Of all the many critical elements in the makeup of a complete construction estimate, the general conditions (GC) component is perhaps the most singularly subjective one. I say “subjective” in the sense that it is subject not only to the unique conditions of the particular project, but subject as well to the broad interpretation that the estimator brings to the task. Ironically, the GC item is also one of those portions of the estimate most commonly given over to formulaic treatment, in spite of the obvious opportunities it offers to distinguish a thoughtful bid from those of the rest of the herd.
Consistent with its plural label, the general conditions unit is comprised of a number of cost-impact items, some of which are applicable to nearly all projects while others may apply only under certain circumstances or in certain markets or geographical regions. The three standard constituent components that nearly always apply across the board are supervision, cleanup and stocking. Other commonly applied items include hauling, hoisting, engineering and per diem. A list of some less frequently cited items, but pertinent ones in their own context, may include temporary facilities, freight, orientation, gate time, in-house deliveries, consumables, special tools, winter protection and permits. Already we can see how distinguishable one job might be from another just based on inclusion or exclusion of pertinent or irrelevant items from the above list.
But even within the basic unit of the standard items—supervision, cleanup and stocking, there exists a great deal of discretion in the assessment of value depending on the circumstances peculiar to a particular project. And given the usual hefty price tags associated with these three crucial items, their assessed valuation may well be a make-or-break factor in a hotly contested bid.
Usually the priciest item in the standard GC trinity is supervision, and there are a good number of weighty variables that enter into the evaluation of the supervisory costs, the anticipated project duration for the scope of work being the most determinative. For many projects a simple ascertainment of the cost to compensate one onsite supervisor for the length of the job sums it all up, and some estimators consider this an encouragement to apply a one-size-fits-all formula for all projects.
However, other job-specific factors frequently have to be considered. For instance, if the job size or an extended schedule requires only a small crew for the duration, supervision may not be deemed a full-time job, and the supervisor’s time should ideally be divided between oversight and actual hands-on production, the appropriate ratio becoming another subjective judgment call. Conversely, sites with multiple buildings or large projects with multiple scopes may require more than one general supervisor, or perhaps one general supervisor with several subordinate foremen with scope-specific skill sets. It is not at all uncommon for a large, complex drywall project to carry an exterior framing supervisor, an interior framing supervisor, a drywall hanging foreman, a finishing foreman and any applicable scope-specific supervisors (painting, plastering or acoustical ceiling foremen) all working under one or more coordinating superintendents. In fact, certain union locals have adopted strict structural guidelines that dictate the makeup of the supervisory staff, based on crew sizes.
Similarly, cleanup, especially for drywallers, is another cost-intensive item that’s a moving target and refuses to hold still for a formulaic treatment. Once upon a time, it was easy for commercial drywall contractors to assign a labor-percentage formula to the task and call it good. In-house or subcontracted clean-up crews rotated in and out of jobsites once or twice a week to remove scrap and dispense with crew-generated trash. But safety concerns and productivity considerations eventually deemed it necessary for general contractors to mandate (and rightfully so) that drywallers—the largest producers of jobsite scrap—remove their refuse from active areas on a daily basis.
Subs responded to this mandate in a variety of ways. Some doubled up their cleaning crews to meet the need, even as others resorted to having journeymen cut their days short and clean up their own scrap and trash at the end of the work day. But then, to further complicate matters, many general contractors now require each sub to contribute one or more full-time laborers to a composite cleanup crew to service all onsite operations. And so it becomes quite obvious that the value of cleanup falls subject to the unique requirements of the particular project and the sub’s individual approach to the item.
Stocking of material is another item that needs more consideration than just applying a formula. While many material suppliers include delivery and stocking in their pricing, there are circumstances peculiar to a particular project that require differing extents of in-house stocking. Limited access to the building due to design or the building closure schedule can prevent all but incremental stocking, which the material supplier will likely not perform on such a piece-meal basis. It’s apparent that stocking access and associated costs must be evaluated by the attentive bidmeister with a case-by-case approach.
Clearly this piece of penmanship is an attempt to demonstrate the discretion afforded thoughtful exactimators by the general conditions portion of the estimate. It is also apparently an incomplete effort and will consequently be continued in the next installment.
Vince Bailey is an estimator at E&K of Phoenix.