Revenue for contractors operating across heavy construction sectors originates with the estimate, and the cost estimation process that takes place before a job goes a long way towards determining how much of that revenue will eventually reach the bottom line as a profit at the end of the job. The estimate also serves as a vital guide for the operations team that will plan, schedule and complete the work according to how it was bid.
With infrastructure and specialty construction projects getting larger and more complex, and with a funding constraints and competition driving margin pressure up, accurate and effective construction cost estimating is more difficult and more critical than ever. The steps below summarize how industry leaders achieve it. The full article 7 Habits of Highly Effective Estimators appears in the November 2019 issue of Grading & Excavating magazine.
Avoid costly spreadsheet errors
Contractors relying on spreadsheet-based systems are at a disadvantage. The biggest problem is errors.
Establish Cost Structures and Templates
The advantages of an advanced software application for estimating and bidding begin with a centralized resource database. This gives everyone preparing bids access to accurate, up-to-date costing information.
Estimating can be a numbers game in more ways than one. Speed counts. The more bids a contractor can complete while sustaining accuracy and confidence, the more chances it will have to win work.
The requirement for several people to provide input over the course of preparing a bid is not uncommon, especially for bigger companies bidding on larger and complex, multifaceted projects.
Connect with the field
The best heavy construction estimators don’t work in isolation. Integration with the scheduling and field tracking systems is especially important.
Connect with the accounting system
Transferring information from an estimate automatically to an accounting system also increases accuracy and saves hours of re-work and re-keying of data.
Optimize electronic DOT bidding systems
Estimators that frequently prepare bids for Departments of Transportation (DOTs) in the United States and in Canada gain big time-saving advantages when they have an estimating software system that allows them to import electronic bid forms, convert estimates automatically to match the required DOT format and then upload the bid for submission.
Individually, each of these habits can improve a contractor’s ability to estimate with maximum speed and accuracy, free up more time to focus on strategy and, ultimately, win more bids at better margins. There is also strong crossover and complimentary effect across all seven, with specialized estimating software and the concept of real-time connectivity playing important supporting roles. Additional details are available in The Ultimate Guide to Heavy Civil Construction Estimating & Bidding Software.