Tag Archives: Bidding

Reliable Estimating Part 2 Building momentum!

The plans are on the street, now what?

Once the Invitation to bid (ITB) is drafted, and sent to every subcontractor on your bid list, you’re free to pursue the other work that piled up. The more your internal systems are built to output an accurate ITB and an optimal bid-list, the more these tasks will depend on a thorough review of the Construction Documents (CD’s). By having an ITB template that requires answers to the most common bidder questions, you’ll be able to focus your review of the Request For Proposal (RFP) and Construction Documents (CDs). Be advised that defining which trades you need to invite isn’t necessarily a quick process.

Reliable Estimating Part 2 Building momentum!

“Sure you’re doing six things at once, but could you go a bit faster?”

A specialty trade or a really small scope of work may be required via a single note in the drawings. It may be a better choice to get the ITB out to the obvious trades, than to hold everything until you’ve scoured the plans for a buried specialty vendor.

An absolutely pivotal concept of reliable estimating is knowing that time is more valuable earlier than later.

You get more out of the early minute than the final hour.

Learning you need to fix a “hole” in your estimate one hour to deadline means you’ve got 60 minutes to get a viable bid together. Until that problem is solved, the idea of winning takes a back seat to the risk of submitting an incomplete bid!   In comparison, an estimator who found just 20 minutes three weeks earlier could have addressed all the issues completely.

I’ve been in the war room in the final hour when we discovered that nobody had invited an entire trade of subcontractors! Until we found a sub with a complete bid, we had only our historical pricing to go on. If we bid and won using our historical pricing, we took a risk that subcontractor proposals would be substantially higher than what we carried. Given the great value of that scope of work, our exposure threatened the success of entire job.   We were in such a hurry with the bid letting software that a single trade was left out.

Reliable Estimating Part 2 Building momentum!

Even with the satellite, Dave couldn’t make the connection…

Nobody found time to verify the invite list in the intervening weeks. Don’t let it happen to you.

Series of sweeps

It’s really simplistic to assume that estimating is a function of counting, pricing, and totaling. The efforts that make the difference between winning and losing are rarely attributed to punctilious spreadsheets. Broadly speaking, a GC estimator needs to conduct a series of sequential sweeps through the CD’s looking for four basic criteria.

Sub sweep

Getting the ITB on the street required the first sweep of the CD’s to determine who needs to be invited, and what information they’ll need to get started.

Scope sweep

This is where the estimator gets a handle on what’s supposed to happen in the project. Estimators must pay particular attention to where scopes of work overlap between design consultants. Architects are famous for not telling their engineering consultants about an alternate request, and engineering consultants are famous for not sharing requirements that should be included in another consultants documents. For example, an electrically operated smoke damper which is shown on the mechanical plans, but not on the electrical. Estimators must review plans looking for where trades will overlap on scope. If the plans aren’t clear on who does what, it’s the estimators job to provide direction to all concerned. Leaving this to chance on bid-day ends up with double-ups or holes. The scope sweep should enable the estimator to roughly define how much work there is for each trade. Any trade with an especially small scope of work should be noted for a mandatory follow-up with a trusted sub. The same goes for sub-tier subs like Fire Alarm, Pavement striping, HVAC Controls, Coring/Drilling, Imaging, etc. I call these “ghost trades” because they’re never clearly visible, but they’ll haunt your bid if you ignore them!

Error Sweep

After two sweeps of the plans, the odds are good that you’ve already come up with some questions for the design team. The goal isn’t to pick the plans apart, so much as it is to resolve issues that are likely to impact the bid. CD’s often fall short of defining vital project information like site logistics, alternates and phasing. Getting these questions into Request For Information (RFI) format early in the process gives the design team more time to answer which may in turn allow you more time to communicate the answer to your bidders.

Strategy Sweep

There are lots of GC estimators out there whose entire strategy is to simply rely on subcontractor bids to deliver their victories. This flawed approach hinges on two fallacies. The first fallacy is that there’s something magical about their company that makes subs want to give them better prices.

Reliable Estimating Part 2 Building momentum!

You can howl, but then you’re singing along!

The second fallacy is that all subs are bidding all jobs at all times. By inviting everyone, they feel sure that the market leaders will send them a bid. This “strategy” is successful only when there’s no real competition.

Estimating is about controlling risk. If it were possible to simply add everything up and arrive at an accurate price the industry would use cashiers instead of estimators. Risk and how it’s controlled is how a plan becomes an opportunity. A lot of estimators get hung up on risk as a one-sided concept. I hear a lot of GC estimators looking to press project risk onto their subcontractors. Poorly defined scope, misleading diagrams, or counter-intuitive specifications are all treated like it’s the subcontractors problem. These GC’s fail to understand that the uncontrolled risk raises subcontractor prices, making the GC noncompetitive. It’s of pivotal importance for a GC estimator to understand that winning bids is a function of reducing risk for everyone.

Taking responsibility for sorting this out is how a GC estimator can set themselves apart from the field and thereby attract the market leaders. It’s pivotally important to understand that this is a proactive measure administered fairly to all involved parties. Bid directives are an effective means to mass-communicate a plan of action but they can be easily shared with your competitors. I recommend using bid directives to provide clear and accountable leadership that your competitors would shirk. Strategies should be treated as confidential information, and communicated accordingly.

Very few jobs will present an opportunity for a single overarching strategy to secure a victory. That being said, if you can’t find any advantage, you won’t likely land a job. Very often the greatest advantage a GC will have is due to an existing relationship with market leading subs. In that case, picking work that’s best suited to the top performers becomes the GC’s strategy for success.

Measuring time!

Finally, we’ve reached the point where most folks believe the real estimating begins; the quantity take off (QTO). I’ve written about software technology for estimating before. There have been notable advancements in how estimators tasks are completed, like computerized QTO. For example, it’s now possible to measure, count, and color the plans without the printed plans, scale, paper, calculators and pencils. While that’s a huge advancement, most of these proprietary programs lack the logical “polish” of standard business programs. These programs offer an exponential increase in the speed of QTO’s provided the estimators learn their idiosyncrasies.

Whether you’re using a digital system or manual takeoffs, there are some aspects of reliable estimating that never change.

“One pass” takeoff

After all the effort to define which Construction Specifications Institute (CSI) Masterformat divisions pertain to your project, it’s tempting to conduct the QTO in “CSI order”. Lots of estimators will begin their takeoffs with Division 2 Sitework and skim through the plans looking for anything that pertains to that division. Unfortunately there are often solitary notes pertaining to a small scope of work that’s unique from everything else shown on the page. This means that the estimator skimming for a specific CSI division will ignore that solitary note figuring that they’ll get it when they sweep for that division. When the note is on a particularly unlikely sheet, it’s often forgotten. Later, when their Project Manager comes down the hall complaining about how they missed something, that note will be very familiar.

I advocate what I call the “one pass” takeoff. I make sure that absolutely everything depicted, noted, or specified on the page be taken off before I go to the next page. If you’re doing manual takeoffs, this means you’ll have to start a CSI division sheet for each division as they present themselves. It’s a lot of shuffling to record your measurements, and the sheets tend to look less tidy from the many edits. This is still worth the effort since it not only catches the one-note traps, I’ve found it’s actually faster than repeated skimming.

Knowing where to stop is as important as knowing when to stop

Unless the job is fairly small, chances are good that your QTO’s will be interrupted or at least spread across several days. Estimators should understand that co-workers have no comprehension of how much focus it takes to complete some takeoffs.

Reliable Estimating Part 2 Building momentum!

I’m…gonna need a moment here…

Something as simple as the height of a concrete stem-wall may require calculations based on information scattered across several sheets. It’s therefore good practice to write (or type) notes on the plans providing the necessary information where it would actually do you some good. General items like area and perimeter measurements for each room can prove incredibly helpful since a myriad of takeoffs are based on these two pieces of information. By leaving a record of basic measurements, you’re able to pick up where you left off with minimal wind-up.

I would also recommend that your day’s work be paused at a meaningful and reliable point. Stopping mid-way through a sheet is sure to keep you up worrying about what you missed. Choose to either stop early or work late in order to leave yourself a clear conscience.

Before you begin an intense take-off, consider your schedule and the day’s obligations. It’s unwise to get a half-baked start on something complicated right before a meeting. One of the advantages of the one-pass takeoff method is that you don’t have to do the sheets in order. If you’ve got a limited amount of time before an appointment, pick a sheet you can complete. Estimators must accurately track and predict how long each element of a QTO will take. The fastest QTO’s are the ones that aren’t interrupted, however estimating is about more than take offs. Getting interrupted at an inopportune time is part of the job.

