Ecmweb 24457 Estimating Essentials 0419 Pr

The Estimating Department Checkup — Part 1 of 3

April 17, 2019
Organization is the focus of the first of this three-part series.

Most of us see our family doctor for an annual checkup — a visit aimed at detecting potential problems that hopefully can be corrected before becoming a serious health issue. The doctor assesses our weight, our heart, and typically performs blood work. It is always a relief when you leave the doctor’s office after being told that you are in good health.

Just as you know the health of your body, you should also know the health of your estimating department. Most of the principles outlined in this article are applicable regardless of the size of a company. Quality estimating is paramount for successful electrical contracting. Let’s consider these vital components. Organization, leadership, and estimating policies must be in order to provide for efficiency, accuracy, and risk reduction.

When a business is not properly organized, paperwork is lost, tasks pile up, and valuable time is wasted. Proper organization has many benefits: It saves time, reduces stress, and increases profitability.

Take a close look at your estimating department and see how well you are doing. How many of these questions can you answer “yes” to?

1. Do you have a weekly estimators’ meeting? A successful meeting must be purposed and planned. The meeting’s priority should consist of current/future estimates and completed projects. Staying on top of your current and future estimates will prevent estimators from being overloaded with work. Good communication will keep estimators informed and productive. Schedule a pre-set time each week for this meeting. It must become routine.

2. Do you have a post-project meeting? A post-project meeting will provide you an opportunity to determine the accuracy of your estimate and the efficiency of the project manager. Unless feedback is obtained from completed projects, you won’t know where corrections need to be made for future projects. Tracking a project’s labor by system, by building, and by floor will provide valuable information for future bids.

3. Do you have an estimating drive on your server with an organized file structure? Estimators must be able to retrieve and save project files in a logical organized manner. Valuable time can be wasted by employees trying to find a project file. It’s best to have all files saved on your company’s server in lieu of a local hard drive. Allowing employees to save project files and information on their local and personal computers could prove detrimental to good organization.

4. Do you have a project estimate template folder on your server? Project templates save time. Creating a folder structure in which drawings, specifications, and addenda can be filed in an organized manner will save time. Templates allow an estimator to quickly create an organized file arrangement of the project’s files. Create a template with the appropriate folders and then simply copy the template and rename the main folder to your new project name.

5. Do you provide structure for employees? What are your negotiables and non-negotiables? Concrete will serve little purpose unless it is poured into a form. A good estimating department will have form, and this form is built with negotiables and non-negotiables. Sometimes, new employees will bring bad habits learned through previous experiences. Negotiables allow freedom for employees, so they are not micromanaged. Non-negotiables prevent bad habits from developing and being brought into the company. Profitability, accuracy, organization, and production should determine non-negotiables. For example, if an estimator’s personal style preference is counterproductive to profitability, change must be mandated.

6. Do you have a written estimating department procedural manual? Most every item we purchase comes with an owner’s manual. This manual gives instructions for proper use and care of an item. It also provides a troubleshooting checklist when the product isn’t working. A departmental procedural manual should provide estimating team members with guidelines and procedures for meeting the company’s estimating objectives.

7. Do you have project estimate binders with organizational tabs? Estimates should be kept in an organized manner. When working on several projects simultaneously, the estimator will need to keep quotations, correspondence, and project documents organized. The binder should have tab dividers denoting various sections, such as Project Information, Spec Notes, Addenda, Estimate, Bid Summary, Quotes, Takeoff Sheets, and Specifications. Set up tab descriptions names that best suit your company structure and market.

8. Are you running the latest version of your estimating program? Contractors invest a lot of money in estimating software. Software companies constantly work on improving their programs to provide greater value to their clients. The wise contractor will have the latest program version and updates. Monies invested in software provide a substantial return on investment.

9. Do your estimators have tech support with your estimating software? It would be costly on bid day if your software and computer froze or crashed. In many cases, a software tech is required to recover any data and get the program up and running again. Trying to reduce overhead by eliminating technical support fees may prove unwise.

10. Do you have a database manager for your estimating program? The database is the heart of any estimating software. Maximizing your estimating software’s capabilities is paramount. Estimating overhead expense is typically a large percentage of a company’s overhead, especially smaller ones.

11. Do you have a protocol for estimators to provide input for modifications to the estimating program’s database? Estimators have different styles. Estimating software is versatile and easily adapted to individual styles. Time invested in database manipulation will allow estimators to perform at the highest level possible. Designating someone to oversee the estimating software’s database and establishing an action plan for estimators to provide input will increase estimating accuracy and efficiency.

12. Do you have email policies for your estimators? In this litigious society, the paper trail is very important. Estimators typically work on multiple projects simultaneously and can’t remember every conversation and detail about each one. Requiring employees to handle important matters related to project details using email is wise. This written documentation will provide the contractor with a detailed record.

Organization in the estimating department will allow for maximum productivity and accuracy. Good organizational structure will allow team members to work independently without having to be micro-managed. Preventing departmental problems is better than having to correct them.

What were the results of your organizational checkup? To give yourself a percentage score, divide your number of “yes” answers into 12. For example, nine “yes” answers results in a score of 75%.     

Kiper is an independent electrical estimating trainer and consultant based in Niagara Falls, N.Y. He can be reached at [email protected].

About the Author

Don Kiper | Independent Electrical Estimating Consultant

With more than 35 years of experience as a construction electrician, industrial maintenance electrician, foreman, estimator, estimating manager, and project manager, Don has used what he learned to lead in the implementation of estimating software with three electrical contractors where he has worked. Don has 17 years of experience in the construction field and 18 years of office experience and he has personally estimated over $700 million dollars in electrical projects. 

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