Commercial Steel Estimating. Kerri Olsen

may get occasional phone calls from general contractors or other customers requesting a quote on a specific project. In addition, someone from your company may drop a set of drawings on your desk. Phone calls to your favorite general contractor or past customers with an inquiry on any up and coming projects is a helpful way both to both get your name out there and to find out about any attractive opportunities.

      Most of the time, you can tell by the project’s title what type of project it is. You may also be able to tell just from the name of the job whether it is new construction or a remodel. For example (these are not actual names) “Joy Rider Middle School” might be a new school. But “Joy Rider Middle School Modernization” would be a remodel. Another example is “Big City WWTP.” This name would be a Waste Water Treatment Plant. You can never really tell exactly what a project is until you look at the drawings, but the name of the project can be a pretty good indicator of what you might find there.

      No matter what the resource, approach every job like it may be the right opportunity. Then consider The Elements of Project Evaluation while making your decision. If it passes all five, then the project may be a good opportunity for the company.

Compliance Requirements

      Never knowingly bid work that is going to get your company into trouble! Positioning your company to take a job with a specific compliance your company cannot meet or specific scheduling requirements that are unrealistic is bad business practice.

      If the project specifications indicate that structural steel fabrication is to be performed by an AISC-certified shop (see references) and pricing is provided by a shop that does not have this certification, this action may invite the opportunity for litigation should you be low bidder. Stay away from such projects. If the project schedule calls for steel delivery in six weeks and it would take your shop twelve weeks to complete, it may be best to pass on this opportunity.

Errors and Omissions

      If you are aware that you may have missed some item in your quote that has made your number too low, make this known to the manager or owner as soon as it is discovered. Moving forward with a project knowingly without disclosing such errors is a serious disservice to your company. The negative ramifications of such action will never go away.

      Exposing errors and omissions upon discovery will allow the company and the customer to process them. Errors and omissions eventually become apparent all on their own over the course of the work; they will make a bad situation worse. Steel estimators are only as good as their last job, after all. Thus, so much work is needed to cover all bases.

Bid Results

      Within a few days of bidding on a project, call the company where you submitted your bid and ask for bid results. You want to learn how your number stacked up against your competition. Knowing the pricing helps steel estimators become aware of what the current market is doing, guiding them towards efficiency in pricing. Get the names of the other companies that competed in the bidding as well as their bid price, if you can. If you can’t get exact numbers, ask for a percentage of the spread between the prices. After a few times of gathering this information, you may discover a consistency with the pricing and the companies that submitted them.

      After gathering and reviewing the historical quote information, steel estimators may be able to surmise what the market will bear with the next quote. This accumulative history of projects quoted, together with what was won and by whom, provides clues as to which shops may be getting backlogged and which ones may become more aggressive in quoting projects.

      Historical bid information helps steel estimators determine how aggressive they need to be, and whether their companies would benefit from expanding or switching markets. Check with the managers who make these types of business decisions to determine your company’s sales direction.

      The industry standard for the bids won vs. jobs quoted indicates that good steel estimators usually get one job in ten. If the steel estimators find themselves consistently or unexpectedly doing better than that, there may be concern for an error in the pricing extensions or for some other judgment error.

      The remaining chapters in this book will break down all the information needed to create a complete steel estimate. The guidance and suggestions will be specific with regards to the materials application of your estimating and, in general, the applied shop labor, painting labor, and handling time.

      By the time that steel estimators have finished listing all the materials, extended all the labor hours, installed the pricing, and completed the bid letter, they should have a working knowledge of the contract drawings well enough to “see” the entire job. Mentally the project is completed—all the steel beams, columns, and miscellaneous fabrications have been fabricated in the shop; loaded on trucks; and sent to be framed together in the field.

2

       The Pricing Breakdown

      We begin with the steel estimator’s goal, which is to create a complete and comprehensive fabrication pricing of structural steel, miscellaneous steel, architectural metals, and any specialty fabrications as derived from a set of bid document drawings and specifications. To achieve this goal, you must perform a complete listing or “take off” of materials. You then add accurate pricing for all labor, materials, goods and services, painting, handling, and shipping necessary to perform the work.

      Explaining this end goal in detail makes it easier for beginning steel estimators to understand the process of creating the steel estimate. For this reason, the pricing breakdown is presented first. Using simple elements, this summary itemizes the categories that comprise a steel estimate and creates the foundation for every quote.

Components of a Steel Estimate

      Most projects have a common list of required components that make up the individual line items. We look to this list to assure that we do not to miss anything that may be needed in our pricing. Table 2.1 summarizes this list.

Table 2.1 Components of a Steel Estimate

       Summary of Components

Steel Detailing	Cost to provide shop detail drawings
Labor Hours	The time for shop labor to fabricate the steel and furnish a competed project
Materials	All stock steel necessary to complete the project
Hardware	Anchor bolts, bolts steel to steel, headed anchor studs
Buyouts	Anything that is not fabricated by your shop, but must be purchased from an outside source and used as part of your shop fabrication, such as grating, expanded metals, and brackets for railing
Paint	Shop primer and finish paint if required
Paint Labor	Labor to apply paint
Galvanizing	Cost to galvanize materials (add 10% more weight to the total weight of fabricated steel to cover for the additional weight of the galvanized material itself)
Handling	Staging raw materials in the shop work stations and moving finished fabrications to shipping area
Shipping	Trucking materials to and from sub-contractors and suppliers, as well as to final destination