造价英文文献

造价英文文献 The Cost of Building Structure 1. Introduction The art of architectural design was characterized as one of dealing comprehensively with a complex set of physical and nonphysical design determinants. Structural considerations were cast as important physical determinants that should be dealt with in a hierarchical fashion if they are to have a significant impact on spatial organization and environmental control design thinking. The economical aspect of building represents a nonphysical structural consideration that, in final analysis, must also be considered important. Cost considerations are in certain ways a constraint to creative design. But this need not be so. If something is known of the relationship between structural and constructive design options and their cost of implementation, it is reasonable to believe that creativity can be enhanced. This has been confirmed by the authors‘ observation that most enhanced. This has been confirmed by the authors‘ observation that most creative design innovations succeed under competitive bidding and not because of unusual owner affluence as the few publicized cases of extravagance might lead one to believe. One could even say that a designer who is truly creative will produce architectural excellence within the constraints of economy. Especially today, we find that there is a need to recognize that elegance and economy can become synonymous concepts. Therefore, in this chapter we will set forth a brief explanation of the parameters of cost analysis and the means by which designers may evaluate the overall economic implications of their structural and architectural design thinking. The cost of structure alone can be measured relative to the total cost of building construction. Or, since the total construction cost is but a part of a total project cost, one could include additional consideration for land(10,20percent),finance and interest(100,200 percent),taxes and maintenance costs (on the order of20 percent).But a discussion of these so-called architectural costs is beyond the scope of this book, and we will focus on the cost of construction only. On the average, purely structural costs account for about 25 percent of total construction costs. This is so because it has been traditional to discriminate between purely structural and other so-called architectural costs of construction. Thus, in tradition we find that architectural costs have been taken to be those that are not necessary for the structural strength and physical integrity of a building design. ―Essential services‖ forms a third construction cost category and refers to the provision of mechanical and electrical equipment and other service systems. On the average, these service costs account for some 15 to 30 percent of the total construction cost, depending on the type of building. Mechanical and electrical refers to the cost of providing for air-conditioning equipment and he means on air distribution as well as other services, such as plumbing, communications, and electrical light and power. The salient point is that this breakdown of costs suggests that, up to now, an average of about 45 to 60 percent of the total cost of constructing a typical design 1 solution could be considered as architectural. But this picture is rapidly changing. With high interest costs and a scarcity of capital, client groups are demanding leaner designs. Therefore, one may conclude that there are two approaches the designer may take towards influencing the construction cost of building. The first approach to cost efficiency is to consider that wherever architectural and structural solutions can be achieved simultaneously, a potential for economy is evident. Since current trends indicate a reluctance to allocate large portions of a construction budget to purely architectural costs, this approach seems a logical necessity. But, even where money is available, any use of structure to play a basic architectural role will allow the nonstructural budget to be applied to fulfill other architectural needs that might normally have to be applied to fulfill other architectural needs that might normally have to be cut back. The second approach achieves economy through an integration of service and structural subsystems to round out one‘s effort to produce a total architectural solution to a building design problem. The final pricing of a project by the constructor or contractor usually takes a different form. The costs are broken down into (1) cost of materials brought to the site, (2)cost of labor involved in every phase of the construction process, (3)cost of equipment purchased or rented for the project, (4)cost of management and overhead, and(5) profit. The architect or engineer seldom follows such an accurate path but should perhaps keep in mind how the actual cost of a structure is finally priced and made up. Thus, the percent averages stated above are obviously crude, but they can suffice to introduce the nature of the cost picture. The following sections will discuss the range of these averages and then proceed to a discussion of square footage costs and volume-based estimates for use in rough approximation of the cost of building a structural system. 