Estimating

Training for

Construction

Part I

Joe Lopez,

Artessa Building Group, LLC

What is an estimate?

• A prediction of probable cost.

• Is figuring out how to put the pieces together in

the most economical manner.

• It is Predictable Not Random or by Chance.

• No Guesstimating

• Prepared by a skilled and trained Professional.

What is an Estimate in the Construction

arena and why is it the key to Success.

Introduction to Opportunity

Seek, Identify, Track, Follow-thru and

Close-out.

If you are not successful, Learn and Retry

Intentions of Owner (Buyer)

Submission and Obligation of Bidder

Impact on Bidder

Lifeline to success of Company

Can sustain the firm to continue in creating

Wealth or eliminate the firm from existence.

Expose weakness

Vulnerable to take over by competitor

Jeopardize relationships with existing

Owners/Buyers, Suppliers, Financial Institutions,

Sub-contractors, Employees and the fate of the

company.

Most projects are Bonded and all is at RISK

ESTIMATING ART OR SCIENCE ?

Art and

Science

combined

result in the

Best results

consistently

Buyer have responsibilities

Award to the Best and

Most responsive bidder.

Cost, Minimize their Risk,

Best results

Bidders responsibilities

Responsive to the RFP as

offered

Most attractive to the

Buyer

Understanding and

delivering the project on

Time, Under Budget and

meeting the

Specifications.

Plan Review

Bidders responsibility

Identifying all of the facets in the Project

Identifying the RISK for the Buyer, but MOST IMPORTANT FOR THE BIDDER

Required Assets

Labor

Materials

Capital

Talent

Plan

Information

Contingency

If you WIN the Bid are you successful?

Contractors are not in the business of winning Bids

Contractors are in Business to make MONEY $$$$$$$

Great Estimating will establish a good Base for a company's success.

Recipe for success

Skills / Efforts

Software / Program

Electronic / Spreadsheets

Talent

Resources

Review of Job Costing

Review of

job costing

Cost Trends Labor / Materials / Equipment

Hourly / Unit / Assembly

Competition

Organize Team

Estimating Leader

Subordinate

Suppliers

Subcontractors

Review of Job Costing

General depository for Company

Know of all competitors

All cost

All conditions

All Information Should be protected

Collaboration and Teamwork

NOTE:

Examination and Review against ATF

Review in Detail

Utilize all skills

within the

Organization

Bring outside talent

if necessary

PROFITS

Profits should correlate to RISK

Materials (low risk)

Labor (high risk)

Subcontractors (conditionally low risk)

General expenses (low risk)

Expertise in one’s silo (low risk)

PROFITS

Estimating for Profits

Good estimating minimizes Contractors risk and

facilitates Project Management and defines the scope

of work.

The estimate is the roadmap that furnishes the

Company and its field personnel with all the details in

a controlled and prearranged format.

Consistent Profit will keep you in business for

generations

Profit is necessary

Understand all of your cost

Review, Analyze and Forecast Cost against Profits

Blueprint and Construction Documents

File, Track, Save or

Destroy

Acknowledgment

RFI and Addendums

Construction

Documents start from

the Invitation to the

Close out.

Submitting Bids

Confidential and Complete

Your Assets are at risk and exposed

Supported

Staff

Collateral

Team

Estimating Team

Owner

Finance

Management

Struggle to Win

Utilizing all of our skills,

experience, assets & talent

We’ll struggle, then we will

WIN!!

Negotiations and Award

Thorough Estimate

Base Bid

Alternates

Voluntary Alternates

Bids should demonstrate

Mathematically Sound

Thorough Understanding

Comfort the Buyer that you are the Best Firm of Choice

DO NOT BE FOOLED BY THE BUYER

Change Orders

Issued by Whom?

Owner or Bidder

Unknown and unforeseen

Margins

High or Lower that Original submission

Impact to Project

Durations

Resources

Finances

Other Projects, Committed personnel….

Common Mistakes

Cutting prices to beat a rival contractor

Underestimating the complexity of the Project

Expecting an excessive amount of favorable conditions and Change

Orders

Overemphasizing Volume purchasing or a kind Owner

Contracting with an incomplete bid

Scaling drawings

Utilizing unproven subs or suppliers

No back bonding

No unit costing

Not accounting for cost increases

Common Mistakes

Cost of Slow pay

Production rates, calculating the Labor Budget is accurate

Take off omissions

Missing quotes and Guesstimate open items

Crumbling under pressure to procure work

Does not utilize an estimate review procedure

Not updating Materials pricing or trucking cost

Not communicating with suppliers and thinking that they will not

impact you.

Estimating Department is not disciplined in their Sole Responsibility

Handouts to be discussed Part II

Reference Materials and Handouts

A Day in the Life of an estimator

7 Habits of Highly Effective Heavy Construction estimator

Ohio Department of Transportation

www.DOT.State.oh.us

Sample Estimate and Bid Tabs

CSI Masterformat

Where to find corresponding documents

American Society of Professional Estimators, Code of Ethics.

Questions?

Thank You

Joe Lopez

Artessa Building Group, LLC

JoeLopez@Artessa.us

End of Part I

Start of Part II

Estimating

Training for

Construction

Part II

Joe Lopez,

Artessa Building Group, LLC

A day in the life of an Estimator

We all experienced this;

We are not prepared.