Three round review

Checking for errors is the best way to catch them but how you go about it can greatly increase your reliability. Huge data sets and tiny differences can stymie even the most dedicated review. The key to catching errors is to structure your workflow around meaningful review points. The simplest problems are most easily caught earlier in the process. Breaking the QTO down, this begins at the page level. Before moving to the next page in the plans, the estimator should review everything they took off on that sheet. The minute detail is fresh in your memory, and transposition errors are more easily spotted. The vast majority of errors are caught at this level.

The next round of review is when tallying a division as a GC, or a major component as a sub. The errors found at this level tend to be more dramatic because you’re moving the contributions of several plan sheets. A flooring subcontractor might take a moment after tallying the carpet and the tile measurements to see if the relative difference they’re seeing aligns with what they’d expect. These order of magnitude comparisons can tell you if you’re missing an individual room or an entire floor.

The third round of review is after the QTO’s have been entered into the estimate. Does the estimated cost outcome align with the division level review? By using the earlier reviews as benchmarks to compare against, the subsequent reviews become more reliable.

Reliable Estimating Part 2 Building momentum!

You could say the process leaves a mark on you…

I would strongly caution an estimator against more frequent reviews of their work because reviews without benchmarks are little more than skimming plans looking for stuff to add. After a person has looked at the same information a few hundred times, their ability to recognize new information diminishes. You have to be able to trust your work by testing it at intervals that allow you to know if you’re right or wrong.

Taking notes

An awful lot of estimating comes down to judgment when dealing with uncertainty. It’s not fair, but an estimators judgment is often criticized after the uncertainty is removed. People don’t care that you had a good reason for your decision, they only care about the outcome of your decision. It’s therefore absolutely critical to develop the habit of clarifying, stipulating, and excluding anything that requires judgment on the proposal. Effective proposals define with minute clarity what is driving the uncertainty. For that, you’ll need to take notes of where you found the problem. Keep in mind that as an estimator, your work is laying the foundation for the Project Manager’s efforts. Everyone needs to know where the tricky bits are located. Plus if you’re expected to present your estimates for review at your company, it’s good to be able to provide references for all the hard decisions you made.

Schedule slip

As mentioned earlier, interruptions at inopportune times are part of the job. I’ve had multi-million dollar estimates interrupted at the last moment over questions on a $50.00 change order! Estimating is about controlling risk even within the estimating process. Plainly speaking, an estimator must not only predict how long a QTO will take on a piecemeal basis, they must also be capable of plotting a path to recovery when they’ve been derailed. It’s at this point that many, many, “old-school” estimators just plan on spending the night. I believe that most estimators could substantially improve their quality of life by committing themselves to solving schedule problems with overtime as a means of last-resort.

Schedule recovery may involve many approaches ranging from additional workers, to less detailed takeoffs. Estimators should consider the value and the risk associated with each scope of work they’re taking off. A perfect paint takeoff can take a considerable amount of time, yet the paint scope is relatively inexpensive when compared to plumbing. Since the paint scope is relatively inexpensive, the relative risk of an imperfect takeoff is quite low unless you can’t attract more than one painting bid. Estimators should always prioritize on high value, and high risk scopes of work. As a GC estimator, knowing which direction to go between similar bids on bid-day is why you’re doing the takeoff. Continuing with the paint example, a pressed-for-time estimator might shift to a square foot cost for the paint scope followed by a list of scope inclusions that painters might miss. Providing sufficient information to scope sub bids is FAR more important than knowing the precise square footage of Paint color 1.

Lots of GC’s have a team of people working on an estimate. If you’re heading up the effort you will need to think on your feet when people call in sick, show up late, or otherwise drop the ball. Project Engineers are frequently “loaned out” to help in estimating, however they are rarely relieved of their normal responsibilities. Many will prioritize their ongoing projects at the cost of your time-sensitive estimate simply because they don’t work for the estimator. Lead estimators must provide and enforce deadlines for every task. Never give a helper sufficient time to squander your recovery. It’s better to check on them too much, than to find they’ve dug you a deeper hole.

Estimators who are working with interns, Project Engineers, etc. should make a special effort to simplify and compartmentalize the tasks they are delegating. Estimators are used to thinking in terms of length, area, and volume measurements, however these terms can quickly overwhelm someone who’s facing their first takeoff. Estimators should understand that “standard” units for takeoffs are arbitrary to a newcomer. For example carpet is measured by the square yard, yet ceramic tile is measure by the square foot. Taking the time to explain that there are nine square feet per square yard can make the difference between a useful takeoff and a mess that nobody understands.

And for goodness sake, if you’re having people do this work without a digitizer, or on-screen takeoff system, then at least give them a courtesy lesson on how to measure areas that aren’t squares or rectangles! While we’re at it, teach them to use decimal feet in lieu of inches! For some reason, this rather obvious point is overlooked in most construction education.

Addenda of mass distraction

Many architects will respond to bidder questions via an addendum before the deadline. Projects and professionalism will vary which means that GC estimators will have anywhere from over a week to only a few hours to incorporate changes made via the addendum. This practice is easily the single most stressful aspect of professional construction estimating because unclear, misleading, and outright contradictory information is often presented without sufficient time to get clarification. Estimators should note that shoddy plans, municipal or “public work” clients, and last-minute addenda are constant companions.

Reliable Estimating Part 2 Building momentum!

The architect finds last minute changes to be the most fashionable…

The absolute #1 priority is to get that information disseminated to the bidders as soon as possible. The second priority is to provide the necessary leadership and communication to ensure your bid-team isn’t derailed by the Addendum.

As a start, every Addendum should be scoured for changes to the deadline, proposal format, etc. Everything that goes to the bid-team should have the most current deadline printed where it’s easily seen. Wherever possible, notify bidders when an Addendum has little or no impact on their scope. If the Addendum ONLY affects the GC’s, don’t bother the subs with needless panic-inducing addenda.

If your Request For Information (RFI) was answered in the Addendum, you might reference whether the Architect response is consistent with your earlier bid-directives. The better your direction, the lower the risk your subs will face. Lower risk leads to lower prices, this is where the truly professional estimator earns their keep. If you do your best to get in front of issues, you may be rewarded with an addendum that confirms all of your bid-directives which means your subs are the only ones who don’t have last-minute changes.

Preparing for the blitz

Bid day is a real test of your skills, knowledge, tools, endurance, and patience. The better part of victory is preparation. Heading into bid-day you’ll need several critical elements in place. First and foremost, you’ll need your estimate “built” which is to say that your QTO has been imported or entered into your template form and prepared to accept subcontractor proposals. You should have a reasonable estimate of every trades worth, and a decent idea of what the final cost will be. Second, you’ll need your bid packet, which is all the completed forms identified in the Request For Proposal (RFP). Generally, this is the proposal itself, a CSI breakdown, a construction schedule, bond, etc. Everything should be as ready as possible for the bid-runner to deliver.

Third, you’ll need the “bid tab” or “scope sheets”. These are the scope of work as broken down in the estimate in anticipation of how the subs will bid. The scope of work is generally listed in rows, and a series of columns are made for subcontractor comparison. As the subcontractor proposal is compared against each row, the item is either checked as included, marked for follow-up, or an allowance is inserted. Once all the columns are filled for a given sub, their tally is calculated at the bottom and the subs are ranked by price lowest to highest for entry into the estimate.

I should mention that every Alternate that affects the given scope of work should be built into the scope sheet. Poorly defined Alternates can wreak havoc on bid-day. It’s important to know what to expect.

Estimators with plenty of time often export their bid-tab as a checklist which they have their subs fill out, endorse and return. This helps to prevent the “gotcha” nonsense that comes with indecipherable inclusions, exclusions, and clarifications on subcontractor forms.

Projects with special requirements for Minority Business Enterprise (MBE) participation should be tracked in real-time in the estimate. Allowing for “what-if” strategy is a crucial tool to making timely decisions. Very rarely will MBE companies be the lowest bidders, so it becomes a balancing act to meet participation goals, without undue cost.

As you head into the final hour, all of your hard work preceding the bid will be paying off. Be sure to “close the loop” with everything you’ve learned on this estimate by tying your estimate tracking to your bid results. An awful lot of an estimators daily struggle comes down to reconciling the big picture against today’s efforts.

Reliable Estimating Part 2 Building momentum!

Winning profitable work is the estimators constant goal.  Very little has more influence on your ability to win than choosing the right opportunities. Everything is an opportunity to people lacking perspective. Estimators must take it upon themselves to provide not only estimates for projects they’ve bid, but perspective on the market in which they compete. It’s vitally important to show your work in much the same way as an estimate validates the proposal amount.

