Construction Estimating Departments
First and foremost contractors need to understand that a successful construction estimating department takes a serious commitment and a large investment to operate properly.
Construction estimators are the nucleus of your construction business, greatly impacting it’s success or failure.
Upper echelon estimators are not easy to find and you will need to pay them well. This is an area not to scrimp on. Typically, good estimators are paid at least the same base salary you are paying your best project managers. Don’t get fancy by offering a lower salary, tied in with performance incentives. This short armed approach will not be desirable to a professional estimator and will be counter productive in achieving your goal.
Don’t expect your senior estimator to do anything else, but estimate. Estimators are not hired to be project managers, accounts receivable collectors or marketers.
Make your estimator as comfortable as possible. Provide enough lay-down space, good lighting, file and rack storage for the multitude of plans they will be working on.
By their very nature, senior estimators are extremely detailed people, analytically driven, and require a peaceful environment to maintain the high level of concentration needed to avoid mistakes.
Construction estimating requires accurate record keeping, the filing of contact information, material quotes, subcontractor quotes, etc.; along with tracking the time spent estimating each job. The estimator is expected to disseminate the means and methods used to arrive at the estimate logic for the project build out.
Provide computerized, digital estimating systems to maximize productivity. If possible, coordinate systems that your estimator may prefer or is familiar and comfortable with, for a seamless transition. If you already have a system in place that your estimator has not used, provide the necessary training to minimize the learning curve.
Good Estimating Departments take a large investment from the contractor to perform at high levels and maximizing their return on investment.
For those contractors not ready to commit financially or mentally in developing a top tier estimating department, they should consider hiring a professional estimating company. The key is finding a comfortable fit with a freelance or outsource estimating company to achieve all the benefits of an estimating department without the financial investment required.
Quantity Take-offs by Construction Estimating Services can benefit Builders & General Contractors
Is there a last minute bid opportunity that you need of assistance with?
Do you have too many bids proposals to handle and not enough staff when a last minute “emergency” bid is due
Send your your blue prints to an experienced Construction Estimating Service
They can provide a quantity take-off or a complete estimate or for those emergency bid occasions.
Their quantity take-offs can be used to plug into your worksheets saving you valuable time.
Many Builders & General Contractors have benefited with reduced costs by outsourcing, alleviating the need of hiring a full time Estimator.
Using the construction estimator’s take-off spreadsheets can also be a valuable guideline for checking quantities as a comparative analysis to ensure no missed items occur.
Consideration is given to every division in order to provide you the details necessary for double checking self-performance work and to compare to your subcontractors proposals.
Experienced Estimating Companies use the latest technology in the estimating process which provides more accuracy and inefficiency with the estimate take-off.
Construction Estimating Companies will be able to provide seasoned professionals with vast experience; which places confidence in the quantity take-offs needed for builders and general contractors.
The use of Freelance Estimators can aid in both temporary situations or for permanent use for your construction estimating.
Quantity takeoff and estimating services can help builders & general contractors with:
- Pricing, project analysis and negotiations
- Preparation & submission of bid proposals.
- Procurement of Sub-Contractors
- Processing and formalizing Sub-Contract documents
- Double checking sub-contractors estimates or change orders applications
- Evaluation of Sub-Contract work in progress
- Account substantiation of Schedule of Values and monthly Application for Payment
- Variations in project costs
- Design-Build guideline costs
- Value Engineering
- Preparation Costs for Final Close-Out
Builders & General Contractors should look for well rounded estimating portfolios that includes experience in all categories of the construction industry such as:
- Commercial – New
- Commercial – Renovations & Fit-outs
- Historical Restorations
- Residential – New – Single, Multi-Family & Complexes
- Residential – Renovations & Remodeling – Single, Multi-Family & Complexes
- Municipal
- Governmental
- Industrial
Building a Construction Estimate
Residential Estimating and Commercial Estimating projects require a similar approach for the construction estimate.
Building a precise Construction Estimate has many components:
- Accurate quantity take-offs
- Proper crew sizing
- Applicable labor rates
- Production rates
- Material costs
- Subcontractor quotes
- Equipment costs
- Logistics and Environmental considerations
- Eliminating emotional ties for a particular
- Drawing from past experience
- Using common sense and reality checks
These are all critical ingredients to estimating your construction projects.
It’s a challenge for most small and medium sized contractors to bid regularly job after job.
Sometimes there’s just not enough time to get everything done. All too often, you’re overwhelmed with the amount of work you have to do, whether or not its job related.
Why not consider using an experienced outsource estimating company as a solution?
- The estimating is done by professionals who are strictly devoted to construction estimating and only construction estimating.
- All component aspects are analyzed and fine-tuned individually for each project.
- You will have additional time to devote to running and growing your business; while your estimates and bid proposals continue on a regular basis.
