How To Do A Quantity Take-Off
Today we are going to talk about How To Do A Quantity Take-Off for Tenders documents.
Some of the projects documents that you come across may need you to do more than just come up with a lump-sum price for your services, that’s why it is so important to read the Tender documents and understand how they require you to respond to the tender. There can be an evaluation criterion that will be used to select successful bidders or they may just want a Lump Sum price for your services. But for the sake of this Lesson, we will assume that the Tender documents are asking you to submit a lump-sum price for your services, so you can learn the in and outs off preparing an accurate cost estimate.
The simple truth is that if you have access to project documents but you can’t respond to them in a timely manner then this whole process is useless to you. Request for Proposals has a deadline or a closing date in which you must submit your bid. If you expect to be successful with Responding To Proposals then you will need a quick way to generate prices that are accurate. Using a Spreadsheet or an estimating software will help you prepare estimates at a fast pace but you still need to understand the basics to assure that you are constantly preparing accurate estimates. If you don’t have a copy of our Estimating Construction Cost Spreadsheet then you can download it here:
Having a reusable template to prepare your estimates is just as important to estimators as obtaining project leads. Most contractors don’t understand how to price work in a way that will guarantee that they make a profit on every project they complete. So, I have compiled some tips that you can use to make sure that you’re pricing your jobs in a way that will generate your profits for every job.
You will be able to use these tips to fill out the spreadsheet that you have just downloaded.
- Review Documents For Completeness
The first step in preparing your quantity take-off is to thoroughly check the project documents and understand the deliverables that will be required to complete the project. The deliverables are usually outlined in the scope of work section of the project documents.
- Read The Specifications
After you have reviewed the project documents for completeness and understand what the deliverables are then it is necessary for you to read the specifications of the bid package. The specifications will have details about the types of materials that will be used to complete the project, pay close attention to the specification because they may have materials and procedures that are different from what you are accustomed to; some of the specifications will cause your pricing to vary.
- Calculate Your Totals
Calculating your totals for your cost estimate is equal to making sure you have all the ingredients before starting to cook a meal. You wouldn’t start cooking then check to see if you had all the ingredients for the dish you are preparing, would you?
Using a template to jot down all your items, total lengths, and required equipment needed to complete the project is an easy way to get all your needed totals in one place. Use a template to capture this information; a reusable template will allow you to have information that you can refer back to in the future. I use a digital takeoff program that allows me to label the items that are needed for my cost estimate and then I export the totals to Microsoft Excel.
- Add Your Quantities To Your Estimate Template
After you have calculated all your totals then the next step is to add all your totals to get your sub-trade or project cost. If you’re using the template that you previously downloaded then you will have to list all the items that will be needed to complete the scope of work. Make sure that you add everything that you will need, missed items will cause you to underprice the project.
- Use Crew Unit Rate
Combining your totals with a unit rate will give you the expected duration to complete a task. If you don’t know your crew unit rate then I suggest you buy a cost-book from Craftsman or RSmeans, each of these resources is compiled with detailed information about construction cost. The information in these resources are correct and have been gathered from estimators in different regions of Canada and the U.S.A.
I would suggest that you only use the cost-book to get your crew rates and contact your local suppliers for materials and equipment costs. Using a combination of crew rates, materials and equipment costs will give you the most accurate costs for your project.
- Add Contingency Percentage
Reviewing the documents and the specifications will give you a clear understanding of the project deliverables and will allow you to add in the necessary contingency percentage for unforeseen circumstances that may arise on the project. I do not have a contingency section on the spreadsheet you downloaded but it can easily be added if you choose to add in any contingency costs.
- Adding Labour Burden Percentage
The government requires that you submit a portion of your employee's pay to them as a cost of running a business regardless of the size of your company. You may decide to set up a health care package or contribute to your employees RRSP, these costs are considered apart of your labor burden and you should charge a percentage according to your expenses.
- Add Indirect Costs Percentage
Indirect costs are the price you pay to stay in business such as your rent, insurance, phone bills and equipment costs that you use to complete your projects and stay in business. Understanding indirect cost is a big topic and you should understand how to charge accordingly to make sure that your project is profitable enough to cover all your expenses.
These simple ways of preparing a Quantity Take-Off can be used over and over. Following these steps will provide you as an estimator, with a process that you can repeatedly use to reduce mistakes and pricing discrepancies to when responding to Request For Proposals.