I continue this blog series to break a decades-long silence in the construction industry – the nine true secrets of successful estimates.
SECOND SECRET
The second secret is the importance of using labor man-hours in the estimate. Labor hours, whether developed by crew analysis or applied on a unit man-hour basis, form another basic part of the foundation of a successful project. The use of a labor dollar per unit of work (ex: $15 per cubic yard for grade beams or $20 per cubic yard for walls) is only applicable when the cost history supports the data being used. For example, the geographic location is the same, the rate of inflation is the same, and the other project conditions are the same. Or in the early estimates such as a feasibility estimate where a decent cost history exists for the proposed application.
A lot of firms may think their man-hours are a secret, but this is not the case. The project conditions (size, location, accessibility, material sizes and types, erection equipment, etc.) play a major factor in the determination of the applicable man-hours to be used in an estimate. What is lesser known, but somewhat acknowledged, is that time and motion studies show that under specific conditions a skilled person can perform only so much work efficiently in a given day. This is typically expressed in a value range such as 100 to 120 units installed in a typical work period. Time and motion studies also will show under certain circumstances more total time can be required for one person to perform the work rather than two persons working together on the item of work.
Projects with incidental amounts of overtime will not incur any significant productivity adjustments. Projects with extended periods of 50, 60 or more hours per week will incur substantial losses in productivity. A second and/or third shift will also incur productivity penalties.
The labor force for a given project will only perform within certain ranges of time for specific tasks and the overall project. An experienced estimator that is applying the man-hours will be able to judge the conditions that affect the worker productivity on the site for each item in the estimate. In essence, preparing a range estimate of time on each item contained in the estimate.
Will the man-hour determination be perfect? “No.” There are too many variables to make any man-hour determination perfect. If one wants perfect man-hours, let the accountant tally them after the completion of the project (but then it is too late). No one company has a lock on this secret; all of the successful firms know one of the secrets to a successful project is having a reliable determination made of the hours required to perform the work.
Don’t miss out on the remaining secrets! Check back soon!
