Construction Estimating and Bidding Training

[Music] what we're we're gonna try to go through today and get these learning objectives is is understand the different types and delivery models that are associated and why we have to estimate how to set up a complete estimate understanding the soft costs the non-bricks and mortar piece that have to go into those estimates and then getting a trade perspective the subconscious side of what goes into it and how us as gcs and cms take that information and put it into the overall estimates we can provide a number so that being said um we'll talk about the different types of estimating there are and why people request pricing really there's some say three major ways of requesting information from an owner and that is an rfq which is requestful qualifications an rfq what they're asking for is basically what are your qualifications what is your strength what have you done that has been comparable to these types of projects and they'll set a team member early on usually this type of process happens before documents have really even started an rfp is on the similar natures but they usually ask for a cost component associated with some level documents it could be something that's sd or even a concept or a narrative and then a hard bit lump sum is when document's 100 complete and uh you're able to get a full number from that and usually that's what you're when people select that once on the documents so all these all of these pricing methods come up with uh the level of document completion document completion i guess from the in a architectural community can come in the form of say four different four major levels conceptual which is nothing more than a napkin sketch it could be a narrative we want to build a 70 000 square foot office building with so many square feet per office basic stuff sd documents are typically when the documents are 25 complete um dd is when they're 50 complete and production documents are 100 percent 100 documents are typically where they get to the permit level when documents are submitted to the city for approval and permits and of these levels of completion is how they kind of fit into those other levels of contracting lump sum as far as a delivery model is concerned is a traditional hard bid lump sum lowest responsive number wins the day and you're bound to what's on the documents and vice versa with the architect and the owner what's on there what you see what you get cm at risk is another delivery model in which a construction manager will be brought on board early in the process you would take a a set of documents and they could be at dd or at sd or cds at that point and what typically during this delivery model the owner is looking for a partner or a person that's collaborative with them to give them a guaranteed maximum price so that at the end of the day they know where they're going to be at but the but the contrary has taken some risk in filling in some of the holes that the architect may not have gone to this kind of ties into where that level of document completion is at and you're not you're not going to have all the full details at the end of the day agency cm is a delivery model in which the construction manager or general contractor would take the documents and administer the management process but not necessarily hold the contracts you see a lot of this relating to municipalities in which the owner will hold the prime contract and then you'll see them on board they'll administer that process they'll also help administer the bidding process as well and then design build is similar to a cm at risk the difference here is that the architect now works for the contractor it works very well in a delivery model where you're fast paced you have to get in the ground while they're still finishing documents from a kind of from a contractor's perspective it's a good way to be able to control costs because you're the ones that are feeding and working with the architect throughout the process and it gives the level it gives the owner a level of reliability that at the end of the day you're still out there at gmp but you're working through and cutting some time out of the out of the process any questions you know i don't want to need someone like a lecturer if you have any questions alon please feel free to ask any questions regarding delivery models and as document completion levels no okay the next stage we're going to turn it over to a group of our gccm's and they're going to explain to you uh basically setting up an estimate i'm brent raymond i'm not the johnston normally i'm a project manager i take my hand at estimating every now and then i usually have to live with what estimators give me setting up the estimate when you're setting up the estimate typically as a general contractor and this is important to note even for the subs you will go and you'll you'll take an excel form and you'll go down with the csi code you'll look in the specification book and it's a great way to start the skeleton of your estimate look at what the owners and architects are saying belong in the building what products belong in the building concrete masonry and then all the specialty products because that's you don't want to miss anything the second part is you're going to look into the scope looking into the plans a lot of people are going to want to start with the plans first i highly suggest you start with the spec book because you may miss something in the plans and it's going to be in the specification book and if you owe if their specification about a fancy pants tack board and you don't happen to see it you need to that reminder to go back before you miss a fancy pants tack board because it's on drawing 56 of 156 and and you're caught without the funds for that for that tag board now that you have a skeleton a way to track your costs um you need to for a gc we need to make our plans available to uh to subcontractors typically we do that through the builders exchange or we have our own plan rooms i do want to note that there's one tricky builder's exchange is great a lot of us have probably done it we've gone online we've we've looked up the things that are ours especially subcontractors the one thing that it doesn't give you it doesn't give you the ability to flip the drawings and see what might be yours on drawings that you're not really looking for i i know how it is you're you're you're plumbing and you want to open up all the plumbing pages and look at the at the plumbing aspects of it but you didn't open up the mechanical drawings and you find that the architect or engineer put requirements for some of your pads you know concrete pad concrete utility pad by plumbing contractor and they put it on the they're tricky that way they do that and so the plan room is great anytime you can go to a plant room or if you're a general you're looking at all the drawings to get a good idea of what the entire project is um builders exchange great but you know always be aware that there could be scopes of your work not specifically on your drawings is there anybody here being caught with a front-end spec a requirement that may you may not have thought of uh i'm going to throw out one phasing has anybody did a job not realize the project's phased and then you're into the job and you find out wow i didn't have that covered or yeah strange cleanup requirements strange hours you know uh requirements that's typically all found in the front end of the spec and i'm going to say most of our mistakes all of our mistakes the lion's share of them is going to be in that that document the the front spec book the solicitation if you're a subcontractor or gc you need to read those things and find out all the little nuances that you're going to owe on the project a great example is for general contractors a lot of cms will require us to not only provide them with an office trailer but we'll have to provide equipment refrigerators a coffee maker for their trailer typically it could run up to ten thousand dollars just to fit out the trailer for the cm and then you have to pay for the rental of the trailer uh on one particular job we had to run a temporary sanitary to the trailer so they could have a working toilet if you miss those things those are big big dollar items down the road that you could get caught with so if anything i speak about the one thing i would really really have you remember is look at the front end uh that's where all of those strange requirements will happen even if you're a subcontractor with a specific scope of work you need to know what the what the general contractor is going to require of you because when when we hire a subcontractor we just don't hire you for your scope of work we're hiring out based on the complete package that was put out there all the specifications the a to b all the addendums the whole package so and then the last item is attend pre-bid meetings now granted as a subcontractor you know it may not be able to attend every pre-bid meeting you're going to have to get a feel for you know if if plumbing and i'm going to stay on plumbing if there's a large scope of work then you need to attend the pre-bin meeting go through that front-end spec first have the questions armed because the other thing is that you do is there'll be vague issues and you ask those questions prior to bid it gets put into an addendum and that arms you that arms you either to price it up or it arms you to defend yourself once you're in the contract that you don't have to you know perform a specific task at work so read the front-end specs attend the pre-bid meetings be armed with some questions to be able to ask you know the owner a couple of typical questions that general contractors will ask are permits you know a lot of times uh if it's if it's city work or or government work the permit is typically by you know the city or the entity that's performing the the the construction but if it's a private client they may not have the permits they may require the general contractor to pick up the permits tap-in fees tap-in fees are requirements there their fees that are assessed by how much water or sewer use the building is going to have and they could be a large sum in some buildings