Many industry personnel believe estimators are simply bean counters, where they dream up a ‘per point’ cost and apply it to the number of symbols shown on the drawings and ‘hey presto’ we have a price for the job. This is the reason so many contractors finish up in the poorhouse.
Then there is the mindset of speed and quantity (“I’ve submitted 10 tenders this week”) against intellect, accuracy and quality, to determine whether or not your company will make money. What value is a hastily prepared tender which loses $50,000 because the estimator was fast, simply lacked the experience and made a mistake?
The first priority is job selection, assessing risk factors before selecting a project to tender is most important. For instance, is the project viable?
Beyond just counting and measuring, the estimator’s first priority is job selection, is the job viable? They also manage the estimate by studying specifications, legal aspects, general and technical conditions of contract, schedules and specified requirements of materials and equipment. Then to write scope letters, seek prices from suppliers, subcontractors, regulatory bodies, monitor addenda and review them for scope changes.
When the base estimate is complete, the estimator calculates the additional on-costs for such issues as:
- site accommodation
- walking time
- site access
- site allowance; and
- PC and Contingency sums,
to calculate a final selling price.
Accuracy in estimating is a powerful skill and essential for the contracting industry. This is a skill based on maths, measurements, labour assessment and risk management. Without these skills the final tender faces the risk of failure.Author – Brian Seymour MBE