Capital Cost Estimating Overview
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Questions and Answers

What is the primary purpose of capital cost estimating in project management?

  • To simplify procurement processes
  • To calculate profit margins
  • To reduce labor costs
  • To determine project feasibility (correct)

Which of the following components is NOT part of capital cost estimating?

  • Direct Costs
  • Return on Investment (correct)
  • Indirect Costs
  • Contingency

Which method of capital cost estimation involves breaking costs down item-by-item?

  • Unit Cost Estimation
  • Detailed Estimation (correct)
  • Analogous Estimation
  • Parametric Estimation

Which factor is likely to lead to increased complexity in capital cost estimating?

<p>Use of outdated technology (D)</p> Signup and view all the answers

What type of capital cost estimate is typically used during the final design phase?

<p>Definitive (B)</p> Signup and view all the answers

Which ethical principle most directly guides behavior in cost estimation?

<p>Principles of conduct (B)</p> Signup and view all the answers

What is a significant challenge in capital cost estimating?

<p>Market price volatility (D)</p> Signup and view all the answers

Which estimate is prepared during the construction phase with the highest precision?

<p>Control (A)</p> Signup and view all the answers

What must engineers do when they believe a project will not be successful?

<p>Advise their clients or employers (A)</p> Signup and view all the answers

Which of the following actions is NOT permitted for engineers regarding gratuities?

<p>Receiving gratuities as a thank you (A)</p> Signup and view all the answers

What should engineers do concerning their professional qualifications?

<p>Clearly represent their qualifications and experience (C)</p> Signup and view all the answers

What is required of engineers regarding conflicts of interest?

<p>Avoid known or potential conflicts (A)</p> Signup and view all the answers

Which of the following actions related to political contributions is permitted for engineers?

<p>Securing salaried positions through employment agencies (A)</p> Signup and view all the answers

What is expected from engineers when giving credit for engineering work?

<p>Recognize the propriety interests of others (D)</p> Signup and view all the answers

How should engineers approach advertising their professional services?

<p>Advertise without misleading language (C)</p> Signup and view all the answers

What is the guideline for engineers accepting professional employment outside their regular work?

<p>Not permitted under any circumstances (D)</p> Signup and view all the answers

What should engineers do before accepting an assignment outside their field of competence?

<p>Limit their involvement to phases they are qualified for. (D)</p> Signup and view all the answers

Which of the following actions is NOT permissible for engineers when issuing public statements?

<p>Promoting their own accomplishments excessively. (B)</p> Signup and view all the answers

Which principle should engineers prioritize according to Canon 1?

<p>Public safety, health, and welfare (A)</p> Signup and view all the answers

When should engineers express opinions as expert witnesses?

<p>When they possess adequate knowledge of facts and technical competence. (B)</p> Signup and view all the answers

What is the primary responsibility of engineers when their professional judgment is overridden?

<p>To inform clients or employers of possible consequences (A)</p> Signup and view all the answers

Under what condition may engineers use their Engineering title?

<p>Only after registering as a professional engineer. (C)</p> Signup and view all the answers

Under what condition should engineers approve documents they have reviewed?

<p>When they determine documents are safe for public health (A)</p> Signup and view all the answers

What should an engineer do if they suspect a violation of Canon 1 by another party?

<p>Present the information to the proper authority in writing (C)</p> Signup and view all the answers

What is the primary responsibility of engineers towards their employers or clients?

<p>To act as faithful agents or trustees. (C)</p> Signup and view all the answers

Which of the following is NOT a focus of engineers according to Canon 1?

<p>Maximizing financial gains for stakeholders (C)</p> Signup and view all the answers

Which statement about engineers issuing professional reports is incorrect?

<p>They can omit data that may harm their reputation. (B)</p> Signup and view all the answers

What should engineers do with criticisms or statements prompted by interested parties?

<p>Make them but cite the source of interest. (A)</p> Signup and view all the answers

What is the emphasis of Canon 2 regarding the work performed by engineers?

<p>Working only within their areas of competence (C)</p> Signup and view all the answers

Which action is encouraged for engineers to enhance the quality of life of the public?