they could be hundreds of thousands of dollars those are great questions if they're not spelled out in the specifications or if the specification says permits and fees by contractor you need to know does that include the tapping fee some cities that's part of the design fee and it won't be required and some it's part of the building permit and it would be required and insurances as well and my cohorts will talk about different types of insurances but as they're telling me about the insurances remember to look in the spec book find out you know what's going to be required of you and be able to be able to ask the owner and as you go through your life of estimating you will make mistakes and you won't repeat them twice and you'll have that little list in your head or on on your desk and as you're going through the spec book did i see this did i see that you know and those are the and when you don't see them those are the questions you're definitely going to want to ask now i do think i've used up my eight minutes so uh i'm gonna i'm gonna turn it over to mr vega who's gonna give you a little bit more detail about the breakdowns and general conditions again mark vega with infinity construction i'm going to kind of expand on what grant was talking about a little bit uh so my first question for you guys is um who knows the csi codes anybody here know all the csi codes now i'm going gonna ask one of these guys what's concrete three thirty three hundred what's site work 2200 it used to be they just changed the csi codes a few years ago so for all of us who've been doing this for however many years the csi codes have changed it used to be 0 through 16 or 17 for electrical and technology now it goes up to 48 so i'm jumping around here on my numbers but it goes up to 48 now i couldn't even tell you what comes after the 20s so there are 48 different codes they use all different numbers now if you would like a copy of those give me your name afterwards and i can email it to you but it was 200 pages long so there are so many codes out there now but that's how we break down an estimate is by those csi codes so when grant was talking about taking your express excel spreadsheet and setting up your codes that's the first thing we do is we take the spec book and we go through it take every spec section that's in there 2200 300 4200 whatever it is and list those on your excel sheet that's how you set up your bid so now you have all those codes and what the heading is for each code you make sure that as a general contractor when you're getting bid day and you're getting sub numbers you have something in each of those codes so make sure you go through the spec book grab the codes out of the spec book there may be ones in there you've never even seen before you know you get into a lot of specialty work and that's where the later codes come in when you get into conveying equipment or sanitation equipment those are the later codes in the book but you might get into that on a job so just because you're a general contractor or subcontractor you go that's the code i normally don't use not necessarily it may be something that if you're an electrician your code is the 16 000 numbers but something in the 40s conveying equipment might tell you what you have to do for that work so make sure you go through the spec book and look at all the codes zero code which i have on here is the bidding and contract requirements that's what grant was talking about that's the front end and that is as a gc one of the most important things like he said so make sure you through you read through it because as a contractor there's somebody doing roofing when i write you a subcontract i'm including that whole section in your subcontract the zeros because that's the general requirements that you're required to to include so that's why you have to read them like grant said allowances alternative contingencies a lot of jobs nowadays owners are getting funding from whatever funding source and they can't go back and ask for for more money later so what they do is they add contingencies or add allowances to the job and they'll tell the general contractor carry two hundred thousand dollars for some item we'll call it allowance one whatever it's included in your bid then they'll say add ten thousand dollars for roof patching that's in your bid well as a subtrade if you're the roofer you need to make sure you included that ten thousand dollars and these guys will get into later about reviewing scopes and things like that but that needs to be in somebody's bid so take a look at those allowances contingencies and those types of things to make sure if you're including it as a subtrade you notify the general or vice versa and grant and randy will talk more about that later but that's why you got to make sure you as a sub know what those alternates and allowances are and as a general that somebody has those included did a job recently where the the alternate or allowances added up to over a million dollars you're adding a million dollars to your bid if you forget it you're going to get the job not the way you want it but you're going to get it so so going into the division one on their general requirements this leads into general conditions okay as a general contractor we have what we call general conditions or back page costs a lot of people call them soft costs things like that and going back to mark's comments about the different delivery methods some of these costs that are in the general conditions may be picked up by the owner if you're doing a cm type job and he'll hold those dollars rather than having the contractor holder if you're doing an agent ccm and you're the owner's representative you're watching all his money so you've got to monitor these costs as a lump sum bid you're the general contractor you have all these costs in your number so we call them soft costs and that term gets used differently depending on what delivery method you have but they are all costs that sometimes there's not a defined number that you have to put to these numbers so how do we develop those costs and how do we know what we're looking at so the first thing we do is we develop a schedule and a site logistics plan now people look at you and go wow you're building a schedule you don't have the job yet well yeah i need to know how long this job is going to take so i can determine what my general conditions and soft costs are most general conditions and soft costs are time driven costs meaning my superintendent is going to be out there for how many months it's a 16-month job i have to put him in for 16 months well i don't know that unless it's in the documents and i read it or i develop a schedule and determine that and a lot of jobs nowadays owners are actually making that part of your bid what is your schedule how long is it going to take you because i say it's going to take me 12 months mark says it's going to take him 14 months well my cost might be higher but i get it done quicker they may like that idea so you develop that schedule ahead of time in the lump sum world when you're just competitively bidding if the owner tells you it's 16 months but you say i can finish in 15 months you can maybe cut some dollars out of your bid because you're going to finish it earlier it's a risk but there's that option so you always develop a site logistics plan and a schedule so you can put your general condition costs together so what's in our general conditions lots of stuff in general conditions this is just a list of a few items that we include so starting down the list kind of give you a quick brief explanation of them permits and licenses things that you need to include does it require a site fence a perimeter a security fence or whatever that might be an item that's on the documents you're required to have a fence around the site it also may not be an item that's on the documents but you know the area you're working in there's a chance of vandalism you may include a fence in your number because you know that you risk a bigger loss if you don't have one these are all things when you're estimating that you have to weigh these options of what do you include and what you don't include on the general condition side temporary utilities and toilets obviously got to have water running water for the masons to work concrete guys plumbers you got to have bathroom facilities for everybody on the job and obviously you need to know how many months you're going to need these facilities so that's why your schedule ties in again grant talked about temporary sanitary for a trailer for an owner or cm something you got to include there that's part of your temporary utility costs winter weather protection this one here is one that on every job i'll look at the guys along this wall and we'll all think differently about winter weather because what do i include you're building a building and you're starting in september i'm going to be doing masonry through the winter what do i have to do to build that masonry do i have to build a tent over the entire building and keep it heated to run my masonry you know we all laugh about that but i've done it i've built the tent over a building so that i could build it in the winter so winter weather is a very big cost that you'll see jobs that may have a tight schedule like that and you'll wonder how guys are 300 000 or a million dollars apart on their numbers that's a big part of it how do they look at doing their winter weather protection so that's one that you always want to look at the schedule to determine what you're going to need on winter weather cleaning dumpsters final cleaning another cost that can vary it can be through the roof it can be very cheap depending on how you look at doing the job you know cleaning is getting to be a very big issue with most owners especially if you're in existing buildings if you're obviously on a public street where you're gonna have to clean the street you know these are all dollars that you have to figure out how you're gonna clean this job and know what your subcontractors have included in their job for cleaning you don't want to double up obviously you're just raising your bid so cleaning is another one uh safety and protection and