Estimation Department – Standard Operating Procedures (SOPs) & Compliance
1. Introduction
The Estimation Department at BEC Arabia plays a crucial role in supporting the company’s strategic objectives by ensuring that all construction projects are backed by accurate, reliable, and timely cost estimates. These estimates are essential for budgeting, resource allocation, project planning, and decision-making processes.
The department operates under a well-defined framework of Standard Operating Procedures (SOPs) that guide employees in their roles, ensuring consistency, efficiency, and compliance throughout the estimation process. The SOPs serve as a comprehensive reference for all estimation-related activities, maintaining high levels of accuracy, transparency, and regulatory adherence.
2. Standard Operating Procedures (SOPs)
2.1 Project Initiation
The estimation process begins with the receipt of project documents from the client or Business Development Department.
These documents may include:
Request for Proposal (RFP) or Invitation to Tender (ITT)
Project drawings, specifications, and scope documents
Bill of Quantities (BOQ) or indicative cost requirements
Timeline, budget constraints, and contractual requirements
An estimation team is assigned based on project size, complexity, and sector specialization.
2.2 Preliminary Review
The estimation team reviews the received documents to gain a clear understanding of:
Project scope and deliverables
Required materials, manpower, and equipment
Special conditions, risks, or unique project requirements
Any missing details or ambiguities in the documents are flagged and clarified with the client or BD team.
A preliminary risk assessment is conducted to identify potential cost variations.
2.3 Cost Estimation
The team uses advanced estimation tools and software (such as Candy CCS, Primavera P6, and SAP ERP) to prepare a detailed cost estimate.
Key cost components include:
Material Costs: Pricing based on market rates, supplier quotations, and historical cost data.
Labor Costs: Wages, skill requirements, labor availability, and compliance with Saudization (Nitaqat) policies.
Equipment Costs: Rental vs. purchase cost analysis, operational efficiency, and project-specific needs.
Overhead & Administrative Costs: Project management expenses, site facilities, and indirect costs.
Contingency & Risk Allowances: Buffer for unforeseen circumstances such as inflation, design modifications, and procurement delays.
A comparative benchmarking analysis is performed using cost data from previous projects and industry standards.
2.4 Review & Approval
The prepared estimate undergoes multi-level internal reviews to ensure accuracy and feasibility.
The review process includes:
Verification by Senior Estimators to validate individual cost components.
Risk assessment team review to mitigate financial and operational risks.
Final validation by Senior Management and Finance Department to confirm financial sustainability.
Any necessary adjustments are made before final approval.
A final pre-submission meeting is held to ensure alignment with project goals and bid strategy.
2.5 Submission of Estimate
The finalized estimate is formatted as per client or internal requirements.
Submission is made through official tendering platforms (Etimad, NUPP) or directly to private clients.
The estimate is recorded in the company’s centralized project management system for future reference.
A submission confirmation is documented, along with any immediate feedback received.
2.6 Post-Submission Follow-ups
The department tracks the status of submitted estimates, ensuring timely responses to client inquiries.
Any clarifications or additional details requested by the client are addressed promptly.
Negotiations may take place, requiring quick cost modifications or alternative pricing strategies.
The team participates in client meetings and presentations to justify estimates and strengthen BEC Arabia’s position.
3. Compliance & Quality Assurance
3.1 Regulatory Compliance
All estimates must strictly adhere to:
KSA construction laws and public procurement regulations
Etimad & NUPP guidelines for government tenders
PIF project procurement policies for mega projects (NEOM, Red Sea, Qiddiya)
ISO standards for cost estimation and risk management
Compliance checks are performed at each stage to eliminate legal risks.
3.2 Internal Compliance
All estimation procedures must align with BEC Arabia’s internal governance framework.
Estimates must be prepared, reviewed, and submitted in accordance with:
Internal approval matrices
Financial policies and budgetary controls
Data security and confidentiality guidelines
Regular internal audits and process evaluations are conducted to identify improvements.
3.3 International Standards Compliance
The department follows FIDIC contract pricing principles to ensure fair cost allocation.
Utilization of global benchmarking tools to compare BEC Arabia’s pricing with international standards.
Continuous alignment with advancements in digital estimation practices and automation.
4. Performance Metrics (KPIs)
4.1 Accuracy of Estimates
The difference between estimated vs. actual project costs should remain within an acceptable variance limit.
4.2 Timeliness
Estimates should be prepared and submitted within the agreed timelines to meet tender deadlines.
4.3 Client Satisfaction
Client feedback is measured by the number of queries or modifications requested post-submission.
4.4 Compliance Rate
The percentage of estimates that fully adhere to KSA laws, internal policies, and international standards.
5. Additional Guidelines & Best Practices
5.1 Continuous Learning & Training
Employees are encouraged to attend workshops and training sessions to stay updated on:
Advanced estimation techniques
Digital tools and automation in cost estimation
Market trends and material price fluctuations
5.2 Cross-Department Collaboration
Effective collaboration with:
Business Development: Ensuring bid alignment with BD strategies
Procurement & Supply Chain: To validate vendor pricing and ensure cost accuracy
Project Management: To align estimates with execution realities
5.3 Standardized Templates & Documentation
All estimates must use approved BEC Arabia templates to ensure consistency and accuracy.
Proper documentation of all estimation steps, justifications, and approvals must be maintained for future audits.
6. Conclusion
The Estimation Department at BEC Arabia is committed to delivering precise, compliant, and competitive cost estimates. Through structured SOPs, regulatory adherence, and continuous process enhancements, the department ensures that BEC Arabia secures high-value contracts while maintaining profitability and market leadership.
🚀 With a data-driven approach, collaboration, and digital innovation, our Estimation Department remains a key pillar in BEC Arabia’s growth and success.
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