How do you update and validate unit price index for construction over time?

1 Use reliable sources

The first step to update and validate UPI is to use reliable sources of data that are relevant, timely, and consistent. You can use published UPI reports from reputable organizations, such as the Engineering News-Record (ENR), the Bureau of Labor Statistics (BLS), or the American Society of Civil Engineers (ASCE). You can also use historical data from your own or similar projects, as long as you adjust them for inflation, location, and scope. Make sure you compare apples to apples and use the same units, categories, and methods of calculation.

3 Adjust for location

The third step to update and validate UPI is to adjust for location, which is the difference in the cost of construction in different regions, states, cities, or areas. Location affects the cost of materials, labor, transportation, taxes, permits, and regulations in construction. You can use location factors, such as the City Cost Index (CCI) or the Regional Cost Index (RCI), to convert UPI from one place to another. For example, if the UPI for concrete work in New York City was $150 per cubic yard and the CCI for Los Angeles was 0.8, the UPI for concrete work in Los Angeles would be $120 per cubic yard.

4 Adjust for scope

The fourth step to update and validate UPI is to adjust for scope, which is the variation in the size, complexity, quality, and specifications of a construction project. Scope affects the cost of materials, labor, equipment, and productivity in construction. You can use scope factors, such as the Project Cost Index (PCI) or the Design Cost Index (DCI), to convert UPI from one project to another. For example, if the UPI for concrete work for a standard office building was $100 per cubic yard and the PCI for a high-rise hotel was 1.2, the UPI for concrete work for the high-rise hotel would be $120 per cubic yard.

5 Validate with experts

The fifth step to update and validate UPI is to validate with experts, such as contractors, suppliers, engineers, or consultants, who have experience and knowledge in the type, location, and scope of your construction project. Experts can provide you with feedback, advice, and insights on the current market conditions, availability of resources, and potential risks and opportunities in construction. You can consult with experts through interviews, surveys, or online platforms. Make sure you ask specific questions, provide clear information, and verify the credibility and reputation of your sources.

6 Review and update regularly

The sixth and final step to update and validate UPI is to review and update regularly, as UPI can change over time due to fluctuations in the market, materials, labor, and productivity. You should review and update your UPI at least once a year, or more frequently if there are significant changes in your project or environment. You should also monitor the trends and forecasts of UPI and adjust your estimates, budgets, and bids accordingly. By reviewing and updating your UPI regularly, you can ensure that your construction estimates are accurate, realistic, and competitive.