security i just did a job downtown cleveland had to have a security guard there from when we left in the evening till the next morning when we came in it was a requirement in the contract from the owner but we had to include the cost so now you got to look at that option am i using a security company am i hiring police what am i doing so those are costs that you got to figure out to put into your general conditions job office office furniture supplies are you having a trailer on sunday what's going to be in the trailer how many people do i have there how am i going to have security on my trailer do i have those types of things all things that again you got to go through figure out what you need to do the job you know grant talked about your spreadsheet obviously most companies have one already set up from day one that has all these items listed and you go through and figure out if you're going to need it or not so you're not recreating the wheel on every job but yet you got to look at every item individually specifically for that job travel expenses is my project manager my superintendent driving between multiple jobs is he on one job only i don't have travel expenses so could be minor dollars could be a decent expense some companies might include job vehicles in that you know if their superintendent has a company truck they got to pay for that truck somehow they put it in here or do they put in his hourly cost for their supervision office staff we all have an office accounting secretarial you know safety officers those costs usually aren't in your job specific costs you don't want to inflate your bid by putting in your overhead costs so what most people do is they have an overhead line item at the bottom of their page that they do on a percentage basis whether it's a percentage of the overall job a percentage of their general condition cost a percentage of just their direct staff costs so there's a lot of ways to do overhead and those four or five general contractors that are up here probably have five different ways of doing it and the four or five subcontractors probably do it five different ways so overhead is not something we can tell you how to do it but obviously you're going to have those costs so you've got to make sure they're included staff benefits workers comp all those types of costs need to be included in your bid if they're for your direct staff on the job so your superintendent he's directly working on that job you're going to include the cost of that person in your bid you're going to include your project manager he may not be there full time he's half time so you include half of his cost but the benefits that go with it workers comp all those types of things you want to include in that cost you don't want to carry that in your overhead number because it's going to vary from job to job and most companies use their overhead number as the same percentage across all jobs they bid now it may get different depending on if your cm if your gc because your overhead or your office cost could be different if you're a cm you have a lot more upfront costs on paperwork and things like that you may bump up your overhead costs on a gc job you'll have a lot less because you're not in there in the front end during design the last thing to make sure you include in your general conditions is insurance bonds i mentioned them but randy's going to get into more detail on them explaining to you all the different types of insurance and bonds my name is randy spencer i'm from dunlop and johnston we are also a general contractor construction manager here in cleveland i want to do want to thank glenn and the cea for allowing our committee which is sort of a committee within the cea the opportunity to kind of come out and talk about estimating our goal as the committee in here is to kind of hopefully improve the future of estimating in our industry at both the subcontractor levels and the uh uh general contractors levels uh most of us are competitors against each other in some way shape or form uh but quite frankly we believe that some collaboration uh and within the industry will improve the industry and certainly in a market right now that is particularly challenged um what i want to talk to you about today is so sort of some of the mundane stuff it's not the bricks and mortar these are items that are kind of more uh definitely a part of these soft costs or these general conditions that are are costs that are incurred kind of at a corporate level for the most part but our items that if not considered through the bidding process will result in a company not being around for very long i'm not going to get real specific with these matters some of them actually have been covered in separate classes put on by the cea but please ask questions along the way if you do want to dig into something a little bit deeper be happy to do that insurances the first three actual four bullet points that you see here liability indemnity special insurance and builders risk these are basically all different forms of insurance that exist within our industry okay liability insurance we've probably all heard of this is there's a wide range of what that covers but basically if somebody out there whether it's the general public or another contractor decides that they want to sue you you know you want to have insurance behind that because that can get very expensive and this insurance is not cheap liability insurance traditionally breaks down this as a general contractor to work that you have subcontracted out because quite frankly that carries a separate premium okay versus work that you're self performing or doing with your own labor okay there's a different premium level for those two office property equipment auto uh computer internal theft a lot of overhead type insurance that you might cover was mentioned earlier that you know you as a company are going to do so much work every year you have to cover the cost of those because those are fixed costs those costs are going to be paid through the profits of your projects you need to consider those costs as you're doing your work so without getting into a deeper into liability insurance just make sure that you in some way shape or form whether it's in that spreadsheet at the bottom line as a number or percentage or you know you can break it down into how much of that work is subcontracted at that rate etc just make sure your estimate is considering those costs indemnity insurance is very similar to that uh the front end that we talked about traditionally the owners will require you to indemnify them general contractors require their subcontractors to indemnify them it's a flow down or flow through effect you need to make sure that you have the costs to be able to provide those indemnifications included in that estimate um real quick special insurances if you're working for these are just some examples if you're working a project near railroads okay certain contractors they're covered they have coverage for work within 50 foot of a main line of a railroad for example we we've done work in the past for norfolk southern okay we have that other contractors maybe they don't but if you're going to build a building i mean it's just a typical building but it happens to be within 50 feet of the of the main line of a railroad you need to have insurance coverage okay that's definitely an additional cost to some contractors hazardous materials are pollution liability depending on where you're working the kind of site the kind of material working with you may need to pull an additional policy specific for that project you don't want to eat those costs when you find out later that they're in fact going to require that you want to include that in the bid so the owner pays for that up front professional liability one of the delivery methods is design build if you're not doing design build on a regular basis you're not carrying that policy as a company but yet if you have a favorite owner that all of a sudden chooses to design build a project you need to carry that liability because you're definitely going to be held to their to those responsibilities builders risk builders risk is an insurance policy that should be purchased on every project that you get involved with whether it's a renovation job whether it's new construction what that policy covers is the materials the project as it's under construction the materials that are on site and stored but maybe not yet put in place and materials that are in transit okay take an air handler that's coming from california runs off the road or off a bridge it's shot it's useless it's wasted the builders risk will step in and basically take care of getting a new air handler to that site if you have a fire if you have a collapse if you have a calamity on the site owner's not going to pay twice right they hired you to put the building up it's not their problem necessarily that a tornado came in and knocked it over that's happened to my company okay you have to have a builder's risk policy in place to cover tearing down those walls that maybe they were structurally damaged but didn't come down that's what happened to us they were damaged so badly they couldn't hold a roof that was not yet on the building okay so what you need to do as an estimator is find out who is paying for that policy it's either provided by the owner or they will stipulate that you as the contractor are to provide it and if you are you're going to carry the cost of that i got a job's got a hundred thousand dollar premium on a builder's risk you can't eat that you need to have that price in that bid and it does vary based on the amount of the cost of the project what's also important to notice is if you're in a multiple prime situation you're bidding a project for the state of ohio for example your mechanical your plumbing your electrical primes your technology packages are typically separate primes they're bid directly and the contracts are held directly with the state i've seen the language both ways where they will stipulate that each contractor will procure their own builders risk policy for their scope of work can get messy if you do have a claim to deal with i've also seen and this is very difficult where