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How to Estimate Using Project Management Principles

Oct. 11, 2023
Recommendations for remaining organized throughout the electrical estimating process

The purpose of the estimate is two-fold. First, it allows the contractor to enter into a contractual agreement with confidence. Second, it provides an organized,  detailed plan to execute the project so it's profitable. In the January 2020 issue of EC&M, I wrote a detailed article about the purpose of the estimate.

Therefore, if the second most important purpose of the estimate is to provide a detailed plan to execute the project profitably, the estimate must be prepared with detail and organization with the project management in view.

Preparing an estimate is only one step of three steps that are taken to be profitable. Let’s first review these three steps. The first step is project selection. You must bid on the best projects that your company can perform and still be profitable. The second step is producing an accurate detailed estimate that will allow the contractor to be profitable. The final step is contract performance by installing the project according to the contract documents in the most efficient manner.

The best definition of project management is having the right material, the right labor, the right information, and the right tools in the right place at the right time. If a project manager can accomplish this, the project should be profitable. Project management needs to focus on material deliveries, adequate tools, and providing the workforce with good information to perform the work as efficiently as possible.

A project manager will perform in the most efficient manner with an organized detailed estimate. This means that the estimator should organize his or her work with project management in view. A detailed and well-organized estimate will give the project manager a jump start in efficiency.

Most projects are comprised of various systems, such as lighting, branch power, feeders, fire alarm, and so forth. When the estimate is organized by these systems, it will provide project management with material listings for each system. If the project is a multi-story building, having a breakdown by floor also provides good information about materials and labor for an efficient installation.

For example, if the project has extensive underground duct banks and conduits, the project manager should be able to quickly get the total materials required for this work from the estimate reports.

Another example would be a multi-story building. When the luminaires are delivered to the project site, having a detailed list of fixture types and quantities by floor will allow the fixtures to be placed on each floor. Hopefully, this will save the contractor from handling the fixtures more than once.

When an estimate is properly organized, and labor codes are used, tracking labor hours used versus labor hours estimated should provide the contractor with great historical data for future estimates.

Let’s look at how estimating with project management in view should look like.

Documentation organization

A good record of communications (written, verbal, and electronic) with the architect, engineer, vendors, and general contractor must be kept. An accurate record of all documents used during the bidding process is a must. The estimator might even make notes, comments, and annotations within the documents based on his or her understanding of the project and how it was estimated. One of the first responsibilities of the estimator is a comprehensive review of the specifications. The notes and comments from this review will help the management team know the estimator’s understanding of the project. All these communications, documents, and notes are invaluable to the project manager.

Estimate organization

The focus of estimating is accuracy, and the focus of project management is efficiency. When the estimate takeoff is structured by buildings, floors, and systems, efficiency can be at its best. Project management must be able to know the necessary materials and labor based on the project’s structure. This is also vital when changes are initiated by the owner. As I said earlier, the objective of project management is the project manager must have the right material, the right labor, the right information, and the right tools in the right place at the right time. Most leading brands of estimating software provide the ability to organize the estimate into these breakdowns. The wise contractor should abandon any software that does not provide this feature.

Turnover organization

The best project turnover will provide the most efficient installation. Major conflicts in contract documents should be resolved during the bidding process. Asking the right questions during the bidding process will save the contractor money if awarded a project. Providing a list of immediate items and concerns that need to be addressed at the preconstruction meeting will be invaluable for the project manager. A project with a compressed schedule/phasing can be challenging. All important milestone dates must be documented. A detailed list of all quoted materials, such as lighting, distribution equipment, fire alarm, and security, must be organized and provided to the management team. Copies of all quoted material packages from all vendors must be retained. A detailed list of any owner-furnished materials and equipment must be well documented.

 Reports organization

Estimating software should allow for reports to be printed for the best project management. The following reports should prove most helpful to the project manager and the project foreman in the field. Not all these reports would be required for every project. The wise contractor will customize various reports for the specific types of projects in your company.

Consider providing these reports:

  1. By multiple buildings, if applicable
  2. By floors, if applicable
  3. By systems such as lighting, branch power, fire alarm, etc.
  4. Labor cost codes for labor reporting
  5. Material totals by categories such as conduit & fittings, wire & cable, distribution equipment, devices, fixtures, etc.
  6. A listing of site power feeders with conduit and cable lengths
  7. A listing of distribution feeders within the building structure
  8. A detailed bid summary report

These reports should allow the project management team to have the right materials at the right place at the right time in the right quantities. Typically, these reports should be provided to the project manager and foreman at a project turnover meeting.

In a relay race, the next runner performs better when a smooth handoff of the baton takes place. The better the handoff from the estimator to the project manager, the better the finish. And when the estimator has project management in view, the odds are increased for a profitable project.

Don 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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