Reliable estimating practices not only improve bidding, they enable decision-making.


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© Anton Takken 2015 all rights reserved


Reliable Estimating Part 1: Getting stuff out the door!

Estimating is a deadline driven vocation that can be equally exciting and stressful. Many estimators are expected to manage multiple projects concurrently. With time at such a premium, anything that goes wrong on one estimate has the potential to disrupt several projects. Estimators must keep a wary eye on their entire system from Request For Proposal (RFP) to the Project Manager Handoff meeting.

Much of what goes into a reliable estimating comes down to a consistent process. The focus here is on building a consistent and flexible process to accommodate the various projects you’ll encounter. Estimators must balance the speed of modularity, against the need for specificity for every part of their process.

Reliable Estimating Part 1: Getting stuff out the door!

Nobody figured the “kids eat free” special would have caused so much trouble…

Request For Proposal

The RFP gives an estimator some information on the project, deadline, client, where to get the plans, job-walk date, and potentially some narrative of how the client wants the bid to be handled. Nearly all of this information is as useful to the subcontractors (subs) as the General Contractors (GC’s). Yet very few GC’s will share this document because the prequalified /selected GC bidders are listed. Nobody wants their subs bidding to a competitor. RFP’s also convey when the GC was notified of the job.

GCs may have a lengthy evaluation process for RFP’s to decide whether they will bid. Some GCs wait until the job walk before committing to an opportunity. This hedging can consume the lion’s share of the allotted time to bid the job.   These GC’s are always rushing their subs to bid in a fraction of the time allotted. Revealing that their ever-present urgency is a bid tactic might encourage their subcontractors to pursue their more forthright competitors.

GC estimators may be hard-pressed to find time to evaluate an RFP when they’ve got hard-bid deadlines peppering their bid-board. The urgency of the short-term, consumes the planning for the long-term. The only way out of this pattern is to streamline the front end of the process so that there are fewer problems consuming time later on.

Invitation To Bid

An Invitation To Bid (ITB) is how the GC invites subcontractors to bid on their projects. It should be obvious that the ITB should include all the information from the RFP. This is where we meet our first opportunity to balance modularity against specificity.

The ITB is a simple document conveying the Who, What, When, Where, and Why’s of the project. Estimators looking to quickly get through this process might opt to provide scant detail on the ITB since they can readily refer bidders to the Construction Documents (CD’s). A currently popular approach is to insert a hyperlink into the text which leads the sub to a website where the files are available. From the subs viewpoint, a virtually meaningless document arrives, obliging them to further inquiry just to know why it was sent to them.

Reliable Estimating Part 1: Getting stuff out the door!

On second thought, maybe I’m afraid to ask what this is about…

Estimators making templates should configure the template to show only relevant information. An itemized list with check boxes is a tedious means of communicating vital information. I recommend configuring the templates to sort each common job requirement into separate lists for inclusions or exclusions. Forcing the GC estimator to answer these questions, obliges them to become sufficiently familiar with the job to know what they’re asking subs to bid.

The entire purpose of the ITB is to solicit subcontractor proposals which will only happen when subcontractors are interested in the opportunity. Whenever obviously necessary information is buried, it makes subs wonder about the GC’s motivation. Maybe the GC isn’t really trying to win the job or perhaps the information is buried in hope that mistakes will lower prices?

Does this document make me look bad?

Unprofessional ITB’s do more harm than good to a GC. Every savvy sub could rattle off a list of GC’s they’ll never bid to again. Most of the time, the firm was just as bad as their ITB.

Most GC’s use some kind of bid-letting system. Quality ranges from excellent to terrible. The only way a GC can really tell what their subs are getting is to create a false subcontractor with an email address they can check throughout the bid. If this was done, I solemnly believe that nearly half the bid-letting systems would go out of business in a fortnight. The ITB’s out of some really popular systems are an embarrassment to the industry.

Reliable Estimating Part 1: Getting stuff out the door!

Efforts to shed light on code development are ongoing…

Translating to trades

Before we can begin selecting subs, we need to know about the project scope. Unless you’re bidding repetitive projects, odds are excellent that you’ll need to go through the plans carefully considering how you’ll get everything handled. Since everything relates back to the estimate, this process should follow some basic principles. First and foremost, is organizing the project scope according to the Construction Specifications Institute (CSI) Masterformat system. The CSI format codifies every conceivable construction scope into a numerical section broadly defined by divisions. The advantage of this system is a universal organizational structure for everyone in the construction industry. The disadvantage is that CSI divisions are not always related to how subcontractors will bid the job. For example, an Electrical contractor’s proposal will often include everything in division 26 (Electrical) , however it might take a dozen or more different subcontractors to cover everything in division 9 (finishes). Even a fairly modest project may generate an extensive list of CSI numbers. Adding further difficulty, some trades cover multiple CSI numbers, or even multiple divisions.

This is where estimators face an entirely unique problem. Most companies maintain haphazard contacts databases that are tied to Project Management/accounting software systems. It’s incredibly rare for these databases to be searchable for fields like trade or CSI numbers. Some bid-letting systems include extensive subcontractor databases and they are generally categorized by CSI numbers. The GC estimator simply checks every applicable CSI division, and the system generates a list of subcontractors for the GC to send an ITB.   Most GC estimators end up creating their own in-house contacts database using a spreadsheet program.

If you decide to build a database of your own, stick to the significant details. GC Estimators virtually never need a subcontractors mailing address, yet they always need the name, email address and direct phone number of the subs’ estimator. I recommend that the subs contact information be listed in rows, ordered by a column defined for CSI numbers. If a sub bids multiple CSI numbers, copy their information for each individual number.

Estimating is a time-sensitive operation, you’ll need fast answers from subs. If one company doesn’t answer, you’ll need another one to contact right away.

Estimators keen to save time might consider using the specification manual’s table of contents to list out the applicable trades. A very complete specifications manual might include a CSI number for every applicable scope on the project. Far more often, the specifications manual will include sections on work that doesn’t apply to the project. Architects often recycle their specification manuals from larger projects without culling the items that don’t apply. This thrifty approach creates huge files with small pockets of useful information.

GC’s who use the specifications manual to list out applicable trades invariably invite subs who find there’s nothing to bid. The wasted their subs time which eventually leads to ignored invitations. What’s worse, easily overlooked notes on the drawings may still require trades not mentioned in the specifications.

Bid list

The an old adage; personnel is policy has a tremendous bearing on a GC’s ability to profitably win work. Pick the wrong players and bid-day prices aren’t going to be competitive without being risky. This is probably the single most common mistake of GC estimators. They use the same bid-list for absolutely everything they bid. Somehow its assumed that “teamwork” will compensate for fielding subs who are too big to be profitable, or subs who are too small to make production. Profitless work is rarely a priority so big subs get there when it’s convenient for them. The job languishes until suddenly they mob the scene. Change orders ensue then you’ll be waiting for them to return. Too-small subs can’t keep up and they can’t get out of the way. Either case ruins the job for any related trade that wasn’t causing problems.

GC’s spend fortunes on scheduling and project management software systems intended to fix this problem. Pick a better team and it’s amazing how little work it is to make them successful. Please note that better doesn’t equate to more expensive. Market leaders are cheaper AND better than anyone else. GC’s with stagnant bid-lists are the least likely to believe market leaders exist because it would disprove their favorite excuses for losing.

Every estimator needs to be clear on some fundamental points. First, the odds of winning are NEVER even. Second, the estimators who know the odds will either win, or they won’t be surprised at the loss. Third, bureaucratic inertia and dysfunctional relationships are responsible for nearly all the bidding problems between subs and GCs.

Reliable Estimating Part 1: Getting stuff out the door!

Bad relationships will trip you up and keep you down

Soft-headed software for hard-headed bidding

Think about how noteworthy it is that there are extensive bid-letting systems with millions of subs on file. None of them are tracking market-leadership. None of them are tailored to the GC’s interests. There is no such thing as a subcontractor selection system that’s based on anything beyond geographic proximity, CSI designation, Union status, and Minority Business Enterprise (MBE) status. The reason it’s not available, is because GC’s are insanely stingy with bid-results. Nobody knows who won the bid in each division, even among the losing GC’s. This code of silence means that every single estimator will need to figure this out for themselves.

These systems offer little more than a searchable directory of potential bidders. The idea is to blast the entire market, and hope that the market-leader sub will send you a proposal. This approach cuts both ways, since market leader GCs aren’t likely to use a cattle-call approach with their subs.

