Construction Cost Inflation Model

The first objective of the project is to identify the current inflation estimation practices, past estimates, and past actuals to develop a baseline of estimation performance. By establishing a baseline, we can compare how well the proposed model performs against past practices. If the model performs better than past practices, the project should be continued. If the model performs the same or worse, a new model should be pursued. The second objective of the project is to use the Producer Price Indices (PPI) for the nine common categories in HCCIs to create material-specific inflation for those nine areas. The HCCI approach to cost estimation follows a method set up by the Federal Highway Administration (FHWA). PPI data is reliable and reported relatively quickly (within a month or two of collection). PPI data also allows for inflation calculations and estimates on a regular basis, as the data is reported on a monthly basis. The third objective of the project is to create a model to project inflation rates several years into the future as highway construction projects may last several years. If successful, this will give a better estimation of long-term project costs and fewer projects will be delayed due to cost overruns and funding reallocations. Closer cost estimations will help Wyoming Department of Transportation (WYDOT) more accurately predict project costs and mitigates shuffling of projects and how they are funded. This data driven method allows for the models to be updated annually. Data may be housed in multiple locations and dashboards may be built on the Center for Business and Economic Analysis website, wyomingeconomicdata.com. Better cost estimations will improve WYDOT operations as budgeted costs should more closely follow actual costs. This means fewer cost overruns, fewer delayed projects, and fewer canceled projects. This also helps with public relations, as there will be fewer projects that run over their allotted budget and the method being used is one suggested by the FHWA. This project also establishes a connection between WYDOT and the CBEA at LCCC. If future economics- related issues pop up at WYDOT, there is now a reliable and known economist to reach out to.

Language

• English

Project

• Status: Active
• Funding: $22650
• Sponsor Organizations:

  Wyoming Department of Transportation

  5300 Bishop Boulevard
  Cheyenne, WY  United States  82009-3340
• Managing Organizations:

  University of Wyoming, Laramie

  Department of Civil and Architectural Engineering
  1000 East University Avenue
  Laramie, WY  United States  82071
• Project Managers:

  Crockett, Ethan

• Performing Organizations:

  University of Wyoming, Laramie

  Department of Civil and Architectural Engineering
  1000 East University Avenue
  Laramie, WY  United States  82071
• Principal Investigators:

  Colsch, Nick

• Start Date: 20230512
• Expected Completion Date: 20250516
• Actual Completion Date: 0

Subject/Index Terms

• TRT Terms: Construction projects; Cost estimating; Forecasting; Inflation
• Subject Areas: Construction; Economics; Highways; Planning and Forecasting;

Filing Info

• Accession Number: 01881975
• Record Type: Research project
• Source Agency: Wyoming Department of Transportation
• Files: RIP, STATEDOT
• Created Date: May 12 2023 1:37PM