2. Percentage Estimates The type of building project may indicate the range of percentages that can be allocated to structural and other costs. As might be expected, highly decorative or symbolic buildings would normally demand the lowest percentage of structural costs as compared to total construction cost. In this case the structural costs might drop to 10,15percent of the total building cost because more money is allocated to the so-called architectural costs. Once again this implies that the symbolic components are conceived independent of basic structural requirements. However, where structure and symbolism are more-or-less synthesized, as with a church or Cathedral, the structural system cost can be expected to be somewhat higher, say, 15and20 percent (or more). At the other end of the cost scale are the very simple and nonsymbolic industrial buildings, such as warehouses and garages. In these cases, the nonstructural systems, such as interior partition walls and ceilings, as will as mechanical systems, are normally minimal, as is decoration, and therefore the structural costs can account for60 to 70 percent, even 80 percent of the total cost of construction. Buildings such as medium-rise office and apartment buildings(5,10 stories)occupy the median position on a cost scale at about 25 percent for structure. 2 Low and short-span buildings for commerce and housing, say, of three or four stories and with spans of some 20 or 30 ft and simple erection requirements, will yield structural costs of 15,20 percent of total building cost. Special-performance buildings, such as laboratories and hospitals, represent another category. They can require long spans and a more than average portion of the total costs will be allocated to services (i.e., 30,50 percent), with about 20 percent going for the purely structural costs. Tall office building (15 stories or more) and/or long-span buildings (say, 50 to 60 ft) can require a higher percentage for structural costs (about 30to 35percent of the total construction costs), with about 30 to 40 percent allocated to services. In my case, these percentages are typical and can be considered as a measure of average efficiency in design of buildings. For example, if a low, short-span and no monumental building were to be bid at 30 percent for the structure alone, one could assume that the structural design may be comparatively uneconomical. On the other hand, the architect should be aware of the confusing fact that economical bids depend on the practical ability of both the designer and the contractor to interpret the design and construction requirements so that a low bid will ensue. Progress in structural design is often limited more by the designer‘s or contractor‘ slack of experience, imagination, and absence of communication than by the idea of the design. If a contractor is uncertain, he will add costs to hedge the risk he will be taking. It is for this reason that both the architect and the engineer should be well-versed in the area of construction potentials if innovative designs ate to be competitively bid. At the least the architect must be capable of working closely with imaginative structural engineers, contractors and even fabricators wherever possible even if the architecture is very ordinary. Efficiency always requires knowledge and above all imagination, and these are essential when designs are unfamiliar. The foregoing percentages can be helpful in approximating total construction costs if the assumption is made that structural design is at least of average (of typical) efficiency. For example, if a total office building construction cost budget is , 5,000,000,and 25 percent is the ―standard‖ to be used for structure, a projected structural system should cost no more than ,1,250,000.If a very efficient design were realized, say, at 80 percent of what would be given by the ―average‖ efficient design estimate stated above the savings,(20 percent),would then be,250,000 or 5 percent of total construction costs ,5,000,000.If the ,5,000,000 figure is committed, then the savings of ,250,000 could be applied to expand the budget for ―other‖ costs. All this suggests that creative integration of structural (and mechanical and electrical) design with the total architectural design concept can result in either a reduction in purely construction design concept can result in either a reduction in purely construction costs or more architecture for the same cost. Thus, the degree of success possible depends on knowledge, cleverness, and insightful collaboration of the designers and contractors. The above discussion is only meant to give the reader an overall perspective on total construction costs. The following sections will now furnish the means for 3 estimating the cost of structure alone. Two alternative means will be provided for making an approximate structural cost estimate: one on a square foot of building basis, and another on volumes of structural materials used. Such costs can then be used to get a rough idea of total cost by referring to the ―standards‖ for efficient design given above. At best, this will be a crude measure, but it is hoped that the reader will find that it makes him somewhat familiar with the type of real economic problems that responsible designers must deal with. At the least, this capability will be useful in comparing alternative systems for the purpose of determining their relative cost efficiency. 