So what’s the solution?

The answer here is to generate your own classification systems to define the best fit for each subcontractor. Please don’t assume that classification based on dollar value is sufficient. Some subs excel at remodels and struggle with ground-ups regardless of the value. Every descriptive quality that makes a difference towards selecting a market-leading team should be part of your analysis.

Every bid-result should be used to tweak your rankings so you’re staying current. There’s no sense in inviting a sub who won’t be competitive, or worse, who wouldn’t perform. The entire system should be built to sort a subcontractor list based on the calculated likelihood of each sub being the low-bidder. Not only are these subs the most likely to help you win, they are the most likely to bid the job because it’s what they’re good at.

Reliable Estimating Part 1: Getting stuff out the door!

Pat’s really cheap on jobs that don’t require pants

I would recommend using a spreadsheet based system for this. Whatever can be done to format the output to match the ITB template will prove helpful. Building a worksheet which allows the estimator to select the job-specific qualities will leave the estimator free to consider what the job needs, rather than populating their sub list. If the job aligns with your job-tracking recommendations, it won’t be difficult to come up with the right subs. Chasing work that’s a bad fit for your subs shows up as low probabilities for everyone. That’s a strong sign you’ll lose the bid unless you find some new subs.

The hidden catch

Since this spreadsheet system is based on data you generated, it’s very critical to differentiate between internal and external perspectives. The GC estimator has very accurate bid-results on all their subcontractors. This internal data is your version of what happened. Unless you won the job, you aren’t looking at what happened on the market. What you must learn on every job you’ve lost is which sub was contracted for each trade. This external data will tell you with confidence which of your subs were market value, and which subs you need to add to your invite list. External results are much more significant than internal.

Even if you don’t know much about the sub, you do know all the descriptive qualities of the job they won. Entering what you do know about these subs allows you to run the probabilities and determine when it’s time to contact them. If they’re fiercely loyal to a competitor, you’ll know which jobs are going to be harder to win as a result.

Some throughput suggestions

If every job generates an estimate, it also generates a list of subs which can be ranked. Smart estimators will notice that it’s entirely possible to simply add your winning competitors sub to your sub rankings and list them as “low” when you don’t know their actual bid amount. This adjusts your job-level output to reflect the external market outcome. By not obsessing about dollar amount, you’re free to track by job descriptors which you can accurately define.

Reliable Estimating Part 1: Getting stuff out the door!

“Spiraling descent into madness” may describe a lot of jobs

Every estimate is for a job which has those aforementioned descriptors so useful to sorting subs. Estimate tracking for the GC is vitally tied to sub performance, all of this information serves that purpose.

Estimators should make their estimate template so that a separate worksheet is populated with the ranked subs and the job specific qualities.

Copying that worksheet into the sorting database file allows you compile trending data on all of those data points.

Making it easier to move this information around, makes it more likely that it will be done. Having a job-specific bid-list of bona-fide market leaders on day one is going to significantly increase your hit-rate which means you’ll be able to bid less often. Which means you’ll have more time to perfect your craft. None of that happens if you’re stuck updating spreadsheets for hours after every bid.

Reliable data relies on short memories

Big-data projects get out of hand quickly. The relevance of historical data falls off quickly beyond one year. Most construction work is seasonal, so last month is potentially less relevant than this quarter of last year. It’s useful to “freeze” weekly, monthly, and quarterly databases by saving locked copies separately on a server. Whenever you do a weekly freeze, take the calculated output of your week’s worth of bids and start the next week with that as your first bid. By never carrying more than one week’s worth of bidding in the database you’re able to re-create any files that were corrupted with a minimum of fuss and bother.

After a year’s worth of records, your weekly update would have the previous weeks rollover plus last year’s data for that week. You might run a bid-list search and be reminded of a sub who fell out of touch. GC’s who decide to re-visit an old revenue stream would be able to call up whatever year they were last doing that work. Old allies are better than cold calls.

Useful tools work in many ways

Take this concept and apply it differently, if a GC created a subcontractor pre-qualification form which helped to rank them according to their relevant job metrics, they could do a bid-list search based on that feedback. Appraising the new sub in the context of existing subs could provide meaningful comparisons and insights into how they might work out. Taking a different tack you could search your estimate tracking to see examples of past bids that were well aligned with this subs metrics. Lots of subs will be a poor fit to the work you’re pursuing. Being forthright about their odds and the frequency of relevant opportunities shows respect for their time, and keeps you focused on fruitful pursuits without offending anyone. Giving everyone an equal shot at wasting their time doesn’t breed loyalty. Calling them when you’ve got an awesome opportunity does.

Reliable Estimating Part 1: Getting stuff out the door!

They’ll love you for it!

Speed is your friend

Estimators are constantly interrupted by demands from projects that are all in different stages of delivery. Getting distracted at crucial steps is where lots of mistakes get their start. It’s therefore critically important to reliable estimating to work quickly and systematically. Every repeated process should have a systematic approach that’s complemented by templates, spreadsheets, and databases that are all built for speed and reliability.

People are very adaptable which can often cloud judgment about what’s faster or more reliable. Programs, databases, templates, or spreadsheets that force you to search through long lists for basic and repeated stuff are wasting time. Just because some program or spreadsheet has “always had” some quirk, doesn’t mean it should remain. It’s far better to have a short list of stuff you’re always using, than a long list covering every eventuality. Buried information is wasted time.

The estimator who can get their team rolling on an opportunity in less time and without skimping on information will have better coverage on bid-day. Bureaucratic estimators often take exorbitant amounts of time to get their invitations out to subs. Subs facing short deadlines and slow-moving GC’s are more likely to decline the invitation because it looks like that GC isn’t committed to winning.

A late hit is better than a fast miss

It takes a lot more work to fix miscommunication than it should. A typo may attract hundreds of emails asking the same question, even if you sent a clarification moments after it was initially discovered. Lots of contractors adopt a “do what I tell you” philosophy with their subs. If your instructions aren’t clear, the subs have little choice but to ask you about it. If their questions aren’t answered, they may withhold their bid until you call looking for it.

My next post will pick up from the ITB and will cover how to increase reliability in quantity take offs, communications, plan changes, bid scoping, and so forth.


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© Anton Takken 2015 all rights reserved

Stuff nobody will tell you about estimating

I suspect every profession has a few hidden qualities you wouldn’t discover until you’d been at the job a while. Estimating has some interesting features that can really make or break your chances of success, provided there’s somebody to point them out to you.

Speed is your friend

On the surface, estimating seems to be about careful measurements, considered accounting, and an overwhelming obsession with minute detail. In practice, successful estimating is about time management. General Contractor (GC) estimators are responsible for getting the information out to their subcontractors (subs) as well as getting the subs questions answered by the design team. Every problem needs time to resolve so it’s really important to maintain rapid communications during the bid.

Stuff nobody will tell you about estimating

Mobile office solutions, speeding you on your way to the next crash…

It’s really tempting to silence your phone and ignore your email for a few hours to get something done. Which leads to the next item…

Leadership is more important than takeoffs

If your estimate relies on sub or vendor quotes, your first priority should always be to providing direction, insight, and encouragement to those bidders. Specifically, your efforts should be directed towards finding a unique and advantageous approach to the project. Ineffective estimators tend to assume that there’s something special about their company that will ensure that bidders will give them their best efforts. In a vacuum of leadership, subs will hedge towards protecting their own interests which never means low prices.

Perspective, then persistence

Hard work and persistence are admirable qualities that absolutely will not lead to success on their own. Lots of estimators assume that bidding and winning have a cause and effect relationship. It’s true that you can’t win if you don’t bid. However the reverse is not always true because there are insincere/unfunded clients with projects bidding that have no chance of being awarded. Sadly these clients consume the lion’s share of the slow market. While they can occur at any level of the market, these clients tend towards the bottom strata wherever they appear. They can be identified by their incomplete plans, short deadlines, multiple alternates, and resistance to answering questions. Everything is supposed to start right away despite the lack of permits, or even plans that would pass building department review. These clients range from uninformed neophytes, to jaded negotiators. What they have in common is the general belief that they don’t owe the low bidders a contract award in exchange for the free bids.

In the worst cases, the client will use the proposals to inform their negotiations for bid shopping. “Helping” an unethical client to award your competitor is a destructive use of your time. Morally flexible estimators might think it’s great to be the person such a client calls to “negotiate” with. Clients who bid shop are cheating all the companies who bid in good faith.   These negotiations open with two assumptions; the client is never fair to their contractor, and they think you aren’t smart enough to see that.

