Correction: The print version of this article incorrectly stated the estimated operating and maintenance costs for a new filter system. The estimated costs are $160 per month, not $160 per year. The digital version of the article has been corrected below.
To provide or ensure a safe and healthy environment, every OEHS professional makes recommendations to management. Our recommendations can include items such as new facilities, alternate production methods and equipment, automation of processes, isolation or protection of employees, ventilation, noise controls, hygiene facilities, medical surveillance, preventive maintenance procedures, monitoring equipment, safety equipment, personal protective equipment, and so forth.
There is always a cost associated with any such recommendation. Sometimes determining the cost is simple, like finding the price of a respirator in a catalog. Often, however, estimates are more complex than that.
A cost estimate is usually thought of as the sum of individual cost elements determined through the use of established methods and valid data and based on what is known to the estimator. A cost estimate is often needed to support evaluations of a proposal’s feasibility or to establish budgets for a proposed project, operation, or equipment purchase. Sometimes these items are expensive, sometimes they’re inexpensive, and sometimes, when carefully chosen, they may even save money. When we can show that our recommendations fall into the latter two categories, management will be more willing, and even anxious, to implement them.
Discussions with management about costs are familiar to most OEHS professionals. We’ll say something like, “We are recommending upgrading the HVAC filter system in order to provide better indoor air quality.” A typical management response is, “Well, how much will it cost? Will it be worth the expense?”
We are at an advantage if we can respond, “According to our estimates, the capital cost will be about $1,250 for the new filter system plus operating and maintenance costs of $160 per month, which is actually $100 less than we pay now. So, we can pay for the capital costs in about a year with our operating costs savings.” Hopefully, management’s response will be, “Sounds like you’ve done your homework. Send me a formal proposal.”
Can we actually provide or find such cost estimates? The answer is yes, in most cases, with approximate accuracy. In some cases we may look to others for the estimates, but even then we need to be able to speak intelligently about cost estimates.
This article explains the rudiments of simple cost estimating for OEHS professionals. As with all disciplines, cost estimates have specialized vocabulary, approaches, equations, and levels of expertise. We may be at the lower levels of such expertise, but our abilities should be sufficient to provide useful rough estimates. See the list of resources at the end of this article for more information.
MAKING AN ESTIMATE
Most estimates we can make often have accuracies of plus or minus 5 to 15 percent of the actual costs. They won’t be perfect, but they should suffice.
There are many different estimating approaches, some more sophisticated than others. Those mentioned in this article are common, easy approaches that anyone might use to provide an estimate. There are also calculators on the web that can provide rough cost estimates.
Equations for Cost Estimates
This article draws on information available in D. Jeff Burton’s Useful Equations: Practical Applications of OH&S Math. The book is available for purchase in the AIHA Marketplace.
Before we begin working on an estimate, we need to understand some basic jargon. The following are traditional terms and techniques we might use in our cost estimating. (More complex estimates use more sophisticated terms and approaches.) Study each term and become familiar with its meaning and usage so the next time your colleague says she has a “horseback estimate” you will have an idea what she’s talking about and how accurate the estimate might be.
Annual costs: Costs incurred over a year’s time—for example, operation and maintenance costs, interest, and lost production. Also known as recurring costs.
Capital costs: The total amount required to finance the engineering, design, construction, purchase, installation, start-up, and initial implementation costs. Also known as turn-key costs.
Engineering design costs: The sum of costs incurred to produce drawings, specifications, and reports. These costs usually include overhead, administrative, computer modeling, drafting, and other design costs.
Estimated costs: A value arrived at using rational methods. A cost estimate usually has a single total value but may have separate component values, such as construction costs, operating costs, material costs, and so forth. The following are seven approximation techniques we might use, listed in alphabetical order:
• Approximate cost estimate: An estimate that is not exact, but useful for early evaluations. Also known as an order of magnitude estimate, rule of thumb estimate, horseback estimate, rough estimate, or preliminary estimate.
• Detailed cost estimate: The compilation of all costs associated with the purchase or implementation (or both) of the control. The detailed cost estimate is usually the most accurate of the methods mentioned in this article and is often performed by cost-estimating experts. Also known as piece estimate or basic components estimate.• Equation-based cost estimate: An estimate that uses equations and formulas developed specifically for estimating costs. Many such equations are embedded in online calculators. These websites may not identify the actual equation being used, so use them with caution.