they will stipulate that the general contractor will carry the builders risk policy for the whole job that's difficult because you don't know what the plumbing costs you don't know what the electrical costs you don't know what the sprinkler is going to cost so you either have to take an educated guess and be willing to undertake that risk for example real quick if you if let's say the general trades is worth 6 million you got a million dollar electrical you got a half a million dollar plumbing number etc they want you to cover the builder's risk so you have to assume that all the bids are going to come in at 10 million and carry a builder's risk policy premium in your bid for the 10 million don't see it a lot but i have seen it quite frankly we walked notifications to the bonding agent also time management you want to do that early the bonding agent traditionally will tell you ahead of time what your bond premiums are is everybody well is everybody familiar with the bond process they very simply put there's there's bid bonds payment bonds performance bonds there's also maintenance and warranty bonds we won't get into those today other than to know that again if the front end requires them there's a cost and talk to your bonding agent to get that cost and include it in the bid a bit bond is a guarantee that basically stipulates that your company will perform will enter into a contract and perform this project for the price that you turn in that very day because if you make a mistake they can hold you to it and the bond is basically a guarantee that stipulates you agree that you will be held to it financially that could include having actually having to perform the job for that price that it could include if the if the entity does want to let you out of it there are costs to re-advertise and re-secure somebody at a higher price they will hold your company responsible for that difference and the cost to advertise print drawings everything so estimating is a serious business when you're submitting bid bonds and the guarantees that go with it um so you need to talk to your agent early because you need to get that bid bond many entities have different forms that they're required the states different from cleveland well let's say it is a state but the state's different for example for osfc or you know maybe different from a private client who's using aia documents etc so if you're going to manage your time you need to get that bond from your binding agent they sign it they mail it to you they hand deliver it whatever you need to get that in time because it is always turned in with the bid um you need to talk to them as i mentioned if how long is the project we talked about schedule durations of projects affect bond premiums and different sureties are different okay so you need to know uh specifics as to how if the job's 16 months long there's typically a bond surcharge for example if the job's 12 months long it depends on the surety or the or who's the bonding company that you're working with they have different requirements but you need to know them include them with the bid bond make sure that the boss signs it i was talking to a competitor last week 8.2 million dollar project they were low on bond was not signed and they did not get the job so you don't want to put all your time into this and basically blow it over or failing to get the boss to sign the bond there's a power of attorney and a state of ohio certification that is also required typically which just validates that the surety is an entity that can do business in ohio without those your bond is null and void that's the fastest way to get tossed okay you need to know very simply payment and performance bonds the payment bond is just a guarantee that you as a general contractor will make sure you're guaranteeing to the owner that you are going to see to it that every subcontractor supplier tradesman union hall is getting paid for the work that they've put into that job in a nutshell okay there is a cost that comes with that the performance bond is just a guarantee that you're going to do the job you're going to do it for plans and specs in the right time frame and if you falter the owner can contact the bonding company and demand that they step in and take over the project to finish it for you that comes with the price okay owners want those guarantees those are hefty hefty premiums you need to know if the jobs bonded and included very quickly permits if the if the permit is going to be procured by you and your bid you need to contact the ver the cities the counties wherever you're working and inquirers to the pricing for that cause they run the gamut we just found out today the city of wadsworth does not uh down at the bottom city or registration we're going to start some jobs in wadsworth they don't register contractors great city of cleveland you got to be registered to do business in the city of cleveland and they they want you to write a check to get signed up include that in your bid okay um see contract are contacting local authorities do they have specific requirements what's it going to take to close a lane or i'm going to touch on that briefly but you know that some of the bigger projects in town you're going to close the lane for a year a lot of times those those kind of lengthy closures fall on the general contractor you better find out what it takes to do that part of the scheduling and the sequencing can you even do that you may bid the whole job figuring that you know what you don't need a giant crane because you can close the lane and park right next to the building for for this that any other you find out after the bid there's no way they're going to give you east 9th street you know so now what it's all over time it's all sunday work kind of things you need to know i mentioned city registration make sure that you know what the costs are and we touched on tap and utility fees the key there again is just to know uh who's paying for those and if it is up to you for example is it cleveland water department or is it another water authority somewhere else call them they publish a lot of it even on their websites but know it going in there's a lot to cover are there any questions on very good just give a little bit of perspective so far we have spoken about i'm gonna i'm gonna put in perspective the six million dollar job up to this point we've all talked about general contractors i'm the last one uh the rest of our fine gentlemen are going to speak about the uh subcontracting aspect of estimating but if we're talking about a six million dollar job we've spent a lot of time talking about general conditions which is probably going to be 250 000 300 000 of a 6 million dollar job but that is the part that really differentiates with all things being equal if we're all the good general contractors receiving all the same good quotes from subcontractors and we're all plugging in the low qualified number the only thing that's going to differentiate ourselves is the general conditions and that's where we're where a general contractor will typically make or break himself or herself is with the uh with the general conditions that's why we spend so much time on it but now you have your spreadsheet you have all your soft costs you've done the investigations you have your cost for your bid performed for your bonds and your permits and and your superintendent and your durations and your winter conditions that you thought of now comes bid day and it's fast and furious subcontractors i love them but they they are going to send you their quotes at the last minute and you're going to have to take these quotes off and you're going to have to look at them and the low number is not always a good number uh you're going to have to take a look at that and see do they include everything and the only way you're really gonna you can't remember everything so on your spreadsheet you're gonna have listed certain items certain particulars uh glazing you know if there's a special frosted glazing at the at the clear story you're going to note that down so when you get quotes in and you're looking at them you want to see do they have this you know do they have this before you plug that in because you may get a million dollar masonry number and that's 250 000 lower than your next mason why you know is it because it's a good number or is it because they missed something you know i mean it's it's and you need to know that because you're putting your 250 000 at risk when you take it when you go in with that low number so the first thing i'd like to say is not all here comes the quotes you know and not all numbers are the same you really need to know through your week two weeks ahead of time your investigation through the bid documents what's going to be required and each scope of work one other item that really helps and i think for all the sub trades out here this would be a really good piece of advice there's only ever been one perfect person and he wasn't an estimator it was a carpenter there's no way that an estimator will know top to bottom every nut and bolt about the project and be able to estimate it all one of the great keys on estimating but don't rely on it is when you get those quotes in and you can compare plumber a to plumber b to plumber c do they include or exclude and you will see things that you have missed you know i have this special stainless steel piping that's required in the sub basement what i didn't see that you know and when i took off the plan when i looked at it i didn't see stainless steel well do the other plumbers happen you know one thing that is really helpful for general contractors and subcontractors when you're experienced and you think that your competition isn't pricing up the right stuff price it up and then make a big note make a big bold note with a sharpie if you need to you know stainless steel piping and even if you show the value of that you know the value is fifty thousand dollars that will force general contractors to take those quotes and compare them to get it to apples to apples because we all get frustrated when we lose a job to somebody who didn't do it right i mean that that's that's the biggest frustration of this in this industry