Successful Estimating Principles
We are covering some of the basic estimating principles detailed in a manual written by Herb Wendes, " Everything You Wanted To Know About Estimating But Were Afraid To Ask." The updated and expanded version of the original manual is now published by Fairmont Press, Inc. "Mechanical Estimating Manual".
Successful contracting is built on a foundation of accurate labor and material estimates with valid markups for overhead and profit. Bids should include direct costs for labor, materials, equipment, subcontractors, indirect overhead costs as well as a provision for profit. The primary goal of the estimate is to cover all costs for a project as they are likely to occur and meet acceptable plan, specifications and performance criteria. Allowances for indirect overhead costs for the year should be allocated on a proportionate basis for each project. Allocation of indirect costs are easily overlooked when considering the multitude of direct labor, material costs, special conditions and specifications for a project.
As much as possible to allow enough time to properly prepare the estimate, most errors are experienced due to rushing, pressures of unforseen interruptions, omissions, inaccurate takeoffs and not having adequate time to clarify plan and specification errors. In many cases a contractor is forced to bid selectively in order to avoid mistakes. In the long run it is better to select projects that have the potential for profit and provide value to the client.
The introduction of specialized HVAC Estimating Software has provided estimators with a valuable tool in preparing accurate and detailed estimates. Software Advice has released a recent survey that considers and evaluates some of these benefits. The link below will lead you to the survey.