Electrical Estimating – Page 4 – Candels Estimating & Training

Look for Safety Protocols in the Specs

A seasoned estimator will know to look for injury prevention and safety protocols in the bid documents. Some contractors will require that all construction site workers attend a “stretch and flex” meeting every morning. On a recent job that we bid, due to the size and duration of the project and the number of workers this bid line item accounted for a cost of over $1 million over the life of the project! This is something that a company would not want to omit from their job costs before they submit a bid.

From an operational standpoint, avoiding employee injuries is paramount. Check your specs for safety protocols for your jobsite! Here are some tips:

Educate employees on safety. Ongoing safety meetings are required on many construction sites. Make sure all employees know how to properly use and store equipment.
Provide protection equipment. Some jobs require protective equipment; be sure it is provided to employees. Hard hats, safety vests, and glasses are usually a requirement on most construction sites.
Don’t take shortcuts. Taking shortcuts may save some time initially but in the long run, an injury will cost the business owner time and money. Or it could injure (or worse kill) a worker.
Monitor safety measures. Check periodically that everyone is in compliance with safety regulations. This gives the business manager the opportunity to correct bad habits before an injury occurs.
Keep the workplace organized and clean. Make sure equipment is properly used, and then stored.
Have a safety and wellness plan. By having a plan in place, employees should know how to act in case of an emergency.

Businesses should require their to always use safe practices when working, no matter how big or small a job is. With the proper investment in safety protocols and injury prevention measurements, accidents can be prevented, saving a business time and money.

OSHA reports that nearly 6.5 million workers are employed at approximately 252,000 construction job sites in America on any given day. With all of these workers, it is crucial that you are committed to job site safety. OSHA lists five of its safety standards that are most frequently violated.

Include 5 Safety Standards when estimating injury prevention

Scaffolding Safety
Fall Protection
Excavation Safety
Ladder Safety
Hazard communication

In terms of estimating, review the safety protocol for each job you are bidding. You may find that there are safety requirements and training for field workers that must be covered in your estimate. When it comes to injury prevention, it is better to be safe than sorry.

Special Take-offs: How Many and How Much?

Ok, the lighting is counted, the branch is wheeled, and you have sent your lighting counts to your vendors. Before you move on to the next system, let’s talk a minute about lighting and dimming controls, daylight harvesting, and occupancy sensors.

Estimating Lighting, Dimming Controls, and Occupancy Sensors

Occupancy sensors can be like a simple switch. The light goes on when someone enters the room, and if the sensor does not “sense” anyone in the room, the light turns off. However, lately, we have seen that there are many types of occupancy sensors which work in concert with lighting control and dimming systems. I will have to admit, the first few times I saw a lighting control riser, I thought it was complicated and intimidating! But when you break down the pieces, you realize that most of the times for each of the items in the system, you need a stub-up or a box or both, and you must assign a labor factor to each, get a material quote from your vendor, and carry the labor and material for the wire. That’s it. More daylight harvesting systems are shown lately, as a way to save energy on bright sunny days. In this case, the sensor detects the presence of daylight and adjusts the building’s lighting accordingly to save energy.

Drawing Keyed Notes

Moving on to branch devices, taking off these items is pretty straightforward. The things you want to watch out for are notes pertaining to tamper proof receptacles (not as expensive as they once were, but still a good deal more than a standard duplex), Leviton Decora devices and face plates (certainly more costly than standard devices), and carrying the proper receptacles for specialty devices. Sometimes there are keyed notes or a schedule for items requiring something other than a standard duplex, even though the symbol on the drawing would indicate a standard duplex. Again, it always pays to read the drawing keyed notes before you start, so you can be aware of anything “special” you might have to take-off. The same is true of kitchen equipment. There is usually a schedule that will either state the proper receptacle or you will be provided with information regarding voltage, amperage, and the number of wire and then you will have to cross reference this information with the NEMA configuration chart which you can find either in the NEC code book or one of the cross reference books, such as Ugly’s. I guess my point is: completing a take-off is more than counting. You have to know what you are looking at and what to look for.

