Construction Estimating Pitfalls and Pratfalls
By Jerry Mollenhauer – CPE-ASPE, LEED AP
Estimators who work for general contractors may know this saga of stress,
anxiety and comic relief all too well:
It is 2:00 AM the night before the day of the big bid. It is the project the
estimator’s firm just has to win. She or he might get to bed in the next ten
minutes, as soon as they finish the masonry takeoff. The new day will see
them at their desk early.
7:00 AM- The bid team is in the office and starting to field the incessant
phone calls, emails and faxes that will not let up until ten minutes before
the bid is due. That is all the time that they will get to calculate and
check the final totals and call them to their bid runner who is waiting at
the bid opening site.
1:48 PM-The energy bar the estimator opened at his desk two hours ago is
still next to his keyboard, getting dry. The estimator has the final bid
summed and confirmed. The bid runner has been given the alternates by the
assistant estimator five minutes ago. Almost two weeks of concentrated
takeoff and communications efforts are about to show some yield. Or not.
1:54 PM-All the estimator has to do is say “22 million, six hundred and
twenty-nine thousand dollars,” followed by a literal repeat of “two, two,
six, two, nine zero, zero, thousand” into the phone to the bid runner, and
ask her to say it back to him as she writes it on the signed bid form. Which
he does; then he waits. The estimator waits a couple seconds for the
runner’s reply, knowing that she is busy but that she never fails. He waits
a bit more, and then he realizes he is listening to a dead phone line. He
hits speed dial for the runner’s cell phone. Straight to voicemail. Again.
Same result. Again. Again. The connection has been lost and the phone is
The estimator’s head is in his hands, his elbows on the desk, as he explains
what happened, and the bid team starts asking questions. Did the runner hear
the bid clearly? Would she dare to deliver a bid number she had no way to
clearly confirm back to the estimator? Would they even want her to?
Construction estimating can be an interesting and harrowing grind. It can
sometimes be equated to the study of Geology, as once described to this
writer by a Yellowstone Park Ranger- “long and interminable periods of
boredom, followed by moments of total helplessness and complete panic.”
People who do well at it may also be fire-eaters who would thrive while
whipping unsociable dragons. They seem to feed off stress, and the more
hectic things get, the clearer they think, the more quietly they speak.
Ability to hyper focus is one of their talents.
The scenario above has and will continue to run in the lives of estimators,
with a number of variables contributing to the “moments of total
helplessness and complete panic” they will endure.
Math errors happen that take all the fun out of the bidding process. Lack of
review time can lead to silly, simple omissions with a big impact.
Or the estimator can be relaxing at their desk a few minutes after
delivering the bid, only to get a frantic call from the low mechanical
contractor, who has just this moment discovered why they are so low, so they
are pulling their bid! Getting out of a bid without getting the bid bond
extracted, by proving a second tier omission or math error can be a lot like
trying to duck whizzing golf balls out on a busy Saturday afternoon driving
range. And not nearly as fun!
Of course, an early warning is better than learning, after the Owner awards
the project, that the low mechanical or electrical bidder is refusing to
honor their bid! Once a general contractor signs the contract with the
Owner, they have very little recourse for adjustment. And zero sympathy.
It’s not a problem, right? It’s a challenge?
Software for estimating gets purchased on the wings of efficiency, accuracy
and error prevention, or rather error detection, because errors are
something estimators make. Actually, the more they do the more errors they
make. And until they get through the learning curve on new estimating
systems, they are more likely to make even more mistakes. It’s not about
making zero mistakes. It is the strategy for dealing with them that counts
in this fluid world of numbers, slim margins and broken promises.
There is plenty of glamour and intrigue for everyone. Normally reliable
material suppliers, dependable sources for years, suddenly become
dishonorable and unreliable, when they are hit with price increases from
their wholesalers. Somehow this all comes home to roost on the estimator’s
desk, sitting there like a feathery predator with carrion breath, as it
tries to make lunch of all the profit and enjoy the hard costs for desert.
And there is no Yin for Yang. No one ever calls and offers to drop their
pricing. And the estimators’ code of ethics precludes the frowned-on
practice of “bid shopping”. The estimator listens as the boss loudly tells
every vendor in earshot that he will fire any of his estimators who he
learns partake in this dishonorable practice. He, the boss, most certainly
does not approve of trying to improve profit margins by looking for better
subcontractor pricing after the bids are closed. But privately, some
employers try to encourage the estimator to grow profits in this way, as
long as they, themselves, can dodge any semblance of guilt.
So it is up to the estimator has to hold the line on integrity, or bear the
blame, because there is plenty of that to go around, and bid shoppers almost
always are exposed. And not just the estimator’s reputation suffers. Most
scorned subcontractors will refuse to quote on the next bid day, to the
offending company. And there is no healing, no forgiveness, and no comeback.