<p>Practicing sustainable development principles (D)</p> Signup and view all the answers

Which practice is discouraged for engineers when explaining their work?

<p>Promoting their own interests excessively. (D)</p> Signup and view all the answers

What role does sustainable development play in Cannon 1?

<p>It is fundamental to the engineers' responsibilities (D)</p> Signup and view all the answers

What is prohibited for engineers regarding the reputation of other engineers?

<p>Injuring their professional reputation maliciously (D)</p> Signup and view all the answers

Which behavior is considered derogatory to the honor of the engineering profession?

<p>Engaging in fraudulent or dishonest practices (D)</p> Signup and view all the answers

What should engineers avoid when utilizing their employer's resources?

<p>Using them for non-work-related projects without permission (B)</p> Signup and view all the answers

What is an essential practice for engineers concerning professional development?

<p>Engaging in continuing education courses (C)</p> Signup and view all the answers

How should engineers approach the registration of their employees?

<p>Support them in registering at the earliest possible date (D)</p> Signup and view all the answers

What is the recommended action for engineers concerning technical presentations?

<p>Encourage employees to attend and present at meetings (D)</p> Signup and view all the answers

What principle should engineers uphold regarding the relationship between employers and employees?

<p>Maintaining mutually satisfying relationships (C)</p> Signup and view all the answers

What should Engineer A recommend to the client regarding safety during construction?

<p>Ensure a full-time, on-site project representative is hired (C)</p> Signup and view all the answers

What obligation must Engineer A prioritize according to the Code of Ethics before proceeding with the project?

<p>Protecting safety, health, property, and welfare of the public (D)</p> Signup and view all the answers

What should Engineer A do if their professional judgment is overruled in a way that endangers public welfare?

<p>Notify their employer or client and appropriate authorities (A)</p> Signup and view all the answers

Was Engineer A's act of using Engineer B's proposal considered ethical?

<p>No, it undermines the proprietary interests of Engineer B (B)</p> Signup and view all the answers

Which Code of Ethics principle was likely violated by Engineer A when submitting a proposal based on another engineer's work?

<p>Engineers should compete fairly and not take advantage of others (C)</p> Signup and view all the answers

What might be a consequence for Engineer A if they fail to give credit for Engineer B's work?

<p>Legal repercussions for intellectual property theft (A)</p> Signup and view all the answers

What action reflects a violation of the obligation to recognize proprietary interests in engineering ethics?

<p>Utilizing confidential data from a competitor's proposal (D)</p> Signup and view all the answers

When proposing a project, what must engineers ensure according to the ethical code?

<p>That the project will be successful (C)</p> Signup and view all the answers

What underlying ethical principle may have motivated Engineer A to proceed with the project despite the client's concerns?

<p>The expectation that client directives supersede ethical obligations (D)</p> Signup and view all the answers

Flashcards

Capital Cost Estimating

The process of determining the total cost of a project, including all direct and indirect expenses.

Direct Costs

Costs directly related to the project, such as materials, labor, and equipment.

Indirect Costs

Costs not directly tied to construction, such as engineering fees, permits, and project management.

Order-of-Magnitude Estimate

An estimate created early in the project with a high level of uncertainty (±50%).

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Preliminary Estimate

An estimate created after conceptual design, with more precision (±30%).

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Definitive Estimate

An estimate based on detailed design, providing the most accurate cost prediction (±10%).

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Unit Cost Estimation

Estimates the cost per unit of work, making assumptions based on similar projects.

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Parametric Estimation

Uses statistical models and historical data to predict costs.

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Fundamental Canon of Ethics

A set of fundamental principles that engineers must follow in their professional practice.

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Canon

A set of agreed-upon principles, rules, or standards that govern a profession; it can also refer to a specific rule or principle.

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Canon 1: Public Safety

The paramount duty of engineers is to protect the public's safety, health, and welfare, even above other considerations.

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Canon 2: Competence

Engineers are only allowed to perform tasks within their areas of expertise.

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Canon 1: Overruled judgment

Engineers must inform their clients or employers if their professional judgment is overruled, and the outcome could endanger public safety.

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Canon 1: Reporting ethical violations

Engineers must disclose violations of ethical standards to the proper authorities.

