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September 2014   

Letís Be Careful Out There!

By: Vince Bailey

While it occurs to me that Iíve never devoted an entire column to the subject of safety, the omission doesnít surprise me at all. Clearly the programs and policies of a construction firm that address the issue of jobsite safety are perpetually pondered by field superintendents, company officers and upper managers, but I think the topic rarely if ever rises to that same level of importance with construction estimators. Itís not so much that weíre a callous lot; itís just that weíre so fixated on prices and production levels and scope and deadlines that we tend to disregard the issues that arenít immediately assaulting our domain. Truth be known, safety, for most of us bidmeisters, is a line item under the general conditions tab to which we allocate a certain amount of cost by formula. Regrettably, thatís the extent of it.

But even aside from the obvious moral obligation that any business enterprise owes its employees, the impact of safety is paramount to any firm, and it affects all team members, estimators included, in a variety of ways. For estimators, this impact is best expressed in terms of cost because we instinctively think in these terms. We seek to minimize cost, and the cost impacts of safety can be both negative and positive.

Aspects of safety that add dollars to our estimates are several and relatively easy to recognize. Onsite safety meetings (tool-box talks, identification of site-specific hazards, mandatory GC meetings) can account for upward of an hour per man per work week. That may sound trivial until you do the math (thatís our job!) and figure out that on a project that lasts a year and requires a 30-man crew, thatís 30 hours multiplied by 52, multiplied by Ö well, you get the picture. Oh, and then thereís the equipment costs: The current state-of-the-art fall protection gear is absolutely tremendousóand so is the price tag to outfit a work force with such necessities. And letís not leave out the cost of training. OSHA classes for onsite designates and safety certifications for the safe use of manlifts, fastening tools, scaffolding, chopsaws, etc. all have built-in costs in addition to the man-hours spent that are not directly engaged in production. Now, this is not to be taken as an indictment of safe practices and policies; it is simply a heads-up that these things have a very real and very significant cost, and if they are not accounted for in the estimate, they will surely surface in the margins.

But thereís another side of the coin, such as how safe practices and policies actually reduce cost. The old adage that safety pays in many ways begins to resonate as we explore this angle.

Labor: While it is a widely held misconception that safe practices hinder production, most studies hold that the opposite is true. Any visible short-term inefficiencies that may occur due to seemingly burdensome rules and regulations are eclipsed by the avoidance of lost production due to injury. In the long term, overall production is higher in companies that have engendered and developed a successful safety program because lost time among productive employees is minimized. Obviously, better overall production levels render more competitive bids.

Burden: Most construction estimators are familiar with the term and meaning of experience modification rate (EMR) only because we have to state our firmís rate on the GCís bid forms. We have some vague awareness that our EMR is based on our past history of the number and extent of lost-time injuriesóthat is, our safety record. Few of us, I believe, consciously recognize that the EMR directly impacts our insurance premiums, particularly workmanís compensation, which comprises a significant portion of our labor burden factor. In short, a favorable long term safety record translates into a lower burden and a more competitive position in the bidding fieldóa notion that should appeal to all good quantifiers.

Risk: As stated before, we of the bean-counting ilk are serious worriers, and that second-natured anxiety does not cease when an awarded job is turned over to the production side. We worry about the final profitability of our jobs almost as much we do about procuring work. However, if our firm has established a successful safety policy, that means they have at least minimized the risk of such potential profit-killers as lost-time injuries and egregious OSHA penalties. In this regard, safe practices protect our profit margin and can ease our estimatorsí edginess, at least a little bit.

Sales: Virtually all decent GCs recognize the importance of safety in the workplace for all the good reasons stated above, and they favor subs who help them maintain an unblemished safety record. In fact, many estimators attending pre-award meetings are surprised to find that a good safety history may be as valuable a selling point as a low bottom line.

As Iíve said, we exactimators tend to see things in terms of cost; thatís the nature of our profession. But perceiving jobsite safety strictly as a cost item disregards the raison díÍtre for construction firms to establish and maintain safety programs: the moral imperative to provide for its employees the safest possible work environment in an industry that is inherently dangerous. If for no other reason than this, we estimators should stay aware of and supportive of our firmsí good-hearted efforts to protect their people from injury and death.

Better still, when we encounter any of our field people, it wouldnít hurt to parrot Michael Conradís weekly admonition from Hill Street Blues: "Letís be careful out there!Ē

Vince Bailey is an estimator at E&K of Phoenix.

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