Let’s Talk About Branch Wiring

Let’s talk about branch wiring. Do you wheel off your home runs? What do you carry for each item? You can certainly review the drawings, and see what you should carry as an average length of a receptacle, and take the cable or wire off as you take off each device. Always wheel off the branch for specialty outlets to ensure that you have enough cable for these items. I look at the specs and determine how many circuits the specs say to carry in a conduit. If there is no information regarding this in the specs, then I do my conduit fill to code, keeping in mind that you should run your lighting home runs in separate raceways from your power and certainly from your low voltage wiring.

Taking off Mechanical Equipment

Taking off mechanical equipment can be made much easier if you print the mechanical schedule and put your lengths next to the schedule as your find the equipment on the floor plan. Often, however, the electrical drawings will contain a mechanical schedule that you could do the same thing from. This is handy because you will be able to determine the wiring and voltage requirements of the unit, and whether or not you will have to carry the disconnect. Keep in mind that even if you do not have to carry the material cost for the disconnect, you will still have to carry labor for wiring the disconnect and any control wiring. Pay special attention to whether the equipment is inside or outside. Anything outside will need an NEMA 3R disconnect, which is much more pricey than an NEMA 1 disconnect. If the item is in an area designated as “explosion proof”, then you will have to use the appropriate wiring method for the Division and Class, and use the appropriate explosion proof fittings, devices, and disconnects which again can add additional cost to your job. In any event, you want to be sure to cover your costs appropriately.

Installation of Feeders, Switchgear, and Panels

The installation of feeders, switchgear and panels is often where most of the money in your job is. It is not just a matter of wheeling off the “from and to” this panel and that. You must ensure that you are using the appropriate method of running the conduit, be it in the slab, on bar joist or on steel beam. Many younger estimators wheel the feeders very tight, but you want to be sure that you again cover your cost and cover extra wire for terminations. Don’t forget to labor your panels and switchgear as well. Many software programs offer you the option to “build” your panel with the appropriate breaker fill. We have found that it is much more estimating time cost effective to come up with labor hours that work for you. For example, we carry 6 hours for 100 amp panels, 8 hours for 200 amp, 10 hours for 400 amp and this formula works for us. Be sure you know how the panels are going to be mounted. Will they sit on a pad or will they be mounted on the wall in which case you are going to have to carry unistrut for mounting? Also, do you have to carry the housekeeping pads? Probably not, but you should always be sure to exclude concrete work if you know you don’t have to carry it. The same would be true of the transformer pad or if applicable, the generator pad. Speaking of the generator, don’t forget to carry the rigging, and determine whether you need to carry generator fuel, start-up, and testing. If you are not responsible for it, please exclude it in your proposal.

Emergency Feeders

Does your project have emergency feeders? Please read the specifications carefully as emergency feeders may have to be run in MI cable, or they may have to be run in EMT that will be concrete encased. Again, be sure to exclude the concrete work if you know you don’t own it. If you have not bid a job with MI cable lately, call your supply house or check your material pricing service to ensure that you are carrying the right price.

Incoming site utilities

Incoming site utilities are generally run in Schedule 40 PVC, but again, read your specifications and the drawing notes to ensure that you can use Schedule 40 PVC, as opposed to Schedule 80 PVC, or PVC coated rigid. In the event that there is a conflict between the drawings, the notes, and the specs, submit a Request for Information or RFI. Certainly there is an appreciable labor and material cost different between these methods, and while you want to cover your costs, you also want to be sure that you do not artificially inflate your labor or material cost. Also, while you will have incoming power requirements, you may also have incoming telephone, CATV or fiber, so be sure to carry what you should. Read the specs to see if you are responsible for man holes or pull boxes too! Site lighting! Are you responsible for site pole bases?