3. Square-foot Estimating As before, it is possible to empirically determine a ―standard‖ per-square-foot cost factor based on the average of costs for similar construction at a given place and time. More-or-less efficient designs are possible, depending on the ability of the designer and contractor to use materials and labor efficiently, and vary from the average. The range of square-foot costs for ―normal‖ structural systems is ,10 to ,16 psf. For example, typical office buildings average between ,12 and ,16 psf, and apartment-type structures range from ,10 to ,14.In each case, the lower part of the range refers to short spans and low buildings, whereas the upper portion refers to longer spans and moderately tall buildings. Ordinary industrial structures are simple and normally produce square-foot costs 10 to ,14,as with the more typical apartment building. Although ranging from , the spans for industrial structures are generally longer than those for apartment buildings and the loads heavier, they commonly have fewer complexities as well as fewer interior walls, partitions, ceiling requirements, and they are not tall. In other words, simplicity of design and erection can offset the additional cost for longer span lengths and heavier loads in industrial buildings. Of course there are exceptions to these averages. The limits of variation depend on a system‘s complexity, span length over ―normal‖ and special loading or foundation conditions. For example, the Crown Zellerbach high-rise bank and office building in San Francisco is an exception, since its structural costs were unusually high. However, in this case, the use of 60 ft steel spans and free-standing columns at the bottom, which carry the considerable earthquake loading, as well as the special foundation associated with the poor San Francisco soil conditions, contributed to the exceptionally high costs. The design was also unusual for its time and a decision had been made to allow higher than normal costs for all aspects of the building to achieve open spaces and for both function and symbolic reasons. Hence the proportion of structural to total cost probably remained similar to ordinary buildings. The effect of spans longer than normal can be further illustrated. The ―usual‖ floor span range is as follows: for apartment buildings,16 to 25 ft; for office buildings,20 to 30 ft; for industrial buildings,25 to 30 ft loaded heavily at 200 to 300 psf; and garage-type structures span,50 to 60 ft, carrying relatively light(50,75 psf) loads(i.e., similar to those for apartment and office structures).Where these spans are doubled, the structural costs can be expected to rise about 20 to 30 percent. To increased loading in the case of industrial buildings offers another insight into 4 the dependency of cost estimates on ―usual‖ standards. If the loading in an industrial building were to be increased to 500psf(i.e., two or three times), the additional structural cost would be on the order of another 20 to 30 percent. The reference in the above cases is for floor systems. For roofs using efficient orthotropic (flat) systems, contemporary limits for economical design appear to be on the order of 150 ft, whether of steel or prestressed concrete. Although space- frames are often used for steel or prestressed concrete. Although space-frames are often used for steel spans over 150 ft the fabrication costs begin to raise considerably. At any rate, it should be recognized that very long-span subsystems are special cases and can in themselves have a great or small effect on is added, structural costs for special buildings can vary greatly from design to design. The more special the form, the more that design knowledge and creativity, as well as construction skill, will determine the potential for achieving cost efficiency. 4. Volume-Based Estimates When more accuracy is desired, estimates of costs can be based on the volume of materials used to do a job. At first glance it might seem that the architect would be ill equipped to estimate the volume of material required in construction with any accuracy, and much less speed. But it is possible, with a moderate learning effort, to achieve some capability for making such estimates. Volume-based estimates are given by assigning in-place value to the pounds or tons of steel, or the cubic yards of reinforced or prestressed concrete required to build a structural system. For such a preliminary estimate, one does not need to itemize detailed costs. For example, in-place concrete costs include the cost of forming, falsework, reinforcing steel, labor, and overhead. Steel includes fabrication and erection of components. Costs of structural steel as measured by weight range from ,0.50 to ,0.70 per pound in place for building construction. For low-rise buildings, one can use stock wide-flange structural members that require minimum fabrication, and the cost could be as bow as ,0.50 per pound. More complicated systems requiring much cutting and welding(such as a complicated steel truss or space-frame design) can go to , 0.70 per pound and beyond. For standard tall building designs (say, exceeding 20 stories), there would typically be about 20 to 30 pounds of steel/psf, which one should wish not to exceed. A design calling for under 20 psf would require a great deal of ingenuity and the careful integration of structural and architectural components and would be a real accomplishment. Concrete costs are volumetric and should range from an in-place low of ,150 per cu yd for very simple reinforced concrete work to ,300 per cu yd for expensive small quantity precast and prestressed work. This large range is due to the fact that the contributing variables are more complicated, depending upon the shape of the precise components, the erection problems, and the total quantity produced. Form work is generally the controlling factor for any cast-in-place concrete work. Therefore, to achieve a cost of ,150 per cu yd, only the simplest of systems can be used, such as flat slabs that require little cutting and much