2. Work Breakdown Structure –Early compilation of significant work items w/ associated cost and schedule considerations –Overview of project –First look at drawings –Familiarize self with drawings –F 4-7, F 4-5

3. Work Breakdown Structure Need to know what work will be in-house and what will be subbed Usual GC work: Hand excavation and backfill Concrete formwork Concrete reinforcement placement Concrete placement Concrete slab finishing Structural steel erection Rough carpentry Finish carpentry Siding Window placement

4. Work Breakdown Structure Criteria for deciding if GC does work Labor – use subs if the trades needed are not employed by GC Specialization – Sub may be faster/cheaper if that is what they do Quality – problems with quality become subs problem not GC’s Price – Sub can do work fixed price for lessthan GC Work load – If labor tied up another jobs – give to subs Schedule – GC can control schedule better with own workers

5. Subs Use Sub call sheet to get interested subs –Give general details about project –Make sure subs do their own estimate –F 4-6

6. Quantity Take offs Measure and count each item of work that GC will perform Time consuming What get counted? –20% of work accounts for 80% of cost –Don’t count nails Start at bottom and work up

7. Quantity Take offs Forces Estimator to think like builder – makes scheduling easier Quantities recorded and then extended out F 4-8

8. Good Estimating habits –Clear paper trail is important –Neat and professional Others will review and must follow logic –Mark up drawing with colored pencils and highlighters indicating what items have been taken off Minimizes errors – Quantities should be measured, extended and summarized as they will be purchased –Waste factors for all quantities should be included –F 4-10

9. Once quantities are taken off –Group all like products together –Transfer to pricing pages –Only one line per product –F 4-9 –F 4-10

10. Pricing self Preformed Work Productivity Labor productivity –Man hours per unit of work –Productivity probably does not change by location – wage rate does –Determine man hours and round up to next hour - not exact science –F 4-11

11. Wage Rates –Davis Bacon for prevailing wage rates F 4-12 –Labor burden 30 – 60% of wage –Cover worker’s comp, union benefits, unemployment, FICA, med ins –Depend on location, craft, accident history –Material prices come directly from suppliers Written quote if possible but can use estoppel F 4-13

12. Pricing Subbed Work Do quick estimate as a check on sub bids –Subs should be close to what you estimate –If too low or high don’t take Always use subs price Analyze F 4-14

13. Pricing Job Site General Conditions Job site admin costs –5 – 10 % of project bid –Need to know how long project is scheduled for –How many labor hours –Project duration vs size

14. Pricing Co Overhead Indirect Costs Accounting, marketing, officer salaries, home office supplies 2 – 5% of project Depends on how many projects and total $ value Profit – 7% of project cost

15. Estimate Summary F 4-16 Remove estimates and replace with sub prices –Material tax – sales tax –Contingency –Insurance – - liability insurance is volume related – depends on safety record 0.5 – 2% –Business tax –Bonds

16. Homework Ch 4 review questions 1,6,8,9,12,14, Exercise 1