Estimate Your Commercial Project By Mike Byrd
t the National Pavement Expo (NPE) held in Charlotte earlier this year, a standing-room-only crowd gathered to learn “Estimating Commercial Sealcoat, Striping, and Crack Seal” information. From that presentation, let’s look specifically at some tried and true guidelines for the company that’s ready to take on a subcontractor role on a commercial project. While there are many projects you could take on—from crack filling to sealcoating to striping a newly paved lot—the foundation for estimating and bidding remains the same. From that base, we’ll look at some nuances to help you estimate smartly on those fine details. When a general contractor has a project for you to bid, you should have a standard set of questions to either ask him or see the answers to in the project scope. When asking these questions, put them in an email so you have a record of the answers. • Will this be prevailing wage? • What’s the deadline (time and date) for my bid? In other words, when does the prime need your price by? Then, what is the projected start date? Obviously, these are not the same. The project start date will give you a good understanding of whether you have room in your schedule to perform this project. Also, if the prime is asking your company to start work prior to his receiving a final price, you might be working on a handshake deal, and that’s not a safe way to conduct business. • Are there any restrictions on what days or hours we can work? • Can you send me the most recent set of plans, with addendums? Often, there are addendums to the plans so make sure you’re working off the latest set. This is important to request in an email, so you have documentation that you sought the correct information. Also ask, what is the actual address for the project? You will need this to send your “notice of furnishings” as well, so you can activate your lien rights in the event the owner doesn’t pay you. It may sound obvious, but the last thing you want to do is count stalls or stencils based on 10-year-old parameters, assume you’ll mobilize for only one day when the project actually has multiple phases, or measure a parking lot adjacent to the larger, more problematic lot your crew will actually be working on. • Is there an on-site contact? Who is that person and will that person have the authority to execute change orders? • If this is a sealcoating project, does the prime expect you to execute one or two coats? • If this is a sealcoating project, will we also be doing any crack filling? • Will there be any changes to the existing striping? This list of questions is the first step of the bid checklist you should be working on for each estimating and bidding process. Your bid checklist should be a standard for anyone putting together an estimate for your company. It will provide vital information about the project, and if designed correctly, can be used by your entire office for job setup, invoicing, auditing, material tracking and for your field personnel to build the project.
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Keep in mind, new construction projects will require typically a 10% retainer to be held for a length of time depending upon the state and project type/size. You may consider that part of your costs. Among the items to include in your price, don’t forget: • travel time to and from the job; • shop time in the morning, and unloading time in the evening; • all direct costs, indirect costs, and labor burdens (payroll+); • permits, licenses, bonds; • meals and perdium; • equipment depreciation; • the owner’s salary; • margins and markups.
The Importance of the Back Office
While many contractors reading this article have a business already started, let’s go ahead and discuss an element of the business you may or may not have given enough attention to: The office staff who have your back. Throughout the estimating and bidding process outlined in this article, you’ll see callbacks to line items that an office worker, accountant or human resources manager will have at their fingertips. From reviewing various insurance policies to redlining contracts for you, the people in your back office are worth their weight in gold. In fact, Mike Byrd attributes much of his success to the well refined back office his wife Leigh Byrd built, managed and maintained. Without the support of Leigh and her team, Midwest Parking Lot Maintenance LLC would not have been able to sustain the growth and success it did. During his National Pavement Expo (NPE) presentation in January 2023, Byrd reiterated the importance of the back office, spelling out, “A knowledgeable, organized and well-trained back office is the heartbeat of the entire operation. They will be on the front lines of protecting both your liability and your assets. They are responsible for filing insurance requirements, taxes, payroll, and keeping both accounts payable and receivable balanced.” Here are some of the roles of the back-office staff. • Accounts payable/accounts receivable • Contracts/insurance/lien waivers/invoicing • Payroll/payroll taxes/BWC/unemployment • Inventory • Job setup/crew tracking • Vehicle licenses/insurances • Drug testing/EEO policy/safety