Low voltage systems may or may not be part of your bid package on any particular job. Be sure you know what to carry, whether it just be “rings and strings”, and EMT stub-up, or a full blown system, including device installation, pipe, and wire.

Ok, your take-off is done; now what? The real work is about to begin. Stay tuned for our next post on reviewing your take-off, applying quotes, and starting to think about direct job expenses.

Get Specific About Job Specifications

You have set the groundwork for an efficient estimating process by knowing your business, your customers, and how to select the appropriate jobs to bid. Now it’s time to focus on the nuts and bolts of the process. A thorough review of a job’s specifications provides the roadmap to get to your bid price.

Front End Specifications

The front end specifications (Division 1) provide general project information that applies to all trades. The responsibility schedule will detail “who owns what.” Do not assume that everything you usually bid is part of the bid package on every project. The specifications should also specify the project schedule. Be sure you can meet the deadline since failure to do so may result in liquidated damages, which could be thousands of dollars per day! Often not being able to meet the schedule is through no fault of your own; you may be losing time from delays due to other trades. In this case, you should document the situation and inform the owner/GC to put them on notice, so as not to be hit with liquidated damages charges.

Project Walk-through

You should always attend the project walk-through, especially if it is mandatory. Valuable project insight can be gained about job site conditions and restrictions, working access, working hours, parking, or materials storage space, and even the presence of asbestos. If you don’t show up, you will not be able to submit a bid. A walk-through allows you to “see” what may not appear in the drawings such as existing equipment, access to the equipment, and general site conditions.

Bond Requirements

Also, the front end specs include bonding requirements — be it bid, performance, or payment bonds. There is a lead time in getting a bond, so the earlier you request one the better. Bonds can take 3 to 4 working days to get. As a result, a good working relationship with your bonding company can reduce the lead time tremendously. And, if your relationship is excellent, you may be able to arrange to write your bonds through power of attorney.

Extra Hours

Finally, the general contractor or construction manager may require you to carry “extra hours” to be used at their discretion, and they may need you to give allowances for contingent items. Often these are high ticket items, so you want to ensure these are included in your proposal. More often, general contractors, especially larger ones, are including “500 extra hours to be used at their discretion,” feeling that they are pre-buying hours that can be used for change orders at a discounted rate.

Electrical Information

Electrical information is contained in Division 16 or 26 specification sections. Other low-voltage information (fire alarm, security, public address, and telecommunications) may be included in separate specification sections. Be sure to know what you will be responsible for within your bid package.

The Specs Supersede the Drawings

Read the specs carefully. As the old saying goes, “the devil is in the details.” If there is a conflict between the specifications and what is shown in the drawings, try to pinpoint a reference within the text that defines the information that supersedes the other. It’s an old wives’ tale that “the specs supersedes the drawings.” For example, the specs may state that outside duct banks shall be run in Schedule 40 PVC. However, there is a note on the site drawing that states all duct banks shall be run in galvanized rigid conduit (which costs a lot more than PVC)!

If you can’t find a particular reference about what information supersedes, submit a Request for Information (RFI) for clarification. At all times, you want to be sure to cover your costs yet at the same time you do not want to cover any unnecessary costs that could unnecessarily inflate your bid price. Whatever you do, always qualify your bid! For example, it could be as simple as “Carried Schedule 40 PVC for all duct banks per specifications. Did not carry GRC per drawings.”

Specs are often considered “boilerplate,” meaning they do not always contain project accurate information. And to be truthful, it can get tedious reviewing hundreds of pages of what may seem to be worthless information. You always want to look for wiring methods, fittings required, required testing and coordination studies, and the responsibility of providing starters and disconnects. For private jobs, you will be able to deviate from the specifications. However, if it is a public project, you will be bidding on “plans and specs,” meaning you will not be able to deviate from the plans and specifications.

