As someone who started in construction almost 40 years ago, there are a few truths that never change. For example, you never want to bid too high or too low. And any advantage you can gain—from the take-off process through build-out—is critical to your success.
For a wall and ceiling contractor, it all starts with making sure your final bid is accurate. Before the first wall is taped, you must make sure all quantities are counted and measured; and materials and labor accurately factored into the final bid. For cost estimators, this likely means hunting down missing project details before finalizing your bid. Ultimately, you must submit an organized and polished final bid.
How do you get there? Bid accuracy begins with an interpretation of structural/architectural/engineering drawings and designs to assure that all required finishes and issues are addressed upfront. Trust me, you don’t want to run into problems down the road, such as failed inspections, rework, and project penalties. Or even worse—structural integrity and liability issues.
For the walls and ceilings trade, it is no longer just about covering studs and rafters. Over the years, I’ve seen this trade evolve into a much more complete specialty. This includes things like installing firewalls, sound walls, smoke walls, and more sophisticated structures like positive-pressure walls to seal and keep out contaminants from another source.
Tips for Improving Bid Accuracy
As already mentioned, if you estimate too high, you may lose. Estimate too low—and you’ve just won a nightmare of a project. To help you win the most profitable projects, I’d like to share a few general tips to consider when estimating:
Use a Project Template as a Checklist –
It’s easy to forget things like permits, landscaping, etc. Use a master checklist to make sure you complete the necessary steps and items. You can also take advantage of tech tools that help with your entire bidding workflow—from finding a project to bid to takeoff and building the final estimate—so all your information is in one place and you’re more likely to reduce errors.
Use the Unit Cost Estimating Method –
Unit cost estimating is twice as fast as stick estimating and just as accurate. Unit costing incorporates the following steps: Compile all the line items for that job > Assign a unit cost to each line item >Total the numbers and have them checked by a second party > Apply a markup
Get Help in Areas Where You Lack Expertise –
If you don’t know a lot about a specific line item, you’re not going to be as thorough in your estimates. Use online templates or predefined modules or even ask subcontractors/consultants who may have more experience in that area.
Check Your Subcontractor Quotes –
Go through the same steps in evaluating your subcontractors’ quotes as you do when looking at your own. Compare multiple subs for each scope of work to make sure you’re covering or uncovering any gaps.
Use the Right Tech Tools –
There are so many more digital tools that you can access now that weren’t available 10 years ago. Make sure you’re using a tool that can quickly measure digital plans and customize pricing.
Leave Educated Guesstimates Behind
There is plenty of evidence that digital tools can help you improve bid accuracy and profitability. But even today, I see a lot of estimators who still lean on the tools of an older generation. Don’t forget that when you manually perform material takeoffs to generate educated cost “guesstimates,” these bad numbers will slowly make their way into formal bids.
It’s interesting to note where we are in terms of tech adoption. Check out what the 2019 JBKnowledge ConTech report found:
- Almost 65 percent of construction pros surveyed still rely on spreadsheets as part of their estimating workflow;
- 54.6 percent use estimating software;
- 37 percent reported using digital tools for take-off;
- 90 percent use dedicated tools for Accounting/ERP;
- 58 percent use digital tools for Project Management.
Judging by these numbers, it seems to me like many estimators still don’t embrace using digital tools for their takeoff and estimating workflows. For others, digital tools are proving to be a game-changer when it comes to improving bid accuracy.
Why embrace digital tools? Consider how well your business communicates when material shipments run late or trades fall behind, requiring schedules to be adjusted. Making sure the office and the field are on the same page is critical to any project’s success. Digital tools can help you keep everyone on the same page—so the field can adjust the sequence of work or address anything that was promised during the bidding process.
Using Tech Tools to Build Better Bids
To the bigger question: how do estimators win more profitable bids when profit margins are tight? Some choose to use job costing software alongside takeoff and estimating software. Many have told me that it helps them drill into why jobs don’t always go as planned. Let’s face it, historical information is critical to building your next bid.
Clearly, I have seen how digital tools can help you gather better, more detailed information, and leverage historical records from previous jobs. This means your business can more accurately compare job cost against the original estimate—so bidding errors aren’t repeated on the next job. When you catch issues, you can make sure your Unit Costs are accurate going forward.
With projects being delayed, canceled, or postponed due to COVID-19, more construction pros will need to embrace the savings and efficiencies that takeoff and estimating software, cloud-based systems, and mobile apps can deliver to your business