i i would have to say so when you do that on bid day instead of hiding it put it in there if you're not sure if it's required put your base number and then make it an alternate let the general contractor that's our responsibility take those risks to understand the complete set of plans and to put those numbers together and to submit a complete package to the owner gray areas scopes and coordination that's experience there will come a time where in the estimate where you can't find a number from somebody you you can't you're going to have to do your own little takeoff you're going to have to put your guess you know um recently i did a job and they talk about having a crossing guard for for school it was a school so during my con my construction entrance i have to have crossing guard there is no prevailing wage for crossing guards you know i don't know if i'm going to hire the housewife across the street or if i have to have a 310 labor out there you know to get the kids across so you're gonna have to take a guess and would love to guess high but the higher you guess the lower your chances of getting to work so you do need to look out for those gray areas areas that you don't get filled you know if you have your spec section on your excel sheet and you're filling it out you're getting ready to turn your number in you go down it and there's a hole it's not filled you know i would typically what we'll do which will if it's included somewhere else i'll put inc you know included if one trade covers multiple items i'll put their names in multiple items so when i scan down i'll see if there's holes in there something that i have to take a guess on and how comfortable are you at that point taking your educated guess a very we would never guess a million dollar mason package you would let the estimate go by you can't guess on something that big and i know we're running short here but i'm gonna speak a little bit alternate pricing and and you're gonna love this um about four weeks ago i built a library i've been a library in warrensville and i was 28 000 low on four and a half million and i was feeling good and uh there were alternates on the job alternates uh that the owner can accept or not accept i had done very well at taking my project manager hat off and estimating and only putting those things in that were needed had i put anything else in i would not have been the apparent blow came to alternates and i put my project manager hat back on and and i wanted to make sure i was covered and so i wasn't as aggressive with some of the credits that i that i could have been or should have been and it put us in a place where depending on what was selected we could end up losing a library and in fact i did lose the library to that fine gentleman right there so so by three thousand dollars by three thousand dollars but fortunately that same day uh i was low on another six million dollar school so my emporia came back um but alternates are they're important um don't don't let them you know slide especially for subcontractors they take on a much greater importance if you have a portion of that alternate that can really make a difference on who the general contractor ultimately gets a job depending on what the client selects for us alternates tend to be a very small part of the job even though in this case it made the difference but if you're a subcontractor and you have that alternate that could be a large portion of your work that will make a large difference if you get selected by the general or somebody else okay i'm going to wrap up real quick uh bid bid day bid day it's very hectic you need to have somebody there typically as a general we have somebody at the site where you have to turn into packages you have to give them enough time to hand write down two copies possibly three copies with all the alternates you have to give them time to get those numbers in because one minute after the bid the the box closes and you're done if it's not in there it doesn't matter if you're low or not all right bid day so you're giving your time your person enough time to put put the envelope in and this is for public bid stay there you know make sure you get all the numbers make sure you understand take a record of them because they're going to tell you where you're where you're at you know i mean if you're if you're constantly sky high then you're doing something wrong you know if you're really low you're doing something really wrong you know you know if you're if you're second or third you know stay stay the course you'll get there you know you'll get there don't do anything dramatic um on private work make sure you follow up it's just like an interview you turn your number in owners like to deal with people they like it's just like everybody else if your number is competitive you may not know that they're not going to tell you but they may not call you if you're not following up so so make sure you follow up and for subcontractors you won't know with generals you need to find out which general looks like they're going to get the job and then follow up with them you know nag us that's what we're here for so just just keep calling uh the last item prevailing wage or diversity requirements on estimates a lot of times it has become more prevalent you have to list your edge participation or possibly mbes fbes w e d es you need to be able to list those things um and so as leading up to the bid you need to get a good idea who's which contractors are bidding you subcontractors which ones meet those requirements how are you going to fulfill that requirement of the bid in some cases you might get a large scope of work like the masonry that will fulfill it and you don't have to worry about it in other cases you will need multiple edge certified contractors to get your five percent um but again if it's a requirement there's no sense in bidding it if you can't make the requirement if it's a goal you need to be as honest as you can and write that down on the bed but you need to be aware aware that that at the last minute that's going to be there you know you're going to have to put a number down and you don't want to get caught with your pants down not knowing what it is after a general gets the job and they sit back and now they need to let contracts out to subcontractors we really want to work with the people that helped us you know the people that got us there because that's building relationships we're going to do it again now obviously you're competing against everybody you know plumbers are competing against plumbers you're not going to get every job we're not going to get every job there can only be one blown but typically you know we're going to lean towards the people that helped us and it could be as simple as putting you know edge certified in big bold letters you know because we see it you know so all right craig and i are going to basically start the trade estimating part we're going to talk about how we put together a trade estimate compared to the general contractors it's it's quite different at the end of the day theirs is more you know obviously general there's they're looking at putting organization of everyone's into the right spots and everything like that their big stress happens on midday because they got to put everything together and make sure they don't have any holes where the trade estimators have to help them fill those holes and there's could be 70 anywhere 70 different people sending marked numbers on midday and he's got to look through them and all that stuff so we have to do our part is to give us give them the best number and presentation that we can on bid day so that they can be successful and then with our relationships pass it on down so uh we're gonna go through it a little bit craig and i we are i work in the interiors metal studs drywall carpentry aspect and and i and i work for vip restoration we have three specific divisions we've got a glass and glazing division uh restoration division as well as a new unit masonry division which is the division that i rush so we him and i kind of we do estimating a little differently so we figure both of us we kind of come up and we give both of our experiences so you have a little bit of both ways of doing that and we'll go from there craig you want to do the first one about choir in the doctor um and zayn explained on the general contracting side what happens is they'll send us invites or we'll get phone calls and it's up to us to kind of take a look at what's involved in the scope of work so what we'll do is you know there's two traditions there's two ways of actually doing it we can get the hard copies um which you can go to the general contractor's office or you can go to certain plan rooms to look at and flip through it find out what the specific scope is for you and determine if you want to go and take it further and bid it with the internet and electronic capabilities now though builders exchanges is probably one of the best sites that we use that you can actually go on site if you have a membership or if you get a private project number from the general contractor you can go in take a look at the project too electronically and then determine what drawings you need what's in the specifications and also to see if it really does make sense for you to bid the job without paying the money right without paying the money and it's a lot of its preference too it's how do you put the estimate together are you more comfortable doing it with the hard paper you know drawings sitting on your desk or are you doing it with a software package that is geared electronically and o'brien does a little bit differently than i do i actually prefer the hard copy drawing so this way i can mark them up flip them over take a look at them ryan uses more of a an electronic version but i think he he supplements it with head size drawing so so after you decide you're going to go ahead and we're going to bid this job the first thing that estimators do and the trades uh as we go through the the specifications you sit there you look okay which specifications uh pertain to my company in my scope of work you know we may bid some of the specs we may bid all the specs that we you know that our company can