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Canon 1: Community service

Engineers should voluntarily contribute to their communities' well-being, particularly in areas of safety, health, and environmental protection.

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Canon 1: Sustainable Development

Engineers should seek to advance the principles of sustainable development in their practice.

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Engineers must limit their work to their areas of expertise.

Engineers should only accept assignments related to their skills. If they need to work outside their expertise, they must partner with qualified professionals for that specific part of the project.

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Engineers need to understand the content they sign off on.

Engineers can't sign off on documents if they don't understand the content. They must be involved in the review or creation of the document.

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Engineers must be honest and objective.

Engineers must be truthful in all their public statements, reports, and expert testimony. They have a duty to be honest and fair.

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Engineers need to be well informed for their opinions.

Engineers can't share information or opinions based on something they haven't researched or verified.

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Engineers must be transparent about funding sources.

If someone pays an engineer to promote a specific opinion, they must disclose the source of funding.

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Engineers must maintain professionalism.

Engineers should not promote their own interests at the expense of their profession's integrity or other related professions.

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Engineers must avoid conflict of interest.

When working for a client or employer, engineers must act in their best interests. They can't have conflicts of interest.

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Conflict of Interest

Engineers must avoid any situation where their personal interests could influence their professional decisions.

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Multiple Payments

Engineers should not accept payment from multiple parties for the same project, as it could lead to conflicting priorities and potentially compromise their impartial judgment.

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Gratuities and Favors

Engineers are prohibited from receiving gifts or favors from clients or other parties that could influence their decisions. This ensures that their actions are based solely on professional ethics.

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Public Service Conflict of Interest

Engineers working for government agencies cannot be involved in decisions involving private or public engineering projects where they have personal interests, to ensure impartiality.

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Unrealistic Projects

Engineers are expected to advise their clients or employers when they believe a project will not be successful, even if it means potential financial loss.

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Confidential Information

Engineers should not use confidential information obtained during their work for personal profit if doing so would harm their clients, employers, or the public.

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Outside Employment

Engineers shall not accept professional employment outside their regular work without informing their employer.

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Professional Reputation

Engineers should promote their professional reputation based on the quality of their work, not by unfair competition or misleading practices.

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Upholding Professional Integrity

Engineers must act in a way that upholds the reputation and integrity of the engineering profession. They should avoid any actions that could damage the profession's image or involve dishonest or fraudulent practices.

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Respecting Other Engineers

Engineers should not spread false or harmful information about other engineers, their work, or their career prospects. This includes refraining from making unfair criticisms.

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Respecting Employer Resources

Engineers must avoid using their employer's resources for personal gain or outside projects without their employer's permission.

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Continuing Professional Development

Engineers are obligated to continuously learn and improve throughout their careers, and they should encourage the professional development of their employees.

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Using Employer Resources Ethically

Engineers shouldn't use their employer's equipment, supplies, or facilities for personal work without permission.

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Professional Employer-Employee Relationships

Engineers should maintain professional relationships with employers and employees, ensuring fair treatment and compensation.

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Avoiding Conflicts of Interest

Engineers have a duty to disclose any conflicts of interest that might arise in their work, ensuring transparency and objectivity.

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Reporting Ethical Violations

If a client or employer overrides an engineer's professional judgment, putting public safety at risk, the engineer should report this situation to the appropriate authorities.

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Is it ethical to proceed knowing the client won't agree to safety measures?

It's unethical for an engineer to proceed with a project if they know the client won't agree to essential safety measures, like hiring a project representative.

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Is it unethical to use another engineer's proposal without consent?

It's unethical for Engineer A to use Engineer B's proposal without consent, even if it's for a competing proposal. This violates ethical principles of fairness and crediting others' work.

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What ethical principle relates to honesty and objectivity?

Engineers should always be honest and objective in their professional work, even when providing opinions or sharing information.

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What does it mean to avoid conflicts of interest?

Engineers must disclose any conflicts of interest that could affect their judgment or the integrity of their work. Examples include personal relationships or financial ties to a project.

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What ethical principle relates to an engineer's expertise?

