Recently a project went out for bids to convert an existing structure into a new Douglas County crime lab and canine unit in Omaha, Nebraska. The budget had been set at $2.5 million dollars and there were 12 bidders who submitted their bids on the project. Based on the current economic conditions that contractors in Omaha are facing just like the rest of the country and the large number of bidders, it would be a good bet that the low bid should be at or well below the budget.
NOT HERE!!! The low bid was for four million dollars! How in the world did they have a budget at 2.5 and low was 4 million? Obviously they did not do their homework and have a real estimate done to set the budget or there was tremendous scope creep on the design.
This is a prime example of how important it is to have multiple estimates done at the various stages of design by estimators. Paying a little upfront can save you big time both in money and headaches in the end.
If you would like to read the full article, it can be found on the Omaha World Heralds website at http://www.omaha.com/article/20100428/NEWS01/704289880.
To me, this looks like a budget that was set in a meeting discussing how much they hoped or wished it would cost. Unfortunately, a budget can’t be determined by tossing a nickel into a wishing well. I may let my kids believe what you wish for may come true, but when it comes to construction costs the only way to answer “how much?”, is by having a detailed cost estimate done on the project.
