JTT Project Manager Standard Guidelines

Transcription

1 ESTIMATING THE PROJECT The guidelines below are for all bid requests. However, many of the subjects will only apply to larger, more complex projects. Always keep in mind that a thorough and well organized estimate will save you time and be of great help when setting up the project. A) The Basis There are several things you must know prior to beginning the estimation process. A formal Request for Quotation requires a different strategy than a Budget Estimate for an existing account. Always read the bid request letter to ensure you understand the scope, location, due date, schedule requirements, and the basis of the bid. Be sure to determine whether the drawings included are samples or are the actual project drawings. Here is some of the basic information needed when preparing for a bid: Type of bid (Budget, NTE T&M, Firm Price, or other) Names of competitors bidding the project Schedule/Duration Project Location Project Agreement Information Clearly Defined Scope of Work Refractory and Technical Specifications Drawings General and Specific Terms and Conditions, if applicable B) The Background Prior to submitting the bid, you must investigate the following areas of background information: Manpower Availability Wage and Fringe Rates Safety Sales Taxes Payroll Taxes and Insurance Licensing Terms and Conditions Engineering Bonding Subcontractors While these issues are already established in many existing JTT accounts and geographical areas, we often explore new geographic locations, as well as make other, occasional changes. The Regional Manager is responsible for alerting you of any changes. Notifying the Accounting department early is an appropriate way to get the most accurate information. Tax, licensing, bonding, labor, and insurance data frequently take time to gather, so place background requests well in advance of beginning any take-off. Updated April 2014 Page 23

2 The specifics of these items are as follows: 1) Estimate Review An experienced PM or your Regional Manager will need time to look over unit hours, logistics, material pricing/selection, and labor pricing. 2) Manpower Review manpower for wage rates and availability; this information determines the quantity of qualified personnel in a particular area at certain times of the year, and also impacts subsistence and travel. The RFQ must also be reviewed to determine if the project must be completed at prevailing wage or under a Project Labor Agreement (NCA, NMA, GPA). The Manpower Manager should be notified as soon as possible to obtain the correct rates, and these rates should be reviewed with the Manpower Manager and Regional Manager to get consensus on a pay scale that is both competitive and appropriate for attracting skilled workers. Pay rates will likely change from season to season and year to year, as dictated by the labor market and nature of the project. See Exhibit B for the typical Wage and Fringe sheet that must be generated to accurately estimate and generate rates for a new area. 3) Financials The CFO/Regional Manager must review these for payroll tax, insurance rates, and bonding rates. Refer to the Payroll Tax and Insurance Summary, which is sent out each year by the CFO, for the appropriate payroll tax and insurance rates. The CFO/Regional Manager should also review performance and payment bond costs and requirements. 4) Terms and Conditions (T & C s) The Regional Manager, CFO, or other Senior Manager should review all terms and conditions, including payment terms, insurance, indemnity, and warranty issues on all contracts. Customer contracts can only be signed by a Regional Manager or Senior Manager. 5) Licensing/Tax Requirements The Tax & License Specialist should review these requirements in new states or regions. They can determine the costs for licensing as well as determine the applicable sales or use taxes that may apply to the project. The licensing process can take up to four (4) months in some locations. Your Regional Manager should have an up to date copy of our current licenses by state. C) The Take-Off 1) Organization of the Take-Off Prepare your take-off so it can be easily checked by another person. For complicated or large take-offs, contact your Regional Manager as it may be appropriate to have the CAD group perform a detailed take-off. Updated April 2014 Page 24

3 Your take-off should have the following qualities: Neat and legible. Organized into small logical pieces, each individually analyzed. Numbered and subtitled with an end summary sheet. Each part clearly noted. Includes the drawing from which dimensions are derived. Lists all assumptions. Spells out formulas first, and then fills in the numbers after. The take-off should break the large project into small, easily defined pieces that allow for different installation rates for each area (the other obvious break point would be points where the grade or thickness of material changes). 2) The Review Always go back and review your figures. Step back and analyze the final numbers: Do they sound reasonable? Have another person check your formulas and math, as well as add up your summary sheet. Nothing should leave the office unchecked. Even the most experienced estimator makes mistakes. D) The Standard Estimating Sheet and Unit Hours (See Exhibits C and D) This sheet must include the following information: 1) Heading And Date 2) Labor - Generally, use the main classifications, including Brick Mason and Laborer. a) Production Rates - Hours and production rates for each task can be entered using two methods: Unit Hour - Put in the quantity of material to be installed or an area (sq. ft.) and use a unit/hr rate for installation. These figures are developed over time, but vary greatly depending on the geometry, location, and conditions of each individual job. They are a good starting point for your estimating hours. Crew Method - This method is more practical, but may take longer to determine. Here, you must set your working crew and estimate the total number of hours or shifts they need to complete the task. Check both methods in all cases. If unit hours are used, crew the job and determine the reasonableness of the durations, and vice versa. b) Labor and Fringe Benefit Rates - Review and discuss these rates with the Manpower Manager in the area. Always have the Manpower Manager provide input on the rates that you are using, since he or she supplies manpower for the project. The Manpower Manager confirms the union rates, percentage of Updated April 2014 Page 25