• Experience cost estimate: Often used for initial planning and to establish likely bids and prices. Experience cost estimates are usually based on past or parallel experiences. Similar terms include historic estimate, engineers’ estimate, budget estimate, conference estimate, and analogous cost estimate.
• Exponent cost estimate: Another form of the experience cost estimate approach that uses an exponential relationship to determine the cost of similar equipment of different size, content, or capacity. An exponent of 0.6 is often used when estimating the costs of ventilation equipment, for example. Different exponents are used for other processes or types of equipment. This approach is also known as the six-tenths estimate and the scaled pricing estimate.• Source estimate: Cost estimates provided by the manufacturer or supplier of the equipment, process, or methods being considered. Also known as a supplier estimate.
• Unit-cost estimate: A cost per unit method. Examples include cost per hour, cost per pound, cost per person, cost per cfm of air (for ventilation), and so forth.
EXAMPLES
Although as many as five different estimates of a project cost might appear at various stages of implementation, OEHS professionals often help establish the initial estimates. Sometimes we may make (or can obtain) more than one estimate, each based on a different approach. If different approaches yield similar estimates (within 10 to 15 percent), that suggests we have pretty good data and can rely on those estimates. If the variance is greater than 15 percent, we probably need to obtain better data.
Where possible, we should include cost estimates and their sources in the reports or recommendations we make to management. For example, you might say, “Our proposed urine and blood tests program for paint shop employees would cost approximately $1,600 per year. This cost estimate is based on the experience of an IH we know at our AIHA local section who directs a similar program and was willing to share his actual costs with us.”
Below are four examples of cost estimates often used in OEHS work. Each example uses rounded figures. (Note: I am the author of Useful Equations: Practical Applications of OH&S Math, which explains these approaches, the equations, and their uses, and is available for purchase from AIHA.)
Cost estimation using the experience approach. Suppose an IH has recommended new respirator cleaning equipment to be installed in a laboratory to help meet PPE requirements under OSHA’s Respiratory Protection standard. She finds that similar equipment has been installed at three other labs in the past few years and has access to their actual costs. To determine her estimate, she applies an adjustment factor that accounts for annual cost increases for the type of cleaning equipment she recommends:
The experience cost estimate is the sum of the three updated prior costs divided by the number of estimates ($8,850 / 3 = approximately $2,900).
Note that other types of equipment have different adjustment factors. See the list of resources for sources of useable adjustment factors.
Cost estimation using the exponent cost approach. To provide better air quality in a school being refurbished, an IH proposes to replace the original proposed air handling unit, rated at 10,000 cfm, with a larger AHU, rated at 14,000 cfm. He uses the formula for the exponent cost approach:
where C represents cost and S represents equipment size. For this example, C1 was estimated to be $7,500 for the originally proposed 10,000 cfm AHU. Therefore, C2 = $7,500 (14,000 / 10,000)0.6 or around $9,200 for the newly proposed 14,000 cfm AHU.
Cost estimation of running an electric motor using a unit cost approach. A new, larger electric motor will use 7.2 shaft horsepower (HP) to drive an air exhaust fan in a hospital surgical suit. The fan operates 80 hours per week, or 4,100 hours per year (t). An OEHS professional is asked what the annual cost (C) to run the fan motor will be. He finds that the local power rate (R) is $0.10 per kWH (the unit cost) and the motor efficiency (ñ) = 0.95. A typical equation for this type of estimate is:
where 0.75 is a factor that converts horsepower to kilowatts. Using this equation, the IH makes the calculation: C = 0.75 • 0.10 • 7.2 • 4100 / 0.95, or around $2,300 per year.