reuse of forms. Where any beams are introduced that require special forms and difficulty in placement of 5 concrete and steel bars, the range begins at ,180 per cu yd and goes up to , 300.Since, in a developed country, high labor costs account for high forming costs, this results in pressure to use the simplest and most repetitive of systems to keep costs down. It become rewarding to consider the possibility of mass-produced precast and prestressed components, which may bring a saving in costs and\or construction completion time. The latter results in savings due to lower construction financing costs for the contractor plus quicker earnings for the owner. One important exception to the above cost picture is that of concrete work in foundations. Here the cost of forming and casting simple foundations (i.e., for spread foundations with very little steel, such as subgrade bearing walls and mat foundations) should be considered at about $90 per cu yd. But in case pile can cost $12 per ft or more in place, of course depending on soil conditions. It is enlightening to pay some attention to the makeup of these in-place concrete estimates. The cost of concrete alone for ordinary reinforced concrete work is about $40 per cu yd delivered. For special concrete, such as lightweight and/or high-strength quick-setting concrete, the cost can go to $50 or even $60 per cu yd. Mild reinforcing steel, depending on the cutting and fabricating complexity of the required reinforcing design, can rang from 30, to 46, per lb in place. For an average of about 150 lb of steel per cubic yard of ordinary reinforced concrete, the steel cost would range from about $45 to $60 per sq yd. Labor, including placing of reinforcing and concrete, cost about $20 to $40 per cu yd depending on the complexity of placing and working the concrete. Form work represents the largest single cost factor for most concrete work. The cost can be stated as per square feet of contact area, with slabs requiring single-side and walls double-side forming. In either case, efficiency depends on reusability and the simplicity of form design. For the simplest reusable plywood forms, such as for a flat slab, the costs will run a minimum of $1 psf of contact area. This amounts to some $80 of forming cost per cu yd of concrete for an ordinary 8-in wall. When beams are introduced, cutting and erection costs are much affected by high labor cost, and the forming costs can easily go to $2.50or $3.00 psf of contact area. Special designs for very complicated forming, such as for nonstandard waffle systems, or for shell and suspension design, will often contribute a large portion to cast-in –place concrete cost, unless the forms are reused. The mass of concrete per square foot of plan area affects the form/cost ratio. This is pronounced in the case of, say, a simple 3-in shell as compared with an 8-in flat slab. At $1 psf form cost, one cubic yard of concrete placed for a 3-in shell will require 108 sq ft of form, at a cost of $108.Thus, the thinner the system, the greater the influence of form costs on total costs. Prestressing costs can now be compared with nonprestressed concrete work. The material and labor for prestressing steel cost about $40 to $60 per cu yd for pretensioned precast concrete and $60 to $80 per cu yd for post tensioned in-place concrete. But with competent design, prestresse structural members are designed thinner in comparison with reinforced concrete design, and the overall cost of prestressed concrete construction could often be cheaper than ordinary reinforced 6 concrete work. The other advantages of weight reduction and minimum deflection are additional. Often where prestressing is not found to be less expensive in term of immediate construction cost, the ability to design for longer spans and lighter elements with less wall, column and foundation loading, as well as the increased architectural freedom, determine the desirability of going to prestressed elements. The point for the designer to remember is that good design in either material will be competitive and frequently one‘s decision is in a context of many important building design determinants, only one of which is the structural system. To summarize, the range of cost per cubic yard of standard types of poured-in-place concrete work will average from $150 to $250, the minimum being for simple reinforced work and the maximum for moderately complicated post tensioned work. This range is large and any estimate that ignores the effect of variables above will be commensurately inaccurate. 5.Summary The estimate and economical design of structure building are important and essential work, which should be valued by all architects and engineers and others. Better you do it, more profit you will receive from it! 7 Estimating Future Highway Construction Costs 12 C. G. Wilmot, M.ASCE, and G. Cheng, P.E. Abstract: The objective of this research was to develop a model that estimates future highway construction costs in Louisiana. The model describes overall highway construction cost in terms of a highway construction cost index. The index is a composite measure of the cost of construction labor, materials, and equipment; the characteristics of contracts; and the environment in which contracts are let. Future construction costs are described in terms of predicted index values based on forecasts of the price of construction labor, materials, and equipment and the expected contract characteristics and contract environments. The contract characteristics and contract environments that are under the