8 Questions (cost & estimating 2)

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Lecture 3- The Estimate

Role of Estimating

 Secure work for the company

 Bid too high – lose work

 Bid too low – lose money

 Estimator has great impact on the success of the company

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3

To Bid or Not To Bid  Through personal contact and the reporting

services, the contractor finds out what projects are out for bid and then must decide which projects to submit a proposal for. Typically they are considering the following factors:  size and location of project

 type of construction and payment schedule

 probable competitiveness

 labor market and subcontractor market

 quality of drawings and specifications

 completion time and penalty

 estimating and bidding time

 need for work

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To Bid or Not To Bid

 Project funding

 Owners

 Availability of qualified personnel

 Trade

 Management

 Availability of equipment

Organization

 The estimator's work must be kept organized to the extent that in unforeseen circumstances, someone else may step in, complete the estimate, and submit a proposal on the project.

 Having a plan for completion of the estimate

 Maintaining up-to-date files

 The estimate of the project being bid must be systematically done, neat, clear, and easy to follow.

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Estimating Notebook

 A notebook should be kept for each estimate prepared. It should be broken down into several areas:

 the workup sheets

 summary sheets

 errors and omissions sheets

 the proposals received from subcontractors

 proposals received from materials suppliers

 a listing of all calls made to the A/E

Planning the Estimate

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Planning the estimate

 When will the work be done

 Who is responsible

 Bar chart schedule may be used

Bar Chart Schedule

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Quantity Takeoff

 Done on workup sheets

 Must list everything needed for the bid

Estimating Sheets

 Workup sheet  Used to make “work up” the quantities/cost of

each item

 Summary sheet  Summarized quantities/cost on workup sheets

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13

The Estimating Process - 1  The estimating process begins after the

firm has decided to bid a particular project.  Acquire the contract documents

 Check the documents to be sure it is complete

 Scan the Dwgs. to get a feel for the building

 Review MEP and structural drawings, floor plans, wall sections to see what materials are being used

 Review the spec. and take notes on unusual items

 Get a feel for the project

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The Estimating Process - 2

 attend any prebid conferences

 perform a site visit and take pictures

 call a meeting with the people who would most likely hold the key supervisory positions if you get the job

 develop a buyout schedule

 develop the subcontractors contract documents and attach the scope of work

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Site Investigation (Visit)

 Access

 Utilities

 Drainage

 Transportation facilities

 Required protection or underpinning

 Storage and equipment location

 Soil conditions

 Local ordnances

 Permits

 Licenses

 Local labor and union rules

Site Investigation (Visit)

 Local material and deliver pricing

 Subcontractor availability

 Road conditions to the project

 Housing

 Banking

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The Estimating Process - 3

 send out postcards (or e-mail) to subs and suppliers and ask them to examine the contract documents and provide quotation

 send copy of the project's bond and insurance requirements to the appropriate insurance and bond companies

 perform the divisional estimate

 establish viable subcontractor prices

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The Estimating Process - 4

 carry over the information on the workup sheets to the summary sheet

 double check all figures (have someone go over the figures with you)

 apply the applicable taxes, bonds, insurance, overhead, and contingency

 finalize the bid by adding profit

 make one last call to the A/E office to be sure you have received all addenda

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Ethics of Estimating

 Ethics is defined as the code of conduct or behavior governing an individual or group.

 Ethics are to be taken seriously and sincerely.

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Bid Shopping

 Bid Shopping: The use by the GC of one Sub’s low bid as a tool in the solicitation of lower bids from other subcontractors of the same trade.

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Bid Beating

 The act of the GC whereby s/he gives a “most favored sub” the opportunity to beat a previously submitted low bid.

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AGC Code of Ethical Conduct

 The figures of one competitor shall not be made known to another before the award of subcontract, nor should the contractor to secure a lower proposal from another bidder use the figures of one competitor.

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Ethics in Procurement

 Suppliers favor a contractor to be a part of the successful bid.

Specialty Contractors

 Advantages:

 Reduced risk

 Disadvantage:

 Less control

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Materials

 Quote should include:

 Material cost

 Freight

 Taxes

 Deliver time

 Terms of payment

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Errors and Omissions

 Make list (via query sheet)

 Get clarification from architect/engineer

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Common Error to Check For

 Math errors

 Omission of items

 Time to complete the project

 Construction waste

 Material waste

 Transferring number from one sheet to another

Common Error to Check For

 Adding a line to a spreadsheet and not including it in the sum

 Set up errors in software

 Formulas

 Not adjusting typical productivity rates

 Improper use of software

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Errors and Omissions:

 the specifications take precedence over drawings

 Dimensioned figures, and detailed drawings take precedence over scaled measurements from drawings

 all important discrepancies should be checked with the A/E office.