Plans offer an estimator an incredible level of detail to build the project in your mind. Lots of people new to estimating feel that too much is better than too little which leads to thick stacks of measurements.
Take a moment and consider what’s really going on. The client described their desired project to the design team . The design team translated that project into construction documents. Now the estimator is trying to translate the construction documents (CDs) and the project, into a competitive bid.
Just as the construction documents must be useful for more than attracting bids, so too must the estimate accurately convey the relevant project features for the build team to be successful.
What are you trying to achieve?
Breaking it down, the estimator needs to accomplish several tasks. First off, the estimator will need to ensure adequate subcontractor coverage by determining what trades are necessary and which contractors are best suited to the project.
Second, the estimator needs to be prepared to scope subcontractor bids. If only one subcontractor bid comes in on bid day, the estimator will need to compare bid inclusions against their own measurements. Accurately priced measurements give a meaningful metric to determine if there are errors or omissions.
Third, sometimes things go wrong and it’s necessary to “plug” a cost into the estimate to cover something that none of the subcontractors included. Depending on the value in question, this can be a mighty test of an estimators confidence in themselves.
Fourth, the take offs need to be flexibly done to provide accurate comparison data regardless of how the work is pieced together. For example, a concrete foundation may have separate firms providing rebar, concrete, formwork, and placing labor.
Fifth, the estimate needs to provide the basic project structure for the build team to work with. Complex and needlessly detailed estimates discourage the build team from relying on your work. Any significant item you caught then buried in minutia will get missed by the build team.
Guy’s…that’s not what green building means at all…
Again, the answer seems to be “more detail is better” since so much rides on this information. In fact, the answer is to pull out MEANINGFUL detail. Rebar and structural steel are priced by the ton, which means that there isn’t much pricing granularity. Major assemblies need to lead the show, followed by a list of ancillary items that are easily overlooked. A classic example in structural steel are embeds for masonry connections. Their weight won’t drive the cost but they will appear in the inclusions/exclusions sections of the proposals. Oddball stuff like structural steel awnings should be broken out as well. Especially if there are requirements for specialized manufacturing-level coatings like anodizing, galvanizing, or ceramic coating.
Scale it back
There are certain trades where a high level of precision isn’t necessary because they are relatively inexpensive. Paint is a good example, if you’re off by a couple of square feet, it’s not going to change much. Painters don’t often list their square footages so it’s more important to touch on the areas by name or material. Stuff like “conference room ceilings” will prove more useful than a square footage of all painted surfaces. Takeoffs should be geared towards precisely measuring items that are likely to be overlooked by your bidders. It should go without saying that anything self-performed should be measured and priced with precision commensurate to the value of the work involved.
Be cautious about what you’re spending your time measuring. The Mechanical, Electrical, Plumbing (MEP) trades can demand a very high level of knowledge to accurately price. Unit costing fixtures and equipment can be very difficult because complex issues drive the cost. Consider the MEP systems to be like the circulatory system in a body. Cost centers will be around major organs and arteries so don’t spend your time measuring capillaries or counting hairs!
How much vs. how little
Speaking generally, the level of relative detail should be inversely proportional to the professionalism and directly proportional to the overall budget impact of the trade in question.
Don’t let the fancy hat fool you – that guy’s a snake.
Material vendors like door hardware suppliers will be inclined to list out each individual hinge which implies that anything not listed is excluded. This is a very unprofessional way to bid the job because you’re inundated with inclusions, and never alerted to exclusions. If there isn’t much scope for the door guy, it’s not a big deal to really drill this down. Whereas on a really big job, the door hardware supplier isn’t necessarily likely to influence you’re odds of winning or losing compared to trades like concrete, structural steel, HVAC, or electrical.
If there’s time, by all means get after the details but understand that pedantic spreadsheets don’t win bids. It’s about having the tools on hand to aid your judgment on bid day. Being “really sure” about a dimes difference is less useful than knowing when something looks to be a dollar off. Quantity take offs for scope that you’re subcontracting should be optimized for reviewing subcontractor bids, not replacing them. An awful lot of estimators forget that.
Too much of too little
At the opposite end of the spectrum is the square foot methodology. An example is “Plumbing: $8/ SF” This is a “fair weather” method that’s only going to give you a single theoretical number to compare the subcontractors to. Lots of bid-mill GC’s employ this tactic because there’s no time to be professional when there’s so many bids to crank out. Square foot costing does have its place in conceptual bidding because it’s unethical to have subcontractors pricing work without compensation or intent to award.
Plus it’s more constructive and honest to tell a client’s design team that you know the market price of similar work runs $X amount than it is to pretend their conceptual design is definitely going to cost $Y amount. The design team should adhere to market norms of their own accord rather than treating the pricing exercise as a budget maximization process.
When the right balance of detail has been achieved you’ll find you are able to compare notes with subcontractors on the scope of work without having to extensively refer back to the plans. It should be obvious that anything you’ve missed previously should be a point of special focus on your future estimates. So too, should be any detailed inclusions that make it to some but not all of your subcontractor bids. If the subs are commenting on it, there’s a reason for it and you should be verifying that everyone’s apples to apples. With practice and experience you’ll quickly learn what’s necessary. Keep in mind that some subcontractors just love to send hoary tomes of boilerplate legalese. That certainly doesn’t make them more qualified. Maintain perspective and use your best judgment before assuming any given subcontractor’s view of bidding is industry standard.
Depending on how the estimate is configured, the estimator may be able to output checklists for subcontractors to individually verify that they have everything. These can be of great help to the build team since subcontractor proposals are often so committed to listing exclusions that it can be hard to say for certain what they’re actually promising to do.
