Last month’s article began by discussing the differences between residential and commercial estimating. It ended with information on creating bid notes and a specification review, which are necessary because commercial estimates can become much more complicated compared to residential ones. The differences in the bid requirements, as indicated in the specifications and on the drawings, can also become more variable than in residential, and with greater financial impact.

Time for the takeoff

After finishing the bid notes, it is time to perform the takeoffs (counts) of items your vendors may need to prepare quotations for the project. The takeoff consists of counting and measuring every item on the plans that represents a cost or expenditure of field labor time. This step will differ from residential estimating, as most commercial projects require materials only available as specialized quotes from electrical wholesale houses. Most of the projects I estimate need quotes for lighting fixtures and switchgear. Other projects may also need quotes for various items such as generators, fire alarm systems and data systems. 

It is very important to read the specifications carefully before soliciting quotations, as there may be restrictions on allowable brands or manufacturers. For many low-­voltage systems (such as data infrastructure and fire alarm systems), certifications from BICSI or NICET may be required. Often the wholesale house will require you to provide counts for the lighting fixture quote, which is why I always do my fixture takeoff first. For equipment such as switchgear and generators, the manufacturers generally do their own takeoffs. 

Finally, solicit your quotations as soon as possible, as they take some time for the vendors to prepare, often as much as two weeks. Also, solicit quotations from at least three sources, as vendors can sometimes fail to provide a quotation on time. You will need to follow up with vendors occasionally to make sure they are still committed to providing a quote on time. 

Understand that “on time” may mean as late as 30 minutes before bid time. This is because the vendors are trying to protect themselves from bid shopping. If you are unfamiliar with this practice, it is when an EC gives one vendor’s quote to another and asks them to beat it. Many general contractors also practice bid shopping, so it is not always a bad practice to deliver your final numbers as late as possible. Read more about this issue in the three-part series starting with “Ethical Considerations” in the December 2022 issue of ELECTRICAL­ CONTRACTOR.

GCs and other parties

This is the first time I have mentioned general contractors. I know many of you are used to dealing directly with your customers, but most commercial projects are bid through one or several general contractors. You will need to work on creating and managing relationships with these organizations. Generally, you are more likely to win bids with them if you have a pre-­existing relationship.

Also, if you are bidding on federally funded projects, you are likely to be bidding per the requirements of the federal Davis-Bacon Act, which is primarily about paying local prevailing wages to laborers and mechanics on federally funded projects. Many states also have similar laws for state-funded projects. 

Many of these projects require that the GCs deliver sealed bids with a list of the subcontractors they used to prepare the bid. The law requires that the subcontractors listed in the sealed bid be used by the successful general contractor with no price negotiations. The contract they offer you must be the same price they listed on the bid form. This is just a brief description of the requirements, so be sure you fully understand the Davis-Bacon law you are working under.

Component parts

Back to commercial estimating. After completing the takeoff, the next step is where commercial estimating differs most from the residential estimating methods with which I am familiar. Everything you counted must be broken down into its component parts, which will then be written on a pricing sheet. Material prices and labor units will be added, and all the math will need to be finished to come up with totals for material dollars and labor hours. These steps, from the breakdowns to calculating the totals, are a time-consuming part of estimating. 

When I started my estimating career in the early 1980s BC (before computers), this step was a necessary part of commercial estimating for most companies. However, there are alternatives for automating some of this work, which next month’s article will cover.

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