Estimating using cost significant global cost models

Cost significant models have been suggested as one way of overcoming criticisms of the amount of detail contained within the traditional bill of quantities. Recent research into these models reveals a lack of formal rules for the selection of work packages to be used within the models, and a potential to overestimate the cost of projects. This paper presents a methodology for selecting work packages, and recommends a refinement to the technique that reduces the variability in estimates produced using cost significance. Estimates are produced using both the traditional method of producing cost significant models, and a refined global cost methodology. Both techniques are tested against unpriced bills to measure the difference in results, with significant improvements being achieved with the new technique.