Guide to Estimating and Basic Bid Sheets Words: Mason HillPhoto Credits: WestLight, Mason HillAn example of an R.O.M pricing sheet that could be used when pricing a project in the early stagesWhat Is Estimating?Estimating is the process of calculating all the costs, time, and resources needed to complete a project during the preconstruction phase. These costs typically include direct and indirect costs, overhead costs, and profit margins calculated to produce a bid. This bid is then sent to a contractor, owner, or another party for the proposed scope of work. Depending on the project's phase or document detail level, the estimate's required detail varies. These levels include Rough Order of Magnitude (ROM), Schematic Design (SD), Design Development (DD), Construction Document (CD), and/or Bid.What Is a Bid Sheet or Estimate Spreadsheet? A bid sheet or estimate spreadsheet is a document that compiles all the required items being bid on and assigns a cost to them, allowing for an educated guess to be calculated for bid day. It is an educated guess because it is based only on the current information, and historical data, if applicable. Project outcomes can deviate once started, assuming the estimator has not missed anything. Factors such as weather, material, labor, and equipment issues can affect project performance if not accurately calculated. So, what should you include in your document? This depends on the company, project, user, goals, and scope of work. Numerous software programs range from basic to advanced solutions that companies can use, which is a topic on its own. At our company, we've developed an Excel spreadsheet template used for every project. It has evolved over the years; we assess and revise the template every quarter. Our project template includes multiple tabs such as our bid proposal, bid sheet, list of regular contractors’ contact info, Material P.O., Submittal Sheet, Pay App, Standard Lien Waivers, R.F.I., Change Order, Closeout Documents, and others. This template has come a long way from the days of using three and five-column paper for takeoffs and bids. Contractors can create their estimate spreadsheets digitally on simple Microsoft Excel or Google Sheets. A quick web search can also provide free templates to jumpstart your estimate. However, masonry is unique and requires meticulous attention to detail in setting up the spreadsheet. In my experience, the bid sheet should include the project document information used to compile the estimate, the date, and the name of the person responsible for the estimate and bid. Below are the minimum items that should be included for a hard bid project:Direct Costs:Material: Generated from the estimator's takeoff.Labor: Calculated from project requirements to complete the project work.Equipment: Calculated to complete the project safely, timely, and at the needed price.Subcontractor Requirements: Calculated based on the intended subcontracted portions of the project to perform your proposed scope of work.Mobilization and Demobilization Costs: All the above direct costs are calculated and totaled into the appropriate categories. These direct cost categories are based on the project documents and the takeoff. Costs are applied to the material, and time is applied to labor. Once time is calculated, it can then be applied to the equipment and indirect cost category.Indirect Costs:Quantified costs associated with the delivery of the project.Overhead Costs:Quantified and based on the delivery of the project.Profit Margin:Quantified and based on company goals.Contractors must understand the difference between direct and indirect job costs. Direct job costs typically include materials, labor, equipment, and subcontractor costs. Indirect job costs are usually associated with the project's delivery and aren't linked to overhead. Proper accounting for indirect costs is critical to avoid underbidding and potentially losing money. Indirect job costs and overhead numbers need regular assessment along with profit goals. Indirect costs are highly variable depending on a company's business model. Examples include repairs & maintenance, tools and equipment, supplies, etc. For instance, renting vs. owning equipment affects indirect costs depending on the rental agreement or the repairs and maintenance of owned equipment. Some track these costs under overhead, which can artificially inflate overhead numbers and create accounting issues. Tracking indirect costs this way is helpful for long-duration projects. Proper tracking ensures fair compensation when requesting a change order or bidding on a cost-plus project. Keeping overhead manageable is also essential.A good bid sheet links to a time calculation, labor days, crew days, and equipment days. This information is crucial for cost calculations and scheduling your company's workflow. Knowing the project duration helps maintain the correct balance of backlog and assess if a project aligns with company goals. Not every project suits every company's set goals. Tracking market prices post-bid and following up on your estimates is also crucial; it can be beneficial in the long run.This is a basic outline. There is much more to each category and subcategory, and it cannot all be covered here. However, the principles outlined will get you started on the right track. A comprehensive article on masonry estimating principles and practices would be book-sized, but it is important to note that it takes time and many questions asked to contractors and peers to develop a professional bid sheet that wins projects without losing money. Good luck, be safe, and do great work. We all rely on each other.
