Every estimator can recall his/her first actual takeoff: gazing at a 40 page drawing set and not knowing how to start counting. Construction estimating is often daunting on the surface, but can be done in a systematic way. If you’re looking to train a new employee, grow an in-house estimating team, or simply want to know what your estimator does all day, here is a step-by-step look at how it’s done.
Step 1: The objective is to read the Full Scope before touching a number
The number one thing inexperienced estimators do wrong is start taking-off before they fully grasp the project. Read drawing/specification and addenda word for word. Include the type of project, size, site conditions, and any special requirements, such as phased construction, restricted access, government standards and compliance, etc., or any specialty systems. This is the initial pass, when you can pick up scope items that you may not spot when you’re heads down counting quantities.
Step 2: Do the quantity takeoff
This is the base on which all other actions are dependent. Using the drawings, measure and count each material and labor item that is needed: square feet of floor, linear feet of conduit, number of fixtures, cubic yards of concrete, etc. Some of the software available (PlanSwift, STACK, Accubid, etc.) can help greatly, and with digital takeoff, there is less chance for error than with manual measurement, but the knowledge of what to count and what it means in terms of labor still must be on the estimator’s own.
Step 3: Apply Current, Localized Pricing
Finalize pricing of materials, equipment and labor costs. This is where experience comes in handy, as opposed to the guess. Materials can vary in cost, price from supplier differs as per location and labor charges are very different as per city and state. A team that provides a California-based team of construction estimating services clients rely on must have current information about the labor market in California and the info required by the Title 24 of California’s building code; a team that provides a Florida-based team of construction estimating services clients rely on must have current information about the hurricanes and the material specifications required by the code, and the pricing of the materials supplied by providers in Florida. One of the most frequent methods of drift from reality is the use of old or general national averages.
Step 4: Account for Labor Productivity
While quantities and unit prices may give a quick idea of the time required for work, they are not a comprehensive representation. Consider crew size, site access and its complexity, and realistic productivity rates for the particular trade and area. A crew on a retrofit in an urban environment will take longer than the same crew on a new construction site – and this should be reflected in the labor estimate not three weeks into the job!
Step 5: Add Overhead, Markup and Contingency
No business can run on just the direct costs. Include overhead (office costs, insurance, equipment depreciation), an appropriate profit margin, and a contingency allowance to match the level of risk for the project. One of the most frequent reasons for jobs that seem to be very profitable and aren’t are because of a lack of contingency or an underestimation of contingency.
Step 6: Review, Reconcile and Finalize
Prior to anything going out the door, check the estimate with the original scope from Step 1. Identify any discrepancies in the trades, verify any large or small numbers that don’t make sense, and ensure that the total makes a “story”. A second set of experienced eyes picks up on things the initial estimator may have overlooked, while absorbed in the details.
The places where Most In-House Teams Stumble
This process is something that could be learned, but it doesn’t happen easily, in multiple trades and regions, and under the pressure of the deadline for securing a job. Whether bidding in other states with varying code and labor environments, or simply wanting to build a team of employees that can understand the ins and outs of construction estimating, many general contractors, construction managers, developers, design-build companies, electrical subcontractors and even government contractors prefer to hire construction estimating services to handle the task instead of creating an entire in-house team.
Construction estimating services California and construction estimating services Florida are often sought after by companies for their local knowledge and expertise in the region, as well as for construction code compliant estimating support.
Put the Process to Work to create a product
Whether you do construction estimating for your own company or are reviewing a partner’s companies for the ability to estimate a construction project, it’s useful to understand how construction estimating works. Our team performs this process every day for our clients throughout the nation, with specific regional experts in California and Florida.
Looking for a faster, clearer price quote on the next bid? Call Concept Estimating today.