They will do this forevermore in some cases. Then the estimator finds
himself without sufficient bidders to complete the bid for the next project.
He can also gain a reputation for bid shopping that can follow him to
another position with another firm.
Yet there is cause for hope, and for a bit of humor in the process. The
estimator gets regular chances to redeem his reputation in his employers
eyes, because new projects pop up to bid more often than kids get the
hiccups. It’s like roller-skating in a ball bearing factory. If you trip but
don’t fall, you get another chance to trip.
Still, the construction business has its lighter moments. There is the
general contractor, let’s call him Dick, who hired a new estimator (goes by
Joe). On Joe’s first day, he was in charge of putting together a simple bid
for a new municipal bituminous parking lot. This is a true story, as related
to me by Dick, the contractor. I don’t think anyone could make up something
like this. And there were witnesses.
The bid was due at 2:00 PM and Joe worked hard, calling subcontractors for
quotes when he needed them, and filling in the costs on the estimate
spreadsheet. Joe worked on through the lunch hour and actually had the bid
together in time to run it himself, a matter of a few blocks, down to City
Hall, for the opening. Dick decided to ride along to watch the bid opening
and so together Dick and Joe drove over to deliver the bid and wait for the
For once in the most improbable of Blue Moon events, they caught a break,
because there were not any other bidders on the project. And as their bid
was somewhat under the engineer’s estimate, they felt positive of an award.
Both Dick and Joe were in a great mood as they drove away from City Hall,
and Dick asked the Joe to pull in at a fast food place by the office, where
he stood them both to lunch.
They took their lunch sacks back to work and, Dick, a happy and normally
very flamboyant person, strutted up to the white board he kept for such
purposes and started listing the various bid categories with a marker. Then
he asked Joe, who had just unwrapped his steaming burger and fries, who the
subcontractors were for each category.
“Who bid the dirt work?’ Dick asked and Joe proudly told him “Big Shovels,
Inc. bid it for $149,000.”
“And the guardrails, who did we get a price from on those?”
“National Safety Rail, for $38,000.00, installed.”
“And the demolition, who bid the demo to us?” asked Dick.
“Swenson and Sons was low,” Joe replied, “Their price was $18,450.00.”
“Good, good,” said Dick. “Who is doing the biggest part of the job? Who is
the paving contractor? Did we get a couple of close bids on that?”
Silence: The quiet rushed in, like a hissing ocean wave. Facing the board,
Dick listened and waited. Echoes of silence. He turned to look at his
esteemed new estimator, who at that moment, was quietly rewrapping his
burger and throwing his fries back into the sack. Without uttering another
word, Joe picked up his soda, walked out the front doors, got in his car and
spun out of the parking lot.
In the silence, Dick knew he had his answer. The paving cost was not
included in the estimate. The estimate was a formally submitted and bonded
bid. He had a new project to manage. And he needed a new estimator. But
after a few years, even Dick, by now a long time AGC member, was able to
laugh a bit about the situation.
Needless to say, the bid team has to be pretty innovative to overcome all
the sand-traps referred to above. With modern technology, an idea like
emailing the bid to the runner so they may copy them onto the bid form can
work well, as it eliminates the chance of a misunderstood verbal quote.
However, the issue of a broken connection also needs to be overcome. Backup
phones are definitely required.
Getting more review time is usually a tougher nut to crack, but extra eyes
over the shoulder of the estimator sometimes help, if the feeling of
micromanagement be avoided. Some estimators may take this to heart as a vote
of no-confidence. Before implementing these types of practices, the team
manager needs to open a dialogue focused on error elimination, by
recognizing that honest, blameless errors are commonplace in this world.
Management must also ensure that the estimator’s work environment allows
little chance of interruption or distraction on bid day due to work issues
not related to the bid. And management must definitely give backup to their
estimators by lending their support and ethical guidance to eliminate issues
like bid shopping.
The issue of vendor and subcontractor quote withdrawals may be with the
industry a long time. The best defense for these types of events is
preparedness. The bid team needs to have some idea of what the project costs
are for every component in all bid divisions. An informed mockup of the
expected final bid tabulation can be invaluable. Using that tool, it will
still always be a judgment call, but if a subcontractor’s quote appears
excessively low, the general contractor’s estimator needs to feel an
obligation to warn the sub bidder in question, and at least give them a
chance to pull their bid from all prime bidders before bids are submitted.
Construction Estimating- Good people and innovative minds will always find a
place in this interesting and vital position. It’s a good gig if you can
hang in there. At least that’s what I hear.
Jerry Mollenhauer, CPE, is a Certified Professional Estimator, based in
His firm, Reliance Estimating Inc., VCEF is a Validated Consulting
Estimating Firm by CERT, the Consulting Estimators Round Table. He can be