Estimating & Bidding Construction Contracts

Disadvantaged Business Enterprise (DBE) Supportive Services Program

The contents of this training course reflect the views of the author who is responsible for the facts and accuracy of the data presented herein. The contents do not necessarily reflect the official views or policies of the State of California or the Federal Highway Administration. This course outline does not constitute a standard, specification, or regulation.

• Welcome and Introductions (Why Are You Here?)

• The Basics of Estimating and Bidding

• Spreadsheets & Estimating Software

• Prevailing Wage Rates & Labor Burden

• Takeoffs & Calculations: Simple & Accurate

• Handling Distractions During Estimating Process

• How To Maximize Your Gross Profits

• The Bid Proposal (Electronic Bidding?)

• Estimating Change Orders in a Timely Manner

• Final Discussion, Q&A and Evaluation Survey

2

Agenda

Why are you here?

➢Please fill out and pass forward➢_________________________________

➢_________________________________

➢_________________________________

What do you expect to take from this class?

3

Welcome and Introductions

Are bidder conferences & site visits important? YES! Especially if site clearing and/or demo is part of the scope Able to listen to questions and answers from other

contractors Meet prime contractors if you are bidding as a sub

Perform the same comfortable routine every time A comfortable routine gives you a mental checklist Save time & cost spent for bids that you do not win

Common pitfalls in estimating Not spending quality time (rushing too much and missing

items) Not reading the general & supplemental conditions carefully

4

The Basics of Estimating

• What is your level of computer literacy?

• What software are you using, now?

• Popular estimating software• PlanSwift: planswift.com (888) 752-6794 View

Video• Sage Est. Software: sage.com (800) 628-6583

• Pro Contractor Est.: maxwellsystems.com (800) 688-8226

• Software for specialty trades are available also.

• Estimating software & computer are just tools• Do NOT rely totally on a computer - GIGO

5

Spreadsheets & Software

Region:(Laborer –Group 2)

Base Rate: Fringe Benefits: Total Base Rate:

Northern CA (Area 1)

$28.24 $19.72 $47.96

Northern CA(Area 2)

$27.24 $19.72 $46.96

Southern CA $30.74 $18.05 $48.79

San Diego (Building Construction)

$28.25 $17.71 $45.96

6

Prevailing Wage & Labor Burden

Region:(Laborer –Group 2)

Taxes on Wages: (FICA, SUI, ETT, FUTA) @ 35%

Workmen’s Comp: ($$ per $100 -Example Laborer 8%)

Total Laborer’s Rate for Bidding:

Northern CA (Area 1)

$16.77 $3.84 $68.57

Northern CA(Area 2)

$16.44 $3.76 $67.16

Southern CA $17.08 $3.90 $69.77

San Diego (Building Construction)

$16.09 $3.68 $65.73

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Prevailing Wage & Labor Burden

• Organization and documentation

• Being organized helps create comfortable routine

• Whether ipad, iphone or paper, write down notes & ques.

• Plans & Specs are never perfect

• The bidder is responsible for obtaining clarifications

• The bidder pays for all misassumptions

• Never bid now and ask questions later

• Everything is not boilerplate

• Keeping accurate history is very important

• Keep the good, bad and the ugly from previous bids

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Keeping Takeoffs & Calc. Simple & Accurate

• Keeping accurate history is very important cont.• Keep bid analysis for each bid (who and how much)

• Know your major competitors (esp. the low ball pitchers)

• The more history the better (esp. time standards)

• Keep history organized for easy & swift access

• Lump sum, unit pricing, gen. cond., T&M, +/- alt.

• All of the above could be included in the same bid

• Lump Sum bids = the sum of all it’s parts

• Unit pricing (labor X hrs.) + (mat’l. & equip. X count)• A single unit price w/production incentives incl. labor, mat’l.,

O&P, etc.

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Keeping Takeoffs & Calc. Simple & Accurate

• Unit pricing (labor X hrs.) + (mat’l. & equip. X count), cont

• Labor rates are simple but measuring time is risky – Got History?

