost indexes
• Standard Forms of Cost Analysis
Το Όραμα Τα πρώτα βήματα
Vision First steps
Dissatisfaction
Η δημιουργική ηγεσία
Η δυσαρέσκεια
Creative Leadership
AACEi and AACE Greece Section

Contribution to the Change through:
• Knowledge and Standards transfer (e.g. TC Management

Framework, Recommended Practices )
• Provision of Training and Certification schemes for Certified
Cost Professionals
• Animation of Workshops, Discussion Forums and Conferences
• Mentoring for exchange of experience and best practices
Thank you for your Attention !

Construction Cost Estimation in Greece: Sustainable Promotion of An Unknown Discipline

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1st International AACE Greek Conference

Construction Cost Estimation in Greece:

Dimosthenis Touliatos is Civil Engineer graduate from the National Technical

1. Pre-tender estimating practice (Unit Price Contracts)

The RICS typical

A typical Greek pre-tender estimating

U.M. Quantities Unit Prices

A typical Greek pre-tender estimating example (cont)

U.M. Quantities Unit Prices

Mark-up for Overheads & Profit

Main remarks on the pre-tender estimating practice

2. The Greek Pricing Regulation:

The Official Government Gazette

The main Work Categories

Building Works (998)*

#.1: Detailed Items Description (#) The total nb of priced Items

An extract from the Greek Price Regulation

Main remarks on the Greek Pricing Regulation

A collection of Price Books in the UK

An extract from the Griffiths Price Book

An extract from the Laxton’s Price Book

The German Web-Based Price Data Base

The BIM extension of the German

The US RSMeans Price Data Base

3. Tendering by discount against the Pre-tender Estimate.

Discounts offered against the estimate presented above in section 1

Work Sections of the Estimate and estimated value

The lowest Bidder The highest Bidder

Mark-up for Overheads

Provisional sum for Price Escalation

Main remarks on the tendering process

4. A formula for a sustainable change.

The Business Case:

The Services we need to procure:

Outline of the System Components (non-exhaustive)

Το Όραμα Τα πρώτα βήματα

Vision First steps

AACEi and AACE Greece Section

• Knowledge and Standards transfer (e.g. TC Management

Thank you for your Attention !

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