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Focus on Labor Productivity to Improve Profits

The best way to increase profit is by managing labor productivity. Too often, project managers, foremen, and owners focus on material and package buyouts, squeezing subcontractors, and cutting back on overhead to increase profits. These actions pale in comparison to what can be accomplished by having highly productive labor force.

Money can be made by smart buying and eliminating unneeded overhead costs, but concentrating too much attention on these items will take your eye off…

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Handling a Request For Information

The contract documents for some projects lack clarity and specificity. An RFI is the estimator’s way of defending his estimate and his scope with the contract documents.

Many times an estimator is placed into a situation in which he must decide quickly about what to or not to include in his estimate. When the risk is too great, the estimator must ask the architect, engineer, or construction manager for clarification.

This is done with an RFI,…

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Understanding Electrical Contracting as an Estimator

The electrical estimator must understand electrical contracting. Electrical contracting consists of five main components:

  1. Estimating
  2. Bidding
  3. Material purchasing
  4. Labor management
  5. Contract management

Most every task performed in an electrical contractor’s office can be placed under one of these five headings. The electrical estimator must understand all five components. Failing to understand these components disqualifies the employee from the status of estimator. If he only understands counting and measuring takeoffs, he is nothing more than a…

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How Healthy is your Estimating Software Database?

The database is the heart of any estimating program. Database arrangement and manipulation is a time-consuming task. It is in constant motion. Most estimating databases have approximately 40,000 + items.

Estimating programs are designed to allow the user to arrange items into assemblies by categories and various takeoff libraries of the program.

The value of estimating software is determined by its’ ability to allow the user to arrange items into specific material categories for quick takeoff.


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Estimating Labor

Estimating Labor – Part 2

Factoring Labor and Labor Factors

In my last estimating article, I talked about the basic labor unit and estimating math. Most of the risks in construction are labor risks. There are so many factors that can cause a project to lose monies.

Factoring Labor and Labor Factors are not the same.

Factoring labor = is the application of adjustments to labor units based on the difficulty or ease of installation of material.

Factoring labor is handled in…

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Young electrician estimating in a residential electrical installation

Estimating Labor – Part 1

Understanding labor and the factors that impact labor costs is vitally important. Most of the risks in construction are labor risks. There are so many factors that can cause a project to lose monies.

Every estimator must know the ingredients that compose a labor unit. And he must know how to do the math to calculate his own labor units for specific tasks.

1st – The Labor Unit

The definition of a labor unit = a unit…

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The Front End of the Specifications

An estimator must carefully read the project specifications.  Sometimes, there are labor and material costs that are required for specified items for the project.

Here are the most important questions to answer and items for review:

  1. Scope of work
  2. Summary of work
  3. General conditions
  4. Supplemental conditions
  5. Are there any special insurances required?
  6. Are there any allowances? Is the OH&P included in the allowance or do you need to add in your bid summary?
  7. Are there…
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To Bid or Not to Bid

The electrical contractor must consider some important factors before deciding which project to bid.  The contractor should only bid work that has the potential to make a profit.  The belief that “WE NEED WORK” may cause you to win a project that you will live to regret.   All contractors need work, but only work that is right for your company.

When you do decide to bid a project, make sure that the decision was made…

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