This article is the third and final installment in the “Estimating Departmental Checkup” series. Part one covered departmental organization. Good organization will allow for maximum productivity and accuracy. Part two covered departmental leadership. Effective leadership is vital in leading a quality team of estimators. This final article will focus on estimating principles that will minimize mistakes and provide you with confidence on bid day. How many of these questions can you answer “YES” to?
1. Are estimates to be completed a minimum of 24 hours before the bid is due? The two main steps in producing an estimate are quantifying and summarization. Rushed takeoffs will usually lead to mistakes and duplications. By completing the quantification process of the estimate at least 24 hours before the bid is due, the estimator can focus on summarizing the bid accurately on bid day.
2. Do you have a master list of bid exclusions and qualifications? Each project will have different exclusions and clarifications. Maintaining a master list of exclusions will help prevent omissions. First, create a template with a complete list of bid exclusions and bid qualifications. Then, modify it for the specific project being bid.
3. Do your estimators maintain quotation files? The majority of projects require the estimator to request quotations on specified equipment and material. Suppliers sometimes may not produce the requested quote. Keeping duplicate quotations on various equipment will provide the estimator with a quick reference. This could include the following: wire, cable, disconnect switches, and cable tray. Price adjustments will be necessary, depending on the date of the previous quote being used.
4. Do you use an electronic pricing service for current market pricing for your estimates? Some estimates can have more than 500 items in the takeoff listing. Most estimating databases contain more than 40,000 items. Manually maintaining this pricing will take an enormous amount of time. Electronic pricing services provide you with great value in maintaining current retail pricing and net pricing for bidding purposes.
5. Do you have an estimating sequence for your estimators to follow? An estimator should have a systematic sequence in preparing estimates. The use of standardized estimating procedures is essential for speed, accuracy, and consistency. Consistent procedures will produce consistent results.
6. Do you have a “turn-over” procedure of the successful estimate to your project manager? Once the project has been secured by the company, the work is just beginning. The main objective of the estimator is accuracy in completing an estimate. The main objective of the project manager is to be efficient. The project manager can be his or her most efficient with an organized detailed report of the estimate. This report should include the following: a detailed listing of materials, all package quotations, and the bid summary. In addition, providing a list of conflicts in the contract documents to the project manager will give him or her a jump-start on minimizing problems later in the project.
7. Do you have a policy for dead estimates? Estimating overhead costs is expensive. Depending on the project size, you can easily invest several thousands of dollars of labor to produce a single estimate. When bidding a project, review your record of dead estimates for a similar project. By maintaining dead project files, this will provide data for a similar project being bid.
8. Do you have an estimate checklist? Every company needs a estimate checklist for their estimators. The checklist should resemble your estimating sequence. The checklist should guide the estimator to complete the estimate in logical steps. This checklist should begin with estimate preparation and end with checking the estimate for completeness.
9. Do you have a bid summary checklist? Using checklists will minimize mistakes and omissions. No matter how you summarize your estimates, you must have a means of making sure that you have included all necessary costs (both labor and material expenses). Create a bid summary checklist that is appropriate for your company and market.
10. Do you have a telephone quotation form? Many times, suppliers and vendors will call the estimator with a last-minute quotation. Having a form to record pricing, freight charges, and quote exclusions will prevent mistakes and confusion on bid day. This form should include lines for the project name, bid date, name of the supplier, and the person providing the quotation. The estimator should request from the supplier that the quote be faxed or emailed for the record. This will eliminate any disputes later over pricing.
11. Do you have a bid follow-up policy? Oftentimes, an electrical contractor will submit a bid price to a general contractor and never know where the company finished in the bidding results. Either the estimator of record or the chief estimator should follow up on bids and try to enter negotiations to sign a contract. Failure to follow-up bids submitted will result in fewer successful projects secured.
12. Do you have color codes for different conduit installations? When performing takeoffs, most estimators have a color code scheme. For example, luminaires are highlighted yellow, fire alarm devices red, equipment connections green and so forth. However, having a color code for the method in which conduit is installed is extremely wise. Developing a color code for “how” the conduit is going to be installed will help the chief estimator know whether the estimator understood the execution portion of the raceway specification. The following is a suggested possible scheme for conduit installation methods: exposed (yellow), slab or UG (green), and concealed (red).
What were the results of your estimating checkup? To give yourself a percentage score, simply divide your number of “yes” answers into 12. For example, nine “yes” answers result in a score of 75%.
So, after completing this three-step checkup of your estimating department, how is your departmental health? Involving team members for solutions in any areas that need attention will build esprit de corps. Make changes where profitable, and be sure to have regular checkups.
Kiper is an independent electrical estimating trainer and consultant based in Niagara Falls, N.Y. He can be reached at [email protected].