Estimated annual costs of heating ventilation air using a traditional cost estimating equation. For health, safety, and comfort, every occupancy requires that fresh, clean, and tempered air be delivered to an occupied location, usually from an outdoor air source. We in the profession are often asked to assist or advise in the design and operation of ventilation systems. When recommending changes in ventilation rates, we would like to know and provide estimates of the costs of tempering the air being delivered. One traditional equation (provided in the ACGIH ventilation manual) used to estimate the costs of heating outside air is:
where 0.154 is a catchall conversion factor; C is the annual estimated costs of heating the air, in dollars per year; Q is the volume flow rate of air, in cfm; dg is the annual heating degree-days, a value for a specific location based on discharge air temperature and the number of days of heating; c is the dollar cost per unit of heating fuel; T is operating time in hours per week; and q is the available BTU (British thermal unit) per unit of fuel.
Suppose the OEHS department proposes that during the winter months an office suite near Washington, D.C. be provided with 4,000 cfm of outdoor air. What will be the approximate annual costs of heating the outdoor air to about 70 degrees Fahrenheit in the office suite? The furnace uses natural gas to heat the air. We obtain the information required:
- Q = 4,000 cfm
- dg = 5440 (for the Washington, D.C. area)
- c = $0.007 per cubic foot of gas
- T = about 60 hours per week during the heating season
- q = 800 BTU per cubic foot of natural gas
Therefore, C = 0.154 • 4000 • 5440 • 0.007 • 60 / 800, or about $1,800 per year.
Such equations and other useful and advanced information on cost estimating can be found in the resources listed below.
D. JEFF BURTON, MS, PE, CIH (VS 2012), CSP (VS 2002), is an industrial hygiene engineer with broad experience in ventilation used for emission and exposure control. He is an adjunct faculty member at the Rocky Mountain Center for Occupational and Environmental Health at the University of Utah in Salt Lake City.
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RESOURCES
ACGIH: Industrial Ventilation: A Manual of Recommended Practice for Design, 29th Edition, Chapter 12, “Cost Estimating.”
AIHA: Useful Equations: Practical Applications of OH&S Math.
American Association of Cost Engineers International.
Bureau of Labor Statistics: Occupational Outlook Handbook, “Cost Estimators.”
EPA: EPA Air Pollution Control Cost Manual, 6th Edition.
Journal of Occupational Health: “Establishment of Reference Costs for Occupational Health Services” (July 2016).
Maryland Department of Information Technology: “Cost Estimating” (PDF).
OSHA: “Business Case for Safety and Health.”
Smartsheet: “The Ultimate Guide to Cost Estimating.”
Wikipedia: “Cost Estimate.”
Techniques for Pricing Out Health and Safety Matters
Cost Estimates for OEHS Recommendations
Although the print version of The Synergist indicated The IAQ Investigator's Guide, 3rd edition, was already published, it isn't quite ready yet. We will be sure to let readers know when the Guide is available for purchase in the AIHA Marketplace.
My apologies for the error.
- Ed Rutkowski, Synergist editor
Disadvantages of being unacclimatized:
- Readily show signs of heat stress when exposed to hot environments.
- Difficulty replacing all of the water lost in sweat.
- Failure to replace the water lost will slow or prevent acclimatization.
- Increased sweating efficiency (earlier onset of sweating, greater sweat production, and reduced electrolyte loss in sweat).
- Stabilization of the circulation.
- Work is performed with lower core temperature and heart rate.
- Increased skin blood flow at a given core temperature.
- Gradually increase exposure time in hot environmental conditions over a period of 7 to 14 days.
- For new workers, the schedule should be no more than 20% of the usual duration of work in the hot environment on day 1 and a no more than 20% increase on each additional day.
- For workers who have had previous experience with the job, the acclimatization regimen should be no more than 50% of the usual duration of work in the hot environment on day 1, 60% on day 2, 80% on day 3, and 100% on day 4.
- The time required for non–physically fit individuals to develop acclimatization is about 50% greater than for the physically fit.
- Relative to the initial level of physical fitness and the total heat stress experienced by the individual.
- Can be maintained for a few days of non-heat exposure.
- Absence from work in the heat for a week or more results in a significant loss in the beneficial adaptations leading to an increase likelihood of acute dehydration, illness, or fatigue.
- Can be regained in 2 to 3 days upon return to a hot job.
- Appears to be better maintained by those who are physically fit.
- Seasonal shifts in temperatures may result in difficulties.
- Working in hot, humid environments provides adaptive benefits that also apply in hot, desert environments, and vice versa.
- Air conditioning will not affect acclimatization.
Acclimatization in Workers
