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The Capex is an engineering product process that begins when individuals, usually department or regional heads, identify the need for a capital asset. They create an engineering proposal with asset type, estimated ROI, useful life of the asset, and more. They submit it to the leadership teams or the finance heads for review and approval. A review of the parallel check estimate should be conducted with the owner, providing independent third-party perspectives. The Capex priorities reflected in the budget thus reflect the strategically aligned intent of the organization and needs to be carefully monitored and controlled. Indeed, capital expenditure variances to the approved budget are very carefully monitored by the most senior executive officers and directors.
We have extensive experience preparing CAPEX estimation, which covers a broad scope from; Order of Magnitude estimates using very ‘high-level’ data, through to Detailed Estimates supported by CAF-CAPEX Cost Estimating Database.
We use Activity Based Cost (ABC) modelling for OPEX estimation for fundamental design and operating decisions. The ABC identifies, quantifies and analyses project activities and resources with detailed accuracy, transparency and visibility. It enables to understand the cost and value drivers for the operating expenditures. The process (represented in the picture below), is based on the principle that products come from activities and the activities consume resources.
We have experience in preparing decommissioning estimates (ABEX/DECOMEX) for both onshore and offshore installations around the world.
We prepare decommissioning estimates using our proprietary estimating model based on cost benchmarking data analysis, originally developed from actual project data and regularly updated and optimized sing a know-how method to reflect current market conditions and the latest decommissioning practices.
What is Replacement as New (RAN) Valuation?
Replacement as New Asset valuation is the process of determining the fair market or present value of assets, using book values, absolute valuation models like discounted cash flow analysis, option pricing models or comparables. Such assets include investments in marketable securities such as stocks, bonds and options; tangible assets like buildings and equipment; or intangible assets such as brands, patents and trademarks.
Asset valuation plays a key role in finance and often consists of both subjective and objective measurements. The value of a company’s fixed assets – which are also known as capital assets or property plant and equipment – are straightforward to value, based on their book values and replacement costs. However, there’s no number on the financial statements that tell investors exactly how much a company’s brand and intellectual property are worth. Companies can overvalue goodwill in an acquisition as the valuation of intangible assets is subjective and can be difficult to measure.
We are Independent Asset Valuation Provider
We have experience preparing valuations from a technical perspective using CAF-CAPEX cost data, to reflect the unique configuration of the facility. Asset valuation is the process of determining the fair market value of an asset.
We apply different methods for Asset valuation, that often consists of apply benchmarked values on objective measurements obtained from Asset Databooks values.
The Absolute value models value assets is based only on the characteristics of that asset using relative valuation ratios, such as cost curves and ratios, that help determining asset valuation by comparing similar assets.
Cost estimating supplemental support and site secondment
This is a solution whereby the CAF-CORPORATION cost estimator would travel onsite and join the owner’s project estimating team at their office and the goal would be to represent the owner’s interest by conducting any of the above activities for an extended period of time.
In other cases, the CAF-CORPORATION cost estimator is hired out by the EPC and is temporarily assigned to the EPC’s office full time to supplement the staff during peak workload periods as needed.
Cost Claim Reviews or Change Order (Notice) Request Evaluations are services provided to owner-operators, joint venture partners, or financial investor stakeholders. The primary objective is to provide due diligence and represent the owner’s interest when evaluating EPC prices during contractor selection and construction execution. Also, if it’s requested, we would support the owner’s project team to assess all the quotations received during the invitation to bid (ITB) process or while construction is ongoing.
Risk Analysis is a service whereby CAF-CORPORATION will lead a formal risk meeting of the project estimate in order to agree on proposed risk ranges and set the project contingency for the estimate. The objective would be to determine the estimate risks by identifying parameters (ranges) based on the likelihood of some occurrence that would impact the costs in key estimate categories. From that, CAF-CORPORATION would perform a Monte Carlo risk analysis and work with the owner to set a reasonable contingency value for the estimate using the organization’s probability of overrun / underrun point. in preparing the estimate.
Value engineering is a systematic, organized approach to providing necessary functions in a project at the lowest cost. Value engineering promotes the substitution of materials and methods with less expensive alternatives, without sacrificing functionality. It is focused solely on the functions of various components and materials, rather than their physical attributes. Value engineering is also called value analysis.