Minnesota Department of Transportation

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Project Management

Cost Guidance

Cost Guidance

The Cost Estimating/Cost Management guidance will be updated.  In the meantime, please use the existing guidance:

Project Highlights

This project involves representatives from MnDOT districts and taps national expertise to develop a new cost estimating and cost management process for MnDOT, as well as related policies.

Key estimating terms: Estimating Definitions (PDF 30KB)

Best cost estimating tips: Estimating Tips (PDF 20KB)

Project fact sheets provide additional information:

The Cost Estimating and Cost Management (CE/CM) Technical Reference Manual details cost estimating and cost management process and policies.

Cost Management Guidelines

Consistent direction clarifies goals and expectations for all MnDOT staff involved in cost estimation and cost management.

The Project Team for the MnDOT Cost Estimation Process Improvement and Organizational Integration Project has approved different areas that provide direction for cost management of projects (see below).

Project managers will integrate points into the Technical Reference Manual for the project, a Technical Memorandum, or policy statement. Definitions of key cost management terms: Cost Management Definitions (PDF 37KB)

After management review and approval of your Total Project Cost Estimate Spreadsheet, you will complete a one-page Project Cost Estimate Summary for each project. Below is an example and a template for the project cost estimate summary.

Cost Estimating

Provide reliable and accurate cost estimates to deliver projects.Project cost estimation is the responsibility of each district and Central Office.

Uncertainty, Risk and Contingency

The application of contingencies based on an assessment of risk will increase the accuracy of Total Project Cost Estimates. The Total Project Cost Estimate for each project development phase will include an analysis of uncertainty and risk and associated contingency estimates.

Cost Estimate Communications

Effective communication about project costs allows MnDOT to effectively share information with stakeholders. To ensure that everyone communicates consistently and uniformly about all phases statewide, the Total Project Cost Estimate will include contingency and reflect inflation-adjusted costs.

Project Cost Management

Consistent management of project costs makes it simple to track changes, control the budget, and evaluate changes against the original project’s purpose. Project managers need to manage project-related costs against the Baseline Cost Estimate, which is the Total project Cost Estimate at the time the project Scoping Report is approved. 

Districts will actively manage project costs to deliver MnDOT’s construction program within SRC budget constraints and program priorities.