There are a few aspects of preliminary estimating services that define the business newcomer or a new estimator this part is very crucial but at the same time very challenging to develop the correct estimate. It is also important to recognize that even the most accomplished estimators are prone to the occasional error. For optimal performance and to avoid expensive mistakes follow these 7 suggestions when preparing your bids.
Gather as Much Information Concerning the Project Early on
One of the most common deadly sins that new estimators commit is not collecting a sufficient amount of information before preparing estimates. Where there are formal structures involved you need to have well-documented plans and specifications as well as other information such as the scope and time frame of the project. It is always good to avoid guesswork and just let the client specify what he/she wants in writing then ensure the same details are incorporated in the estimate. This exercise of interpretation, though time-consuming, can help eliminate potential mistakes.
Perform On-Site Evaluations
However, other aspects such as the proportions and outline of the building are lacking in blueprints. Self-audit: Familiarize yourself with the conditions that may affect your bid at the job site such as accessibility to the site, proximity to resources/suppliers, geographical features, presence of rocks or soils, and other concerns that may be deserving of attention, and it is crucial to discuss with the project manager. Make changes before the final computations to account for site-related issues, tools, and equipment, or higher labor and material costs.
Use Accurate Cost Data
It is often the case that even the most experienced estimator may rely in some situations on outdated cost data; therefore, it is advisable to revise the prices as often as possible. Fixed and variable costs vary from time to time, and you require up-to-date information for the hourly/unit labor rates, price of materials, and rental fees for equipment, among others within your region. You must look at industry cost analysis reports, contact your suppliers and distributors for quotes, and look at the most recently developed estimates to use the most justified and up-to-date prices.
Clearly defining the scope of work is essential in any project to ensure that expectations are met and that there is no confusion on the specific duties that are required from the personnel involved in the project.
Other risks are derived from errors made in defining the scope of projects. When looking at plans and specifications, what is within the scope (and what is not) must be clearly understood. Any issues in scope should be cleared in writing before bidding so that one does not assume things about the project. Be sure to convey the work you plan on listing as a fixed bid and ensure all stakeholders acknowledge the scope of work as stated in estimates and contracts respectively. Lack of clarity over the scope that is expected in a given project is one of the worst things that can ever happen to any given project.
Use Estimating Software Properly
Electrical estimating service software can increase efficiency, but it also can be hugely problematic if the features are employed incorrectly. Be wary of data, as it can be produced by a computer program with certain features and limitations. Ensure that you get the proper settings of product libraries, cost databases, assemblies, productivity rates, and other related factors correct from the onset. Follow procedures of using software tools that are provided for use correcting manual inputs and doing estimate checks to find inconsistencies.
Confirm Completeness
This is because, when preparing the estimates, parties involved are under tremendous pressure to complete the job on time, and this often leads to missing out on certain items. Make sure to thoroughly go through the estimate before submitting any bid to ensure you have not left out any costs. Confirm that you have enumerated each of the work activities and have priced each of the work tasks and phases have looked for specifications that are expected by the client have cross-checked with past estimates for similar lumber take off service projects and have added other components such as project management, safety measures, insurance, overhead, profit margin, etc.
Communicate Assumptions
Assumptions, exclusions, and qualifications while preparing the estimate should be recorded as follows. Below are elements that should be classified as “owner costs” or should not be included in the contractual cost estimate. If there are, and it is realistic to do so, point out any accommodations made for design risks, poor site conditions, or phasing concerns. This way there is no unnecessary confrontation down the line when clients find out additional costs they were not aware of.
Some Prevention Strategies That You Can Use to Avoid Mistakes
Estimators should avoid the following pitfalls, to which they are naturally prone: There is no doubt that despite requiring constant effort, excluding common estimating mistakes is crucial for increasing the accuracy of bids. In general, it is advisable to provide initial estimates from your research before putting a figure to the project. These include, but are not limited to, the ability to read plans effectively, comprehend specifications suitably, and apply estimating tools appropriately and with diligence.
Some strategies that can be used are on-site visits, confirmation of the scope, updating of cost information, and especially when going through estimate reviews. Finally, all assumptions and exclusions incorporated in estimates must be fully explained to the client. Adopting the above strategies will help in improving your confidence in construction cost estimates.
Conclusion
In construction bidding, profit levels are typically an inverse function of the bid pricing levels, meaning the more precise the estimates for the project, the higher the margins. They result in low profitability since they cost the firm a lot of money and also tamper with customer relations. Thus, contractors mitigate leaving dollars on the table by getting complete project details early, checking and verifying the project scope, pricing the project at the current rates, leveraging software checks, and specifically detailing out estimate assumptions.
No matter how perfect an estimate of project costs may be, the following best practices when estimating will assist in emphatically defining or isolating for you the risks and certainly provide you with bids that will have your customers smiling while, at the same time, ensuring that your firm achieves its targeted profits systematically. It is far from a simple process to provide accurate estimates but effort and skill are the solution and the effort spent is well worth it.
