Being awarded construction projects is at the top of mind of every general contractor. Below are two points we’ll tackle in this article:
Point #1: Being awarded work depends greatly on the detail and accuracy of estimates submitted
Point #2: A faster response rate increases the number of proposals estimators can respond to. Effectively increasing the probability of being awarded more work.
One of the most laborious parts of the bidding process is completing the estimate. Ample time is spent analyzing the different features of a project. To further complicate things, material prices constantly change with market fluctuations.
Estimates finished faster benefit from more current and accurate pricing. The faster estimates are finished, the more bids that can be sent, and the more projects to potentially win. Proposals sent faster than competitors have the added benefit of making a team present most competent for the job.
Perhaps the most important benefit to the estimator will be the 15-20 hours a week made available to focus on higher value tasks like value engineering, scoping and identifying the best trade partners. Instead of wasting time drawing lines and polygons, estimators should be free to improve the job design, help the owner save money, and truly align project interests. Additionally, estimators can ensure everything is included in the proposal and confirm the sub-contractors can effectively handle the project.
Below, this article details the following:
- Increase the probability of being awarded construction projects by submitting more proposals.
- Accelerate the estimating process by using standard best practices.
- Cut hours, days, or even weeks off the estimating process by implementing new technology.
- Combine new technology with the existing workflow to improve efficiency.
4 Stages of Construction Estimating
Analyzing the construction estimating process will help to understand where efficiencies can be made and what best practices can be utilized.
Construction Estimation - Stage 1
In Stage 1, estimators become familiar with the following:
- Project scope and size
- Getting familiar with the owner
- Project expectations
- Site layout and ongoing operations
- Permit applications
An estimator needs to assess all factors that will affect the price to complete a project.
Factors assessed include:
- Soil quality
- Weather conditions
- Existing geographical challenges
- Shipping and logistics
- Storage capacity on site
- Environmental regulation
- Site accessibility
Identifying price impacting factors early on and accounting for them in the proposal is essential. Underpricing a proposal can cause a contractor to lose the job or to potentially lose money and risk legal complications.
An example of a price affecting factor is a project that will encounter heavy snowfall and will need to account for the cost of snow plowing as well as winter storm weather's effect on project delivery. Pricing attributes should be justified to the owner so that the price is accurate and inclusive of all variables. By communicating these factors to the owner, a level of trust and transparency is established. Alternatively, competitors may state a price without justification creating little rapport with the owner.
- List the scope of work including requirements, important details, and budget.
- Research the project owners to find out their project history and familiarize the team with their preferences.
- Visit the project site to identify factors that may impact the project.
- Break down the project to identify how the different components are priced.
- Attend pre-construction meetings to clarify details of the project.
Construction Estimation - Stage 2
Analyzing the project drawings will help to build a comprehensive list of the materials needed for the project. Once lead times and relationships between tasks are developed, a project schedule can identify the project's timeline.
The quantity takeoff process usually takes hours or even days depending on the size of the project.
New technologies can be implemented to make the takeoff process most efficient and accurate. The time savings provided will transform an estimator's workflow.
3 Types of Takeoffs:
The manual takeoff is tedious and can consume weeks. Even if you are a pro, human error is possible and ample time is wasted.
Estimation software programs that draw polygons manually are labor intensive and mundane. It may take an estimator 90 minutes per sheet to complete an area analysis.
Togal.AI leverages deep machine learning to automatically analyze drawings and generate quantity reports. A complete takeoff is done in seconds.
7 Ways Togal Can Make an Estimator’s Workflow More Efficient:
Process building plans in any format including JPG, TIFF, PDF, and more
- Accurate Object Detection
Togal identifies showers, sinks, bathtubs, doors, parking spaces, and more
- 3 Step Takeoff - Upload, Set the Scale and Generate Quantities
After the takeoff is complete, minor edits and modifications of classifications are needed by the estimator to confirm the takeoff is done according to how their team wants it presented.
- Improved Manual Tools Do It
If estimators need to make edits, the manual tools within Togal facilitate ease and productivity. The Togal developers were able to identify the pain points of the estimator using typical estimation softwares and make significant improvements to how the tools function.
The time saved with Togal.AI’s tools will allow for estimators to focus on what is most important. Whether that may be submitting more proposals, value engineering, or winning more work.
Comparing plans to identify difference is seamless and can be done in seconds with Togal.AI’s plan comparison tool
The inefficient time saved equates to costs saved on the salary of employees’ time.
Togal reduces the time needed to complete a takeoff, it does not replace the estimator. The estimator is an essential part of the pre-construction process that must analyze the plans and identify where problems may exist or where efficiencies can be made. The estimator must review Togal’s takeoff to customize it to their needs for the project. Machines will never eliminate the need for humans but rather make the human workflow most efficient and eliminate the most tedious and time consuming tasks. To book a demo with Togal.AI, click here.
Construction Estimation - Stage 3
Labor and resources and how they relate to the schedule will be identified in the third phase.
- Construction methods
- Labor - types of trades and the time needed to dedicate toward the project
- Materials - identify lead times and logistical storage available on site
- Technologies and equipment needed
Once the variables are identified, the projected costs can be assigned to each component of the project.
Proper budgeting is essential to identify all costs involved. The following must also be accounted for within the budget:
- Profit margin
- Variable cost buffer - unforeseen circumstances and price fluctuations that could impact the profit margin
- Discounts and efficiencies for the owner to best price the bid compared to competitors
5 Recommendations for the Proposal:
- Work closely with vendors and attain quotes for materials
- Identify the base rate for labor
- Secure unit pricing to prevent cost fluctuations
- Invest in cost databases like RSMeans or National Construction Estimator from Craftsman-Books. These indexes will provide average costs and pricing based on zip codes.
- Analyze past projects to identify where costs could be similar.
Construction Estimation - Stage 4
The final presentation to the owner takes place in the fourth stage.
Bids that are most attractive to the owner are ones that identify all the components involved with competitive pricing. The owner is focused on the bottom line though they also want to ensure they are partnering with a general contractor that can effectively complete the job and a team that is positive to work with.
3 Recommendations to Stay Most Competitive:
- Review the checklist to ensure all requirements have been fulfilled.
- After submitting the bid, communicate with the project owners. This will help to stay top-of-mind while other bidders are reviewed.
- Keep track of your bid success rate to determine what is most effective. It is important to learn from every presentation to improve for future pitches.
As the construction increases, efficiency is essential to most capitalize on economic growth and a changing industry. It is essential to stay abreast of modern changes to maintain a relevant business model and workflow.
Book a demo of Togal.AI today.