Welcome to DCD, home of the number one construction magazine!
ABOUT DCD    THE MAGAZINE    D4COST    CONTACT    HOME
Welcome to DCD.com!
     

 Current Issue
 Click here to
 read the issue.
Click Here To Access The DCD Archives™
Subscriber Login

Content/Departments
   Current Issue
   Issue Archive
   Specifiers Spotlights
   Building Products Revue
   TradeWinds
   Technical Articles
   Insights
   Case Studies
   DCD Sq. Ft. Cost Guides

   Cost Trends


Advertising
   Media Kit

Subscriptions
   Free Subscription
   Subscribe
   DCD E-News Subscription

D4COST Software


 


Click Here to
Subscribe Today
for Your FREE
DCD Magazine
Subscription

A Takeoff is A Takeoff – or is it?
By: Angelo Castelli

From a distance looking at a set of plans might seem like a very sequential process. Owner seeks a desired result. Architect designs blue prints based off of the desire. Blue prints are converted into plans. Quantitative measurements are done against the plans. An estimate is submitted. Bid is won. Project is built. Pretty simple right? Ok, not exactly that simple. Trust but verify. Check and recheck. Measure twice – cut once. All of these may be overused clichés but isn’t it interesting that everyone follows them. Companies want to do the best work for the least cost to get the most profit. If so, then is duplicating work ever beneficial? The definitive answer is yes! The best example of where replicating work pays off is the takeoff. A takeoff done to sell the business is different than the takeoff done to build the job. Not understanding this may mean the difference between profitability and losing money.

An estimator’s responsibility is really that of sales. The takeoff and pricing completed by the estimator are intended to cover all of the known costs for the sole purpose of securing the contract. Generally speaking there is a very short amount of time to gather all of the necessary information available and complete the work to put together a winning bid. Experience shows that almost never, no let’s be honest, NEVER is all of the information for the project available to the estimator during the initial takeoff and bid estimation.

If the project manager uses the estimator’s takeoff and budget as the project benchmark the likelihood of success is limited. This is of course no fault of the estimator, it is simply a result of ‘not knowing what you don’t know’ at the time of the bid. A takeoff and bid used to sell the work is not the same as a takeoff and budget used to build the job. Project managers should complete their own analysis of the project. After winning the contract, at a minimum a thorough review of the quantity takeoff as well as the material and labor budget should be conducted. The best practice is for the project manager to deploy value engineering to save on materials, labor, and equipment.

Although Value Engineering (VE) has its roots in manufacturing it has been utilized in the construction industry for a number of decades. Value Engineering is a focused, innovative way to review project requirements to achieve the end result at the lowest total cost over the life of the project. It is not intended to be a process for a project manager to review the work of a peer, such as an estimator, or purely that of a cost cutting process. The earlier in the lifecycle of the project that VE is deployed the higher the probability of project success. Value Engineering will save money on materials, labor, and equipment.

Project managers who complete their own independent takeoff and pricing exercise do so at a greater level of detail. There is more information available to them and there is time to dive deeper into the project specifications. Project managers that utilize this method achieve a higher gross margin than those who don’t take the time to complete this exercise. A project that begins with detailed scrutiny starts on solid ground for avoiding cost overruns.

There really is no better way to learn and understand a project than to do a takeoff and price it. The depth and level of understanding around a project is significantly higher than reviewing someone else’s work on the project. During this process the project manager may find anomalies or errors in the original bid. If an error is found, the best time to identify the issue is during the project set up not when the job is 20%, 30% or 50% complete. The earlier the error is identified the lower the cost to resolve it and the less impact it will have on other project phases.

Project managers should set a personal goal of finding, at minimum, a 5% - 10% cost saving as part of setting up the job. A thorough review of the specifications should be included. There are risks or rewards that are found in the specifications during the project manager’s takeoff that might have been overlooked or did not exist at the time of the original bid. Specific items that should be included in the project manager’s takeoff are material substitutions, pre-ordering material at custom lengths, and potential prefabrication.

Extensive analysis before start of construction is to develop a construction ready budget. The best budgets are collaborative, credible, and measurable. This collaboration/teamwork starts between the estimator and the project manager and is then carried on between the project manager and the site foreman. The budget deliverables include: a color-coded takeoff, detailed color-coded labor costs, a solution to keep track of the budget, reports for additional material, scope, and change order updates. The takeoff and pricing is done with the foreman. This collaboration ensures that when the foreman receives the color coded plans and corresponding stock list and labor budget, it is easier for him to track and manage the job. Unless the project manager completes an independent takeoff, all of this information would be built on what was known at the time of bid. And everyone knows that is a far cry from the post-win process.

A takeoff is a takeoff trivializes the value of quantitative measurements done after the contract is signed. Don’t take the easy way out which is also the riskiest way out. Trust but verify. Check and recheck. Efficient and accurate takeoffs result in effective winning bids. Detailed and documented takeoffs result in on-time and profitable builds. So do the quantitative measure twice – you won’t regret it.

Angelo M. Castelli is Vice President of Operations for On Center Software, Inc. Mr. Castelli’s responsibilities include Direct Sales, Channel Partners, Marketing, and R&D. In addition, he serves on the firm’s executive Vision Team, a think tank for the future of construction automation. 


©2015 Copyright DC&D Technologies, Inc. All rights reserved. | DCD Construction Magazine | Email: webmaster@dcd.com