control of highway agency officials, can be manipulated to reflect future cost-cutting policies. Application of the model in forecasting to highway construction costs in Louisiana shows that the model closely replicates past construction costs for the period 1984–1997. When applied to forecasting future highway construction costs, the model predicts that highway construction costs in Louisiana will double between 1998 and 2015. Applying cost-cutting policies and assuming input costs are 20% less than anticipated, the model estimates highway construction costs will increase by 75% between 1998 and 2015. Key words: Highway construction; Costs; Estimation. Introduction State Departments of Transportation are required to prepare highway construction programs that describe their planned construction activity in the short term. There is usually considerable interest in the program from local authorities, politicians, and interest groups. Draft programs are typically presented to the public and to various agencies at the local, regional, state, and federal level for comment and review. Ultimately, a program will be approved by the state legislature and will become the formal program of construction of the state Department of Transportation until a new program is developed in the next cycle a few years later. Because individual projects are of considerable importance to politicians and individual interest groups, it is common that progress on a construction program is closely monitored. Any deviation is likely to be queried, and the Secretary of the state Department of Transportation or a senior official in the department will often have to defend the situation publicly or in the state legislature. This can lead to perceptions of incompetence and erosion of support from the legislature and the public. To prepare reliable highway construction programs, road authorities must have accurate estimates of future funding and project costs. While future funding is obviously never known witha great deal of certainty, it is often the estimation of project costs that cause upsets in the execution of construction programs. Inaccurate 8 cost estimation is one source of error, but another, the escalation in cost of a project over time, is another source disruption to the program that is usually not anticipated and catered for. Typically, when projects are costed, their costs are estimated in terms of the current cost of the project, and this estimate is not adjusted for the year in which the project is scheduled for implementation. These cost increases can be significant and are, of course, cumulative across projects; also, they rise at an increasing rate each year into the future. Estimating future highway construction is the focus of this paper. The model developed in this study was developed with data from the Louisiana Department of Transportation and Development ~DOTD! and is therefore particular to that state. However, the methodology employed could be employed in other areas. Measuring Project Costs When construction in the field lags behind planned construction in the construction program, it is usually because the projects that have been constructed have cost more than anticipated. This is not random variation of actual costs about estimated costs, because, clearly, underestimates would cancel out overestimates over time in such a situation. Rather, it is evidence of a consistent underestimateof all projects collectively. The benefit of this is that it can be measured at the overall level, which is much easier to measure than at the individual project level. In the past, change in overall construction costs has been measured in terms of construction indices. These indices are weighted averages of the cost of a set of representative pay items over time. They have been used to display cost trends in the past. However, there is no reason why cost indices must be restricted to displaying past trends; they can also portray future overall costs, provided the representative pay items on which the index is based can be forecast. A predictive construction cost index was adopted in this study to describe the change in overall construction costs in the future. The formulation of the index is described later in the paper. Past Increases in Construction Costs When the change in overall construction costs in the past is observed(as measured by popular construction cost indices), it is apparent that they change significantly from year to year and that the changes can sometimes be quite erratic. The common assumption that construction costs change with the rate of inflation can lead to poor estimates of future construction cost. To illustrate, the Federal Highway Administration‘s Composite Bid Price Index, an index of overall highway construction costs, is plotted in Fig. 1 together with the Consumer Price Index (CPI), a common expression of general inflation. The FHWA CBPI for the entire nation and for Louisiana alone is plotted in the diagram. All indices have been normalized to a value of 100 in 1987 for comparison purposes. From the diagram, it is clear that highway construction costs change erratically and even display different short and long-term trends from to those of the CPI. It is also apparent that construction cost changes are different in Louisiana from those in the nation as a whole. While not shown here, review of the FHWA CBPI from other states shows that many of them show a deviation from national values. Past Methods of Forecasting Highway Construction Cost 9 Forecasting future highway construction costs