Engineers must recognize their limitations and only work within their areas of expertise. If they need to work outside their knowledge, they should collaborate with qualified professionals.

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What ethical principle relates to giving credit for work?

Engineers must give credit to the original creators of designs, inventions, and other work. This includes acknowledging the contribution of others, especially when referencing or adapting their work.

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What is an engineer's primary obligation?

Engineers must prioritize public safety and welfare above all other considerations. This includes reporting any instances where their professional judgment is overruled and could potentially endanger the public.

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What is the ethical principle related to community service?

Engineers are encouraged to participate in community service initiatives, particularly those focused on safety, health, and environmental protection.

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Study Notes

Basic Capital Cost Estimating

  • Capital cost estimating is crucial for project planning and execution
  • It helps engineers develop accurate estimates, mitigate risks, and ensure project success
  • Estimating determines project feasibility, aids budgeting and planning, facilitates decision-making, identifies financial risks, and provides a baseline for cost control

Components of Capital Cost Estimating

  • Direct Costs: Construction, procurement, installation
  • Indirect Costs: Engineering fees, permitting, management
  • Contingency: Allowance for unforeseen expenses
  • Escalation: Adjustments for inflation
  • Taxes and Financing Costs: Associated taxes and financing costs

Types of Capital Cost Estimates

  • Order-of-Magnitude (±50%): Used in early project phases
  • Preliminary (±30%): Used in conceptual design
  • Definitive (±10%): Used in final design
  • Control (±5%): Used during construction

Steps in Capital Cost Estimating

  • Define project scope
  • Collect data on materials, labor, and equipment
  • Breakdown costs (direct, indirect, etc.)
  • Apply costing methods
  • Plan for contingencies
  • Document and review estimates

Methods of Capital Cost Estimation

  • Unit Cost Estimation: Cost per unit of work
  • Parametric Estimation: Statistical models
  • Detailed Estimation: Item-by-item breakdown
  • Analogous Estimation: Past project comparison

Factors Affecting Estimates

  • Project complexity
  • Location and logistics
  • Market conditions
  • Regulatory requirements
  • Technology advancements

Challenges in Cost Estimating

  • Incomplete project definitions
  • Limited or outdated data
  • Market price volatility
  • Regulatory changes

Conclusion

  • Capital cost estimating is essential for project planning and execution. It provides engineers with tools to develop accurate estimates, mitigate risks, and ensure project success.

Canon of Ethics for Cost Engineers

  • Ethics Defined: A concept of morality within a context of cultural values, social norms, professional values, and accepted behavioral standards.

  • Values: Guiding beliefs that motivate opinions, attitudes, and moral obligations.

  • Principles: How people ought to behave in a specific situation.

  • Why Study Ethics: Increased awareness of importance due to publicity surrounding high-profile engineering failures.

  • Engineers should be aware of the moral implications of their decisions in the workplace.

  • Ethical considerations are crucial for decisions as these affect public health, safety, business practices, and politics.

  • Ethical Values Include: Integrity, honesty, fidelity and responsibility.

  • Fundamental Principles include: Engineers uphold the integrity of the profession by using their knowledge and skills, being honest, serving the public and clients with fidelity, increasing and supporting the prestige of the profession.

  • Canon 1: Engineers prioritize the public's safety, health, and welfare while strictly adhering to sustainable development principles during professional duties.

  • Canon 2: Engineers shall perform works only within their areas of expertise and competence.

  • Canon 3: Engineers should provide public statements with integrity and objectivity, naming the proper person who did the work.

  • Canon 4: Engineers must act ethically for clients and employers by avoiding conflicts of interest.

  • Canon 5: Engineers should present their services truthfully and avoid unfair competition with other engineers.

  • Canon 6: Engineers should uphold honor, integrity, and the dignity of the profession by acting responsibly

  • Canon 7: Engineers shall maintain their professional development and provide opportunities for those under their supervision.

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Related Documents

EDS 512 Basic Capital Cost Estimating PDF

Description

This quiz covers the fundamentals of capital cost estimating, crucial for effective project planning and execution. Learn about direct and indirect costs, types of estimates, and essential steps in the estimating process. Enhance your understanding to improve project feasibility and budgeting.

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