Checkmate the dodgy bidder
Be advised that any error in the estimators checklists can be exploited so it’s often better to be more general with skilled trades, and more specific with unskilled trades. Savvy estimators with time to spare scope the subcontractor bids first to tweak their checklists before sending them out. The time saved by avoiding phone tag and laundry list scope readings with all the bidders can be impressive . However this is not a recommended methodology for a highly competitive hard-bid situation. The subcontractor bids often won’t come in early enough to allow time for that process before the deadline.
Some firms will send their checklists after the bid deadline when they have reason to believe they will be awarded the work. Getting the subcontractors to answer “on the record” in simple, easy to read terms helps the PM to get subcontracts written without a lot of “gotcha” nonsense. Bidders are a LOT more amicable about scope inclusions before the contract is written than after.
Getting the show started
Circling back to some of the other objectives of an estimate we should touch on the subcontractor coverage. Unless you’re bidding nearly identical projects, each project will have a unique subcontractor list.
The goal of an estimate at this point is to ensure there are no bid-day shortfalls in coverage. This starts by defining who’s going to be involved. Scaling the scope of work to the subcontractor is a good move because some projects will have a very minor amount of work for a subcontractor and it’s not always cost-effective to mobilize the “big dog’s” to take care of it. Plus it keeps a more diverse subcontractor roster allowing your firm greater flexibility in terms of what you can bid profitably at market level pricing.
Softly spoken danger
If there are MEP drawings, chances are excellent that you’ll need an HVAC (Mechanical), Plumbing and Electrical sub. Be advised that on plans lacking these sections, they may be necessary to “safe off” areas of demolition. These hidden requirements fall to the bidders to figure out. Interior design plans are often studded with key notes that require specialty materials in odd installations. Catching these items early is critical to give yourself enough time to track down the correct supplier and/or installer.
For example; “artisanal glass”. I’ve encountered some examples that were hundreds of dollars per square foot and the only indication on the plans was a single key-note on an elevation drawing of a doorway transom. Nearly $2,000 of material hung on that solitary key-note. Keep in mind that “per typ.” means everything in that detail, note, or icon is a typical installation multiplied by however many locations the architect considers “typical”. Designs with extensive shorthand can compound the effect of anything you missed. Lazy notation should signal a need to slow down and be very detailed about what’s going on.
Disorganized design calls for detailed exclusions
Don’t forget the specifications. I’ve written about FF&E packets before. If your project has one, there’s a strong probability of design conflicts. It’s really critical to be precise about what you are and are not including in your bid because these problems are never resolved prior to bid day.
With the possible exception of the door hardware schedule, any time you see fixture or equipment schedules listed in the specifications, you should announce their existence to the bidders.
Speaking of specifications, lots of projects use “canned” spec’s which means that the design team is re-using a very long and extensive specification manual. They include sections for materials, processes, and installations that aren’t part of the project. Some estimators make the mistake of using the specification sections to determine their subcontractor list. Canned specs end up as “false alarm” bid invitations and subcontractors get tired of following up with the GC to see if they missed something. Learning that you didn’t bother to check the plans to see if there was anything for them to bid tells them you’re not checking facts.
Not a good look.
Big money on little notes
While reviewing the specifications, take note of any material or vendor suppliers that are mandatory. National accounts are fairly common on chain restaurants, stores, hotels, etc. These stringent requirements are often thoughtfully buried in an easily overlooked note or midway through a lengthy specification section. The cost implications can be huge and can greatly influence who will be bidding your work.
Sole specified vendors can become prima-donnas who expect the work to come to them. You can’t expect these folks to announce themselves before the bid. But rest assured, if you try to build without them they will spring from the sidelines to demand their contract. They are never cheap because they don’t compete.
With the answer in hand, the perspective changes
Understand that no matter how difficult it is to determine that some specialized material, vendor, or subcontractor relationship exists, the build team will assume the perspective that you should have caught it. Design teams often give a lot of thought to specialty materials so they’ll be quick to identify where they were shown on the CD’s. Asking why important details are so poorly conveyed is better muttered to yourself. But I digress…
National accounts or sole specified vendors are typically more important to the client than the design team which may explain why these requirements lack prominence on the plans. Maybe some day professionals will realize that C.Y.A. is a policy that ensures you’re always sitting on your hands when things go wrong for predictable reasons. If you find this nonsense, make a point of calling everyone’s attention to it with Request For Information (RFI’s).
The sooner and more accurately you pull these specialized items to the forefront, the more likely you are to get complete and correct bids from your subs. The build team will be spared unpleasant surprises as well.
Time is a finite resource
Astute readers will note that I’ve focused more on finding hidden requirements than painstaking measurements. Estimators for GC’s are looking to reduce the risk of a project by ensuring that the scope of work they’re planning to subcontract is complete. Obsessively measuring obvious stuff that every bidder will include consumes a great deal of time that isn’t going towards discovering the little details that make one bidder more complete than another. Just because you can do takeoffs at an impressive level of detail doesn’t mean that you should. The goal is to profitably win work at an acceptable level of risk. Risk isn’t controlled by pedantry, it’s controlled by thoughtful analysis of contributing factors. If some factor doesn’t contribute, it’s not relevant. It’s hard for some folks to accept but you don’t actually need to know everything to make the right calls. You need the right information and enough time to act on it. Prioritize your work accordingly and you’ll be successful.
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© Anton Takken 2014 all rights reserved