How to price hard construction costs in your estimate – Bleuwave Live Episode 9

Audio transcript may not be 100% accurate:

Hi, everyone. It’s JJ Levenske back with bleuwave live and wanted to pick up part two of a three-part series in the estimating format and presentation to the owner or just understanding kind of the middle part.

So, as we said in our previous episode, we talked a little bit about the general conditions or the things that were above the line. Now let’s talk about the actual hard construction costs and how to tabulate that some of the risk or some of the things that I’ve seen in the disparity in that arena. And then how do you convey that? Or how do you explain that to the owners in a tabulation form?

So this is where all the meat and potatoes is usually the bulk of the cost of any project. So, as I said before, this is, imagine the concrete. Imagine framing. Imagine steel, drywall, all the finishes.

I believe it’s very important to have a line item for everything that’s specific to a scope. As far as I’ll use an example, let’s say concrete so there might be building concrete and then there might be site concrete.

And then there might be ancillary concrete. I like to break those three elements down so that the owner, when we convey and share those items, they can see everything.

Another thing that I believe is very important. Mainly this comes more to the underwriting and kind of the finance world they want to see. You’ve heard the proverbial hey, we’ve got to get three bids in every category, and that still holds true.

But what I found is that by sharing the information there, sometimes you can you can tell a bigger story. And what I mean by that is typically in. Imagine that there’s, that looks like a spreadsheet, and there’s maybe five or six numbers in that particular thing. Let’s use that concrete as an example.

And let’s say there’s an extremely low bitter that’s not qualified. We will, typically, within our system, we have a way of highlighting that and then treating that as a note.

So whether that’s the owner or the underwriter of that of that financing mechanism, they can see that there was a reason that that was an unqualified bid, and then it again, depending on how detailed you are with the algorithms in the math and the back end. It can either taint the average, the mean the median.

And then you can go on to explain why the next best qualified bitter has the appropriate number that matches that scope of work. So that that kind of comprises the middle section. But I can’t emphasize enough that not putting things into bulk.

I just find it easier again to explain and have that level of transparency so you can convey the bigger picture. You know, typically your big ticket items like mechanical, electrical steel.

You know, the building envelope, those air somewhat self explanatory. But when you get into some of the finishes, sometimes it’s better to break those down like typically we will.

A good example is on commercial projects. We will break the tile into flooring versus wall tile. I mean, we all walk into commercial restrooms, and it’s pretty standard now to have a very intricate and fancy floor to ceiling tile system with the schluter design on different reliefs in there for the aesthetics.

So we typically will break that out, so that everyone can see the difference in that as well. For those watching and listening. Maybe mix it up and go into a little bit more detail on your next presentation and see if it has a negative or positive impact.

We tend to try it based on the scope of the project you don’t wanna put so much in that is just overwhelming. But enoughto have, um, discerning an impactful information for the owner to make rightful decisions on your behalf.

So give it a try and we’ll look forward to the part three, which it was going to talk about. The below line items, which will be the tax bonding fees, consultants, things of that nature. So until next time, this is JJ from bleuwave live.

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