Executive Summary Many approaches exist for estimating – two of them being a theoretical approach versus a production history approach. One is based on what you think, the other on what you know. These terms may not be familiar to you, but the difference in execution may be. What is […]
Using a Static Indirect Bid Item in your Bids
Executive Summary Create a static bid item in all of your bids to serve as a checklist for indirect costs – both jobsite and corporate indirects! The bid items in a job. Whether you make up the bid items in your proposal, or the client gives them to you, or […]
Your Equipment Rates: Where to Start
Executive Summary Whether in an estimate setup or change order negotiation scenario, if you do not know your equipment rates, start with a baseline cost. You know your equipment rates? You own ten, one hundred, or even a thousand or more pieces of rolling stock. Do you know what they […]
Contingency Doesn’t Exist When Low Bid Wins
Executive Summary When an owner determines the method of award is that the low bid wins, they shouldn’t expect contingency in a contractor’s bid. Here’s what they should expect. What is Contingency? If you go to google.com and type in “definition of contingency” you get this: [QR] A provision for […]
Pre-Bid Questioning to the Owner or Yourself
Executive Summary Many challenges in a project can be flushed out in the pre-bid phase with clear and concise questioning to the Owner. Consider these questions as a part of your bidding procedure. The Bidding Procedure The procedure’s quite simple: there’s an advertisement phase, an estimating phase, and then the […]
Setting the Bid Unit Price: 2 Main Reasons for Unbalancing
Executive Summary Setting of bid prices on a unit price bid can have significant effects on the financial performance of a project. Set your unit prices in your proposals to have positive impact. Be strategic. Balanced Bid PricesA balanced bid price is when each of the bid items shares equally […]
Closer to 1.30, not 1.50
Executive Summary A common mistake in estimating is the cost of an overtime manhour. Overtime is generally not one and one-half times the straight time rate. It’s usually closer to 1.30. What’s in a labor rate? A labor rate is a combination of three numbers: the base rate, the tax, […]
An Hour’s not an Hour, and it’s Certainly not a Day
Executive Summary There are differences in an hour: a manhour, a crewhour, a 50-minute hour. And an hour’s not a day, so there is another calculation for a manday. Here is a quick explanation of these estimating terms. Definitions There are several ways to estimate the cost of construction work. […]
Estimating: It’s an Art and a Science
Executive summary. Construction estimating isn’t wholly about the numbers. It involves a “feel” in its execution. This is why many say estimating is an art and a science. What is estimating? An estimate is just that. An estimate. Not an exactimate. Getting low on bid day or successfully negotiating a job isn’t […]
The Joint Venture Estimate: Setup is Key
Executive summary. Whether bidding a job together in one shared document, or running comparison estimates, the setup in a joint venture effort is critical to success. Consider establishing the following before starting your estimating effort. And, be consistent. Be consistent. Why setup is so critical. There’s nothing more important in […]
Earthwork: What’s a Cubic Yard?
Executive Summary A cubic yard is not a cubic yard when it comes to earthwork estimating and field operations. Know the difference to best estimate productions and to negotiate pricing in the field. Estimating Earthwork Let’s say you’re at your daughter’s soccer game and you’ve been asked to excavate a […]
Introduction to Contractor Estimating
Executive Summary. The reader is introduced to the process of contractor estimating from initial project evaluation through the call for bond, the takeoff, the actual estimating of a civil project, an even the turn in of the bid. Bid Evaluation and call for bond. Contractors consider many facets of a […]
Unit Conversion
Executive Summary Converting from one unit of measure to another is critical for any position of management in a construction company. Using the internet is one way of doing it but knowing the simple process of fraction multiplication and the value of the number “1” gets it done too. Unit […]
Cost versus Price
Executive Summary: Cost and price are two different measures of money in a construction bid. Knowing the difference is fundamental and can improve profit. What is cost? Cost is the expense associated with an activity or item. It is just cost. It has nothing to do with price. In construction […]
Unbalancing a Bid and Cash Flow
Executive Summary Cash flow is vital to a contractor’s survival. Taking advantage of setting unit prices in a bid, and also knowing cash strangle points is imperative for business owners and project managers. Here’s a Video The first ten minutes of this video (presented by this article’s author) is a […]
The Difference Between a Good and Great Estimator
Executive Summary Estimators are difficult to find, but one way to determine whether you have a good or great estimator on your staff, or in the interviewee chair, is whether or not they talk productivity rates or unit prices. What is construction estimating? A construction estimator has many skills – […]
Why is the Accounting Department Telling Me How to Estimate?
Executive Summary: Estimators know the construction work while the accountants know the financials. These two parties must work in harmony to benefit the company and their own livelihoods. This article recognizes the needs of both parties. The dilemma and end goal. Most firms beyond the “Mom and Pop” stage, have […]
The Importance of Construction Cost Estimating for Civil Engineers
In episode 066 of The Civil Engineering Podcast, Anthony Fasano talks with Scott Jennings, P.E. principal of SJ Construction Consulting, LLC about the importance of cost estimating for civil engineers. Here are some of the questions asked of Scott: Can you walk us through the process of putting together a construction […]
Hawaii Case: A Subcontract is Valid and Binding Without a Signature
Executive Summary: Contractors too often allow their subcontractors to commence work without a fully executed subcontract. A contract between the two parties can be binding even without a signature. Learn from this June 2017 case in Hawaii how a contract can be formed without a signature. No signature required. Pacific […]
Owners Need to Stop Expecting Filet Mignon on a Hamburger Budget
Executive Summary: An August 19th, 2017 cover page headline in The Economist magazine reads Construction: the least efficient industry. Their general position on our industry’s efficiency I didn’t think was far off, but the blame was misplaced. Owners need to help turn this industry. For their own sake, not just […]
Including the Portion of Corporate Overhead in a Bid
Executive Summary: Determining how to account for the portion of corporate overhead to be included in a bid is a calculation that every company makes a bit differently. Learn the definition of corporate overhead and how it is included in a bid. What is corporate overhead? Corporate overhead is the cost […]
Determining Equipment Rates in Estimating
Executive Summary: Equipment cost within an estimate is one of the most common areas to make large scale adjustments in a bid’s price. It is also a large component of a heavy/civil construction company’s bid and balance sheet. Because of these reasons, it is vital to know what your fleet […]
The $5 Casio: Your Best Tool
Executive Summary: With all of today’s fancy and complex tools available in the marketplace, nothing is more important than simple calculations (and common sense). Rely on simplicity and basic math to check your work. The Message: I travel the country frequently helping contractors. I help clients one-on-one in dirty old […]