has been achieved in basically three ways in the past. First, unit rates of construction such as dollars per mile by highway type have been used to estimate construction costs in the short term. However, this method has generally been found to be unreliable, because site conditions such as topography, in situ soil, land prices, environment, and traffic loads vary sufficiently from location to location to make average prices inaccurate estimates of the price of individual projects or even of all projects in a particular year. Second, extrapolation of past trends, or time-series analysis, has been used to forecast Koppula 1981; Hartgen et al. 1997). Typically, future overall construction costs ( construction costs have been collapsed in these analyses to a single overall expression of constructioncost such as the FHWA CBPI or the Engineering News Record’s Building Construction Index ~ENR BCI! or Construction Cost Index ~ENR CCI!. However, these types of models are usually only used for short-term forecasting due to their reliance on the notion that past conditions are maintained in the future. Third, models have been established that describe construction costs as a function of factors believed to influence construction costs. The relationship between construction costs and these factors have been established from past records of construction costs. Typically, the models established in this manner have been used to estimate the cost of individual contracts. These models, with their relational structure, are the only models expected to provide reliable long-term estimates. The model developed in this study is of this type. Proposed Construction Cost Model It is clear that there are numerous factors that affect construction costs. However, it is striking that most construction cost models developed in the past have used only a few of the many influential factors identified above. One reason for this is that information is generally not available on many factors in data sets used to estimate models. Another reason is that information on the qualitative conditions surrounding each contract is difficult to obtain. These are problems that prevail in most circumstances and are difficult to overcome. To mitigate against the effect of an incomplete set of factors, two strategies can be employed. First, it may be possible to represent some of the absent factors by surrogate variables that are in the data set. For example, as mentioned earlier, annual bid volume has been used in the past as an inverse measure of the level of competition prevailing in the construction industry at that time (Herbsman 1986). Similarly, the number of plan changes each year can serve as a measure of design quality. Second, if the modeling of construction cost is changed from estimating the cost of individual projects to estimating overall construction costs each year, the modeling task is simplified. This is because it is no longer necessary to try to model individual projects in which conditions inflate the price in one case and deflate it in another, since such conditions would tend to cancel themselves out among projects in the same year. For example, firms that reduce their bid prices in an effort to win a particular contract could be balanced out within the same fiscal year by those that increase their prices because they already have enough work and are not particularly interested in winning the contract. Similarly, those firms with expertise in the type of construction required 10 will be balanced out by those with low levels of expertise in that area. Thus, it is generally more tolerable to operate with fewer relevant factors when modeling at the aggregate or overall level than when modeling at the disaggregate level. The objective of this study is to establish a model, estimated on historical quantitative data, that incorporates as many relevant variables as possible and is capable of estimating the future overall cost of highway construction on an annual basis. The model is intended to assess the impact of alternative future conditions on highway construction costs and assist officials of the Louisiana DOTD to identify management policies that will help limit the increase in highway construction costs in the state. It was also the perception of those interviewed that contracts let in the fourth quarter of the fiscal year tended to result in higher bid prices. This was because there was a tendency for projects to accumulate in the fourth quarter due to various delays, and the increased volume of projects resulted in decreased competition among contractors. Model Structure The model developed to predict overall highway construction costs in this study is based on five submodels of price estimation. Each submodel estimates the price of a pay item representative of cost model a dominant construction area. Dominant construction areas were identified from past expenditure in different areas of highway construction. From the Louisiana DOTD data for the period1984–1997, it was found that more than 50% of all highway construction expenditure occurred in the areas of asphalt concrete surfaces, Portland cement concrete surfaces, excavation and embankment, structural steel, structural concrete, and reinforcing steel. Interestingly, these construction areas are identical to those used to estimate the FHWA CBPI. The structural steel construction area was not included in the model developed in this study, because more than 98% of expenditure in this construction area was bid as a lump sum in each contract with no record of the amount