- When the estimate is near completion, it’s the perfect time to review all the estimate spreadsheets and related take-off data. The final adjustments can then be made by you as you feel necessary.
The best part is; you had the freedom to devote more time to your company while the estimate work was being done concurrently.
Letting professional estimators assist you with the construction estimating can be the answer to consistent bidding.
Consider outsource estimating.
Tips for a Successful Project
Proper Planning Prevents Poor Performance
The Five “P’s”
It’s true; we reap what we sow.
It’s no accident when a construction project is built on time and within budget; without sacrificing quality workmanship or materials.
From the outset, construction estimating is the backbone for establishing a solid foundation for any project. It all starts there.
We’ve all heard about the project from hell?
To avoid this scenario and improve your chances of success, it’s best to follow this principle:
KISS = Keep it Simple Stupid
- Take the time necessary to design a project within your budget.
- Depending upon the project size, develop cost estimates at various stages of design to ensure the budget is realistic or design changes can be made early on. It is far better, and less expensive, to work out all the kinks in the design stage rather than once construction begins.Remember contractors love change orders.
- Solicit reputable contractors to submit proposals broken down by areas of work or divisions and thoroughly review their proposals against your estimate for cost verification. Every proposal should be submitted with details. All proposals must be submitted on an apples for apples basis to establish fairness of proposals.
- When going over bids, remember that the lowest bid is not always the best. Examine bids carefully to determine which contractor provides the best service, selects the highest quality materials for your project, is most experienced, and seems most capable of completing the project to meet your expectations, in the best timeline possible
- Enter into a contract that is clear with all project criteria included; specifications, project drawings, materials, time lines, payment schedules, required inspections, project close-out procedures, etc.
- Establish payment milestones that fairly represent work in place. Be aware for contractor front-loading costs that inflate actual work in place. REMEMBER – You have invested in that Construction Estimate for exactly this purpose. It will pay for itself over and over again.
- Progress meetings are the key to avoiding unnecessary project problems and regular communication is imperative. Remember, project success is a two-way street.
- If a problem does arise and a disagreement develops between you and your contractor, stay calm so that tempers do not flare. Set a time for you and your contractor to get together, and go over the problem. Listen to your contractor’s side of things, and request they do the same for you. Don’t bury your head in the sand until the problem gets out of hand.
- As the project approaches completion, ensure punch lists are developed and completed, officials have signed-off and all closeout documentation has been received and submitted to the necessary agencies.
Investing in a detailed pre-construction estimate provides extreme value and will be used for checks and balances throughout the project.
There is never any guarantee that a construction project will run smoothly, however following these tips should help you toward that success.
Estimate Outsourcing; Year End Analysis = Overhead Savings
So another year is just about in the books.
Construction estimating requires constant adjustment to stay competitive; to land your share of projects.
How accurate were your project conclusions?
It’s time to review your approach and measure those results; to see what’s working, what’s not and how to adjust.
Are you losing your market place? Are you turning a profit? How do you stack up against the competition and what are they doing better than you?
In a perfect world every project estimate or sale quota was right on target and no adjustments need to be made……. oh yeah and then you wake up.
Taking a hard look at project estimates and their rate of success is imperative for course adjustment to your business model.
In business, as in life, you can be sure of one thing…… everything is temporary.
Everything eventually changes; good, bad, rich or poor. It’s natures law.
Ironically you’ll learn more from your failures. It’s easier to identify what didn’t work than why something was successful.
Success has a way of breeding complacency and failure promotes urgency. Staying successful is a more difficult status to maintain. Those companies who have achieved some success need to continue searching for leaner and better means and methods to sustain those results.
The most profitable and efficient construction companies have learned to get better results doing more with less. Outsourcing has greatly aided their efficiency effort.
Why sustain a staff with top heavy overhead when using an outsource estimating company can cut annual expenses?
Closely analyzing where expense savings can be realized will go far in your endeavors toward success and outsource estimating is a great aid to that end.
Responsible Construction Estimating loses to Irresponsible Construction Estimating. Who is the Real Loser?
The entire construction industry has undergone a change. Estimating for construction projects has become more difficult. Fewer project start-ups has more contractors bidding on less opportunities.
Today’s world is a much different place than twenty years ago.
Unfortunately, through a growing economy and a false sense of security, it took only a few greedy wall street executives and the relaxed requirements of lending institutions to cripple our nation, eventually devastating millions.
America, once the land of opportunity, had become too fat, happy and comfortable. We had developed Popeye’s Wimpy negotiation style, ” I’ll gladly pay you Tuesday for a hamburger today”.
That philosophy has paralyzed the economy and has promoted more poor judgement among contractors, estimating projects lower than cost; just to get work. This will eventually cause more problems and will be a matter of time before more building projects fail.
