A New Look at Plumbing Estimating

Your bidding process could be costing you jobs and money. Maybe it’s time to take another look.

The estimating process is a critical phase in the acquisition of new projects for your plumbing contracting business. As such, it offers a wealth of opportunities to put your best foot forward when bidding on potential projects.

Think of your next bid as a tool in your sales arsenal that can help sell your expertise and increase your chances of winning the job.

Your Installation Expertise
The manhour value, or labor unit, you assign to each step in the project process—receiving, unloading, stockpiling, distributing, installing and testing a piece of equipment—reflects the value of your installation expertise. By carefully selecting manhour values for each activity and adjusting these values for conditions that may decrease or increase your installation time, you’ll minimize the risk of losing money on the project.

One way to improve efficiency is to maintain a database of manhour values for each activity. “Contractors should have an historical database that they can use when preparing estimates,” says Joseph Galeno, co-author of Plumbing Estimating Methods and director of construction management services for E.W. Howell, a New York-based general construction management firm. “They should maintain a database of manhour values for each respective element of work, based on materials such as cast iron pipe, copper pipe and plumbing fixtures, and the capacities and type of the equipment.” Galeno recommends using values that were used for the most profitable projects.

Your Added Value
According to Galeno, offering value engineering options as part of your bid is a good way to show potential clients that you have thoroughly researched their job. “If there’s nothing in the plan or spec about an alternate, you can offer recommendations for alternate systems and materials that might save them money,” he says. “It shows interest in the job.”

However, Galeno adds, “Value engineering is effective only if it is done at the schematic stage of a project. If the design engineer has progressed to the stage where design is almost complete, the cost to affect a change is very expensive.”

Don’t Sell Yourself Short
“A lot of contractors are short on time, so they often will use a percentage of the direct costs of a project as their general-conditions cost to cover all the miscellaneous costs,” Galeno says. “When it’s your money on the line, that’s a dangerous thing to do because general conditions and miscellaneous expenses can make or break a project.”

Galeno recommends itemizing all miscellaneous costs, such as barricade protection, plans, blueprints, temporary protection, printing costs, telephones and computers. “These are real costs that are incurred every month that you’re on the job and, if you underestimate or overestimate them, you’re going to have a problem,” he says. “It’s simple to put 8 percent on the direct cost. But it can get you into trouble.”

Clarity, Accuracy Count
To ensure the best results, take steps at the outset to make sure your plan and bid are clear. “Qualifying your bid is critical because very often plans are not clear,” Galeno says. “You should seek clarification from the design or mechanical engineer. If there’s a discrepancy or something is unclear either on the plans or in the specifications or both, the contractor should prepare a written request for clarification for the design engineer.”

Galeno recommends qualifying your bid by preparing a list of qualifications, or exclusions, once everything is clarified, “The qualifications sections should list what you do or do not include to make your bid as clear as possible,” he says.

Galeno also cautions estimators to make their take-offs as accurate as possible. “Piping is tedious because there’s so much of it,” he says. Because the cost of fittings differ per size, your quantification of piping, fittings and valves should be accurate. If it isn’t, it will distort your bid and your material pricing will probably be inaccurate.

An accurate estimate also enhances productivity. “With a good estimate, you can hand [it] to the project supervisor and he can order the materials directly from it,” Galeno says.

Exclusionary Rules: Defining Who Does What

Your bid should include a master list of tasks that, as a rule, you do not perform. Include a list and highlight those items that are not included in your estimated cost. The following is a list of potential exclusions that can be included on your master list: Final cleaning of fixtures and equipment Backings for plumbing fixtures Toilet room accessories Electrical work Line voltage electrical wiring and conduit Temporary utilities Painting, priming and surface preparation Fire protection and landscape irrigation systems Cutting, patching and repairing structural members Equipment supports Removal or stockpiling of excess dirt Foundation drainage and site dewatering Concrete work Access doors Setting equipment furnished by others Equipment and personnel hoisting Wall and floor blackouts Pitch pockets Costs for payment and performance bonds Site utilities Asbestos removal Surveying and layout of control lines Source: Plumbing & HVAC Manhour Estimates, Ray Prescher