Be aware that specs may include information on systems that are not shown or referenced on the drawings. Carefully review the written narrative describing the system, components and wiring methods. And again, if any doubt exists, qualify your bid.

A thorough review of the specifications helps you map out the entire bid process and set the stage for the next part of the estimating process — the take-off.

Tips for Women to get into Electrical Contracting Industry

An increasing number of women-owned contracting firms are helping to level the playing field in a traditionally male-dominated industry.
While current statistics reveal only 9.5 percent of National Electrical Contractors Association (NECA) members are women-owned businesses, this number has tripled in the past 15-20 years and reflects a trend seen in physically demanding, tech-centric fields everywhere.

Here are some tips for women looking to get into the field:

Networking is very important for electrical contractors, and many jobs are won based on relationships that you build with each other in construction.
Participation in groups such as Women in NECA is extremely beneficial.
Get certified as a WBE. Certification as a Women’s Business Enterprise (WBE) is very important if you’re looking to do automotive industry work, federal and/or state work.
Encourage teamwork; it helps to foster a team-based approach involving men and women who all bring something different to the table.
Believe in yourself; don’t give up hope when you’re down.

These tips are just the beginning of what woman are capable of doing. Woman are strong and have a bright future in the electrical industry.

Bidding and Bonding Essentials: When and Why?

You know your business, and your potential customers know you. The next step is looking at jobs available to bid and the companies soliciting your submission. The number of bidders, the “signals” you are receiving from those seeking a proposal, and whether you have the tools, equipment, bonding or pre-approval required are items you must consider before you even think about starting your take-off.

Available jobs can be found on various bid boards and websites and networking with general contractors. Once you have found one or several jobs that peak your interest, pay attention! Review the drawings. What is the quality? Are there “engineering holes” because the project is still in the “design” phase and the contractor may just be looking for a budget price?

Understanding Scope of Work

Do you understand the scope of the work and do you have experience in this type of work? If not, you may be open to potential pitfalls that could cost escalated labor or material costs, or both. Do you have the proper human resources, tools, and equipment to complete this type of work? Renting or purchasing certain items will certainly raise your job costs.

Which general contractors are bidding the job? Do you have a relationship with them? Remember, you may need to submit several bids to a GC before you are awarded a job. Beware of providing “check prices” too! If the project is a public bid opening, it will be awarded to the lowest bidder provided they meet pre-approval and bonding requirements if any.

Consider how many electrical contractors are bidding. If there are several electricals bidding, the plans are marginal, or you do not have a relationship with the GC, walk away! Spend some time looking for projects that suit your company! And time is a critical factor! Often job schedules are extremely tight. As a general rule, the more condensed the schedule and the more trades on site, the less productive your labor will be. Potential overtime wages and labor inefficiencies should be factored into your proposal.

Back to relationships again. Establish relationships with your vendors…lighting, gear, fire alarm, ensuring that you get the “right whisper” number on bid day. Many times a job has been won or lost because of the “play” in quotes on bid day.

Bonding

Finally, some critical factors: Does the job require a bid or performance bond? Bonding capacity is a key part of a contractor’s portfolio which minimizes the financial risk faced by project owners and developers.

A performance bond provides a legal guarantee that the contractor holding the bond will perform specified work or face financial penalties.
Bid bonds guarantee that the bidder will sign a contract if awarded the job and will uphold his price.
A payment bond protects the owner if a subcontractor fails to pay its suppliers avoiding mechanics liens.

Make sure to give your bonding agent plenty of time to prepare the bond so you can meet your bid day requirements!

Beyond bonds, many projects require pre-approval to not only work at a site but to submit a bid. Don’t wait until the last minute to address this issue, as there could be a mountain of paperwork to complete, which may require the assistance of your accountant or bonding agency.

By paying attention, you will have a better handle on choosing the right jobs to bid. Bidding smarter will give your company the edge.

