The Role of an Estimator - Clearing up the Misconceptions
As a consulting estimator, one of the most common questions I get is, “What is the percentage of jobs that you get for your clients?” And my answer is “None!” “I don’t get jobs for my clients. I’m an estimator.”
An estimator’s role is to predict cost. It’s really that simple. Although the skills and responsibilities of an estimator are quite complex, it all comes back to this simple definition.
Clearing up the misconceptions will take a lot more.
The Estimator is not a Salesperson
Having bias in any situation is toxic to its outcome. As such, if an estimator has any bias whatsoever, including the desire to get the job, then this bias will flow into the work and flood it with toxicity in the form of inaccuracy. This can even happen without the conscious knowledge of the estimator.
Oftentimes, executives and/or employees wear many hats. They can sometimes be the estimator, the salesperson, the contract negotiator, purchasing agent, and maybe also the accountant. While that may be a good arrangement in certain business structures, the duties and responsibilities of each title need to be recognized. When you are estimating – that is predicting cost – you cannot be the salesperson at the same time, as the goals of these two are often conflicting.
A colleague of mine who has been in the construction industry for 40+ years told me about the time his boss said to him, “Make a mistake on this one, I really need the work!” When I first heard this story 15 years ago, I always thought that it was a joke. The more time I spend in the construction industry the more convinced I become that it was quite serious.
Value engineering is important. There is nothing wrong with finding creative and better ways to perform a project with a better value. In fact, it should be part of every project analysis, and a tool that the estimator uses often. It is a tool that may or may not get you the job. However, the estimator needs to approach it from a cost perspective the same way that she/he approaches the rest of the project, with the full acceptance that a value idea is just that – an idea – and it may turn out not to be a value after a full cost analysis is completed. If the estimator approaches the value idea as a ticket to getting the job, then it may be just as inaccurate and potentially toxic as any other biased work.
A well-developed cost estimate is a tool for the salesperson, whether it changes hands or the user changes hats. Sometimes the value of a proper estimate is more in empowering the salesperson to walk away from a project with confidence.
It is important to clarify that being unbiased does not equate with a lack of empathy. Of course I want my clients to get a profitable contract! The key word is “profitable”. I vehemently dispute the adage “It is not personal – it is business” Business is personal unless you are a robot. I root for my clients with the clear knowledge that the best way I can serve them is by doing my job well, by predicting true cost with absolute skill, focus, and dedication.
An Estimator is More than a Compiler of Bids – A Lot More
Estimating is many things, but the one thing that it most certainly is not is simply a compilation of subcontractor quotes. Subcontractor quotes may be a piece of the puzzle, but that is where their relevance remains.
A viable estimate represents a complete understanding of every step of the construction process and what it entails to build the project. A viable estimate includes an understanding of which parts of the job are not buildable as proposed. A viable estimate follows the project with dollar signs from beginning to end, every step of the way.
A competent estimator starts with extracting a complete and proper scope of work, with great attention to all components necessary to complete each item.
The quantity survey is an equally important aspect of the estimating process. The estimator must account for many factors, including, but not limited to, waste, proper conversions, height and depth factors, variables in specifications, accessibility, compaction adjustments, and many other factors that may be relevant to any given specialty, whether they are delineated on the drawings or not.
I remember the time a colleague of mine told a group of veteran estimators that when anyone asks him what it takes to be hired by his firm, he responds, “The only two qualifications required are the ability to count and to not be color blind.” The room exploded in laughter, and he laughed the hardest.
Phasing, time and escalation of costs, and climate are some of the other important factors that an estimator considers in the prediction of cost. In many instances, means and methods employed will impact the cost estimate too.
Only after all of those factors are considered, analyzed, and documented in a clear and concise manner, is when identifying the cost of each item can begin. It is impossible to predict the cost of an unknown.
Allocating cost to units involves a complex process. When an estimator “puts a number” on a unit, identifying it as cost, there must be a logic behind it that the estimator understands fully, one involving a comprehensive methodology, formulated specifically to the entity that will rely on it.
If subcontractor quotes fit into this puzzle in a given situation, that is fine, as long as all of the other puzzle pieces are given their considerable weight without compromise.
It would be remiss not to address the argument of so many that if a subcontractor commits to a lump sum price, and the contract corners them in with rock solid language, why would that not be considered a solid estimate of costs? Why should an estimator go through all of the steps to ensure that the proper scope of work and quantities have been covered in their subcontractor quotes? Without delving into the ethics of this, and whether it is good business practice, let’s focus on cost itself for now. Does the estimator who engages in this route also consider the legal fees to fight the potential change orders, the time lost in the fight, the potential cost in replacing the contractor that cannot perform within the parameters of the contract, regardless of its rock solid clauses? Estimators predict cost from all angles, to the completion of a given project. Admittedly, there are many avenues to reaching a similar conclusion. If this is the road you like to travel, then at least make sure you have an accurate map.
An Estimator is Not Only as Good as the Software Employed
In fact, the software is only as good as the estimator.
I often ponder about this interesting phenomenon. I constantly get the question, “What software do you use?” Does anyone ask that of their accountant? There is a great misconception that the best estimators are simply proficient users of excellent software.
Software is a tool. An estimator must have skills that far outweigh any one tool. Give me a pad of paper and a pencil, and I will give you a good estimate. And, OK, a ruler wouldn’t hurt. Seriously.
It is true that better tools enable better efficiency and sometimes a more polished product. However, the proficiency level is strictly with the estimator, completely independent of any tool.
Although the role of an estimator can be clearly defined, the methodologies employed will always remain inherently complicated, creating a propensity for misconceptions. The estimator juggles countless balls at once, and cannot lose sight of any one of them for a moment. Yet each ball contains predictions and contingencies that may or may not line up precisely in the field. That is why it is still called an estimate.
About the Author: Rifka Malik is the president of Sitework Estimating Services, Inc. and has spent the last 20 years in the construction industry, specializing in sitework. She is a Certified Professional in Erosion and Sediment Control (CPESC) and a Certified Professional Estimator (CPE). Ms. Malik is an independent consulting estimator, a presenter of seminars and presentations to the AEC community, and has published construction-related articles in relevant publications. For more information contact firstname.lastname@example.org