Estimators
Calculate and investigate the cost of wages, materials, overheads and other operating expenses.
Tender day at the estimating office
You are an estimator at a building company, working out what a job will cost from the plans, supplier prices and labour needs. It is Monday and a tender for a school-style community hall is due on Thursday. You have drawings, supplier quotes and a growing pile of questions.
Choose what you would do. Then see what happens. There are often good reasons for each choice.
We need to win this one. The other builder is going to be cheap. Can you sharpen the price by trimming the contingency? It is a bit padded, I think.
Explain what the contingency covers and trim only what you can justify
You find a small amount that is unnecessary and cut it. Dan sees the rest is real. Prices have to survive the job, not just the tender.
Cut the contingency a lot, since a win is better than a safe price
The tender is won and a month in, the job runs over because of ground conditions. The company loses money on a job it should have priced properly.
Refuse to change anything and tell Dan the numbers are what they are
The number is honest, though Dan feels shut out. A conversation about what could be trimmed might have found a middle path.
The steel price I gave you last week has gone up. The market moved on Friday. I can hold the old price if you confirm the order today. Otherwise it is the new figure.
Keep the old figure, and hope the order is confirmed in time
The tender is accepted a week later and the price has gone up. The company must pay the difference out of its margin.
Confirm the steel order today to lock the price before you win the job
The price is held, but you have committed the company before winning the tender. If you lose, it holds steel it does not need.
Use the new figure in your price and note when the quote expires
Your tender is accurate and valid for a stated period. The client knows prices can move. A quote with an expiry date is fair to both sides.
I looked at your labour hours on the last job. They were too high on the framing. I did it in half the time. Can you tighten your numbers for the next one?
Cut all framing hours by half from now on
On the next job, the crew has no pre-cut materials and runs over by days. One good job does not set the standard for all.
Tell her the estimate was based on the plans, and that site times will vary
You are right, but Priyanka feels brushed off, and you lose a useful source of real numbers.
Thank her, ask what made it faster, and adjust where the conditions match
She explains that the crew had the materials cut in advance, which will not happen every time. You adjust some jobs but not all. Feedback from site is gold, if you ask why.
How it went
On Thursday the tender goes in with a price you can defend line by line. Estimating is part arithmetic, part imagination of how a job will really unfold, and part courage to hold your numbers. Would you enjoy turning a drawing into a believable cost?
This is a simplified, fictional situation to help you explore. It is not professional instruction or a test of your ability.
Case study: The quote that left out the scaffold
A fictional case set in the estimating office of a medium-sized building and renovation company.
The situation
Jun was an estimator at Larkspur Builders. He had priced a two-storey extension for a family and was a day from sending the quote. The sales manager was keen because the family had two other quotes. Going through his list one last time, Jun noticed he had no allowance for scaffolding to reach the upper wall. It was a significant cost, and nobody had mentioned it.
What they did
He added the scaffolding and rechecked the rest of the list for anything missed. The final number rose. He told the sales manager plainly why. He also wrote a note for the client explaining what the quote included, so the extra cost would not look like padding. The sales manager was not happy but agreed the original number would have lost money.
How it turned out
The family accepted the higher quote and chose Kestrel because the list was clear and complete. The job came in close to the estimate. Jun built a standard checklist for two-storey work and the sales team started using it to answer client questions.
What would you do?
- Why might it have been tempting to send the original quote?
- How would you explain a higher number to a client without losing them?
- What does it say about estimating that you can only check what you thought to include?