Management Article
 
Electrical Estimating and Project Management

Extracted from Mike Holt's Electrical Estimating Book
© Copyright 2002 Mike Holt Enterprises


CHAPTER 2 - ABOUT ESTIMATING

2.01 Qualities Of A Good Estimator

The following is a list of qualities that identify a good estimator:

  • A willingness to learn.
  • A good knowledge of construction and the ability to visualize the electrical requirements.
  • An orderly mind and a tendency to be careful, accurate, and neat.
  • An open mind willing to change and take advantage of new products and new technology.
  • Decisiveness and the ability to make decisions and not be intimidated by details.
  • Fairness, honesty and integrity.
  • Knowledge of electrical codes and the ability to read blueprints.
  • Patience, you must be able to finish the estimate without losing your cool.
  • Procedures, the ability to follow them.

2.02 Duties And Responsibilities Of The Estimator

While the duties of estimators may vary from contractor to contractor, the basic principles remain the same. Generally, the duties of the estimator include but are not limited to:

  1. Determining the cost of the job (estimate).
  2. Purchasing material.
  3. Insuring bid accuracy.
  4. Providing project management information.

2.03 The Estimating Work Space and Tools

Before you estimate your first job, you need to have the proper work space and tools. Your work space must be efficient, well illuminated, and located so that you will not be disturbed. When you estimate a job with improper tools it will take you longer to complete the estimate and you will often have poorer results. Good estimating tools cut down on human errors, increase efficiency, and pay for themselves very quickly.

2.04 Types Of Bids

There are several types of bid requirements you might experience. They include:

  1. Competitive bid
  2. Design build
  3. Negotiated work
  4. Time and material
  5. Unit price

2.05 What An Accurate Estimate Must Include

An accurate estimate must include, labor cost including burden (fringes), material cost including fixture and switchgear quotes, sales tax, subcontract and rental expenses, direct job expenses, and overhead.

Note: To determine the bid price, you must include a margin for profit.

2.06 Improper Estimating Methods

There are many improper estimating styles of determining the selling price for a job. They include:

  1. Ignoring the specifications
  2. Meeting the lowest price
  3. Shot-in-the dark
  4. Square foot method (ball-park price)

Note: The square foot method is helpful to check an estimate for bid accuracy

2.07 Proper Estimating Methods

The proper methods of estimating include time and material pricing, unit price, and the detailed method.

2.08 The Detailed Estimating Method

There are six steps of a detailed estimate. Estimating Process

  1. Understanding the scope of work.
  2. Taking-off symbols (counting and measuring).
  3. Determining the bill-of-material.
  4. Pricing and laboring material.
  5. Extending and totaling cost and labor.
  6. Completing the estimate summary.

2.09 How Accurate Can An Estimate Be?

Not all expenses can be anticipated in advance, but experienced estimators accept a satisfactory margin of error in the accuracy of the bid. If you break the job down into its smallest possible parts, then the magnitude of each mistake will be reduced and, hopefully, the mistakes will cancel each other out.

Computer Assisted - Using a computer to determine the bill-of-material, perform pricing, laboring, extending, and totaling eliminates most estimating errors.

Accuracy Of Estimating Materials Material is the most predictable part of the estimate and can generally be calculated to within a few percentage points of the actual cost for new work. Accuracy Of Estimating Labor Labor is more difficult to predict than material, but with experience, labor can be calculated to within 10% for new work, and 20% for remodeling.

2.10 Manual Estimate, Computer Assisted, Or An Estimating Service?

Today there are three primary methods of estimating a job. They are, the manual method, computer assisted, or an estimating service. Each method has its own set of advantages and disadvantages.

Manual Estimates - The manual method has been used by electrical contractors for decades. There are several disadvantages to estimating manually, they include:

  • Cost to complete each estimate.
  • Errors in math.
  • Lack of project management information.
  • Inability to respond to changes.
  • Time to complete the estimate.

Computer Assisted Method - The computer assisted method of estimating is actually the same as estimating manually, except that a computer is used to perform the thousands of mathematical calculations, millions of times faster and more accurately than a human. The competitive advantages to a computer assisted estimate include:

  • Changes are easily accommodated.
  • Improved project management and reduced cost.
  • Improved bid accuracy.
  • Reduced estimating time.
  • Reduced management cost (overhead).

Estimating Service - An estimating service is a temporary agency that you only pay when you need it. When an estimating service produces an estimate, you have the opportunity to review the bid to ensure that the estimate is accurate and complete. You might use an estimating service to double check a bid, or you don't have the time to do the bid yourself.

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I hope you find this short summary helpful. If you want to know more about estimating, please attend our seminars, order the book or the home study video program today.

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