deal with that's when you make your decisions of how you want to take part your estimate like for mine i can look to see okay is there plaster in this job as their spray fire proofing you know are there acoustic ceilings wood ceilings and at least gives you an idea of what what's all involved uh going through the specifications i always take very good notes of what to look for in the drawings it's it's a big it's a big key if you sit there and say well there's a note here it says there's a specialty wood ceiling that i know that could cost you know a hundred dollars a square foot i'm gonna find that someway somehow or i'm gonna ask the question of where is this uh that's a very important thing the the second thing is is to flip through the drawings before you start a takeoff or anything same thing you kind of go through it you look for you see okay how big is this job uh you know what's involved where is it where's it at location how we're gonna stock it you get just a general idea of where you're going to go with it and how you're going to go ahead and do your takeoff am i going to do the exterior first then go on the interior my new ceilings it kind of gives you a whole overview of that and then after that that's when you kind of go from there you start building your proposal based on what you're going to work on and we'll go back to more the takeoff is the next step but basically once i'm done looking at a drawing i actually build my proposal to send to these guys so i have a format of how i'm gonna start working okay these are the spec sections we're gonna include here's my base bid uh there's three alternates or additional items that i need to price i can put those on there now so i won't forget it go through i put my qualifications uh we're not you know we exclude this or we include this uh make sure it's always there and i keep that right to the side of me so as i'm whatever i'm working on i can just go ahead and put it right in my proposal it never gets lost in translation i don't write notes on the drawings or anything like that if it's something that the general contractor needs to know about uh it's one of the best things that you know my relationships with the general contractors will say is hey brian when you give us a number we know that it's it's it's there you've got everything and if you if you exclude something there's a good reason why you're not trying to pull a fast one on us you know you're saying well i don't have you know we have all the metal stuff but we don't have the drywall you know we you know it's a it's a good thing and that's uh that's getting the respect and relationship with them so as long as you keep giving them the proper proposals the way they want to see it it will help with uh you know securing work right and there and the general contractors estimators are also going to kind of out they're going to look out for you too so there's something that you're sending over as a scope but they see something that maybe you didn't see as a subcontractor they're going to identify that to you too and then you're going to go back and say oh all right i need to add this to my proposal and get the pricing together so funny takeoff again it's different on anybody who's doing it electronically manually i think pretty much everybody's doing it some form of electronically i know personally i use excel with the masonry components in the job i could have 40 different line items and it really all depends on how it's being taken off you know you've got a wall here you know when you look along this wall this is a good wall this is a production wall you look at that wall right there that is not a production wall so you need to figure out you know how many mandates does it take here how many mandates does it take here and how you're going to actually do the takeoff um excel seems to work good for me because i can actually identify each wall separately it gives me my average which again in this business it's all about law of attitudes so um brian i know this is something a little bit yeah basically one of the things then glenn mentioned it there's an advanced estimating class um anyone interested in trade estimating uh it's a program that i use it's called on center software it's it's it's a pretty expensive program by all starts the imagination but it's a good class that the guy who's training is a phenomenal teacher and he can give you what electronic estimating really is and what's involved and everything like that if you choose not to use that program that's one thing at least you can get a better idea of how we go about it so like what i do is i'll take a job and basically you know we get these drawings here and basically using a mouse and nothing else we color code the lines and it tells me that for this wall i have a hundred feet and a hundred feet is x amount it tells me then i put it into my other program it says 100 feet that's that's 25 sheets of drywall and i could say that a guy can hang 20 sheets of drywall a day so that's you know 1.25 or whatever mandates times what a man makes an hour and it multiplies everything out i don't have to do any of the math uh puts everything there and then i can say from there i could have all my cleanup requirements supervision requirements i could put my overhead in what we used to call profit is now overhead still it's a one line item and everything is basically automated and it's there is very you can definitely still make mistakes and everything like that but it's very trackable so if mark comes to me and says hey brian we're eliminating this wall i can really quickly go and you know delete that wall and my price changes automatically it's very helpful for speed and in my opinion accuracy i can go up to the general contractor and show them my takeoff on a job and say hey i have a red line here i have this wall or you know here's what we have and it's a very effective tool uh as far as going and putting everything together this is called center on center software and it's the one that the advanced estimate class will come and kevin kevin miller who's coming in in district it's uh i said it's the program i've used for 10 years it's pretty pretty efficient and there's and there's some i mean even in our division we've got like one of my estimators has a package called uh tradesmen so we think what that does is actually provides a 3d model it builds the building up you can actually pull things out put things in and it changes the whole composition the last item i did want to talk about was this building the conditions for you know the condition your crew composition how you're going to put it together because that's probably one of the most important parts of the estimate um i think that it's probably safe to say you've got a fixed component and a variable component material is primarily fixed when the economy is bad you have fuel prices going the way that they are that that might change things on the material but in most cases your material is a fixed cost labor is your most important thing to make sure you have right so when you build that condition you've got to go back on historical data figure out what your crew composition that that maximized your profit was it you know did i have five bricklayers and three laborers did he have you know five carpenters and one labor you know those are things you need to look at as you're putting your estimate together to make sure that you're putting a competitive bid together but also to make sure that you're going to make time hey guys i'm john our center with the xbr center we do uh specifically metal stud drywall ceramic tile floors things like that so i'm going to gear my conversation more towards these finishes uh but the stuff i want to talk about are some of the nuances in a project that uh you're gonna have to put in for an estimate and uh in order to be in construction we have to get our material to a job site so first i want to talk about some deliveries and lifting we have two specific projects i want to talk about the existing building downtown key tower for example and a new project being built from the ground up in the middle of a field somewhere uh what are some of the differences you might encounter getting material to each different project traffic if anyone's taken a truck and left it from their office at seven in the morning and probably hit traffic at 77. it's going to take longer to get a job to deliver material to a job downtown than it will out in a rural area somewhere what else is let's say it's a six-story building how are you getting the material up to the sixth floor they got a great elevator freight elevator or if it's if it's a new building it might not have a freight elevator maybe a crane right who's providing cost for the crane company maybe the general condition maybe the general contractor may be the subcontractor you have to read the specifications and the scope of work to see who has to provide that uh cost um how about in an existing building elevator size you have to think about elevator size if i have a four foot by ten foot sheet of drywall i can't get it in an elevator door that's three foot by seven foot so i may be walking that drive up three or four flights of stairs um also uh in a new job uh buck hoist operator if there's a buck hoist who's picking up the cost for the operator uh if you have night deliveries and you need a standby electrician who's picking up that cost things like that mobilizations we're good on this slide here mobilizations who's ever been a job that said multiple mobilizations may be required for this project everybody has and what does that mean that means if something goes wrong you need guys all over the building to fix this of course well as a drywall guy i like to walk into a room like this and see four walls ready to hang studs are up roughing's complete hang all four walls and walk out of the room well let's say your bill you're bidding an office and the owner has these extravagant big desks and you can't get them into the building uh with uh in the normal sized door so you need to leave off a 10-foot section in each room of studs and drywall that means you have to figure for a crew to come in fix the studs once the desk is in put the drywall