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  • Writer's pictureTristan Wilson

"All the Pieces Matter"

I sat in a conference room across the table from a delightful business person who runs a fine construction and materials firm. When I asked about success, this person leaned back in their chair, paused for a second, and quietly said that "the second our management team feels like they have it all figured out and we're at the top of the heap is when are in deep trouble." This company's performance suddenly made a lot more sense to me.


Have you ever participated in a highway bid review where it was assumed that the plan quantities were accurate without running independent analysis? Blindly using the plan quantities and skipping the critical step of doing one’s own homework with extensive takeoffs is a recipe for failure. It is that simple.


How can we confidently estimate and bid a unit price project if we do not know what the final quantities are expected to be? The answer is that we cannot as it would be impossible. Takeoffs are the lifeblood of unit price bidding. Contractors set themselves apart with efficient, accurate, and meaningful takeoffs performed far in advance of bid day.


6 Quick Takeoff Rules:


1. Assemble the Right Team Early

Involve estimating, surveying, modeling, field teams to delegate, divvy up, and get ahead quickly on takeoffs. Increased complexity (e.g. earthwork, structures, phasing, erosion and sediment control, traffic shifts, detours, and subcontractor dependencies) may involve a cross functional team depending upon Estimator experience and workload. The difference between asking for help 3 weeks before the bid date and 3 days before is significant. The right people on the bus doing the right jobs is a winning formula.


2. Work Backwards

A friend of mine often suggests that I “Start with the end in mind”, a phrase popularized by the late great Steven Covey in his book, The 7 Habits of Highly Effective People. What level of takeoff detail is expected from the Estimator? Outlined expectations up front and utilization of standard takeoff templates breed consistency. Takeoffs can be the most cumbersome and time consuming part of the estimating process. And the risk and reward makes them utterly worthwhile.


3. 80/20

Things broken down into smaller pieces are more manageable. Think about the 80/20 rule. Which 20% of the bid items involve 80% of the cost and or risk? Consider starting with those first.


4. Digitize To Get Your Edge

There are a multitude of software providers with digital takeoff solutions

such as Bluebeam Revue and Trimble Business Center. An army of startups in the built world is attacking the takeoff frontier to optimize processes that save time and money using artificial intelligence (AI), machine learning (ML), and other advanced technologies. Many involve augmentation, which means that the technology works hand in hand with people as opposed to running fully autonomously. Sidebar: Does anyone remember the beep beep beep sound of the old AGTEK “digitizer” for earthwork takeoffs?


5. Subcontracted Items Count

This is low hanging fruit for many highway contractors. The siren’s song of overlooking the subcontracted items is tempting. It may come in the form of a comment such as “Well, it’s not really ‘our’ item, so we will just plug the sub’s price”. If bidding as the prime contractor, every item is your item. Lester Freamon, famed fictional Baltimore City Detective from HBO’s The Wire, may have said it best: All the pieces matter.



Will it take losing a $9MM job by a razor thin margin (one that would have been won had a silt fencing takeoff not been omitted) to convert the nonbelievers?


6. Over/Under Analysis

A process and system for comprehensive over/under analysis on key items and job types is a fantastic way to gain insight. Not all items can be perfectly measured as unique Owner preferences may dictate in-place quantities.


Level of detail implies preparation. The critical quantification work is done at the outset to create accuracy and confidence in the final bid numbers. Risk is minimized through a systematic “trust but verify” approach to pay item quantification. Summaries of estimated quantities often leave much to be desired. Every item counts. In today’s competitive world, complacency leads to extinction. Takeoffs take time and are part of the job. Doing them every time well is worth it. Bids are like puzzles and it can be exhilarating to be a part of a dynamic estimating team pulling all these complex pieces together.


At Edgevanta, we are building a technology to help solve the project acquisition process for our customers. We welcome your insights as we review the 8 fundamentals.



Sincerely,


Tristan Wilson

CEO and Founder

Edgevanta, LLC


This is the third deep dive of a multi-part series on the project acquisition process of the construction cycle for highway contractors.


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