It’s a vicious cycle and somewhat ironic that the cause of the failure is once again the cause of more failure.
Less lending cripples growth and has a devastating affect on construction. Fewer projects attract more contractors to make illogical business decisions. As the saying goes “desperate people lead to desperate actions”.
In order for contractors to survive regrettably their illogical actions affect the logical approach of sound construction bidding. Contractors with sound business practices now are penalized and become the ”underlings ” to the irresponsible bidding contractors.
This insanity must stop.
Eventually the reckless estimating practices of those contractors will be weeded out.
My advice to contractors is don’t change your approach to estimating. It will prove to be wise in the long run.
Let’s not let poor judgments of the past lead to poor judgments today.
Our future and yours depends upon it.
Hear one, Hear all….. It’s Time to Estimate; It’s already Mid Fall
Hey Contractors….. are you prepared for winter?
It’s mid November and winter is on the way. As the holiday season revs up, your project opportunities slow down. Along with the seasons distractions and rising spirits comes the reluctance of spending money on construction projects until spring.
For contractors this means one thing; time is of the essence in getting as much work as possible to carry you over until spring. Unfortunately you are not alone. All your competitors are in the same boat and they need the backlog too. It’s survival of the fittest time.
This boils down to basic business principles. Bid as many construction projects as possible to land one or two. Yes, this takes additional manpower and an extraordinary amount of effort, however, it’s no time to hire full-time employees when business is about to slow down.
Chianelli Estimating is an outsource estimating company designed for these crunch times. You can depend upon our expertise and take-off accuracy to assist with your project estimates. Using Chianelli Estimating will allow you to bid more in less time and all the related burdens of hiring additional full-time employees do not apply.
Chianelli Estimating is built on a strong foundation. What sets us apart is our years of acquired wisdom working in the field, and the ability to apply that experience for a sensible approach to your construction estimate.
Build up that backlog or risk being left out in the cold.
Chianelli is an outsource estimating company you can depend on, when you need it most.
Low Bids Benefit Building Owners
Does the owner benefit from the lowest bid? Not always.
Scenario:
A company needs to expand it’s facility. Their accounting department has established a project budget that can not be exceeded and, if adhered to, the project is feasible.
The committee agreed that minimizing design and consultant fees would leave more for constructing the building.
The project design begins and takes months or maybe longer to complete. All the painstaking details; drawing upon drawing, revision after revision as the project documents are developed. Better yet, the committee believed the estimated cost from the accounting department would be met.The final design is complete and is now ready to go out to bid.
Bid packages are distributed to interested contractors and the process begins.
The owner is delighted with the many bidders interested in the project .
As bid day approaches the owner’s anticipation rises and is anxious to receive the bid proposals.
Finally bid day arrives and the months and months of planning are coming to fruition.
Bids received and opened.
The bids have a large spread in proposal amounts. Some are much lower than the estimated building cost and many were well above the budget. Great news because some bidders are lower than the established budget estimate and the project could move forward.
Bids are reviewed by the building and finance committees. After careful review, a meeting was set-up with the lowest bidder to cross-check their estimated costs; which ultimately convinced the committee to accept the bid and move forward.
All parties thought this was a win-win situation. The contractor had secured the project and the owner would realized a huge savings on the cost of the project estimate established.
Ground breaking takes place and all is good with the world.
Three months into the project the euphoria has long gone and problems begin to develop. Building inspectors have given numerous notices of deficiencies and reworks are necessary. Subcontractors and material yards begin calling due to lack of payment and are beginning to lien the project. The GC is issuing change order upon change order daily, asserting the referenced sections of work is not included in their contract. Time is slipping by and the project is now headed into the winter months which will further slow down production.
The cost savings that once was, doesn’t look like it’s goning to happen; in fact the project is now likely to exceed the budget.
Headaches, Headaches, and more Headaches……..
The perfect set-up for failure. This is a sad scenario but it happens more than you may think.
Tough lesson learned with a very steep tuition to pay.
Moral of the Story:
One of the most important keys for a successful project, is to establish a realistic and accurate project estimate for budgeting purposes. Chianelli Estimating is designed to do just that.
Chianelli Estimating provides cost estimates which are accurate, dependable, efficient and affordable. Our estimating expertise has acquired the knowledge and construction savvy necessary to provide our clients with project estimates geared for a successful ending.
Building Owners, Architects, General Contractors & Subcontractors can all benefit from using Chianelli Estimating Outsourcing.
Chianelli Estimating is a great estimating solution for all types of clients and building projects.
Remember…… “Long after the sweet taste of low price is forgotten, the bitterness of poor quality remains”
I Got it, I Got it, I Got it… No you Got it
This was the project you wanted; no needed. You’ve heard about the project coming for sometime now and it’s here. You have a great working relationship with all the players; the Architect, Inspectors, Fire Marshall and you know the owner well. It is perfectly suited for your company, right in your wheelhouse, ideally located and there for the taking.