back on separate crew to tape the drywall and then that's also going to affect the painter and case for a guy and anyone else that comes after him scheduling it's important to not only know your schedule when you're bidding a job but other contractors schedule we did a job in an existing hospital where it was a 8 foot by 200 foot corridor and on one end of the corridor there was an electrician pulling wire above ceiling and on the other end of the corridor there was a guy installing ceiling grid and below them both were was my company installing the floors so that's not your typical production where you have a clear corridor zip up some ceiling tile pull your wire put the floors down so you have to know your project and adjust your uh adjust the coiling for it uh specifications being a drywall guy most blueprints they say use type x drywall unless noted otherwise well that's great on the blueprints but if you look in the specifications it might say moisture resistant drywall in all wet areas so i have to pick up the added cost for the moisture resistant drywall general requirements of the of a project are you bidding your typical scope of work for example i would bid studs and drywall insulation or are you bidding a specific scope of work where you need to pick up snow plowing you need to pick up temporary toilets fire extinguishers those sorts of items always be aware of your bid schedule let's say you do your quantity takeoff and you figure out your estimate and you come up with 200 mandates of painting can you do five men for 40 days sounds like good size crew what if your duration days are only 10 days instead of 40 how do you adjust accordingly for that do you need to pick up overtime do you need to pick up shift work it's all added cost that needs to go into your estimate uh site limitations parking can you park right on site do you need to pick up a shuttle to get your crew to and from the job every day job specific conditions if you're bidding a job in an existing space a hospital for example a lot of hospitals now require badging you got to get a badge so you can have workers on site so the hospital knows who's working there well let's say the badging takes four hours per worker you figure there's going to be 30 workers on site 4 hours times 30 is comes out to be 15 mandates there's 15 mandates you don't have in your production they need to figure somewhere else on your project on your estimate uh last thing i want to talk about is retainer typically on a job you're going to see retainer as 10 percent over the first 50 percent of the project let's say you have a three-year project and it is heavy on the material so you hit your 50 percent complete in the first year of the project that means you're going to be carrying your that 10 or 250 000 for the remainder of the project for two years so that's money that's right out of your cash flow for two years that you need to account for somehow we've talked a lot about the gcs the beginning of the half mostly revolving around public bid stuff where you have big bonds and that sort of thing and as an estimator there's a lot of strategy grant was talking earlier about alternates and how it made the difference between being low and not low and some guys might play the game with i don't think they're going to take this alternate or i know they're over budget so they're going to be looking to save money so there's a lot of strategy and well maybe i can save them money and make myself low or maybe i know there isn't i'm a roofer there might be an allowance for deck replacement and they might say include so much bad deck in your price well i might know there's no bad deck so if i put a huge allowance in it might price me out of the job but if i run into more than i expect i might take a risk so there's a lot of games that we all play trying to be competitive to get the job but then not losing money on the job the big difference though is a public versus private on a public bid that's it you turn it in it's done you don't get a chance to talk to the owner and go hey you know i made a mistake or you know what i i found a better price on the material i can save you know a couple thousand dollars here once you submit it it's over you live with it um gc's too you know we all are living with that bit versus the private projects you might have a relationship with the owner and he might say hey you know what i'd like to work with you um but i got a price that's better can we sit down and see if we can make this work or um they might always work with you but they're getting other prices just to keep you honest grant again mentioned you know relationships you know how important it is grant might get 10 different roofers giving them pricing and they might all be responsive bids but he might go geez these guys are a pain these guys are good but this guy really helped me out you know so i want to help him out if i can so we might have that opportunity as a sub to work with the gc and maybe get the job not even being the low bid on bid day but because he has the opportunity to pick who he wants to work with um gcs don't necessarily get that same look from a public bid that we might get on a public bid as a sub trade so it's really important to understand what kind of situation are you in and how can you best help the guys on the gc side because if my friendly gc over there doesn't get the job and a non-friendly gc does my chances of getting the job are very bad but if i can give my friendly gc an advantage i've got a better chance of getting the work too so i want to make sure that i'm giving them the information maybe even two or three days in advance so he can come back and go gee trevor you missed this you you need to pick this up and then when i give my pricing to the less favorable guy i might not give him much time to analyze it i might give it to him at the last minute so at least i got my foot in the door but i'm not giving him a chance to shot my price and go find out if there's somebody that'll do it for less on my side i get it all the time at weekly i got a bid doing an hour i don't have a price for roofing i need a price and you know i'll tell you what any of these guys calling me in the room i'll drop what i'm doing and i will get it because they're going to work with me if they get the job often though i'll drop what i'm doing i'll help a guy out and then some other guy's doing the work and i know they didn't have a price from them when they got the bid and now they're working with someone else guess what next time that guy needs a price he probably isn't going to get it for me and if he does it's probably not going to make him very competitive so uh you know just realize that the relationships being built and how people treat you and how you want to be treated it all goes kind of in the equation uh i'm a concrete and site work subcontractor uh one thing i noticed sitting there listening to the general contractors is there's a common thread between subs and generals you have to know your costs you have to know what your costs are your home office costs your direct costs and get that covered in the vid uh do i have any concrete or excavation contractors in here i got one uh any other sub trades carpentry we've got a carpenter uh question what's a labor cost but he's only getting 24 in his check where's the rest very important very luck a very tough lesson that young companies young estimators learn is what it what's what you write your hourly rate you're 24 93 for 310 labor right now isn't what a 310 labor costs so we've done a very good job of talking about recovery cost recovery overhead recovery home office recovery and i've you know listed on the next slide there's everything i could think of was with your home office costs your salaries your labor burden is a huge factor for a self-performing contractor that we haven't really talked about yet uh i printed out a sample labor rate sheet that we use for uh local 310 laborers this is their updated rate their taxable hourly rate in their check is 24.53 so most people in their estimate will say all right 23.53 no you have fringe benefits even if you're not union you have fringe benefits health insurance uh pension fica food asuta payroll taxes workers comp insurance uh all that needs to be accounted for and recovered in your bid so it might be 27 or 50 of your hourly rate but whatever it is you need to figure out what it is and get that recovered as as part of your uh your costs also home office recovery as a sub trade we've talked about that too uh general contractors talked about all their uh costs in putting a bid together you need to have your permits you need to have your insurances sub trades need to have that covered as well uh you just need to be aware that your material costs your labor costs your home office costs even though some material for example someone might quote five thousand dollars to deliver for cabinets on a project is that what the cabinets really cost do you have to cover delivery costs you have fuel surcharges do you have unloading just just unpacking what are you gonna do with the the trash the clean up to the dumpster who's got the dumpster there's a lot of extra costs that need to be factored in and included uh anybody have any questions about labor rates i i did a sample laboratory if anybody wants to see it i'll have it around afterwards but uh that was my two cents you know we kind of talked about a lot of these on the general content okay on the general contractor side it's a little different for a gc than a sub but we all pay these same fees a big gc might get a better bonding rate than a really small operation but we still have a rate and as an estimator a lot of times on bids they want to know what is your bond rate because that might be an alternate they might say we haven't decided if we want to bond this job but we might um so average is something usually under one percent but if you're say a poorly funded company or you've had some issues in the past your bond rate might be three percent um that's a red light you know when a owner sees your bonding rate being out of line with the norm there's a reason why you're out of line um so a lot i know a lot of contractors that'll lie