The Case Estimating Process

1. The Case Estimating Process George Weissgerber

2. An Estimate “IS”… • a tool to establish a fair price as well as a budget for production goals. • a reflection of what the contract / sale included in the scope and specifications. • an outline of the events that need to take place and the their costs. • derived from the Case historical “average” costs for a given job or task.

3. An Estimate is “NOT”… • going to be 100% accurate for every task, situation, client or carpenter. • shared in detail with the client. • the only information needed to build. • a coaster for your coffee cup.

4. The Estimator • Estimating for “Murphy” is a Folly! • An estimator must not assume that the worst will always happen. • An estimator should define and set limits around tasks where Murphy could show up. • The estimator must maintain an outlook that is: Positive and Consistent but Realistic

5. Sales / Design / Estimating Sales Process Contact PA/FS CD Contract Design Process Verbal Sketches CAD Blue Prints Estimating Process Ball-Park Refined B-P CJES Final Estimate

6. CJES Estimating Case Job Estimating System

7. Estimate Structure • Before you can understand your actual costs you must understand your estimated costs. • The essential general components of most large or small remodeling projects are: • Start-up or preparation to do the work • Demo or preparation of existing conditions. • Structural foundations and/or framing. • Exterior finishes • Plumbing / HVAC / Electrical • Interior finishes. • Punch-out / clean-up.

8. CJES Assemblies • Estimating projects that are readily definable are started using pre-assembled generic estimates called “ASSEMBLIES”. Assemblies are structured to include most of the items, and their quantities, that will be included most projects as well as many items that “might” be needed. • Note: Assemblies are used to set the pricing of the Wag Tool.

9. CJES Items • Items in the estimating system are broken down into four general categories: • Labor • Materials • Subcontractors • Other

10. CJES Item, Cost Codes • The only way you can consistently accurately estimate is to compare your average cumulative estimated costs to your average cumulative actual costs and feed that information back into your estimating system. • This process becomes more accurate if the estimates are broken down into fundamental disciplines. We call these divisions “Cost Codes”.

11. Parts of an Item - Labor • Labor = (Wage + Burden) x Mark-up • CJES assigns a specific period of time to complete each unit (UOM) of an item. • The time assigned is derived from historical cost variation studies of completed projects.

12. Typical Labor Burden Rate Calculation

13. Labor Cost Codes 1-015 Protection / Shoring / Site / Concrete / Masonry 1-020 Steel / Iron / Rough Carpentry / Decks 1-030 Roofing / Window / Ext Door / Ext Trim / Siding 1-035 Plumbing / HVAC / Electric / Insulation / Drywall 1-040 Cabinets / Tops / Int Trim / Int Doors / Shelving 1-050 Tile / Finish Floors / Painting / Punch Out All estimated and actual Labor costs should always be assigned to the appropriate cost code.

14. Case Time Card

15. Parts of an Item - Materials • The CJES material costs can be defined by two general categories • Standard off the shelf, “staple” items • Customer “selected” and/or “special order” items

16. Staple Material Items • Staple item costs are maintained in the CJES database • The quantities and costs are automatically calculated in the estimates • An estimate item’s material quantities are set from typical amounts used per “Item UOM”, plus a “Waste Factor” • The estimate quantities are then converted into a “Purchase UOM” which calculates how much to buy • The purchase price of each material item is determined by adding 15% to a “quality” lumber/hardware store’s price. • 5% to 9% is for sales tax • 6% to 10% is for mistakes or other slippage you eat Don’t be pennywise and pound foolish with staples

17. Special Order Material Items • Selected/Special Order items are not part of the CJES database. • The estimated costs of Selected/Special Order material items are determined by client selections and supplier quotes. • Allowances are often used in place of hard quotes to move the client to a decision (sale). Next to labor, Special Order materials present the biggest risk for lost GP. WHY?

18. Material Cost Codes 1-015 Protection / Shoring / Site / Concrete / Masonry 1-020 Steel / Iron / Rough Carpentry / Decks 1-030 Roofing / Window / Ext Door / Ext Trim / Siding 1-035 Plumbing / HVAC / Electric / Insulation / Drywall 1-040 Cabinets / Tops / Int Trim / Int Doors / Shelving 1-050 Tile / Finish Floors / Painting / Punch Out All estimated and actual Material costs should always be assigned to the appropriate cost code.

19. Parts of an Item - Subs • The CJES sub costs represent typical costs for subs doing smaller remodeling projects • Specialized work of any size over the minimum should always be done by a sub • Your actual sub costs are very much determined by your relationships with subs • Larger sub estimates should always be backed up with a written sub proposal The subcontractor’s quote is entered into the estimate

20. Subcontractor Cost Codes 2-112 Concrete/Masonry 2-146 Siding/Ext. Finish 2-114 Plumbing 2-147 Roofing 2-115 Insulation 2-154 Finish Floor 2-124 Electric 2-164 Ceramic Tile 2-134 HVAC 2-174 Misc Sub 2-144 Drywall

21. Parts of an Item - Other • Othercosts are miscellaneous items that are classified as job costs but are not labor, material, or subcontractor costs. Examples: • Permit fees • Permit service fees • Engineer or architectural fees • Dump fees