You think, okay this one is gonna be mine. The fit feels right, the timing is perfect, you need the work and its ideally located and you like all the players. It’s a no brainer. You decide to pull out all the stops, to go all in and expend all the necessary effort to secure the job. You keep telling yourself to stay focused, don’t let your guard down , don’t get out smarted and don’t get greedy. This one you can bid with a minimal margin, because the risk is low. Remember you need this one … you can’t let this one get away.
You send for the bid package and get it the next day. Great, plenty of time to put the estimate together. Here we go, we’re off to the races. You’re gonna get a million prices. You call all the material yards, your most dependable subcontractors and equipment suppliers. You basically call in every favor due you since you since 5th grade.
The project estimate came together like a dream. Tomorrow is bid day, you’re done with the bid estimate early and you mentally begin to plan on starting in three weeks. You get a good night sleep, wake up early and head to the office. The morning drags on and your fax is receiving unsolicited bid proposals galore. Every proposal that comes in is higher than the ones already inserted into the estimate. Your confidence is at an all time high. Time to leave for the bid opening and you leave the office with a skip in your step.
You arrive, walk in, place your bid in the bid box and take a seat. Other contractors begin to file in and follow suit. Some you recognize, some you don’t. It doesn’t matter in a few minutes all the bids will be opened and they’ll all be history.
The Architect opens the bid box, sorts out the proposals and begins the with opening. You see you’re about 3rd down in the pile and can’t wait for yours to be opened. You’re gonna show this group of contractors just how its done.
The 1st bid is opened and read aloud…. the bid proposal is about $100 thousand lower than your bid. What? No! It can’t be! You didn’t hear it right. There’s some mistake. You feel the blood rush from your face, you turn white and you’re light headed. As other bids are opened you hear voices in the background but nothing registers. You are totally numb and can’t get out of there fast enough, short of crawling out so no one sees you leaving.
What just happened? Who pulled the rug out from under you? You had it nailed or so you thought. How can the other guy do the job for that amount? You’ve done everything right and worked extremely hard. Your preformance was text book perfect.
Well guess what, he may not be able to do the project but he will be awarded the job while you are on the sidelines. How can you ever recover from this loss?
You’re completely drained. You’ve spent the last month licking your lips only to end up with chapped lips and no job.
It’s happened to all of us at some point and unfortunately more now than ever.
Mistake #1 – You made the critical mistake of getting too emotionally involved and fell in love with a project. This can be devastating.
Sometimes another view point or opinion is helpful to level the playing field.
Chianelli Estimating can provide you with outsourse estimates and an unbiased view.
Our estimating experts are professional, experienced and will provide you an accurate estimate.
Sometimes taking a step back and removing yourself from those situations, that may become too emotionally involved, helps to see the forest through the trees.
Chianelli Estimating can be the perfect compliment for your company. We can do the heavy lifting during the take-off phase and you can put the final touches on the bid proposal when complete.
This may save your sanity, alleive some pressure and help you gain to time to run your business.
Lesson learned ….. just when you think you got it, someone else did.
Chianelli Estimating can help you keep your eye on the ball.
Estimate Done, Bid Won but No Time to Relax
So bid day has come and gone. You’ve won that project and succeeded in achieving your goal. All the hours of estimating and project analysis have paid off. The sweet smell of success is in the air and you can now take a deep breath, right?
Wrong. Yes, all those efforts have paid off and you have that euphoric feeling, however this is no time to relax. There is much more to be done.
The project has already been thought out, built and completed ……. on paper that is…
It’s now time to take the pleura of calculations, the material and subcontractor proposals received along with the building sequencing and logic developed, to have it all come to fruition.
Not an easy task.
Depending on your company size and infrastructure, the project needs to be handed off to a project manager or to whoever will be responsible for the project build-out. Many times the estimating department is instrumental in developing the purchase orders needed to be issued, contracts needed to be written, executed and secured.
The project schedule needs to be honed and submittal documents need to be compiled .
Long lead time items need consideration for timely delivery which means submittal concentration needs to focus on these items immediately.
Okay mission accomplished, this job complete and now it’s time to relax, right?
Wrong. Most construction companies can not run their business on only one project and must bid on many to get just one. It’s time to continue searching for the next project and the estimating process begins all over again.
Work backlog is imperative to keep the work flowing in and to ensure no down time occurs.
This is the perfect opportunity for Chianelli Estimating to assist you. You can maintain your focus on your start-up project while continuing to provide bids on additional projects.
It’s true that work attracts work and jobs get more jobs.
Chianelli Estimating provides experienced, efficient and accurate construction estimates and is a great outsourse selection to compliment your company.
Using Chianelli Estimating can help grow your company and is ready to give you that support.
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