“It took twice as long and cost twice as much.”
-Anyone who’s been through a remodel
Project estimating is an essential component in the Design and Build process. Believe it or not, contractors can take action early to avoid the costly client “surprises” all too common during construction.
How Bidding Typically Works
Sending a project “out to bid” is a massive undertaking, which contains the following steps for the General Contractor:
- Send completed plans out to multiple subs from each specific trade to ensure competitive pricing (e.g., three different concrete companies to bid on the foundation).
- Send plans to the specialties, material reps, and vendors as needed (e.g., exterior windows and doors), who detail out their estimates based on the design specifics, and assist in verifying that all of the correct items are included for proper installation.
- Establish deadlines for estimates to be returned by the “subs” and vendors, following up every few days.
- Root out issues well before they happen; even if a “sub” is under an agreement outlining the requirements of working on projects, every project is unique and “gray areas” are aplenty.
The Evolution of an Estimate
If you’re waiting until you have a fully completed set of plans to start talking about actual, real-world budgets, you’re waiting too long. The amount of effort that goes into the preliminary construction estimating process directly correlates with projects falling short of, meeting, or exceeding expectations. As the initial concept evolves through design into a detailed and ready-to-build plan, expectations should be set early and often at developmental milestones—each estimate more accurate than the last.
Here’s an example of how an estimate should evolve:
- Your contractor should begin estimating a project in the early stages of design when the project layout and floor-plan are decided upon. Rather than “ballparking” the entire job with a general “cost-per-sqaure-foot” guess, the contractor needs to dive deeper and apply formulas to the specifics of the build; by square footage of the proposed area (tile walls, for example), linear footage of custom woodwork and cabinets, and adding multipliers for wall height, build complexity, and site access. While finishes and details are not yet decided, assumptions can be made and a general margin of error should be included (+/-) for when the details do get worked out.
- As the design evolves into a more defined plan, your contractor should then measure specific linear footage counts of walls, adding multipliers for lumber types and sizes and estimated structural or “load-bearing” walls, add in specific material selections, and include adjusted estimates for finish types and textures (e.g., smooth stucco vs. sand finish).
- After a project is engineered and plans have been submitted or approved, your contractor should perform in-depth lumber take-offs, detailing every piece of wood and hardware to be used in the build, the estimated amount of waste, and current labor rates to come to the firm cost. On top of this, more specific product types and related installation methods can be accurately accounted for (e.g., plumbing costs for an in-ceiling rain head shower head instead of the traditional wall mounted fixture).
This approach aims to identify tangible and specific items early on—not just generalities with “gray areas.” The goal is to proactively avert project “surprises,” which are costly in more ways than one. Do not simply accept round numbers and overestimations. Hitting your timeline and budget is possible.