In Part 1 (February 2018 issue), we learned to care for the estimate preliminaries. In Part 2 (April 2018 issue), we learned the steps for quantifying the estimate, requesting material pricing, and caring for any subcontractors. In this third and final installment, we will look at the steps necessary to check the estimate that will bring confidence on bid day.
Step 11: Check, review, and analyze your estimate.
First, check the estimate for omissions. If your company uses estimating software, the program should allow you to print a materials report. Review your report, looking for items that may have been missed during the takeoff process.
Second, check for material mistakes. The most common mistakes are the duplicated and missing items.
Third, analyze your estimate, and make any necessary adjustments. Remember this important principle in estimating: Focus on what matters. That means you must identify where the greatest risks are in the project — both in material and labor. One example of material risk would be copper wire and cable. If copper wire and cable make up 50% of the material costs, then the estimator must be sure that these materials are priced at current market levels. Labor must also be analyzed. If the conduit, boxes, and hangers make up 65% of the labor hours, the estimator must double check the labor units used for this portion of the work.
Fourth, check the estimate labor per device. When the estimate is broken down by systems such as lighting, branch wiring, and fire alarm, then the hours for each device in each system can easily be determined. Simply divide the total labor hours of a given system by the total number of devices, and that will give you the hours per device. The estimator that does this consistently will notice a pattern of hours per device. This is a great way to check an estimate.
Fifth, the labor must be checked for adjustments due to installation difficulty. It will require more labor hours to install conduit at 40 ft in a vehicle maintenance building than it will in a space with a 9-ft ceiling.
Sixth, all basic and quoted materials must be checked and verified. The basic materials, such as conduit, boxes, devices, and hangers, are typically priced using a pricing service or through local suppliers. This is a much better option than maintaining your own prices manually on 25,000 different electrical items. Most commercial projects require quoted packages, such as luminaires, panels, switchgear, and fire alarm systems. These quotations must be checked for accurate quantities and spare parts. Be sure to note lead-time on these quoted materials. When working on projects with aggressive schedules, long lead-time items may require extra costs to expedite the delivery date.
Step 12: Estimate temporary power requirements.
Temporary power and lighting on some projects can be expensive. If there is no existing local electric utility power source near the project site, then either generators must be used or the power must be extended to the site. This may require utility poles and overhead power lines. If the power must cross an existing roadway, permits and fees may be required by the authority having jurisdiction (AHJ).
A careful reading of the temporary power requirements in the CSI MasterFormat is necessary to arrive at the costs for a project. Per the document, temporary power requirements are listed in Section 01 51 00 Temporary Utilities. Temporary power costs may include:
• Establishment of a temporary service or extending of an existing service
• Monthly consumption charges
• Lights per square foot of the construction area
• Convenient receptacles — the quality is usually based on so many per square foot
• Connection of construction manager’s trailer
• Connection of each contractor’s trailers
• Security lighting around the site perimeter
• Grounding of any temporary fencing
• Connection of specialty equipment of various trade contractors such as welders
• Temporary generation.
Depending on the project and temporary requirements, additional labor hours might be required for the following: maintaining light stringers, removal of temporary power lights, receptacles, and generator fueling and maintenance if temporary power is required 24/7.
Step 13: Check for all addendums.
Most projects will have addendums issued during the bidding stage. The estimator must check that all addendums have been received. Most addendums will address items for multiple disciplines. The estimator must carefully review all addendums and address all electrical items in the estimate. Remember, addendums may change more than material quantities. Changes may include items such as the project’s schedule, phasing, staging areas, allowances, and working hours. These will have an impact on the electrical contractor’s price.
Step 14: If quoting to general contractors, send letter with scope of work early.
When the electrical contractor is quoting as a subcontractor to the general contractor, a scope of work letter is necessary. This scope letter is the contractor’s terms and conditions of the bid. It is vital to have a clear scope letter with your quotation. Your scope letter to the owner or general contractor should include the following:
• Base bid
• Alternates – indicate add or delete
• List of drawings, list date, and any revision numbers
• Specification sections covered by your quote
• List of addendums and dates received and included
• Your company’s “Terms & Conditions” at the end of the quote
• Length of time the quote is valid
• Change order policy
• Back charge policy
• Delay clause
• Payment terms
• Exclusions or inclusions:
• Overtime or off-hour work
• Hazardous materials disposal
• Power company and utility charges
• Demolition — make safe for others to remove
• Taxes and/or bond
• Temporary power
• Trash removal
• Sales tax
• Rock removal, if you are responsible for excavation
• Roof penetrations and sealing — be aware of roofing warranties. Check who is the current warranty or maintenance holder.
It will prove helpful in your relationships with general contractors if you can provide your scope letter the day before the bid is due. This will allow you to adjust your price per a well-defined scope.
Step 15: Review with chief estimator.
Reviewing the estimate with the chief estimator is necessary to properly bid a project. The estimator must prove to the chief estimator that the takeoff is properly quantified, materials priced to specification requirements, and labored per the project conditions. This will bring assurance when the bid summarization is done.
In summary
In this three-part series of the estimating sequence, we have looked at the estimate preliminaries, performing the takeoffs, and checking the estimate. The benefits of having an estimating sequence are as follows:
• Estimators will have increased confidence in their work.
• Increased speed and greater estimating departmental production.
• Increased organization.
• Increased estimating accuracy.
• Reduced estimating omissions.
• Confidence during the bid summarization.
Using an estimating sequence preparing estimates is essential for speed, accuracy, and consistency. Consistent procedures will produce consistent results.
Kiper is an independent electrical estimating trainer and consultant based in Niagara Falls, N.Y. He can be reached at [email protected].