Labor Adjustment Costs

Now that you have determined that your take-off is accurate and you applied the necessary costs, let’s consider labor adjustment costs.

Depending on the size of the project you are bidding, you may have to carry money for a project manager (who is responsible to ensure the job is built to what was carried in the bid and/or negotiated upon award).

Oftentimes, the field labor force, for example, will have no idea that special provisions were negotiated with the owner for certain things such as the use of aluminum feeders (if allowable by local code) or open fire alarm cable. The project manager will communicate this to the job foreman, another labor component you should carry–again, depending on job size.

For very large or complex projects, you may have to carry more than one foreman. In union environments, the labor superintendent’s salary and/or a steward’s salary will probably be considered part of the company overhead, which we will get to a little later. Some larger companies also carry money for the estimator or clerical staff.

Labor Adjustment Costs – Escalation

Technically, for any building more than four stories high, the labor adjustment costs include an escalation rate of 1 – 2% per floor, which means that any item that is installed on the 20th floor, for example, will take longer to install than one on the first floor. How is that possible? Let’s not forget that a labor unit is comprised of the actual installation time, plus time for material procurement, coffee breaks, and actually getting to the area of work. So presumably, it is going to take longer to get to the 20th floor than the first floor, which includes not only waiting for the man lift but also transporting the appropriate material to the work area from the staging area.

In this competitive bid market, I realize that if you carry everything that I talk about, you may never be awarded a job. However, it is the estimator’s responsibility to identify ALL the costs in the estimating process. Then, upon review of the estimate and bid, items can be strategically cut to get closer to a more competitive number. At this point, decisions to cut items become strategic, but you have to know your complete costs before your strategy comes into play.

Estimating Overhead and Profit

Some companies bid their projects with a “fully burdened rate,” meaning the labor rate that they use to bid a project already includes a specified overhead amount in the hourly rate. Other companies apply their overhead rate as a percentage within a line item in their bid. Whichever option you choose, you should know what your overhead percentage is and carry it on every job. If you don’t know your overhead percentage, talk to your accountant. I suggested in a previous installment of this series that you should make friends with your accountant so you will already have this information. You simply cannot bid a job without covering all your costs, unless you want to risk the exposure of losing money on the project, if awarded.

Finally, profit is a beautiful thing. However, most estimators I know put in very little for profit: 2% to 5% — and for good reason. The market is just too competitive. This is where knowing your market, your customer and your competition will guide you to success. Only you can decide what will give you the magic number to get a scope review and eventual project award. Look at past bids and completed projects, review your numbers, and see if you can get an advantage somewhere.

In the next article, we will discuss your bid price and putting together a proposal (scope) letter to accurately describe what is included in your price. This is the final, and one of the most important steps, in submitting your price to the general contractor. Don’t miss it!

Never Underestimate the Power of Relationships

Now that you have assessed your business, know your overhead, and have a deeper relationship with your accountant, you are now ready for the next step. You know your business, but do your potential clients know you?

We know that price is a big driver in purchase decisions; however, when a general contractor, developer, construction manager or owner is faced with two similar prices, and they know one company, but not the other, who is more likely to get the contract award? That’s right—the one with the relationship. And, even better if you have a company history in the type of work you are bidding (and please let the contractor know that!).

Building Relationships is Key

Over the years, the theme that recurs is the power of relationships. Relationships help you find the private jobs and jobs that the general contractor may already have. Contractors who have remained busy, despite the economy, have put time and effort into building and maintaining relationships with their client base. They make this an integral part of their business, not just something to do “when they have the time.”

Just as many have viewed the task of “getting to know your business” as daunting, some may feel the same way about establishing, building, and maintaining relationships with clients. All you need is time! Over time, with just a bit of effort, you can build profitable relationships. Just do it!

