MILWAUKEE – Estimatorsare often racing against the clock when preparing a construction takeoff andestimate. They juggle multiple projects and are frequently faced with thechallenge of design plans that are incomplete or inaccurate.
“Contractors live and die by the quality of their estimatingdepartment,” says Abe Schainker, senior vice president, cost managementfor JLL, a leading professionalservices firm specializing in real estate and investmentmanagement. Bid too high and you risk not winning the job. Bid too low it could mean a loss.
“The estimating system is the sales tool of the constructionworld,” says Jeff Gerardi, president and CEO of ProEst, a provider of technology to automate theestimating and preconstruction process and exhibitor at CONEXPO-CON/AGG 2020.  It’sessential to win business and it starts with a construction takeoff.
A construction takeoff determines how much material isneeded to complete a job. Multiply by the number of units by the price of thematerial to calculate your material costs. Add in the cost of labor, equipment,subcontractors and administrative personnel, fees, insurance and desiredprofit. All of this goes into the estimate. The tools for the job have evolvedover the years from hand scales and wheels to sophisticated software.
CONSIDER ESTIMATING SOFTWARE
Microsoft Excel spreadsheets are the most common way to puttogether estimates, but Gerardi cites compelling reasons for moving to acloud-based estimating platform. Collaboration is a significant driver. “Asmultiple people get involved in putting together an estimate, the ability tocollaborate on an estimate in real time is important,” says Gerardi. “As acompany grows it becomes more apparent that you need to better manage theestimating process.”
ProEst makes it possible to scale up without incurringadditional costs because fees are not charged per user.  Instead,companies pay a small percentage of the value of the jobs they are awarded. “We want everyone to have access to the software,” says Gerardi.  Acloud-based platform means that contractors don’t have to worry aboutmaintaining or updating the system. Being accessible from anywhere is anadvantage for an increasingly mobile workforce.
In Excel it’s more difficult to lock down standard pricingand productivities with multiple users. “If you want to re-use information andtrack historical trends, that’s where Excel is not going to be beneficial,”adds Gerardi.
Schainker sees advantages to estimating software but hedoesn’t believe it’s for everyone. “Contractors may feel their templates areworking just fine and they don’t want the added complexity,” he says. “Thereare pros and cons to both options.” The fact that Excel is included with thecost of a computer purchase makes it attractive.  Excel spreadsheets arealso very flexible and can be highly customized to a particular project.
Estimating software has the advantage when it comes toaccessing data that can be used by multiple people throughout the organizationon future projects. “One of the biggest benefits is to data mine theinformation for later use, such as the cost of concrete or structural steel,”says Schainker.
Speed is essential to successful estimating and it may be agood reason to move to estimating software. According to Gerardi, ProEst usersexperience a 50% productivity gain versus Excel. Payback on the investment istypically achieved within one year. Contractors can determine an estimated ROIwith a calculator onthe ProEst website.
If you decide that estimating software is right for yourbusiness, look for those that integrate well with your construction managementsoftware. Integration means you can easily compare estimates with actual costsas you move from project conception to completion.
UNDERSTAND THAT THE TOOLS ARE ONLY AS GOOD AS THE USER
Regardless of the tools used, estimators need to fullyunderstand the construction process and how the estimate will be used.
“Estimating tools are only as good as the user that wieldsthem,” says Schainker.
Sometimes owners ask for a preliminary bid and other timesthey want a full lifecycle analysis. At the beginning of a project, estimatorsmay only be working with a description of the project, rather than drawings.“We have to price not only what is shown but the entire scope of the project,”said Schainker.
He cautions that default unit pricing may not fully accountfor all of the factors that can affect the price of materials and laborincluding construction volume, availability of key trades, and supply chainissues. “All of this needs to be reflected in your estimate,” said Schainker.
As an owners’ representative, he wants to be sure thecontractor’s estimates are accurate, and there aren’t going to be anysurprises. “I am not here to beat up on the contractor,” says Schainker.“Everyone has a right to make money.”
BUILD ESTIMATING TALENT FROM WITHIN
Estimators in the U.S.  often learn their skills on thejob. Schainker believes few construction management programs give estimatingthe attention it deserves. Estimators are always in demand and it’s difficultto find people with the right experience. “The solution is to bring on morejunior people and spend time teaching them how to read drawing andspecifications,” says Schainker. “They need to learn how to ask the rightquestions.”
Unfortunately, it’s not uncommon to invest time trainingsomeone, only to have them leave. “There’s no quick fix to the problem,” addsSchainker.
Based on Schainker’s experience, project overruns areusually a matter of the scope of the project changing without the budget beingupdated, rather than a failure of the estimator. Regardless, a final audit is agood way to identify what cost estimates were accurate and why there werevariances on other projects.
About the Associationof Equipment Manufacturers (AEM)
AEM is the North America-basedinternational trade group representing off-road equipment manufacturers andsuppliers with more than 1,000 companies and more than 200 product lines in theagriculture and construction-related industry sectors worldwide. The equipmentmanufacturing industry in the United States supports 2.8 million jobs andcontributes roughly $288 billion to the economy every year.

About CONEXPO-CON/AGG
Held everythree years, CONEXPO-CON/AGG is the must-attend event for construction industryprofessionals. The show features the latest equipment, products, services andtechnologies for the construction industry, as well as industry-leadingeducation. The next CONEXPO-CON/AGG will be held March 14-18, 2023 in LasVegas, Nevada. For more information on CONEXPO-CON/AGG, visit https://www.conexpoconagg.com.

 


Media Contact: 
Justin A. Metzger, MA
Manager of Public Relations
CONEXPO-CON/AGG + IFPE
414-274-0677
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