Any estimate that will not lead to contract is a waste of time. Better estimators don’t make better clients. Until such time as estimators can seek recompense for time wasted on feckless clients, we must protect our companies interests by declining to bid. In hard times, the estimator must be prepared to accept that this means precious few real opportunities will exist. This reality escapes those consumed with hope that behind every half-baked set of plans lies a great opportunity. The fact remains, when the good clients exit, the market declines. Down markets always have lots of terrible clients wasting everyone’s time with profitless jobs that rarely happen. It’s the only time they can attract bidders.

Stuff nobody will tell you about estimating

“Attention everyone, ship Desperation is now boarding..”

There is no market for bad news

Estimators looking to trade publications, and mass-media for relevant information on their market are bound to discover that there are precious few articles that will admit when things are bad in the present. Unless the article is written to influence an election, you can count on the article to refer to bad markets in the past tense framed in the perspective of steady improvement since then.

Periods of intense bidding with low backlog should indicate that contractors are starving for work and are chasing whatever is out to bid. Often, these times are couched in phrases like “Bidding picked up in the 4th quarter signaling potential growth this spring”.

Once spring rolls around and the summer rush work comes out to bid, these articles will say “Despite holiday season slow-downs, construction steadily climbs”.

This optimistic world-view is on display whenever you talk to other estimators. Go to a job walk and eventually you’ll hear someone ask; “You guy’s staying busy?”. With rare exception, the response is merely a list of the most impressive sounding projects that estimator won within the last nine months or so. Nobody likes a downer but it’s important to understand that what you’re hearing is not the entire truth. Estimators must learn to look beyond what’s said, and listen for what is missing.

If you’re struggling to land work, consider what you’re hearing from others. If the projects listed at a job walk are all finishing up, that’s a strong indicator that new victories aren’t newsworthy which may suggest that your problems are shared. Subs bidding to GCs should pursue bid results aggressively. GC’s are often more candid about the client, and the market after they’ve lost a bid. Estimators who speak truthfully and share what they see often benefit from information shared in kind. GC estimators are often listening intently to the nuance of what their subs are telling them. Don’t get too involved in trying to appear strong when you’re trying to find work.  Posturing sends the wrong message.

Decisions define us

Estimators exist because it’s not possible to simply “add everything up” like a cashier. Simply put, estimators must make decisions about what to do when things aren’t perfectly clear. The lack of information is a risk, making a decision on how to handle that risk means you’re accepting responsibility for the outcome of that decision. It’s easy to see that decisions based on the worst case scenario is the most likely to add money and time to your estimate. GCs who habitually sandbag their estimates are communicating their priorities. Competitive sub bids will go where they won’t be squandered.

While on the topic of unclear plans, it’s worth commenting on motivations. Missing, incomplete, or contradictory requirements may be a symptom of design team motivations. Estimators who’ve reviewed plans from a design-build project may notice that the plans have far fewer notes, and shorter specifications than projects developed for hard-bidding. Design professionals working on hard-bid projects are primarily concerned with their liability.

Design teams know that budget blowouts are a frequent outcome of bidding. Costly items are often sparsely mentioned on plans in the hopes they’ll be overlooked by the contractors. These buried notes are an owner-placating feature that the designer is trying to buy with the contractors money.

Stuff nobody will tell you about estimating

It’s rare to see such a perfect application for existing technology

Their decision to be predatory speaks volumes on their character. Exposing these traps through Request For Information (RFI’s) is how you can control risk without losing the job.

The advantage of ethics

Dishonesty is rampant in the construction industry. Incomplete plans labeled “100%”, or unrealistic schedules, are simple examples but this issue runs deeper. Information is withheld simply because it’s less risky to remain silent.

Bid results are traditionally provided upon request.  In practice, this typically means the GC estimator plays “keep away” with the information until it’s all but assured that the sub will never profit from it. Some GC’s are so focused on their own interests that it borders on cruelty. Providing bid results is seen as additional work that only benefits subs.

The deal offered to subs is to either award them a contract or furnish them with bid results in exchange for a free bid. GCs should promptly and publicly furnish this information to recompense subs for their bids. Better informed subs deliver better bids.

Acting ethically can present huge advantages beyond good-will. Trustworthy estimators benefit from stronger relationships with their vendors and subs. There’s less risk in working with honest people, lower risk means lower prices, which means you’re harder to beat and more profitable than your competitors.

It won’t do much good to pursue the bottom of the market with high-minded principles. However an established reputation for fair-dealing has a way of opening doors to quieter opportunities. The very best clients choose to work with honest contractors. There may be fewer opportunities compared to the hardscrabble market. However the work you’ll land is more successful, and reliably profitable than the high volume of profitless work out for public bidding.

Good estimators have pull

With all the information going back and forth, it’s easy to overlook a vital aspect of an estimators craft. GC estimators rely on subcontractor proposals to help define, describe, and value the scope of work. Attracting market attention is a function of a good opportunity, minimized risk, and profitability. Market leaders will avoid unprofitable, risky, or difficult projects. As an estimator it’s easy to think that the project’s intrinsic qualities aren’t under your control. To be sure, there are definite challenges in bidding ugly work.

The estimator must understand why they’re pursuing a project. Simply grinding out bids because a Request For Proposal (RFP) landed on your desk is what I call bid-milling. Bid-milling is the practice of chasing everything in the hopes that higher volume of bidding will create profitable wins.

Stuff nobody will tell you about estimating

It’s not a good look

This never works because each firm will be a market leader for specific opportunities. A contractor with a high volume of losses communicates that they’re not a real contender. The market-leading subs won’t waste a bid on GC’s who aren’t sincere about winning.

A GC estimator needs to understand that a mediocre project with a good client can be made into a profitable and low-risk opportunity through their leadership. GC’s who habitually work for good clients naturally attract market leaders. Contractors with a history of well-managed and reliably profitable projects are able to reduce the risk of less professional clients and their design teams. All of this starts with the estimators commitment to controlling risk.

Estimators who pursue good opportunities with accountable leadership, ethical dealing, and meaningful feedback are more successful than their competitors because they are the professionals, that everyone wants to work with.

I encourage you to consider those actions carefully. These simple actions are profoundly rare in professional estimating because most folks think their situation is different, therefore some aspect doesn’t apply to them.

Success in this craft requires clarity and intent above all else. There are no shortcuts with something this simple.

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© Anton Takken 2015 all rights reserved







Request For Information

We estimate the cost to build a design because neither the design, nor the construction are perfectly controlled. Most buildings end up with notable differences from the bid-day plans. Since the bid-day amount is the basis of contractual award, these differences take the form of change orders. The only thing clients dislike more than change orders, are delays. As estimators, we have the ability to set a project on the right course by calling the design-teams attention to likely problems.

Before we get too far into that process, it’s important to understand the perspectives of all the key players. Effective communication comes down to how you ask a question, rather than what you’re asking about.

Request For Information

“While it may have been a good question, the response left the stronger impression”

The Client thinks you know the cost of everything all the time

Since estimates are “free”, clients tend to think of estimating as an auction where each bidder knows the projects’ value from the beginning. Clients may assume that a few days with the plans and maybe an hour walking the site is all a contractor would ever need to build a job perfectly. General Contractors (GCs) are guilty of creating this impression when they’re trying to get on the clients bid list. Like any sales job, there must be a balance between what’s promised and what can be delivered.

The Architect believes their intent is obvious, and it’s your responsibility to know what to do.

By the time a set of plans has been put out to bid, the Architect has spent a tremendous amount of time developing the design. The minute differences in paint shades may have more emotional value to the Architect than the way something’s bolted together. While Architects may spend months or years developing a set of plans, the majority of their time may have been sunk in helping their client to pick between different schemes. This means that the nuts and bolts of the final design are put together in a compressed timeline.   Clients can and do make substantive changes at the last moment, causing predictable grief for the Architect. Nobody’s going to say this before the bid, but the Architect relies on the GCs estimators to make reasonable assumptions about missing information. If your Project Manager (PM) tries to submit a change order for something the Architect feels is obviously necessary to fulfill their design intent, they’ll claim that means and methods are the GC’s responsibility. For example, it’s not ordinarily the Architects job to define the length of screw necessary to attach a substrate to a structural element.

Once the answer is known, everyone will think the solution was obvious from the beginning

Estimators face a completely different set of challenges. Bids must be competitive, thorough, defensible, and profitable. A proposal distills all of the scope of work to a few variables like cost, and duration. This has the effect of making every proposal appear uniform, while concealing the impact of unanswered questions.  Many estimators have won a bid by incorrectly interpreting the Architect’s intent.

