Counting the cost
29 June 2017
This year’s NDA Convention included a round table on estimating. The participants were Scott Homrich, Scott Knightly and Dennis McGarel, and the moderator was Dr Mark Shaurette.
Mark: How do you approach estimating?
Scott H: We start from the end and work backwards. We focus on total demolition with a moderate amount of interior and selective.
Dennis: We go after large demolition projects. We don’t do a lot on interiors.
Scott K: We are similar. It’s about man days and production.
What about the process of and need for collecting your data?
Scott K: It’s all about quotes. The sales person will do a walk-through about the parameters of the project. The guys in the office will do take offs of quotes all day long and feed those into a spreadsheet. Then we read the documents and find anything that can trip us up. We visit the job site – this is so important, it’s a team effort – and learn of any possible problems.
Dennis: The best estimator at Brandenburg is our database. There is information from projects in the past, for example there can be seven, eight or nine power plants so you can get in the neighbourhood of your material costs. Scrap generation, for example, can win or lose you the bid. The perfect bid is no good if you don’t win the job.
Scott H: I’m a terrible ‘guesstimator’. If I don’t have historical data I don’t go near the job. There are a million different things that kick in. I rely on historical data to a fault. You can do a take off of quotes, but you need to link that together with historical data.
How do you analyse cost data?
Dennis: Through schedules – the cost per week, month, day. I leave it to our project managers to track that as it goes. Unless there is a big change we won’t look at that data again.
Scott H: I do an overview of everything, and break down daily records. There are different cost accounting modules that you break down into each component part and pull it out. You can use that on six or seven jobs in the future as historical data.
If we can keep track of labour, waste and equipment, other things will take care of themselves. If any one of those slips, it will be difficult to change as we flow through the process.
Dennis: We’re generating information and quotes anyway, it’s part of the job. Demanding clients and high-paperwork jobs can give you a leg up.
Scott K: One thing I get drilled into myself every day is budgets. You have to give the project management team a budget to work from. If you have 100% of the man hours done, you better have 100% of the job. If you can’t follow that weekly or monthly, you can get into trouble in a short space of time.
Do you have a post mortem about the outcomes?
Dennis: Successful projects don’t get looked at very often, at least for us. It’s projects that don’t go well that are our problem children. At least 90% of the time, anyone who dealt with one of those projects will know why it didn’t go well.
Scott H: We have a weekly operations meeting. It’s a one and a half hour meeting every week and I don’t say three words in it. I don’t know the projects in detail, but I can pretty well tell whether a job is working. It’s like a post mortem but we do it as the job is going along. Almost every job gets a post mortem as well. It’s not about the work, it’s how productive the work is.
Scott K: A lot of the time, it come down to the process.
What are the challenges involved in estimating?
Mark: No two jobs are the same. How does the type of project influence job cost reporting?
Scott K: It depends whether the job has a lot of labour on it. Communication is important too. You can use apps that come straight to the data package. You try and break it down as best you can, but labour and communications are the biggest problem.
Scott H: We are improving the data. I set up a system of how you estimate it, how you track it. You have to find the system that works for you and your team. I have my system and it works well for me. You want repeatability so you can collect good information and rely on good information time after time.
Scott K: All kinds of estimating programmes are out there. Young guys are on CAD, which has freed up the sales people who really understand the projects. You should track the usual items that you use, but don’t track the mundane ones that you are never going to use.
Dennis: I always think when you walk into a project you should be thinking what are your means and methods, how are you going to get the job done? But that’s almost the last thing you do. Once you get the quotes and the materials down, once they are comfortable and consistent with those, that’s when you can get into means and methods.
Scott K: You have got to take your estimate and build on the schedule. It’s one of the last things we do – but you have to or you get boxed into a corner.
What’s the best form of information? What’s not so good?
Scott K: The best information is take offs. You have to get the data and you have to be accurate.
How do you increase the efficiency of the estimating process?
Scott H: I started with a pencil and paper. Every time I did something on paper I figured how to do it in Excel. Now I have one spreadsheet with about 35 different tabs, and I force the estimators to look tab by tab by tab for the scope of the work. It helps them find areas of work they might have left out with a blank piece of paper.
Scott K: I have a spreadsheet for every item, whether it’s a $10,000 item or a $100,000 item. A guy designed it for us as a kind of catch all, so I can use it for checks and balances as well as a spreadsheet. I don’t think there is one single programme that can do everything for demolition.
How do you look at project timing and phasing?
Scott K: That’s where experience comes in. We look at phasing quite a bit, but it’s not as important as quotes. You can’t change phasing.
Dennis: For us phasing is very difficult. We are more machine oriented and I don’t think we are very good at phasing. It’s very difficult for us to put a price on it.
Scott H: I would second that. We are very similar.
Do you include contingencies?
Scott K: Probably all of us do it. When you look at the risk, what you put on can put you out of the ball park by 1 or 2%, but you need it there.
Scott H: The risk goes down with the historical information that you have that shows you are able to do that job in that time frame.
Dennis: We would like to include contingencies in our projects, but I don’t know whether that would work out.
In terms of cost to complete, do you go and look at a job again?
Scott K: We do it based on three or four items, based on the biggest risk. You do have to go back and look at it when project managers aren’t close to where they say they are.
Dennis: If there are issues, we start bringing in more people.
*The next National Demolition Association Convention will take place in Austin, Texas, USA from February 21 to 24, 2018. For more details, please visit www.demolitionassociation.com
Article orginally published in the March-April 2017 issue of D&Ri. To register to receive the magazine on a regular basis, please visit www.khl.com/subscriptions