The Role of Cost Estimation/Tendering in Engineering Projects in Nigeria

Abstract

Energy is the bedrock of development of any nations as the overall development of the economy is tied to its energy supply. Despite the potential huge deposit of energy resources in the world, adequate provision of infrastructure to raise the living standard of the people has always been denied. Energy supply contracts most times are stalled due to factors attributable to poor cost planning and failure to adopt a suitable method for price adjustments or incentivized pay and among others as hiring the wrong contractors, setting unrealistic goals, inadequate contract details, inflexible contracts, having limited or poor understanding of expectations, poor project and contract management by the engineers and energy contractors, failure to understand scope or statement of work before bidding or contract negotiations. The beneficial role played by effective cost estimation in contracts which is preceded by a project execution, necessitated the paramount need for this technical paper. This paper discusses cost estimation methods and how various elements of cost estimation are prepared for engineering contracts.