Request For Information

Architect: “No, no, I wanted all three like the middle one!”

  Be advised that many Architects include a General Conditions specification that stipulates that whenever the contractor is faced with multiple requirements, they should always defer to the most costly option. This gotcha specification works in obvious conflict with competitive market pricing. After the bid, it’s always obvious that they wanted something expensive. Before the bid, they don’t have time to answer your question.

Fast answers to easy problems

Estimators may have a few days with the plans before the Request For Information (RFI) deadline. Architects have RFI deadlines to provide themselves with sufficient time to properly respond to bidder questions before the bid deadline. On many commercial projects, it’s very common for the RFI deadline to be a week ahead of the bid deadline. Be advised that most Architects see absolutely no problem in answering all the RFI questions the day before or the day of the bid deadline. GC estimators won’t have time to generate easy to read directives for their subs. It’s a race to make last-minute changes before the deadline.

This leads to the first imperative of RFI writing; getting fast answers. It’s pretty tough to improve on a “yes or no” response in terms of rapid communication. By extension, this means that RFI’s should be written to elicit a yes or no response. The key here, is to understand that multi-step or multifaceted questions lead to confusion and delays.

Let’s say that the finish floor plan shows a room that’s missing any call-outs for wall finishes, trim, or flooring. With rare exception, specific paint colors won’t affect the price for bidding purposes. Asking if the walls should be painted may elicit a simple “yes”. In contrast, a request for the desired finishes of all the walls in room XYZ could lead to a situation where they don’t answer because the Architect is still debating between paint colors. Bid day passes and you never got to know if the room will be painted or not.

Addressing one issue per RFI allows the Architect to answer the easy questions right away. If they’re still debating about paint but not carpet, they won’t answer an RFI asking for both the paint and carpet. From an estimating standpoint, getting half the missing information might be worth its weight in gold.

Every design is a work-in-process

It seems painfully obvious that estimators questions are going to be focused on getting the job priced. If two options cost the same, we don’t need to know which one in order to bid the job. Design teams know that their published decisions are fulcrums for accountability. Estimators must keep in mind that design teams and clients may have little knowledge of how their aesthetic decisions affect the budget. An open-ended requirement in the plans is seen as a “placeholder” for a future decision. The problem for GC’s is that it’s a contractually binding requirement to an unknown. From the client and design teams perspective, the missing information is “no big deal” because they presume the estimator knows what everything costs all the time.

Request For Information

They get cranky when you point out the holes in their design”

Applying this insight, estimators are well-advised to do a little research on what’s at stake before they draft their RFIs. If a fixture specification failed to define the finish, the estimator should inquire as to what impact the available choices will have on pricing. If there are prices for the “good, better, and best” options, draft the RFI with those options listed. It’s possible that the design team is debating between colors at the same price point. Getting the design team to define the price point, solves the estimators problem. Questions that won’t affect your bid should be noted for future hand-off to the Project Manager since it’s not worth the administrative effort until you’re under contract.

Get a complex problem on one page, and a proposed solution on another

It can be particularly difficult to get a yes or no answer to a complex problem pertaining to spatial relations. Architects use a variety of perspectives to depict the project scope. It may require constant flipping between a plan view, a cross-section, and an elevation drawing to visualize the problem you’re trying to address. The RFI needs to be less work for the Architect and for everyone who must understand their response. One very low-tech way to address this problem is to literally photocopy the plan areas in question. Re-size and cut out the copies until they fit on a single 8.5″x11″ sheet. White-out every note, callout, or icon that doesn’t pertain to the question. Make a copy of this sheet. Use one for the question, and the other for a proposed solution. Label them accordingly. Bubble the areas in question to call attention to only what you’re asking about.

The RFI should simplify the problem and refer the reader to the first sheet, before suggesting a solution referred to on the second sheet. Simply asking “Is the proposed solution acceptable?” This leaves you with an RFI that could get a quick “yes” while providing your subs with a simplified two-page diagram of the issue and it’s resolution. Be advised, creating a simple diagram of a complex solution can be a very arduous task. Try it yourself and you’ll have newfound respect for Architects.

Many architects will follow-up later with an addendum or an ASI which incorporates their RFI direction into the plans.

Respect the designers intent.

Architects spend a great deal of time refining their aesthetic vision of the project. While competitive estimators are motivated to find cheaper options to land the job, Architects fulfill their duty to protect the design’s integrity. This often places them at odds with budget conscious clients and their contractors.   It’s therefore good form to treat their designs intent with respect. In the simplest of cases, an RFI might open with an explanation of the issue, followed by “we believe the design intent is: (your suggestion)…” wrapped up with “Is that correct?”

The tone of the question implies that you’re on their side and that you see their solution but you want to check with them first. Estimators should studiously avoid phrasing that communicates: “hey these plans are wrong, here’s a cheap shortcut.”

Request For Information

“Good information, but… wrong application”

Some thoughts on suggestions 

RFIs are the only way that a GC Estimator can communicate on the record with the design team. On the surface, it seems like an RFI could only be used to ask questions. In fact, the majority of the time, the GC will have a distinct preference for how any given problem is solved. Including a suggestion in your RFI is how you can try to steer the solution to your benefit. If there are multiple potential solutions, you should never assume that the Architect or the client will know which suggestion is the most cost-effective one.

I’ve encountered situations where moving a wall 3″ in a single direction saved thousands of dollars compared to any other option. Including that information in my RFI proved instrumental in getting a prompt reply. Architects who aren’t sure which choice will be the most cost-effective may request alternate prices on the bid. Alternates exponentially increase the estimators workload without offering much potential for reward. RFI’s that lead to more questions than answers are bad for business so share what you know to facilitate solid decision-making.

GC estimators are looking for better, cheaper, and faster solutions. The natural opposite of all of these things are sole-sourced specialty products and their vendors. Sole-sourced items tend to have long lead times and high prices compared to similar products. Architects have very little concern for lead times or difficulty in managing prima-donna vendors. That’s the GC’s problem. As surely as night follows day, specialty products tend to create unusual problems for the build team. Bringing this back to RFI’s, the estimator will often find it necessary to resolve issues pertaining to, or caused by, specialty products.

Defensive designers will delay decisions

Architects tend to believe that high prices come with high quality (except for change orders), so design teams tend to be quick to shoot-down any efforts to replace over-priced products with substitutes. If you’re competitively bidding a project, the cost of an expensive assembly is only a problem when there’s a reasonable chance your competition will miss it. Estimators who ask for solutions geared towards retaining the annoying, expensive, and long-lead product will get quicker replies from the Architect than those which oblige the Architect to defend their design decisions.

The one-note trap

The more expensive, hard to get, or outright difficult the product is to work with, the more likely it is that the Architect will require it with a solitary note located where absolutely nobody would look for it. Estimators who catch the note risk losing the bid by including the high-priced item that their competitors will overlook. Architects spend lots of time picking out something that’s dear to their design, so it’s very suspicious that they’d take chances on its inclusion through minimalist notation. This may be a trap intended to make the GC pay for signature design touches that the client can’t afford.

Request For Information

Daylight is the best disinfectant

Whenever these traps are encountered, estimators should draft RFI’s identifying precisely where the note appears, why it appears to be an error (i.e. because it looks like it doesn’t belong) and asking the design team to confirm that the sole-sourced thing has no allowable alternates. When it’s appropriate, ask the design team to list the approved vendors of the specialty product, because chances are excellent that they worked with one of them directly.

Architects can’t afford to ignore that RFI, and by answering it publicly, the bidders are all on equal footing to compete. By all means keep that feature’s price handy because once the budget is blown, it should be item #1 on your list of Value Engineering ideas.

Some notes on notation

Construction Documents (CD’s) are the composite of a set of drawings (plans), Scope letters, Request for Proposals (RFP), specifications, soils reports, directives, Addenda, and RFI responses. Mid-sized projects may have literally thousands of pages in their specification manuals, and hundreds of sheets in their plans. After all the work in putting them together, design teams are often imperious about questions that are answered in the CD’s.

RFI’s should pointedly reference the applicable sheets, details, and specifications down to the individual sub-heading. If you don’t tell the design team where to find what you’re looking at, they won’t have much reason to believe there’s a problem.

Whenever necessary a screen shot, or photocopy of the relevant information with bubbling around the area in question should be attached to the RFI. The motivation is to guide the reader through your natural confusion. For example:

Note A on Detail 5/A5.1 calls for “5/8″ thick ceramic tile”, which corresponds with the dimensioned layout of the room shown on the Floor Plan Sheet A6.1 (see attached). In contrast, specification 9300-122,A,5 calls for 24″ thick ceramic tile (see attached). We believe the intent is to install 5/8″ thick ceramic tile.

