To be or not to be—organized, that is. Well, it’s not that black and white. Estimates always need to be organized. The question is how much and in what ways.
I learned to estimate from employers and classes. Commonly, there was a “keep it simple” philosophy. This was just before personal computers arrived, so we did all of our estimating manually, including exploding the assemblies, listing all the materials on pricing sheets, entering pricing and labor units, extending every row and totaling each column. We completed all of our calculations with desktop calculators, using miles of paper tape and dozens of ink cartridges.
We were instructed never to make additional breakdowns unless the bid form required it. My employers felt it was not wise to spend extra time on bids with a limited chance of winning. For instance, if you have a good hit rate, such as 20%, any time spent for extra breakdowns and organization would be wasted on 80% of the projects. The only organization was by the type and size of the materials. If we won the project, then it made sense to spend extra time to break down the estimate for project management and accounting reasons.
Enter the computer. Today, electrical estimating software packages can organize and break down estimates in a variety of ways. However, while bidding, the fastest way to prepare an estimate on the computer is still to keep it simple. Every separate breakdown you prepare takes more time to input takeoff. For example, if the project management wants a six-story building broken down by each floor, many items will have to be input six times.
Many estimating systems can handle some breakdowns automatically. For instance, if your company needs material and labor to be categorized for a tracking system, you can define the takeoff’s categorization within the estimating system’s database. Many systems come with categories already defined, which the user can fine-tune. When you win a project, all you have to do is print the proper report for accounting.
The first reason to create separate breakdowns is the bid form. Many smaller commercial projects I bid do not require breakdowns as they are lump sum or just one number. Large commercial and industrial projects often have breakouts, or multiple bid items. Most of the time, the bid form requirements are mandatory, and your bid could be thrown out if you do not comply with the bid form’s requirements. I bid a project in May that had 45 bid items. What a pain! I had to allow for a lot of extra time to input takeoff and prepare recaps. I ended up developing a special spreadsheet in order to deal with analyzing and manipulating 45 recaps.
Another breakdown that can be prepared when you win a project is the “schedule of values.” Most general contractors require this breakdown within so many days after a Notice to Proceed or the signing of a contract. The GC uses this breakdown to check your installation progress and ensure you are not overbilling. Generally, I export the report to a spreadsheet where I can rearrange the takeoff to meet the GC’s requirements.
On-screen takeoff programs that are linked to your estimating system enable you to create additional breakdowns without extra time for manual data entry. Both of the systems I am familiar with allow you to assign each component or assembly to a breakdown structure during takeoff. The takeoff is sent directly to your estimating system with no manual entry required. Each on-screen takeoff program works differently as to how it links to your estimating system. Work with your software vendor to see how they can assist with creating the breakdown structures you need.
I was recently asked about organizing estimates to meet breakdown standards, such as work breakdown structure (WBS) and construction work packaging (CWP). Speaking as someone who works mostly on hard bids, I still believe you should keep the estimate as simple as possible. A lot of estimating time can be chewed up while creating organization and breakouts that are not required at bid time. If you do need to break down your estimate to meet some WBS of CWP external requirement, most estimating systems should be up to the task. All of the systems that I am familiar with can handle complex breakdowns.
Organization is a key to success. However, don’t use additional time organizing your estimates in ways that are not required at bid time, especially when the outcome may not be beneficial to your company.