Electrical Estimating Bid Proposals

In a recent post I wrote about the differences between residential and commercial estimating. There are also significant differences between residential and commercial proposals.

Most of the residential proposals I have seen contain three sections: price, scope and contract. For a commercial proposal, the price section can remain the same, the scope section will be enhanced, and the contract section will be eliminated.

The contract section is the major difference between residential and commercial proposals. Instead of dictating the terms with your contract, you will be negotiating the terms of the general contractor’s or owner’s contract. Because of this, your new proposal must be designed to protect you from problems in the contract and the bid documents.

First, your scope section needs to limit your work. This is because many specifications require you to include any electrical work shown on any drawing. Some specifications try to require that you provide electrical work the engineer missed. If a small detail on an obscure drawing requires electrical work, you would have to provide it if you do not limit you scope.

Start with a statement like “This proposal is based on the following documents”. Follow this statement with a list of the bid documents, including the plans, specifications and addendums. The next statement further limits your risk. It can be added right after the document list, or further down in the qualifications section. It is – “The correctness and completeness of the contract documents is the sole responsibility of those who have prepared them. This proposal covers only that work that is adequately shown, described and/or detailed in the above referenced contract documents”.

The three parts of this scope section work together to protect you from poor specifications and bad plans. This wording will protect you from those “at no additional cost to the owner” phrases.

The scope is then further defined by two lists: Exclusions and Qualifications. Exclusions are short statements defining what you are not going to do, such as “Temporary Power”, or “Utility Company Charges”. Qualifications are complete sentences meant to clarify gray areas of the bid documents, such as “The incoming service locations are not shown. The service conduits included in proposal are limited to stub outs 5′ outside the building.”

Next is your pricing section. Keep it simple and clean. Here is an example.

Base Bid – $45,657.00
Alt #1 – Add $3,432.00
Alt #3 – Deduct $5,444.0

Most word processors have a feature that allows you to line up the decimal points in a column of numbers, which looks very good. In Microsoft Word, you can use a decimal tab.

Close your proposal with a brief sentence. Most I have seen look something like “Please call me if you have any questions”.

Follow this with your signature and title, and you done. Send the proposal to the GC’s at least one day before the bid. This gives them time to respond to your exclusions and qualifications. If you don’t give them time, your proposal may end up in the circular file.

On Screen Electrical Estimating Update #1

A lot of things have changed since my last post on this subject. The software has gotten better, and the way we use it has evolved. The last three years have seen a complete shift from paper takeoff to digital takeoff. We are currently using two software packages, Planswift and Surecount.

Planswift was the first digital takeoff software we purchased. It is used in our office for projects of any size, but does not allow multiple estimators in the same project at the same time.

We have been using Surecount in the office much more often since a recent update. The autocount feature is now working very well. Surecount is also used for projects of any size.

We decide which product to use after a review of the drawings. Projects that lend themselves to autocount are done on Surecount, as are projects that require multiple estimators. Planswift’s more advanced manual takeoff tools are used for projects that can take advantage of them.

There are several advatages to the use of digital takeoff that continue to stand out. No more paper drawings is the first. I can’t tell you how much I don’t miss handling and storing paper drawings. We recovered a significant amount of storage space as our paper archives disappeared.

The second is editing and corrections. When you make a mark on paper, it’s there to stay. Digital takeoff allows complete editing and correction to all of your takeoff. Your counts and measurements can be un-counted, edited, moved or deleted as needed.

The third is increased production. Paper takeoff requires three steps; counting, marking and recording. Digital takeoff accomplishes all three steps in one click of the mouse.

Fourth is drawing distribution. We have rarely had to pay for plans since we switched to digital. Most often, the drawings are downloaded from a web site at no cost.

Both of the programs we use release regular updates. The authors are constantly adding features and making improvements. Planswift just released a new version and Surecount has one in the wings.

Adding Planswift or Surecount to your estimating tools would not be a mistake.

Following Up Your Bids

I know, following up your bids is time consuming. However, not following up your bids can be a company killer. You spend a lot of time and money preparing bids. Keeping good records, and taking the time to analyze them will result in more successful bids. In other words, less bidding, more contracts.

Keeping good bid records will allow you to answer questions  such as:

    Where do you stand compared to the other bidders?
    Which general contractors are getting work?
    Which electrical contractors are getting work?
    Are your bids being shopped?
    Are you more likely to get certain kinds of work?
    Are you bidding to low?
    How many bidders were there?

At a minimum, keep track of the following information:

    Your bid price to each GC
    Your square foot price to each GC
    The price and square foot price the project went for
    Who won the project?
    What price did the project go for?
    What type of work is it?

Take time to analyze these records carefully. The information needed to fine tune your bid strategy is in there. Are you always high on certain kinds of work? Do you just need to shave couple of points off to win more projects? Is one of the general contractors giving all the work to the same electrical contractor?

With the answers to these types  questions, you can save time and money by bidding only projects you have a real chance of winning.

#$@! Electrical Specifications #1

This is the first of what will probably be many short posts regarding electrical specifications that do not make sense. Here is one I read today.

“Underground conduit shall be PVC40. Conduits other than PVC40 shall be converted to PVC Coated GRC before rising thru
the floor slab”.

What’s the point?

Feel free to share your examples of bad specs.

Electrical Estimating and Addendums

Addendum – According to dictionary.com, the definition is “something added; an addition”. For construction estimators, an addendum is a change to the bid documents before the bid date. Addendums can add and/or delete scope from a project.

The past few years have seen addendums become a larger impact our estimating . Projects are more likely to have addendums, and the addendums often have a much larger scope then they used to.

Earlier this year, we were bidding a waste water plant upgrade. The biggest part of the takeoff was a solar drying facility. There were hundreds of loads and instruments in the area. The duct bank feeding the area had about 160 conduits in it. The day we finished the takeoff, an addendum was released that redesigned the entire facility, with no bid extension. It made for some long days and working weekends. What really irritated me was that the engineers had to have been working on the revision for weeks. They could have warned us.

Addendums are also getting very expensive. The example above took about 40 hours to complete. Last year, we were working on a small new wastewater plant. The day after we completed the project, the whole bid set was replaced with an entirely new concept and layout. It took around 30 hours to re-do the entire takeoff. Again, the engineers had to have known, and could have warned us.

The examples above are two of the more extreme instances. We are however, seeing more addendums in all sizes and types of projects. I am even seeing addendums on cookie-cutter chain stores. After building a hundred or so stores across the nation, you would think they could get the design right the first time.

I have spoken to many people regarding this issue. It seems each person has a different opinion regarding the increase in addendums. If you believe in the saying “follow the money”, the problem is driven by profit, as in the engineers making profit and passing costs to the subcontractors. I also heard that designs that were shelved for the recession are coming back out, and are lacking in coordination to get the design completed. One cost consultant I spoke with believes federal contracts do not allow enough money for a good design. 

No matter what the reason, poor design work impacts estimators and the companies they work for. Addendums wreak havoc with bid schedules and cost the contractor money. The decrease in document quality, and the increase in the number off addendums seems to be another move in shifting costs to the sub-contractor.