Not focused.

No Bid Bond in hand.

Team member did not show up to work, they are not focused, prepared, etc…

Guestimate, for a multitude of weak excuses. It’s not their money, etc…

Relied on Subs to submit their Bids complete and on-time.

Special item that we need pricing on did not come in.

To many bids and you can’t qualify them.

Bid form is difficult, way too many Alternates,

no cooperation and you are over your head.

Bid or Pass? Risk it all?

A day in the life of an estimator 1. Bids every job aggressively

a. Believes each job can be won.

b. Goes for the KILL.

c. Loves the feeling of Winning.

d. Always looking for new projects to bid.

2. Study each project thoroughly.

a. Reads the Specifications, all of the specs.

b. Study the Geotechnical report.

c. Study the General Conditions for Special or unusual conditions.

d. Looks for special schedule considerations.

e. Checks for Tax considerations.

f. Looks early for unusual items that me hard to price or where there are no substitutions.

g. Studies the Addendum (s) and notes the changes onto the plans.

h. Visit the site, Photograph as required.

A day in the life of an estimator i. Build the project in his/her mind.

j. Develops a list of questions and talks to the Architect, Sub-contractor, supplier.

k. Discuss project with in-house Field Staff.

I. Develop a list of value Engineering ideas.

n. Prepare a thorough review of the project for Management.

3. Promote each Project.

a. Send out Solicitation.

b. Talk with Subs.

c. Seek out new Sub contractors.

d. Talk to Management.

e. Seek advice of Superintendents and Project Managers

f. Make sure we are listed in all publications, list, bulletin boards, etc.

g. Keep an ear to the ground for interest in the project.

AMERICAN

SOCIETY OF

PROFESSIONAL

ESTIMATORS

WWW.ASPENATIONAL.ORG Code of Ethics

Do the Math

Know your Math

a. Know the area to be built.

b. Make all takeoffs accurate

c. Take-off as many items as practical

site, concrete, masonry, (all that

you know and understand)

d. Check your estimates against normal

cost or Subs numbers. Qty. & cost.

e. Make sure estimate is set-up

accurately, check against spec. index.

f. Have all takeoff work completed well

before bid day.

g. Have an overall idea of the cost before

bid day.

A day in the life of an estimator

5. Organize Bid Day

a. Have a Division of work allocated ahead of time.

b. Have Scope sheets organized.

c. Make arrangement for extra support.

d. Have all Alternates and unit pricing estimated and filled in.

e. Have the Bond Ready and Signed.

f. Have the Proposal Form filled out in advanced.

g. Have the person turning in the bid thoroughly briefed.

A day in the life of an estimator 6. Put it all together

a. Qualify sub bids thoroughly.

b. Prepare qualifications.

c. Enter the numbers accurately.

d. Submit the bid on time, that means early.

7. Review each project after the bid/proposal is completed

a. Review failures.

b. Review wins.

c. Prepare Bid Book for Project Management.

d. Be careful about making commitments.

e. Develop relationships with subs and suppliers.(even if you did not use them)

MasterFormat Divisions (2004)

MasterFormat was first released in1975 and only had 16 Divisions, in 2004 it was updated and now has 50 Divisions, with 49 & 50 reserved for future.

Division 00 Procurement and Contracting Requirements

Division 01 General Requirements

Division 02 Existing Conditions

Division 03 Concrete

Division 04 Masonry

Division 05 Metals

Division 06 Wood, Plastic, Composites

Division 07 Thermal and Moisture Protection

Division 08 Openings

Division 09 Finishes

Division 10 Specialties

MasterFormat Divisons

Division 11 Equipment

Division 12 Furnishings

Division 13 Special Construction

Division 14 Conveying Equipment

Division 21 Fire Suppression

Division 22 Plumbing

Division 23 Heating, Ventilating and A/C

Division 25 Integrated Automation

Division 26 Electrical

Division 27 Communications

Division 28 Electrical Safety and Security

Division 31 Earthwork

Division 32 Exterior Improvements

Division 33 Utilities

Division 34 Transportation

MasterFormat Divisions Division 35 Waterway and Marine Construction

Division 40 Process Integration

Division 41 Material Processing and Handling Equipment

Division 42 Process Heating, Cooling and Drying Equipment

Division 43 Process Gas and Liquid Handling, Purification and Storage Equip.

Division 44 Pollution and Waste Control Equipment

Division 45 Industry Specific Manufacturing Equipment

Division 46 Waste and Wastewater Equipment

Division 48 Electrical Power Generation

For detail scope and definitions go to:

csi@csinet.org www.ArchtoolBox.com

Ohio Department of Transportation

www.dot.state.oh.us

Pages - Construction Bidding Information

www.dot.state.oh.us/Divisions/ContractAdmin/Contracts/Pages/default.aspx

The Department shall NOT accept, review, hear or consider any bid protest or

construction claims arising from the attached information. In the event that

there is a conflict between the attached information and the bidding

documents, the bidding documents shall take precedence.

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Thank You

Joe Lopez

Artessa Building Group, LLC

JoeLopez@Artessa.us