4 travelers, and cost of travel (subsistence, travel time, and transportation costs). You may have to use composite rates on out-of-town projects to accommodate the differing rates. Insist that the Wage and Fringe Sheet be completed in full for all new areas (see Exhibit B for a sample). Carefully read this Wage & Fringe Sheet, as fringe contributions may be required on either hours worked or hours paid (includes OT multiplier). c) Payroll Taxes and Insurance - This is determined by the CFO at the beginning of each year. It should be noted that the straight time insurance rate must be applied to all straight time and the straight time portion of overtime and doubletime hours. For the overtime rate, this rate is applied only to the premium portion of all overtime and doubletime hours. d) Room and Board/Travel And Transportation - Although this category is obvious on most jobs, it is crucial that you check with the Manpower Manager prior to starting the project to determine the quantity of travelers required in a certain area. If travelers are required, discuss travel reimbursement/pay rate, subsistence, and cost of airfare and ground transport (rental cars needed) with your Manpower Manager. e) Overtime - See the Sample Overtime Calculation Sheet, Exhibit E. This calculator will take into account Foreman differential, swing shifts, and all variations of working hours. Apply the calculated amount into the appropriate box in the estimating sheet. It is important to note that overtime rules vary across the country and by labor agreement, so overtime rules must be confirmed with the Manpower Manager. f) Targeting Money from Unions In certain competitive situations, we may receive grant money (market recovery) from unions as they want to recapture work from non-union companies. This is often paid upon completion of the project. In the event you receive targeting money, it can t be accounted for by a reduction in the labor rates, as our full payroll taxes and insurance must be calculated on the paid rate. Targeting money should be captured as a credit on your estimate so it is not used in the payroll tax and insurance calculation. 3) Material Estimate a) Material Pricing - The easiest and quickest way to get pricing is to use Price Book pricing minus 20%, although this method should only be used for budgetary estimates for customers that we plan to invoice using the price book. On any job of size or competitive bids, you should send out a standard bid form to your suppliers. When time permits, it is always of value to get a few bids from credible suppliers. Bid forms should include: Price FOB Plant Testing Freight Updated April 2014 Page 26

5 Lead Time Packaging size if applicable (55# bags or bulk sacks) Estimated quantity of material needed b) Material Warehouse Pricing - For maintenance accounts and budget estimates you may use Price Book pricing without marking it up. Do not do this for out-of-state work, since the Price Book pricing includes tax and freight to the warehouse, which can differ dramatically depending on the state. c) Sales Tax - Sales tax varies depending on the state, county, and city. Common mistakes include assuming each state has only one tax rate and applying sales tax to the freight and testing cost of a product. Separate both testing and freight on all invoices, to reduce paying excess tax while driving up the cost of a job, as freight can be taxable in some states and non-taxable in others. If a gross receipts-type tax is required, the sales tax should be 0% in this area and the gross receipts tax applied to the bottom line, after profit and overhead. Each state may have different tax treatment for freight, equipment rentals, labor and/or outside subcontract service. d) Freight and Insurance for Overseas Shipments - Review freight and insurance for any work overseas and anytime there is equipment being shipped via boat. Contact the CFO for details. 4) Equipment and Cartage a) Logistical Rentals include trailers, vans, phones, office equipment, and buses; itemize these on the main estimate sheet. b) Outside job equipment rentals are items the company may not own, including welding machines, forklifts, chipping guns, compressors, etc. Create your own itemized list, get quotes, and tie them into the main estimating sheet. Often, the Warehouse Manager can price this for you. Have him write down the location for all quotations. We have also negotiated reasonable nationwide pricing with a few rental companies. These rates are available on the JTT intranet. c) JTT Company owned equipment - Generally, JTT charges equipment to our customers per our Equipment Rental Schedule. Projects incur a cost for company-owned equipment used based on the number of man-hours worked on the project. Currently, the cost we use is $3.50/man-hour. d) Freight and Insurance for Equipment - Review freight and insurance for any work overseas or out of the country, and anytime there is equipment being shipped via boat. Contact the CFO for details. e) Taxes - Sales/use tax is required in most states on all equipment. Please check with the Tax & License Specialist for specific tax rates. Updated April 2014 Page 27

6 5) Other Costs - Always address each of the subjects below. If not included, it should be qualified. For most large projects, obtain at least three bids. a) Dry Out b) Staging - We may choose to perform this work ourselves. c) Steel Work - We may choose to perform this work ourselves. d) Refractory Testing - This should be obtained by the manufacturers, but in all cases they should have the proper specifications. e) Crane Work f) Welding g) Sandblasting or Painting h) Scaffolding i) Disposal of Debris - We should avoid this expense whenever possible. j) Outside Engineering/Drafting Services k) Taxes - Some states require sales tax on the above items. Please check with the Tax & License Specialist. 6) Total Job Costs - This total should include all job costs with no mark up. 7) Overhead and Profit - Generally, we use a minimum of 15% overhead and 10% profit. In recent years, we have increased these overhead/profit levels so that our combined profit and overhead has equaled 30% of revenues. The overhead and profit on bids varies greatly depending on the account, confidence in our installation rates, time of year, competitive environment and potential for long term business. Consult with your Regional Manager for input on profit and overhead percentages. 8) Gross Receipts Tax - See 3C above. 9) Sign Off - After you complete your estimate, it needs to be reviewed and signed off by the person with appropriate signing limits. Identify the Sign Off early so the responsible party has time to review individual parts of the estimate. See the Sign Off sheet shown in Exhibit H. This list should be printed out by the PM assembling the bid and reviewed before passing on to your Regional Manager. Updated April 2014 Page 28