Is that correct?

If not, please provide the desired tile thickness for the area in question.

Be forewarned, irrelevant details always attract attention and causes confusion. Screenshots are really easy but it’s virtually impossible to cut out all notes, dimensions, and icons that will distract your reader from the real question.

Formal for a reason

RFI’s are a formal and contractually binding process between the GC and the Architect/ owners representative. The questions and their answers become part of the defined project scope of the contract. This means that unless otherwise noted, the questions you asked the Architect during the job walk are off the record. They can absolutely disavow any direction, instruction, hint, or help they gave you.

You should not directly ask any questions of the Architects’ consultants (engineers, interior designers, landscape designers, etc.) because the consultant’s response would effectively bypass the Architects’ control over the design. Architects extend the same courtesy to the GC by not communicating directly with their subcontractors. Most GC’s instruct their bidders to direct questions only to the GC’s estimator and emphatically warn bidders that contacting the design team or client will result in exclusion from the bid.

Life in the slow lane

The price paid for binding answers is time. RFI’s involving multiple design disciplines take the longest since there is more coordination required to answer. If the design team is answering multiple GC’s questions, they might compile and collate the RFI’s looking to avoid redundancies on their next bid-directive. This leaves even the easy to answer RFI’s waiting for a last moment response.

RFI’s are frequently misunderstood, or mishandled leading to situations where after weeks of waiting, the response fails to solve your problem before the bid. Architects who don’t understand your situation aren’t inclined to extend the bid, or revisit a “closed” issue.

Estimators need to understand the stakes of writing RFI’s properly. Many botched RFI’s lead to Architect responses that add additional layers of confusion, risk and frustration. Perhaps worst of all, your competitors poorly written RFI might oblige you to sort out a problem they created.

Informal guidance          

Occasionally there will come a problem that leaves your estimate stuck until you’ve got the Architect’s answer. In these cases, Estimators should reach out to the Architect informally and ask for advice on how to phrase the problem so it will be easily resolved. Some Architects will appreciate the courtesy and may even tell you how they’ll answer your RFI. Not only is the RFI answered, but the estimator gains time to share the information with their subs before the bid.

Subcontractor driven questions

Skilled trade subcontractors can come up with some very technical questions. A GC Estimator may lack the trade-specific knowledge to properly articulate the question to the design team. Many GC’s simply copy and paste a subcontractors RFI onto their template and submit it as though it was their question. These RFI’s may be poorly written, or asking for information already provided in the CD’s.  Since skilled trades generally correlate to engineering consultants, the RFI responses may be full of incomprehensible engineering legalese. This is most prominently displayed when a soils engineer answers an excavators poorly written RFI.

Request For Information

Rick knows what he’s doing but his writing is atrocious.”

GC estimators should take the time to learn what the sub is asking about. If this issue affects one bidder, it likely affects others. Getting to understand the problem and it’s likely solutions, is critical to asking only what you need to know. There are lots of sub estimators who were pressed into estimating, or are expected to estimate in addition to a host of other duties. RFIs before the bid should be decidedly geared towards answering estimating questions. You need to know enough to price the job, not to perfectly build it on bid-day.

Preparing for the bid

Sometimes the most dearly needed RFI’s go unanswered before the bid deadline. Estimators need to prepare contingency plans for every significant RFI. Generally speaking, the suggested solution in your RFI should be your bid-day default condition. If that RFI goes unanswered, then your proposal clarifications will need verbiage informing the client that you’ve included your specific solution to an issue raised in RFI (#) submitted to the Architect on (Date). Most clients aren’t paying attention to their Architects RFI log. A submitted bid implies that you had everything you needed to accurately bid the job. Architects who ran out of time answering RFI’s should have every sympathy with your situation. If the issue is serious enough that you can’t risk such a move on the project, it’s time to reconsider the opportunity. Sometimes missing information is intentional.  Weak design teams and unreasonable clients won’t improve after the contract is written.


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© Anton Takken 2015 all rights reserved

Relationships and their place. Push vs. Pull

A quick view of most advertisements for the construction industry will reveal a few consistencies in how they perceive their client and their product.  Trite sayings hinging upon “building relationships” abound in construction advertisement.  Taken out of context, these same marketing efforts would have more in common with personal ads than custom manufacturers.

What would you say you do here?

Most General Contractors in the Commercial market do not self-perform the majority of the work.  In point of fact, they’re called General Contractors not builders because administering contracts is really what they do.  As a result most of them lack substantial focus on what they’re really there to do which is to faithfully execute the design according to the contract.  This means that the subcontractors are where the “rubber meets the road” so to speak since the subcontractors are the ones actually building the job.  Interestingly, few if any General Contractors make mention of their relationships with subcontractors when promoting their company.

Luxury car makers don’t advertise the special relationship they have with their clients.  They emphasize that they make the best car,  period.  Construction companies seem loath to admit that they  build what is designed; they don’t get to choose the level of quality, aesthetic appeal, or social prominence of their projects.

Relationships and their place.  Push vs. Pull

“Dang it Carl, I said move the Church AFTER the wedding.”

Put your back into it.

So what is a client getting when they call a GC?  Mostly they’re getting risk management, project control, contract administration, and subcontractor “pull”.  “Pull” in this sense is the market value of that particular GC to any given group of subcontractors.  GC’s with a reputation for not paying their subcontractors have less pull than better GC’s.  There’s a lot that goes into your pull.  For example, if a GC has been on a losing streak, they’ll lose pull with subcontractors.  GC’s that chase bad clients will lose pull with subcontractors.

Bringing focus back to estimating, the amount of pull you can generate has a lot to do with how you handle your bids.  For most subs, the only thing they have to go on is how you communicate with them.

Like a lot of things in life, it’s the outcome that matters not the intent.  Some folks get hung up on sending everyone the exact same message, without actually pausing to consider how that reads to an individual.

Bid invitations are a good example of this.  It’s fast and uniform to send everyone on the bid list the exact same message.  Often these invites cover a few key points like the deadlines, site walks, and such while excluding individual trade-level details for fear of it not applying to all recipients.  It’s pathetic how frequently invitations to bid fail to evoke any enthusiasm for the project, the client, or the opportunity.  Mostly they’re a bland memo directing the bidders through the GC’s particular brand of bureaucracy.  When coupled with bid-letting services, these invitations can end up appended to a “do not reply” email that conceals everything from the recipient until they summit the mountaintop of logins, sales pitches, and file downloads.

Relationships and their place.  Push vs. Pull

As an outcome, this is counterproductive to pulling subcontractors towards the opportunity the estimator is pursuing.  A great deal of what’s wrong in business relationships comes down to pushing when it would be better to pull.

Design relationships

Design teams fall victim to this process as well.  Traditionally, the Architect brought all the engineering disciplines together to develop a cohesive and thorough plan.  Like most industries, the concept of compartmentalization rose to the fore and now its common practice for a project to have a long roster of design consultants working in degrees of isolation from one another.

I don’t know what’s existing and neither do you, but it won’t be me that pays.  It’ll be you.

Projects that must refer to existing conditions are often riddled with notes declaring that all bidders have tacitly accepted responsibility for field verification of unknowable items.  These “gotcha” requirements are used in lieu of consultants making their own site inspection and designing accordingly.

Site inspections,  coordination meetings, and construction oversight are sometimes viewed as “add alternates” to the design package.  Clients often accept or decline these services based on their budget, schedule, and professional proclivities.  Clients pre-disposed to “hurry up” work can’t spare the time for consultants to fully fledge their designs.  Noteworthy examples are property managers pushing for Tenant Improvement projects that close the deal on a lease.

To the client, the savings in design fees and duration may appear worthwhile until the market pricing reflects the additional risk imposed by an incomplete design.  During market slumps, these clients use competitive bidding to flesh out the issues with the design which they ask bidders to solve.  Once they’ve got the answers, they incorporate them via addendum and put it back out to bid.

There’s no time to do it right the first time, but we’ll find time to do it again.

This “refine-design-by-bid” tactic initiates an unfortunate dynamic in the market.  Bidders who’ve invested in “helping” the client are rewarded with several costly rounds of bidding before the project goes to contract.  They know that rolling these expenses into their next proposal will all but guarantee a loss.  They also know that every answer they provide will be used to assist their competitors in arriving at a complete proposal.  Every round of bidding further diminishes the profitability of the project.  For some bidders the “solution” is to seek recompense in overpriced change orders.

