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Running With the Big Dogs, Part 1

I am well acquainted with a once-successful drywall contractor who made his fortune on the residential side of our industry. He worked diligently during the glory years (remember?) providing interior wall and ceiling finishes on tract houses, condos and apartment complexes. He learned all the rather simple ins and outs of the trade and, as his company’s sole estimator, he developed a set of unit pricing formulas that clicked, and he prided himself on tight board counts that were always accurate right down to the sheet. His business thrived and life was good.

Then, as we all know too well, the bubble sustaining that fantasyland known as the housing market imploded and sucked all the air out of this contractor’s world. But this particular drywall contractor, being an astute businessman (and an avid reader of this column), smelled the coffee and moved to downsize immediately. He cut his workforce and reduced his home office overhead to a fraction of their former size within a month after feeling the first effects of the market tailspin. His canny sense and flexibility enabled him to survive for several seasons on the meager income offered by remodels and an occasional custom home because his overhead was consistent with his work load.

Unfortunately, this plan was designed to stave off insolvency for maybe a year, 18 months at best. None but a sage few expected this downturn to drag on into a fourth and fifth year. Prospects for recovery grew dimmer for this residential contractor as even renovation activity dropped off after that first year of austerity.

That’s when a glimmer of hope pierced the darkness. News that certain areas in the commercial drywall market were enjoying an uptick (mostly public work and health care) reached our man’s ears and, as before, he reasoned that a shift in the focus of his endeavors could quickly resolve his economic woes. He still had the resources and the ingenuity to follow the gold. He was ready to make the leap from residential to commercial wall and ceiling work, demonstrating his commitment to the new plan by upgrading his license, and updating his estimating software to include a program with a solid commercial drywall database.

You’re Serious About This?

At this point, I am going to offer more than a few words of caution. Never one to throw cold water on the entrepreneurial spirit, our intrepid pioneer, spurred by a newfound wave of optimism, could use some sobering advice before he boldly launches into the dizzying realms of the commercial side of the industry, particularly at this point in time. He thinks he is at the doorway of opportunity, but without being forearmed with a working knowledge of all the intricacies, he may well be at the threshold of ruin.

First, and perhaps foremost, he is broadening his scope to include aspects of the trade with which he is likely very unfamiliar. Specification sections for drywall include metal framing, and general contractors expect proposals to encompass all aspects of the trade. Our venturing sub is probably aware of this but underestimates the sophistication of this portion of our work. Stud size, gauge, flange width and spacing must all be determined to begin with, and no, they are not often clearly designated in the bid documents. Partition layout and hollow metal door frame installation are expected inclusions, among others.

Playing heavily into this is the fact that most of the available work is of a type (again, public work and health care) that often includes shell work in addition to interior build-out. Shell work pulls yet another spec section into the mix: cold-rolled (heavy gauge, structural) metal framing. Exterior framing is then chained to exterior sheathing, and so on. Of course there are unit price formulas that address typical framing assemblies, but by my reckoning they are no substitute for a familiarity with degrees of difficulty informed by substantial experience.

Even the drywall portion of typical commercial assemblies can be maddeningly convoluted at the hands of a villainous design team. Fire-rated walls, sound-rated walls, moisture-resistant walls, tile-backer walls, lead-laminated walls are all typical assembly factors on a wall-types page. Head-of-wall details, acoustical caulk, through-wall penetrations for overhead rough-ins, differing levels of finish—all industry standards familiar to the experienced commercial estimator. A novice, however, might easily become as frustrated (or as dangerous) as a blind dog in a butcher shop.

Won’t You Reconsider?

Once he’s sorted out the components (in a year or two), our commercial newbie must now assign reasonable labor productions to all of these mind-boggling conditions. As everyone knows, production levels are the mystery factors that can make or break a bid, and by the same token, make or break the profitability of a project. Again, field experience or years of commercial estimating experience are about the only qualifications for making this endeavor anything more than a game of darts with blind man. Varying degrees of difficulty, field conditions, skill levels in the workforce, efficacy of supervision, and GC cooperation all factor into a well-considered production level for any given assembly or condition on a commercial project.

OK, by now you probably get the gist of where this is leading. I truly hate to rain on anyone’s parade, but worse still I hate to see anyone mistake a downward slide into the proverbial toilet for a water park ride. There must be hundreds of barriers to entry that a residential contractor should consider before attempting to go commercial.

Next month, we’ll hit the most formidable of them and hopefully spare our entrepreneurial residential contractor/estimator from the busy blade of the reaper.

Vince Bailey is an estimator at Valleywide Plastering in Phoenix.

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