June in Southern California means that the weather is usually cloudy most mornings; residents have come to call the period “June gloom.” This summer’s industry publications brought a different kind of gloom to estimators, no matter what the geography. The rules of the estimating game seem to be changing even more than in past years.
The changes are coming from several different places. The procurement laws have been altered for some types of work. At the same time, construction management firms have taken on new roles. These changes place even more importance on complete estimates, which give management the tools to meet every challenge.
Estimators have realized for years that their work product is subject to “being nailed on the post-office wall,” an expression that refers to the less-than-scrupulous contractors who pass your bid on to a “buddy.” To combat this type of behavior some firms have “don’t bid” lists, while others submit their bid without a second call.
Other have tried Bid Depositories, in which bidders for a project are required to call in their offer the day before deadline. The bidders were then on their honor to submit those bids to the general contractor or accepting agency. The idea was to hold contractors to their original bid and to discourage bid peddling. The depository was a voluntary effort, financed by the contractors using the service. Since the depository service was not mandated, it soon was overwhelmed by those who chose not to follow its honor system.
One of the last refuges for estimators not wanting their work abused has been projects that require a list of subcontractors at bid time. These projects are usually of a governmental nature, or financed with governmental funds. Most listing requirements stipulate that any contractors whose sum total for the work scope is more than half a percent of the overall project costs must be named as part of the bid documents. This provision does not completely eliminate the shopping of bids, but the practice has helped.
ELECTRICAL CONTRACTOR previously reported that some state laws now interfere with design/build projects. While there have been laws requiring prequalification of contractors bidding as prime contractors, those requirements were meant to assure that the contractors had the assets to complete the project. The latest wrinkle will decrease the number of firms that will be allowed to bid and work design/build projects. While less competition may be a welcome factor, the method may open the back door to deals to the detriment of the constructors, users and those financing the projects.
Another example of changing rules took place in Oregon. In that case, a county commission determined that the construction of a 26,000-square-foot warehouse with office spaces was detoured from a normal bid process due to timeline constraints. The commission claimed that bypassing the normal bid procedures would allow the building to be completed on time. If the timeline were the real reason for bypassing bid procedures, perhaps the commission should have acted earlier. It is always amazing when government forces use their lack of foresight to enact expediencies that may be outside the law.
With the recent increase in school construction, many districts are turning to construction managers. Construction management systems have been tested and contractors have had experience dealing with them. Though not unknown to the industry, a new wrinkle is that some construction management firms are becoming “at-risk” firms. The firms are not only managing construction, but they are, by taking this stance, acting as the general contractor. For those estimators who have established contacts with general contrators, get ready: it appears that many GCs will be replaced by the construction management at-risk firms.
The construction management at-risk system appears to be yet another method where responsibility is deflected from the owners and shifted to other entities. How these new relationships affect the protection of the electrical contractor is a concern that estimators must consider when deciding to bid a project.
Experienced workers in the electrical field have had to adjust for a number of differing methods. The current changes are yet another layer to which the industry will have to adapt and take in stride. EC
DAVID is a professor of electrical technology at Long Beach (Calif.) City College, a consultant and an expert witness. He can be reached at 562.597.1877 or at firstname.lastname@example.org.