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The next step in determining your break-even cost is to transfer the material cost from the Price/Labor Worksheets to the Estimate Summary Worksheet. Once this is accomplished, you will need to account for lighting fixtures and switch gear, miscellaneous material, sales tax, small tools, and waste and theft.

Lighting Fixtures
In an attempt to maintain high profit margins, suppliers often hold prices until the last moment before the bid so their competitors will not have a chance to undercut them. You need to have the Estimate Summary Worksheet completed ahead of time. If the quoted items have not been inserted, then a reasonable “guess” must be noted instead. This will avert an omission of high value materials. This way, when the last minute quote prices arrive, you can determine the bid price. Be sure to review the quote when it arrives to ensure substitutions were not made. If they were, you may need to talk to the supplier to ensure you will not have to bear an additional cost if the substitutions are not acceptable.

Author’s Comments: Be careful not to make a mistake when transferring the supplier’s prices to the Summary Worksheet. Insist on written quotes, and be sure the quote includes any freight and shipping costs.

Miscellaneous Material
It is impractical to try to determine every material item required for a job, like mounting screws, pulling compound, wire connectors, tape, and so on. You can either try to take them off or add a percentage to the total cost of material as an adjustment; I suggest you add 10 percent of the material cost as a factor when you are doing the estimate manually.

Computer-Assisted Estimate. A 2 to 3 percent adjustment to the total material cost should be sufficient for small items not taken off.

Switchgear Quotes
In an attempt to maintain high profit margins, suppliers often hold prices until the last moment before the bid so their competitors will not have a chance to undercut them. You need to have the Estimate Summary Worksheet completed ahead of time. If the quoted items have not been inserted, then a reasonable “guess” must be noted instead. This will avert an omission of high value materials. This way, when the last minute quote prices arrive, you can determine the bid price.

Author’s Comment: Be careful not to make a mistake when transferring the supplier’s prices to the Summary Worksheet. Insist on written quotes, and be sure the quote includes any freight and shipping costs.

Tools
Costs for ladders, cords, cordless drills, screw guns, drill bits, hacksaw blades, and countless other small tools must be included in the estimate. A factor of 3 percent of the total material cost is considered an acceptable value for small tools.

Waste and Theft
In addition, be sensitive to the cost effect of workers wasting material, and to theft on the jobsite. What is a reasonable factor to include for waste or theft? For an organized and efficient organization that manages material carefully, a reasonable factor is 5 percent, but you will not really know unless you do a study to determine this adjustment.

Sales Tax
Sales tax varies from state to state, county to county, and also from city to city. Be sure you are familiar with the sales tax rules in the area where the job is located.

Author’s Comment: Do not forget to include freight and shipping costs (which are not taxable).

The above content is extracted from Mike Holt's Electrical Estimating Program.