Basis of Estimate — Process Industries
Same BOE, plant-specific fine print. The general basis of estimate applies everywhere, but for a process plant a few entries carry outsized weight — above all the battery limits (where scope starts and stops) and the basis of any factored estimates. Get those wrong and the whole number is misread. Built on AACE 106R-19.
What this standard adds
This builds directly on Lesson 14's general BOE — every principle there still applies. What 106R-19 adds is the process-specific checklist: the entries a reviewer of a plant estimate will look for first, because they're where process estimates most often go wrong or get misunderstood.
What's distinctive in a process BOE
- Battery limits (ISBL/OSBL) — Exactly where the estimate's scope starts and stops — the boundary that defines what's in the number.
- Equipment basis — Which equipment is priced how — quoted, from database, or factored — and the source and date of each.
- Factor assumptions — For factored estimates: the factors used (e.g., total installed cost as a multiple of equipment cost) and their basis.
- Scope of supply & site basis — What's in the contractor's scope, and site assumptions (location, soil, climate, labour) affecting cost.
What to document in a process BOE
| Element | Process emphasis |
|---|---|
| Scope & battery limits | ISBL/OSBL boundary; units included/excluded |
| Capacity & basis | Design capacity, feedstock/product basis |
| Equipment basis | Pricing source per item (quote/database/factored) |
| Factors & method | Installation factors and their derivation |
| Bulks & indirects | How piping, E&I, and indirects are covered |
| Site & pricing | Location, currency, date, escalation, labour basis |
| Allowances & contingency | Process-specific allowances and contingency rationale |
Using the process BOE well
For a process estimate, lead the BOE with crystal-clear battery limits, document the pricing basis of every major equipment item, and never leave a factor unexplained. Scale the depth to the estimate class (a factored Class 4 BOE leans on factor documentation; a detailed Class 2 BOE on take-off and quotes). Done well, it makes the process estimate reviewable (Module 2D) and defensible in any later change or claim.
Nine things to remember
- 106R-19 tailors the general BOE to process plants — same backbone, process anchors.
- Battery limits are entry number one — ISBL vs OSBL defines what's in the number.
- Silence on battery limits invites disputes — state them explicitly.
- Document the equipment basis — quote, database, or factored, with source and date.
- Factor assumptions are invisible — always document the factors and their basis.
- Record scope of supply and site basis — location, soil, climate, labour.
- Scale BOE depth to the estimate class — factors for Class 4, take-off for Class 2.
- It makes the process estimate reviewable and defensible.
- One BOE, many sectors — universal discipline, local critical fine print.
Glossary
- Basis of estimate
- The documentation of how the estimate was prepared.
- Battery limits
- The defined boundary of the estimate's scope.
- Bulks & indirects
- Piping/E&I materials and non-direct costs.
- Equipment basis
- How each equipment item was priced and sourced.
- Installation factor
- A multiplier converting equipment to installed cost.
- ISBL
- Inside battery limits — the core process units.
- OSBL
- Outside battery limits — utilities, offsites, storage.
- Scope of supply
- What's included in the contractor's provision.