• Key supplier relationships are important – Pricing History

• In some cases renting equipment may be better than owning

• General Condition Estimates• All indirect costs (mob & de-mob, supervision, equip., etc.)

• Easy to over/under bid

• Time and Material Rates• This method usually applies to change orders (sometimes

alternates)

• Alternates (add-ons and/or deductions)• Pain in the neck but must be taken seriously• Could be a real factor in lowest bid situations

10

Keeping Takeoffs & Calc. Simple & Accurate

• Field production – means & methods

• How well do you know your crew? Got History?

• Risky to keep changing prod. means & methods at bid time

• Find what works, perfect it and stick with it

• Explore creative incentives that could save time

• Cost controls

• Are contingencies really necessary?

• YES, if you DO NOT take estimating seriously

• NO, if you bid a lot of jobs & keep accurate bid & job hist.

11

Keeping Takeoffs & Calc. Simple & Accurate

• Owner/Estimator wearing too many diff. hats

Learn to be a productive multi-tasker

Estimating is an investment into your business

• Starting, stopping, coming back and remembering

Begin at step one and maintain a comfortable routine

Write key notes at every stopping point

Come back & review notes and costs up to last point

DO NOT rely on mental memory (keep updated TO

DO list)

12

Dealing With Distractions

• Know your numbers: overhead, dir. cost, GP and NPUpdated & accurate accounting records are very

importantKnowing that overhead is low could keep bids lowA good job cost accounting system is important for

historyKnowing actual Gross Profits can help with future bidsKnowing actual Net Profits helps with cash flow

adjustments

• Know your niche (projects easy to bid w/high GP)

• Should I be competitive or profitable?Do I have to choose between the two?How can I remain competitive & be profitable?

13

How To Maximize Gross Profits

• Keep it SIMPLE

• Clear understanding• What’s included• What’s NOT included• Include ALL requested information• Check it and double check before submitting

• Electronic bidding - going green• Planet Bids (paper & electronic bidding) Visit Website• Cal eProcure (paper & electronic bidding) Visit

Website• Depending on the agency• Training is available - Webinars

14

The Bid Proposal

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Caltrans Bidding Information

Caltrans Contractor’s Cornerwww.dot.ca.gov/hq/esc/oe/contractor_info

➢Use the Caltrans site to manage workload

➢Review what Caltrans is doing in your area

• Use Master Forms to order Documentswww.dot.ca.gov//hq/esc/oe/project_status/cont_doc_info.html

16

Caltrans Bidding Information

Solicitation documents available through https://caleprocure.ca.gov/pages/

• Register for free

• Click “Get Public Procurement Information”

• Select “See Current Bids”

• Enter 2660 in the Department field.

• Search for bidding opportunities

• Download bid package and addenda

• Who got the job and for how much? http://caltrans-opac.ca.gov/contracts/ bidresults.htm

• Can lose money if not timely

• Submitting RFI’s could be the first step• Don’t wait until the task starts to ask questions• Plan 3 – 4 weeks ahead of critical path tasks• Build a good working relationship w/proj. mgr. or

supt.• Be flexible but still make a profit on each change

order

• Negotiate terms & conditions for disputed C. O.• Disputed change orders will be paid if handled

properly• Avoid Liquated Damages

17

Estimating Change Orders

18

Thank you!

➢ Questions & Answers

➢ Evaluation Survey – Link will be emailed to you after this class

➢ Upcoming Classes – Register today!

➢Check www.dbe-advantage.com

➢Emails will be sent to you soon

19

Business Development Program

➢ Business Plan Development

➢ One-on-One Mentoring

➢ Free Technical Assistance

➢ Certificate upon Completion of Program

➢ Teaming/Partnering➢ Access to Recorded Webinars➢ Access to Valuable Business

Resources➢ Custom Level Bid Matching

For more information:➢ Visit: www.dbe-advantage.com➢ Email: dbesupport@gcapservices.com