Holloway Consulting provides Construction Consultant Services to law firms, public agencies, developers, owners, design professionals, construction managers, general and trade contractors. This page is intended for general and trade contractors regarding considerations related to subcontractor’s estimate analysis:
Construction Consultants
Subcontractor Bid Estimate Analysis
Bid Estimate Administration
The subcontractor’s original bid estimate, complete with site investigation report, contract analysis, vendor quotes and quantity takeoffs should be bound and maintained in a secure location. This is a key document that indicates intent of the subcontractor and describes the conditions and work which he has contemplated and tendered a price on. It should as a matter of course contain an estimating schedule, manpower loading chart, major equipment loading chart, and cash flow analysis. The last is an important item in the future establishment of any entitlement to interest on compensable damages claims.
It doesn’t matter if the subcontractor borrowing costs are calculated and the profit margin is reduced accordingly to maintain the same bid value; whatever can be established as being routinely contemplated and practiced in the estimating procedure is strongly arguable as applicable to calculations of compensable damages. In the same vein, qualifications, exceptions, unit price composition, insurance rates, labor escalation, overhead, and G&A percentages and rates used should be clearly denoted in the original bid estimate.
Bid Estimate Format
A standard format should be developed for all bid estimates. At the completion of a successful bid, an estimator or cost engineer should be assigned to immediately put the original project estimate in the format of a control budget. While it is fresh in his mind, an estimator can organize this file and add whatever explanatory notes are required. This requires only a short time and the cost is far outweighed by the potential benefits should a dispute arise in the course of construction.
Good subcontractor bid estimate documents constitute some of the best evidence and can be persuasive when properly compiled and maintained. One of the reasons that original estimates are not used in the analysis during some our consulting engagements is that they are incomplete and too poorly developed to be useful.
Read our next page on subcontractor risk reduction measures.
The Holloway Consulting Group, LLC
Construction Consultants and Experts
12081 W. Alameda Pkwy., #450
Lakewood, CO 80228-2701
Denver Phone: (303) 984-1941
International Toll Free: (888) 545-0666
Fax: (303) 716-0432
Email: steve.holloway@disputesinconstruction.com
Blog: disputesinconstruction.com
Web: hcgexperts.com
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