Cost Risk
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Description:
In the typical project life cycle, cost estimates are often produced several times in the planning and design phases. Additionally, a thorough estimate should account for imperfect information, volatile market conditions, uncertain assumptions, etc. COSTRISK analyses are performed for two primary reasons. First, risk analyses of cost estimates provides a rational and justifiable basis for establishing contingency. Second, cost risk analyses are useful for identifying the major causes of project cost uncertainty. The COSTRISK analysis software program will provide the cost engineer the capability to assess risk and uncertainty associated with any Military, Civil Works, or HTRW project cost estimate, at any time during the project life cycle period. This process of “probability based” estimating will be used to revise estimates based on “confidence levels,” and can assist in the evaluation of project contingency funds. The COSTRISK software is designed to work with Tri-Services cost estimating programs: MCACES, RACER, and PACES. In addition to these interfaces, COSTRISK is capable of performing a cost risk analysis on any cost estimate that is developed in Microsoft Excel. COSTRISK performs cost risk analysis on the construction cost estimates using Monte Carlo simulation techniques as the basis of its calculations.
Current Version:
Version 3.1, released in October 2001
Point of Contact:
Mr. Jim Nichols
U.S. Army Corps of Engineers
(256) 895-1842