Home » Business

Construction Estimating - The Most Important Factor

Apr 24, 2008
When a contractor estimates a construction project - such as a new commercial store or perhaps a home remodel, the estimate is based on total labor hours, plans and permits, and material. By far, labor hours will always be the bulk of the estimate.

Depending on the type of work performed and where the work is being performed, labor hours can make a project exceptionally costly. When bidding a project, it is important to analyze how your crew's productivity will be affected by jobsite conditions, especially the shift they will be required to work. Does the project call for night work, normal day work, or graveyard hours? It is extremely important to know the required working hours prior to bidding any project.

Graveyard shift - You will encounter jobsites that require work shifts between 10pm and 6am. These types of projects are usually heavily populated with the public during the day. Or, they can be buildings such as banks, government research facilitites, or a medical supply manufacturer.

Prior to bidding a job that requires this kind of work shift, it is important to realize that most Union crews will require overtime pay. And if your employees work a graveyard shift on a Monday night, and then you switch them back to a normal shift on Wednseday, you are potentially looking at an overtime rate for the entire work week.

If you bid on a project that requires graveyard work, you must bid the project high enough to cover the productivity loss, the overtime rates, and the fact that you will be short one or more workers during the normal hours of the week for other projects.

You also need to take into consideration that your support contractors - material suppliers, delivery companies, etc., will not be available between the hours of 10pm and 6am. And if they are available, they will most likely charge high hourly rates.

To properly install a graveyard-shift job requires strong organization from the very beginning. One or two mistakes with scheduling or deliveries can ruin the chance for any profit.

Although these types of jobs can be tough to properly estimate, the bidding competition is usually lower since many contractors simply won't bother bidding a graveyard shift project. Quite often, a contractor can be very aggressive with pricing and bid the project by as much as 50% higher than normal and they will still win the contract.

Night Work - This time frame of work is usually between 2pm and 10pm. Although not as harsh on a crew as the graveyard shift, these work hours can still make daily scheduling difficult when one of your crews is committed to these work hours. At the very least, you should bid all labor hours at overtime rates. Materials and deliveries shouldn't be a problem because most of your support contractors will be available for the early part of your shift, usually until 5pm or 6pm.

Day Work - These types of jobs will require the most competitive estimate. These are the bread and butter of every contractor, and a large volume of these types of contracts are required for a contractor to survive.

Other factors that must taken into consideration: is the project in a residential neighborhood or commercially zoned block? What type of access do your workers have to the project? Are plans and permits required? If your workers need access to their work truck, how close will they be to their vehicle?

One last consideration for bidding a project: is the project going to be completed in phases, or all at once?

I once managed the fire protection installation for a remodel at Tiffany's jewelry store on Rodeo drive in Beverly Hills. This was a graveyard shift job that was to be completed in 10% increments. While that was perfect for Tiffany's and the general contractor, it was terrible for our construction company.

They required us to have a crew on site two nights a week for graveyard shift work and the rest of the week they did not need us there. We lost three days of billing during the week because we could not send the same crew that just worked 10pm to 6am to another job during the day. Switching work shifts is not only expensive when it comes to Union rules, it also breaks down your workers morale and lowers overall productivity.

Before bidding any construction project, you should always take into consideration the work conditions your crew will be subjected to and then price the estimate accordingly. When you know your crew will be up against poor working conditions, it is always safer to greatly inflate your price or perhaps to not bid on the project at all.
About the Author
For planers, visit: DeWalt Planer . For compressors, visit: DeWalt Compressors. Also visit: DeWalt Scroll Saw.
Please Rate:
(Average: Not rated)
Views: 142
Print Email Report Share
Article Categories