Posted by & filed under Business Strategy, Electrical estimating, estimating Tips & Hints, Prime Cost of labour RICS/ECA, Tender Topics.

gingerbreadman

 

 

 

 

 

 

I was recently contacted by a contractor enquiring about electrical estimating a project for them, they told me it was for some houses and flats, they wanted to know how much it was going to cost, at this point I hadn’t even seen any information. I asked what is their scope of works was, for example did it include ventilation, fans duct, showers. They mis-understood the term ventilation thinking this was mechanical. That actually was my point, very often customer don’t have a clear idea of the scope or if they indeed want to embrace the whole scope. This is an issue in the fact they are asking for a price to undertake an estimate but aren’t clear or sure of their scope.

 

They told me it was a small job of 6no dwellings. They sent the information over, there was 9 PDF’s I total. After looking over the information I could see there was 6 different dwelling types, and health and safety document and a site plan. The site plan showed the plots and dwelling types. So by comparing the documents I could see the number of dwellings was in fact 72no. I called the customer back and said how many dwellings did you say this project was, “six” they said, and did I think they could do the project for £200,000 and make a profit. Where did the £200,000 come from, they said that’s what they had been told their price needed to be.They contacted their client to verify the number of dwellings and indeed it was 72no not 6no.

 

This is the classic gingerbread man moment, you know the story the Gingerbread man wants to get across the river, the Mr Fox kindly offers to transport him to the other side, at first the Gingerbread Man hops onto his tail, completely trusting of Mr Fox’s motives, as Mr Fox swims across he encourages the Gingerbread Man to comer ever closer nearer to his head, so he can, “Hear him better”, The Gingerbread Man obliges innocent and unsuspecting, then finally Mr Fox urges him closer, hop onto my nose, the with a flick of the Foxes head the Gingerbread Man is tossed up into the air and then, SNAP!!! Into Mr Fox’s open jaw.  

 

Back to electrical estimating the dwellings, and the £200,000, There was electrical services to 4no communal areas with fire alarm, lighting etc. lets deduct £8000 for this communal work. We discussed that if we divide £192,000 by 72no that equals £2,666. Let assume profit of £400. We know they require an intruder alarm, SKY that circa £600+£350, That leaves us £1316, let’s say labour is £1000 (House crew rates) , that leaves us £316 to buy cable £250, CU £100, 2 sockets and 8 spurs, 12 switches, and 10 lights etc. . We concluded that we could not obliges Mr Fox on this occasion. PS When Mr Fox was challenged over the £200,000 they requested they just compile the Tender and submit the best price they could.

 

Posted by & filed under Electrical estimating, estimating Tips & Hints, Mechanical Estimating, Tender Topics.

Regular readers of our newsletters will know we teamed up with Geraldine Fleming to bring you useful in-depth knowledge
We have covered;

Newsletters 1 -10

I would like to receive Tender Topics 1-10

 

Newsletter Topic Comments
1 Like it or Lump it Can your customer chop and change your scope of work once your in contract?
2 Open ALL hours Make sure your tender isn’t open forever, how long before your offer expires
3 Fixed Price Contract Is your tight profit margin going to get squeezed with price hikes just around the corner?
4 That’ll be the Day Dayworks, there’s never going to be any! But there always is, what should you do to ensure you know at risk?
5 Equal & Approved Contractors are always under pressure to drop their tender, but who gets the benefit and who gets the risk?
6 Liquidated Damages Watch out for a damages piled on and even allocated to you when you haven’t even contributed to the problem!
7 Document Control Know what you’ve priced, what’s been issued and what you’ve built to, attention to detail ensures keeping control of costs and profit.
8 eTendering Frequently used now, but what’s the benefit and why should you consider it?
9 Provisional Sums Get this one right and you could be sitting on a goldmine.
10 Attendance Who’s supplying what? For FREE or given FREELY, state what your offer is based on t avoid unwelcome contra charges later.

 

Newsletters 11-20

I would like to receive Tender Topics 11-20

Posted by & filed under Electrical estimating, estimating Tips & Hints, Mechanical Estimating.

brexit

On the cusp of a major referendum to decide if we remain or leave the EU have you considered how it may affect your business when undertaking your Mechanical or Electrical Estimating?

