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1. COSTING DEPARTMENT ESTIMATION OF REALISTIC EXECUTION OF A PROJECT

2. Meaning of Cost Estimation: It may be defined as the process of determining the probable and profitable cost of a project before the actual engineering and procurement starts . Cost estimation takes into consideration all expenditure involved in the design, engineering, procurement, implementing and commissioning along with all related service facilities such as transportation cost, water cost, labor cost, electricity and other power costs as well as a portion of management expenses and profit margin also.

3. Objectives of Cost Estimation : The main objectives of Cost Estimation are listed as follows: Cost estimation enables the management to fix the actual cost of a project well in advance of actual procurement. Cost estimation indicates to the management whether the contemplated design and method of project and procurement will be economical or not . To determine whether the equipment, technology and structures of project and its parts can be procured and executed economically in the location itself or to be purchased from outside. To determine the most economical, material, tooling method to engineer and procure the project. To prepare project budget. To standardize the quality, quantity and performance of the items involved in the project in order to control costs involved. To evaluate alternative product design. To determine the standard cost of the product which represents the best estimate that can be made of, i.e. what should be the cost of material, labor and overhead etc. after eliminating the additional costs, inefficiencies and wastes.

4. Procedure for Cost Estimation Documents collection: - Financial Bid Sheet Preparation: - Understanding the Scope of Work: - Listing Out Queries for Pre-Bid Meeting: - Pre-Bid Meeting Attend: - Material List Preparation: - Self-Procured and Imported Item Differentiation: - Test Certificates follow up: - Planning, Drawing & Designing of the Project: - Technology & Process Analysis: - Rechecking the eliminating Errors: - Listing Out the Materials to be supplied along with Quantity: - Completion Time Bar-Chart Making: - Corrigendum and Addendum follow up: - Labor Cost Calculation: - Calculating the Additional Expenses: - Calculating the Management Expenses: - Security Deposit Addressing: - Final Billing Amount Calculation: - Approving the Rate following different stages: - B.O.Q – Financial Bid Preparation: - B.O.Q Rechecking Financial Bid Upload: -

5. The Detailed Procedure of the Costing Estimation is Mentioned Bellow:- Documents collection: - need to collect the assigned tender documents from searching/bidding executive or download the same from e-procurement site. Financial Bid Sheet Preparation: - Going through tender and addressing important point of consideration for cost estimation and project execution. Understanding the Scope of Work: - Analyzing the project description, scope of work and detailed technical specification of all the minute items of the project. Listing Out Queries for Pre-Bid Meeting: - Listing Out Queries in the Technical Specification or Scope of Work to email to the Govt. department and ask during the pre-bid meeting. Pre-Bid Meeting Attend: - The Costing Executive needs to attend the pre-bid meeting of the tender as to get the answers of the queries asked and to get knowledge about the new changes or corrigendum, addendum or any miss-understood clauses in the tender documents. Material List Preparation: - To prepare a list of the mechanical, electrical plumbing and civil components, parts, structures and materials to be supplied in the project. Self-Procured and Imported Item Differentiation: - To take decisions about procurement of input requirements i.e., to decide which component can be produced/procured for our own factory itself and which should be procured from outside market.

6. Test Certificates follow up: - To address the test certificates required during technical bidding to the technical team and follow up with the testing department for testing of the items not tested previously. Planning, Drawing & Designing of the Project: - To make planning, design and prepare drawings for the project having various diagrams like, SLD - single line diagram, P&T diagram, and detailed overview diagram of the units and parts of the project to be installed or constructed. Also to submit them during technical bidding. Technology & Process Analysis: - Decide the methods to be used, and sequence of operations, machines to be utilized; labor and wage rates allowed to the workers in consultation with project department. Rechecking the eliminating Errors: - As per product design decided the accuracy is rechecked along with error elimination and finishing and accumulation of the whole project. Listing Out the Materials to be supplied along with Quantity: -To determine and listing out the quantity and volumes of the supply materials by calculating the quantities of various input materials and civil, electrical, mechanical and plumbing works to be done along with temporary sheds and other additional equipment and transportation arrangement. Also need to prepare certain bidding document formats according to our requirements of the construction equipment and vehicles required for transportation. Completion Time Bar-Chart Making: - To determine the time required for performing various operations and preparing various charts for the technical bidding i.e completion time bar-chart, work flow report etc. Corrigendum and Addendum follow up: - On a daily basis the costing executive need to follow up regarding any corrigendum od addendum published by the department.

7. Labor Cost Calculation: - To calculate the labor cost by considering the wage rate applicable for various categories of employees and other operators employed for executing the product. Calculating the Additional Expenses: - Calculate the prime cost of the product by adding all direct expenses to the total material and labor costs i.e, operation & maintenance cost, site transportation and loading-unloading and laying conveying cost, taxes and deduction cost as per the new government guidelines etc. Calculating the management expenses: - Calculate the management expenses i.e., price escalation margin, additional unavoidable costs and expenditure on repair and maintenance of the project unit or other parts and equipment, insurance, water and power etc. Security Deposit Addressing: - Determine the performance security, retention money and other additional performance security amounts as per the department and the taking some amount out of that in to estimation out of precautionary cause as well as inflation rate. Final Billing Amount Calculation: - Then determine the total cost i.e the final billing amount is calculated by adding all the above costs and expenses and taking a certain percentage of margin or profit into consideration. Approving the Rate following different stages: - After the final billing amount calculation the financial bid sheet and costing sheet is shown to the Tender Department head, then after getting approved it is forwarded to the next stage where it is shown to the vertical head of the department, then after getting approved it further shown to the Managing Director for final approval of the “to be quoted bid price”. B.O.Q – Financial Bid Preparation: - Then After final approval of the Managing Director, the Costing Engineer Prepares the B.O.Q – Financial Bid of the tender as per the item rates to be quoted. B.O.Q Rechecking: - After the B.O.Q fill-up concerned department head and other assigned members recheck the B.O.Q to ensure elimination of any Error. Financial Bid Upload: - Then the B.O.Q and other Financial documents are uploaded in the Tender E-Procurement Site in presence of the Costing Executive, Bidding Executive, Searching Executive and Tender Department Head.

8. CONCLUSION Thus cost estimation simply involves a systematic and technical approach to find a realistic expense to complete a project. In general, the accuracy of an estimate increases (i.e . the estimated cost approximates more closely the actual production cost) when more and more detailed calculations are done in estimating.

9. THANKS AND REGARDS RABI SANKAR MOHANTY ANAMIKA YADAV SOURAV GIRI SUBHRAJIT PRADHAN