about their bonding rate and eat the difference because they'd rather get the job so sometimes you do see that and again it's in that gaming you sometimes want to put a number that's going to make you competitive but also cover your cost the insurance i'm sorry i skipped that um for us we're roofers we're high risk everything we do it's about as dangerous as it gets we're working up above there's people working below us so we're not only worried about our people falling or getting hurt but we're worried that they're going to kick something off the roof and hurt the mason putting the walls up below us a lot of risk our insurance is all about the man-hours so for every hour i have a guy in the job or every dollar i pay a person i'm paying a certain percentage for my liability insurance my auto insurance is more fixed by the number of vehicles at the end of every year we get audited they look at how many man hours i had for each cost you know a roofer versus a sheet metal guy versus a truck driver and at the end of the year we pay the difference so then we might assume we're going to have x amount of hours but we maybe had more so now we're going to write a check for the difference so accounting for it in our bid knowing that every hour i sell i've got that covered so at the end of the year if i get a hundred thousand dollar bill because we had a good year we did more volume than we expected um we we collected that hundred thousand dollars over the year it's not like it's insurance it's a flat price you know i need to collect a hundred thousand dollars over the course of the year and it's done no it's variable it moves with how much work we do so in a good year your insurance could be real high and in a bad year you might not pay much in insurance you might even get a credit back bwc this is something on the estimating side can make or break you and it's not so much on your estimate but it's on the management of your jobs and running your companies if you don't manage your bwc your rate will make you uncompetitive every time you have an incident or have an accident or have a claim it's going to affect that rate and that rate stays with you for five years um it takes a year to show up and then it's on for five so if you have a major claim you might lose a competitive edge for six years based on how long that experience stays with you so managing that that rate and keeping it competitive is going to allow your estimate to get you work and obviously when your rates get high and you're not doing more work all your fixed costs of doing business stay the same but you're doing less volume so you're becoming less and less competitive not more and more so keeping your arms around all those different components is what's going to keep you in business management um you know there's a lot of kind of talked about it and i forget which one the gc said you know you have a superintendent on site you know he's going to be there for three months or whatever that's a direct cost versus you know the person answering the phone the guy writing the checks um all the other people in the office that are supporting what's going on in the field the truck driver is collecting materials as they come into the warehouse and then getting in the job those are sometimes a little bit harder to pin down right to a job but somehow you need to account for those indirect costs just like you're accounting for the direct cause and that's a moving target you learn from experience you might learn that just a trucking in you know john arsenal's example whether it be downtown or in the country you're going to look back at your past history go geez i had to pay 10 a day for parking every day my guys were there and i had 10 guys there every day i have to factor in that parking into my price because i'm paying for it um so those are things that sometimes you don't learn until you make the mistake and you're paying out of pocket but those are mistakes you don't want to make more than once um kind of touched on support stuff trucking warehousing pricing right now on materials is kind of going crazy with gas so a lot of it is i'm bidding a job today and it might not go for one quarter two quarters a year two years i've been a lot of work that doesn't happen for four or five years sometimes it's beneficial for me to buy a job put it in my warehouse and beat two price increases even though i've got to double handle the materials now it still might be more competitive than taking a 10 price increase and other times there might be so much material it might be too much to warehouse or unloading it and everything else you might be better off paying the the additional cost working with your suppliers to lock in on prices you know those are important and gcs and everybody in their office does it different i know a lot of gcs they have an estimator who passes the job off to a project manager for the sub trades at least in our office we bid the job and manage it so as an estimator i'm thinking about what does it cost today and as a project manager i want to buy it for what i figured or better you know i don't want to be paying an extra 10 because i forgot about the increase so keeping an eye on all those things are really important not just in your estimate but actually making money when you do the job because you know we can have the best estimate and manage the shop poorly and not make any money even though you had a good estimate or sometimes have a bad estimate but find a way to manage it the right way have the right crew mix buy the materials the right way you know cut out the phasing if possible and all of a sudden save a job maybe you would have lost money on and break even or turn a profit and at the end of the day if we're not making money or at least covering our costs we're not going to be in business very long so one more site okay economy of scale the competitiveness with jobs um you know talking about the library job there's a multi-million dollar job the gc's in town are all got their eyes on those jobs because there are only so many of those they're with a public entity where the money's good they don't have to worry about a private owner being able to write the check um so there's a lot of competitiveness on that the material pricing is competitive the subcontractor's pricing is competitive the uh general conditions is competitive the margin of error is very small so when you're bidding a big project yeah you got to be competitive your pencils got to be sharpened now if you're bidding a you know a small build out or a little addition or something it might not have so much attention one you're not going to be able to dangle a carrot in front of your supplier and buy a better material pricing because guess what you're buying 10 sheets of plywood you know it is what it is you know foam off the rack that's the price um so you also have the opportunity to maybe make a little bit more money you still have to do all the paperwork like the million dollar project even though it's a ten thousand dollar project so a lot of the office costs even though it's small you're still doing all the same things in the office so your costs to manage it are more expensive so you should make percentage-wise maybe a little bit more um also the fact there's less people looking at it you know if i've got 20 roofers bidding the same project every gc in town versus one owner calling three guys you know i'd rather have that 30 chance every day of the week than trying to bid with 20 people um you know my success rate's just gonna be that much better so knowing again what is the situation you're in and uh you know how to address it and treat it so one you have the best chance of getting the job but two you also have the best chance of maximizing your profits um always you know talk about contract requirements there's liquidated damages in the contract you know if you don't finish by the completion date there's a cost associated to missing the date so you always want to be on time you want to be on budget and you want your customer to be happy i mean the worst thing you can do is have a good estimate do a good job but butt heads with the owner the whole way and now you've got an owner that's telling everybody he knows how horrible of an experience it was even though everything went right but the experience was bad and usually the guy that uh is building that multi-million dollar building that private owner or the uh large turner or somebody like that they talk to other people so all of a sudden that good word of mouth or bad word or mouth spreads really fast and you only want good things going out and sometimes it means doing things that cost you money and you're not getting paid for to keep that good reputation and a lot of guys in this room's company's been around a long time and it's not because they fight over every little thing sometimes the little things you can't fight over you have to just do it because you know what even though the owner's wrong he expected it and i want to work for him again or i want him to tell his buddies that you know i'm the guy to call when they need a new group so all that comes into play and how to manage a deal as well as estimating um we just want to recap and make sure that i guess we covered the objectives that we sought out when we first started which was understanding the different types of delivery models we went through the different types of documents and different types of way that an owner or someone would ask for a number how to set up an estimate we went through that pretty extensively different divisions of csi's and what to look out for in midday soft costs and hard costs and understanding all those costs as well as what the trade the sub trades look at perspective wise and getting how what they go into and put together their numbers how that affects the gc and what they need to account for at the end of the day so in closing i hope this was a good experience for you all you

Channel: Construction Employers

Views: 643,474

Keywords: construction, employer, association, AGC, contractors, builders, bidding, plans, project, manpower, takeoffs, negotiation, change order

Id: Er1FsdNblrc

Length: 82min 26sec (4946 seconds)

Published: Wed Feb 13 2013