This adversarial attitude angers clients who feel they invested heavily to see their project happen and feel exploited by greedy build teams.  Clients who’ve weathered this experience often arrive at the next bid with an enthusiastic commitment to pound out the issues before they sign another contract. Very rarely do they see the connection between “refine by bid” and overpriced change orders.

Perhaps the most frustrating observation to offer here is that the total pre-construction cycle on “hurry up” projects often end up matching the duration of having it properly designed in the first place.  Complete designs mitigate change orders, and bidding once restores profitability for the build team.  There’s more incentive to actually finish the job quickly when it’s clear the only profitable path is efficiency.   A critical aspect here is that clients need to comprehend that a request for proposal is supposed to be a commitment to actually hire the winning bidder.  Distorting the pre-construction process by eliciting free design help and  re-bidding is communicating a very one-sided  and unethical view of the Client-GC relationship.  It’s unreasonable to expect fair and ethical treatment when it’s not reciprocated.

Bringing this back to relationships it’s worth pointing out that departures from traditional responsibilities can’t and won’t happen without consequences.  Pushing off design responsibilities onto the build team will corrupt their relationships with the work and with each other. It also serves to alter the consultants relationship with the project in that they move away from taking responsibility for their design and move towards evading liability for every conceivable issue.  If consultants aren’t given sufficient time and opportunity to inspect existing site conditions, they tend to think there’s little alternative but to pass the buck.

Relationships and their place.  Push vs. Pull

Engineers haven’t been the same since we took the trains away from them…

Professional conduct

Much of the hijinks mentioned above is more prevalent during recessions than at other times.  Given the choice, most professionals would rather pursue legitimate work that offers sufficient time and opportunity to do a good job.  GC’s are by definition, subcontracting the bulk of the work they bid. Viewing the Construction Documents (CD’s) as a liability, many estimators believe their role is to ensure that every scope item is included in one of the subcontracts.  When the focus is exclusively covering your hind end, it’s easy to miss opportunities to better understand where the subcontractors are coming from.  Subcontractors bidding to notorious cowards will be reluctant to offer insights into how discrepancies in the plans may offer opportunities to win.

Opportunity may only knock once

GC estimators that don’t dig in and really make the effort to know what’s going on with a project are constantly caught flat-footed when subcontractors call with questions. Whether its incompetence, cowardice, or a lack of commitment, the result is the same; subcontractors will take their best ideas to wherever they’ll profit the most.  In practical terms that can mean competing GC’s will get better pricing or it could mean that subcontractors make tough decisions about how best to “play” the situation.

For example, I’ve encountered situations where subcontractors choose to take a chance on a scope discrepancy without telling the GC estimator because they had proven themselves to be unwilling and/or unable to take a measured risk. Since the subcontractor can’t rely on protection from the GC if their gambit doesn’t work, they hedge their bet by keeping a goodly portion of the potential savings.

Don’t be an obstacle to success

The GC estimator rolls into the bid carrying that subcontractor because they’re lower than their competitors but fails to fully capitalize on what that subcontractor relationship has to offer them.  The relationship becomes more about what the subcontractor can achieve despite the GC estimator than what the team can accomplish together.  It’s a short leap from not sharing the bounty achieved through special insight, to purposely working on deals to exploit weak GC estimators.  Subcontractors who view themselves as king-makers aren’t likely to be positive force in the market.  This is how they get their start.

“I don’t know what this is, what do I do?”

None of which is to say that a GC Estimator can’t rely upon their subcontractor relationships to help them with issues and scope items they don’t fully understand.  Skilled trades require an incredible amount of specialized knowledge that a GC estimator couldn’t be expected to possess.

There is however a difference between blind leadership, and taking the council of trusted allies.  The GC estimator should be consulting with trusted subcontractors on scope items they don’t understand with the goal of building a working knowledge of the issues involved.   It’s an odd thing but it’s often possible to change the dynamic of a bad relationship by asking for help in understanding what the other person is facing.   Be a good student and retain what you’ve learned to earn a reputation as a consummate professional.  Before long you’ll likely encounter a situation where you’re relating something you’ve learned to a bidder thereby re-paying the market for its investment in your education.  Keep that in mind the next time you hear a “dumb” question.

Once again, there’s greater benefit to all concerned when professionals actively seek out responsibility to pull the project forward rather than pushing responsibility for incomplete work down the line.

Civilization is in retreat because it’s become unfashionable to do the right thing.

Understanding the critical relationship between quality outcomes and individual professionalism at every stage is the metaphorical keystone supporting the project arch.   Every buck that’s passed get’s a “vig” tacked on and when the bill comes due (and it will) the project will pay.  It’s important to break from thinking of your task as being done in a small room with a door in and a door out.  What gets passed down the line matters.  Many projects with supernaturally bad design teams get built anyway.  Just because someone passed the buck to you, doesn’t mean you must pass it on in turn.  An estimator converts the nebulous construction documents into a real and enforceable, construction contract. Some Project Managers have a well-earned disdain for estimators who’ve bound them to build a disaster with a schedule and a budget. Don’t be that guy.

Actions have consequences, make certain that you are pulling in the right direction and that everyone “downstream” is as well.  Project Management needs to keep the promises made at the bid stage, and they need to ensure subcontractors hold up their end as well.  Otherwise subcontractors may again “game” the estimator knowing they can exploit Project Management once they’ve slipped past the bid stage.

What does the client care about?

An awful lot is put out about when to invest in this or that.  Terms like “Value” become little more than boardroom chaff.  In reality the client is very concerned with value, however what they value isn’t always so obvious.  Answering questions and making them feel good about their purchase may be contingent for a sale however it’s not what they THINK they’re paying for.  In fact, most of the talking, drawing, thinking, and demonstrating doesn’t really factor into their concept of what they’ve hired you to do.

What they see

To the client, actually making the thing is where the magic happens.  Those are the skills they imagine they’re paying you for.  Since they perceive your pre-construction time as “free” they indulge in every tangential thought that comes to mind.  During a project they perceive the job site to be chock-full of workers and materials so changing this or that seems easier than if they imagined that change as a separate job going out to bid.  Design teams are keenly aware that their mistakes, oversights, and mis-communications are costing time and money.  During construction the client typically views the design team more as an adviser and quality control enforcer than anything else.  GC’s’ are generally loath to expose design team shortcomings for fear of retribution.   Diplomatic efforts to price necessary change orders stemming from design shortfalls can devolve into bickering about cost legitimacy versus design integrity.

The client and design team camp may shake their heads at the gall of the build teams prices while the build team shares their exasperation with projects that are changing direction while the clock runs out.

The pattern of pushing project responsibility down the line without each tier pulling their own weight is the root cause.  Returning to the opening of this article; “Building relationships” need not be a vacuous and misdirected approach to success.  Clients are not in a position to actually know that decisions to short-change a fully developed design will cause the problems they sought to avoid by hiring a design professional if nobody has the courage to tell them so.

Relationships and their place.  Push vs. Pull

“Sure you’re attracting lots of attention, I’m just saying you might take a different route next time”

 Making mediocrity acceptable through placation, participation, and proliferation of stupidity is not “worth it if you get the job”.  Lowering standards and passing the buck are the stock in trade of hacks.  Blurring the line between hacks and pros from the clients perspective represents a strong deterrent to future business.

Be better, be honest, and don’t be afraid to speak up.

 It’s in everyone’s best interest to speak truthfully with the client.  Many incomplete designs are put to bid by design teams who are deeply (and silently) frustrated by the client’s miserly haste.  GC estimators often succumb to pressure from marketing and pre-construction directors to bid risky designs.  Pushing rather than pulling.  If instead the GC Estimator took the opportunity to present solutions before bidding, they might persuade the client to make changes that profoundly improve their odds of an ideal outcome.  At worst, the estimator could articulate the issues that could hurt the client, pulling them in the right direction.

Now it’s time to bring this all back to relationships.  In my experience, there’s a contingent of dubiously moral folks in the market who rely on “relationships” to cover or offset the fact that they’re neither a good value, nor a market leader.  They are “connected” and often use their connections to exploit or extort the industry.  It’s foolish and dangerous to allow these people to “do you a favor” because they’ll be sure to demand what you “owe” them.  Working around them will incur their wrath as well.  It’s bad business wherever they’re involved so pick your path with care.

At the opposite end of the spectrum are the people who are a veritable institution of good value, straight dealing, and integrity.  It’s a privilege to work with these rare individuals.  The sad truth is that they are rare no matter how common it is to read an advertisement extolling these virtues.  I hope this article has inspired you to choose that legacy for yourself.


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© Anton Takken 2014 all rights reserved