of steel included in the bid. This made comparison of the cost of structural steel among contracts impossible. The other five construction areas included in the model were all represented by pay items whose prices were expressed in terms of rates, which permitted comparison among contracts. A schematic representation of the overall model with its five submodels is shown in Fig. 2. Each submodel estimates the price of a representative pay item from each of the five dominant construction areas. The contribution of each submodel to the overall model is accomplished by combining the prices of the representative pay items in an index similar to that of the FHWA CBPI. In this case, because the formulation is slightly different from the FHWA CBPI and is constructed specifically to reflect past and future overall construction costs in Louisiana, it is named the Louisiana Highway Construction Index and is defined as Validation Model performance is ideally validated using data not used in the estimation of the model. In this case no such data was available. Dividing the existing data set into two portions to estimate the model on one portion and use the other for validation was not practical, given the limited sample size in some of the submodels. For example, the 11 concrete pavement submodel has a total of only 212 observations, and estimating the submodel on the highly variable data on fewer observations would reduce the accuracy of the estimates. Thus, the performance of the model was assessed by observing how well it reproduced observed construction costs. Using the same data as that on which the model was calibrated, the estimated and 1997 are shown in Fig. 3. The 95% observed LHCI values for the period 1984– confidence limit of the observed LHCI is also shown in the figure to illustrate that the estimated LHCI values are, for the most part, contained within the 95% confidence limit of the observed LHCI values. The chisquared test of the similarity of the estimated and observed LHCI values indicates that a significant difference could not be observed at the 99% level of significance. Investigating the behavior of the construction cost index in Fig. 3 reveals interesting reasons behind the observed behavior. Reviewing the data and observing its impact on the forecasts through the model allows an analyst to determine the primary causes of change in construction costs during certain periods in the past. For example, the main cause of the decrease in construction costs observed in the period 1984–1986 can be traced back to a decline in labor and petroleum costs during that period. The rapid increase in construction costs from 1995 to 1996 was primarily due to a combination of rising petroleum costs and an increased proportion of smaller contracts. The drop in construction costs observed immediately following this event (i.e., in 1997) was mainly the consequence of an increase in the average size of projects from those let in 1996, very few projects being let in the fourth quarter, and a decrease in the average duration of projects. Conclusions This study has shown that the literature indicates that a comprehensive set of factors contributes to the cost of highway construction. In this study, the most influential factors were found to be the cost of the material, labor, and equipment used in constructing the facility. However, characteristics of individual contracts and the contracting environment in which contracts are let also affect construction costs. In particular, contract size, duration, location, and the quarter in which the contract is let were found to have a significant impact on contract cost. Bid volume, bid volume variance, number of plan changes, and changes in construction practice, standards, or specifications also make a significant impact on contract costs. Other factors are expected to have an impact on construction costs but were not included in this analysis because no data on their values were available. The model developed in this study reproduces past overall construction costs reasonably accurately at the aggregate level. Predicted overall construction costs are not significantly different from observed costs at the 99% level of significance. This accuracy is largely the result of the aggregate level at which construction costs are measured in this study; at the individual contract level, the submodels capture only between 42 and 72% of the variation in the data. It is suspected that much of this variation is due to unobserved, essentially subjective factors that influence the bid prices in individual contracts. However, some of these idiosyncratic variations at the individual contract level average out in the aggregation process. 12 This model can be used by highway officials in Louisiana to test alternative contract management strategies. Increasing contract sizes, reducing the duration of contracts, reducing bid volume and bid volume variance, reducing the number of plan changes, and reducing the proportion of contracts let in the fourth quarter all serve to reduce overall construction costs. Highway officials can assess the impact of strategies they believe are achievable by applying the model. Most importantly, though, the model can assist in estimating future construction costs and providing the means to produce more reliable construction programs. Reference Associate Professor, Louisiana Transportation Research Center and Dept. of Civil and Environmental Engineering, Louisiana State Univ., Baton Rouge, LA 70803-6405. 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