Cost Management
Cost Management Guidelines
Providing consistent direction helps clarify goals and expectations for all Mn/DOT staff involved in cost estimation and cost management.
The Project Team for the Mn/DOT Cost Estimation Process Improvement and Organizational Integration Project has approved the following five areas that provide direction for cost management of projects.
The points that are included in each area eventually will be integrated into the Technical Reference Manual for the project, a Technical Memorandum, or policy statement.
Uniform and consistent use of terms is important to understanding the content in these areas. Please refer to definitions of key terms.
Cost Estimating
Providing reliable and accurate cost estimates is critical to improving Mn/DOT’s ability to deliver projects.
To improve the reliability and accuracy of cost estimates, project cost estimation will be the responsibility of each Mn/DOT district and Mn/DOT’s Central Office.
- Cost Estimating Potential Guidelines (PDF 23KB)
Uncertainty, Risk and Contingency
The application of contingencies based on an assessment of risk will help create a more accurate Total Project Cost Estimate.
The Total Project Cost Estimate for each project development phases will include an analysis of uncertainty and risk, and associated contingency estimates.
- Elements of Total Project Cost Estimate (PDF 22KB)
- Uncertainty, Risk, and Contingency Potential Guidelines (PDF 22KB)
Cost Estimate Communications
Confusion and miscommunication about project costs make it challenging to effectively communicate with stakeholders.
To ensure that project costs are communicated consistently and uniformly statewide, regardless of project development phase, the Total Project Cost Estimate will include contingency and reflect inflation-adjusted costs.
Project Cost Management
Inconsistent management of project costs makes it difficult to track changes, control budget and evaluate changes against the original project’s purpose.
Project-related costs will be managed against the Baseline Cost Estimate, which is the Total Project Cost Estimate at the time the project Scoping Report is approved.
- Project Cost Management Potential Guidelines (PDF 17KB)
Program Management Districts are in the best position to understand the needs that drive the project and manage the project and its costs through all phases.
Districts will actively manage project costs to deliver Mn/DOT’s construction program within SRC budget constraints and program priorities.
- Program Management Potential Guidelines (PDF 21KB)
Publications
What's New
- Training Schedule Announced
- Implementation begins
- Office of Project Scope and Cost Management established
- Peer Review Workshop applies key concept