Last month I made the assertion that of all the critical elements that make up a comprehensive construction estimate, the general conditions component is perhaps the most subjective one. I supported that position by describing the various project-specific circumstances that might impact the cost of supervision, cleanup and stocking—the three most consistently significant general conditions that an estimator may encounter. I made this argument to underscore the discretion that we bidmeisters are afforded in our assessment of these values on a job-by-job basis and to hopefully dissuade some of my quantifying colleagues from the common practice of relegating this pivotal portion of the estimate to a one-size-fits-all formula.
For this installment, however, I offer an informative approach to the topic, rather than a persuasive one. I will once more invoke my often-cited exemplar from Dr. Samuel Johnson, who famously said, “People need to be reminded more than they need to be instructed.” So this writing will be devoted to presenting a catalogue of transient conditions (exclusive of the typical trio above) that may or may not apply to any given project but, if omitted, may prove to be a fatal oversight. Many thoughtful estimators keep a running list of these optional conditions just so the chances of such a lethal omission are minimized. Their checklist might include such far-flung items as per diem and/or travel expense, temporary facilities, engineering, orientation, gate-time, drug testing, background checks, safety, hoisting, freight, special tools and/or equipment, consumables, fuel and winter protection. Obviously, there are a good many other possible conditions that may occur on any given project, but this list covers the most common ones in our industry.
Is It In or Out?
One of the most costly conditions included in the above itemization is also the easiest to identify for exclusion or inclusion: per diem. Per diem is the per-day allowance offered to employees working out of town to offset extra expenses incurred in that regard. This extra, non-taxable compensation may include housing, fuel, travel time and food. Even within this standard condition, there are variables that will impact the per-day amount to be calculated. There may be considerable opportunity to hire from the labor pool in or near the location of the project, minimizing the need to include per diem for no more than perhaps a supervisor and a core crew. On the other hand, in-town work may be so plentiful that a generous per-diem amount must be offered to compensate for the hardships of working away from home in order to lure qualified help into traveling. Evidently, there are more variables associated with per diem and travel than the hotel rates in a particular area, or the current (or projected) price of gas, but these two must be considered as well.
Similarly, temporary facilities may be costly, easy to identify, but not necessarily so easy to project. A large project may require the presence of a full-time project manager or managers, which in turn necessitates the inclusion of cost for a job trailer for the duration of the project. Many estimators calculate the monthly cost to rent a trailer but fail to account for setup, electricity, phone, Internet, etc. In other instances, remoteness of the site or special circumstances demand that the sub provide his own temporary power, lighting and/or water. Generators, lightstands, pumps, fuel and all the various parts and pieces suddenly come into play. Plainly, these forecasted costs must be accurately calculated into a complete estimate.
Engineering is a condition that is carried by the metal framing subcontractor more and more frequently as the responsibility for design is not-so-gradually shifting from the design team (makes you wonder why they’re called that) to the sub, sometimes by sleight of hand. Regardless, if the documents require it, the exactimator must include it. The requirement is usually spelled out in the “Cold-Form Framing” section in the general notes of the structural drawings, or in that specification of the project manual, or both. Usually in these cases, there is a dearth of details in the structurals that pertain to our scope. Quantifying cost for stamped shop drawings can be tricky. Many engineers charge by the detail (for example, $500 per detail) and the number of details needed to satisfy the requirement is tough to determine. One former colleague used to count the number of architectural details pertaining to the heavy gauge framing and doubled it. He was usually pretty close. Go figure.
An entire set of certain general conditions might well be placed under an umbrella category called “security.” They are orientation, badging, background checks, drug testing, gate time, tool checks and daily safety talks. It is a fact that many owners operate secure facilities that demand an inordinate amount of precautionary time-eaters that in some cases may actually double the labor time on a particular project. Prisons, airports, schools and high-tech plants are among such security-sensitive facilities. A friendly general contractor who has done his research on a particular facility may prove helpful in quantifying how many man-hours per day to calculate for such encumbrances to keep them from becoming budget-busters.
Think About It
A careful read of this installment might incline a thoughtful estimator toward compiling and developing his own checklist of potential general conditions for possible application toward each project proposal (that is, if he doesn’t already have one). I’d venture to say that we all need some such written reminders to free our minds from having to re-create them from rote, and free them to pursue the more lofty endeavors that a bidmester’s mind was made for—for instance, counting door frames.
Vince Bailey is an estimator at E&K of Phoenix.