The cold call method is a very good idea. You might not get to see the person you are calling on, but you can leave your business card, some company information, and even a box of doughnuts for the office staff. When you get your foot in the door, be prepared to bid a few jobs before you are awarded one. This is the contractor’s way of getting to know you as he watches how your prices come in. Watch for potential new clients when you are driving around, then stop in to introduce yourself. Check out construction sites too; it’s all about being in the “right place at the right time!”

Clients can also get to know you with documentation about your company. A simple folder with slip sheets detailing your staff, capabilities, tools and equipment, and past notable projects is a good start. For the more creative, create a brochure. If you do not have any experience in graphics, contact your local college. There are always students willing to share their new craft at a reasonable price. Also, adding a website always adds to your company’s credibility.

Meet New Clients in Networking Groups

An excellent way to meeting new customers is networking groups such as the Chamber of Commerce, the Rotary Club, the Elks or Eagles, and other social organizations. Chances are you will meet someone that will need work done, or they will know someone who does! Check out the Associated Builders and Contractors and the Associated General Contractors, too. Both represent all specialties within the U.S. construction industry and are comprised primarily of firms that perform work in the industrial and commercial sectors of the industry.

Cold calls, social clubs, and industry organizations will undoubtedly introduce you to potential clients. When you get the chance to bid, don’t expect to get a job right away, but persistence will pay off! Also, in our current world of technology, (think texting), it is still important to put your face to your company’s name and be able to explain why someone should do business with you. It’s a lot easier for a client to say “no” to someone they don’t know. Make it your business to get to know them and do everything in your power to become indispensable!

The Estimating Process – It Starts Earlier than You Think!

When do you think the estimating process begins? This article is the first of a 12-part series on the estimating process. In starting the New Year, it is appropriate to examine the processes we complete but might not give much thought to, such as estimating.

Many of you might think that the estimating process starts with the take-off, but that is step 3 or 4. The estimating process starts way before any actual “estimating” or “counting” begins, and certainly before you peruse the bid boards to see what is out there to bid.

Include your overhead costs in your bid

To get to the heart of the matter, you must know YOUR BUSINESS! Knowing your business comprises of many things. First, if you do not have an accountant or a relationship with your accountant, start the new year right and establish a relationship, because your accountant can tell you a lot of things about your business that you may not know. When I work with contractors to put together a bid, I often get a blank stare or silence on the other end of the phone when we get to the “overhead” part of the proposal. When bidding a job, you should cover all costs, both direct, or those related directly to the job, such a commodity material, labor, quotes, direct job expenses, and the like, and indirect, such as your overhead. If you do not know your overhead, how do you know that you are indeed covering your cost? The process of determining (and changing) overhead need not be daunting, but this information is critical to the estimating process.

Other things should be considered before bidding a job. What is your labor force like? Are you a union or non-union shop? If you are a union shop, then your field work is dependent on available workers when you call the union hall. If you are a non-union contractor, you have a staff of electricians. What is their experience level? If you, your foreman, and your electricians have absolutely no expertise in a particular type of work, then you must think twice before bidding it. A good example is a waste water treatment plant. It’s not clean work, no pun intended. It is full of a PVC-coated rigid conduit, explosion proof fittings, and a lot of equipment, definitely not “learning ground” for any contractor.

Speaking of which, do you know what your firm is “good at?” Do you know what size project is most profitable for your company? Following that same school of thought, do you have the tools, equipment, supervision, and infrastructure for the work you bid? Again, work with your accountant if you are overwhelmed with answers to your questions. No sense chasing work which will not ultimately turn a profit for your company.

How about bonding capacity? Many contractors wait until they are knee deep in an estimate to realize they don’t know if they can get a bond for the work. How about project labor agreements? If you have never bid a job with a PLA on it, are you familiar with the paperwork you will have to submit for the certified payroll?

I have given you a lot to think about. Most of it probably isn’t new to you. However, as we begin a new year, it is a good time to pause, reflect and evaluate what is and is not working.

In our next post, we’ll discuss the next step in the estimating process: Finding jobs to bid.