If we vote to leave we could see major currency fluctuations in sterling, this could mean that goods to be purchased or delivered may go up in price, especially when so much of goods specified are from Germany. So ensure that you use a Brexit price adjustment clause based on the euro to sterling rate of exchange at the time of tender.

For example you may consider some wording such as , “Our tender is based on the exchange rate of the euro to sterling on the day of submission of our tender. Should suppliers increase their quote values we reserve the right to pass the increased cost on.” This may then form the basis of a discussion of who and where the risk will sit when reviewing your electrical or mechanical estimate/Tender.

What does the ECA say about Brexit

Disclaimer

You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider.  

 If you have any specific questions about any legal matter you should consult your attorney or other professional legal services provider.

 You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.

Posted by & filed under Electrical estimating, estimating Tips & Hints.

warranty

During the course of electrical estimating we have noticed there seems to be overkill these days in consultants specifications for  what they require for handover, are use the word THEY, because these are standard general specification clauses that are in the consultants standard speciation’s without thought or consideration to what the client might need or require. They often have a list of items they require in an M&E Operating and Maintenance Manual that are irrelevant. For example is, provide warranties for equipment supplied. Warranties seek to do the opposite of what they imply. A manufacturers warranty will limit their liability for repair or replacement or consequential loss should the goods fail, further more the warranty is given to the purchaser of the goods and cannot be relied on by the third party, the customer.

The warranty cannot be called upon by the customer because they are a third party. unless the warranty uses the phrase, “third party rights” . There will also be a condition of proof of purchase to be able to claim on the warranty The customer is reliant on the specifier selecting reputable and reliable goods in the first place. The specified supplier will normally enforce their own commercial conditions on the customer, and being specified the Contractor has little barging power, nor is it likely the warranty wording can be changed.

Another example when electrical estimating is faulty finding guide, asking the contractor to provide a fault finding guide, this is impractical and naturally limiting and potentially lethal. To believe that the manual can anticipate all faults that may occur then write a guide on finding and curing them ignores the fact that the services are complex and should not be interfered with by a novice. The person finding fault and curing it should be a competent person, in Amendment 3 of BS7671 2008 17th edition this is recognised, 134.2.1 appropriate inspection and testing shall be carried out by skilled persons competent to verify that the requirements of this standard have been met. If you write a fault finding guide their is a high risk that a none skilled and competent person will attempt to fault find and cure the fault. A skilled and competent person wouldn’t need a fault finding guide to the installation, just a good operating and maintenance manual that has schematics and record drawings , test results, manufactures and part numbers and maintenance schedules. irrelevant.

 

Posted by & filed under Uncategorized.

UK Estimating Support’s Amanda Johnson and her friend Sam Newey and many other women are taking part in a very challenging journey across 450Km Vietnam to Cambodia to raise funds for , this follows on their successful Christmas fund raiser when they managed to raise £13,000 over two Charity ball evening events at
Read more

If you would like to donate please use the Just Giving Link

Just Giving

Posted by & filed under Business Strategy, Electrical estimating, estimating Tips & Hints.

“As I hurtled through space, one through kept crossing my mind; every part of this rocket was supplied by the lowest bidder.”

Wow, this is a powerful quote and brought to my attention by Ian Graham on LinkedIn recently.

rocketTo me this illustrates the difference between those procuring a service or goods and the user who will come to rely upon it. The user is very often far removed from the decisions taken by others; a descision frequently based on price and not benefits.

We often look for the lowest cost in construction but in other areas of our life this action is alien to us. For example, when we buy a car, the price is a consideration, but we weigh this against benefits, reliability, after sales service and energy usage and if they are of a benefit then this is worth the comparative cost, or “Value”. In short we consider the whole life cost. All too often though the industry treats procuring MEP as a commodity like fuel or electricity with the lowest cost being the overarching consideration.

The problem is that the industry assumes that with all specifications and drawings you are getting like for like. If the tender documents were clear and unambiguous then this is likely but this is rarely the case. So, when you are considering the lowest price ask yourself “Have they quoted the same thing?”

When is comes to buying a service, cost it the least safest indicator to rely upon. Suppose you went to see a consultant about your eye sight for laser eye surgery, would you choose the cheapest or who you think would do the best job and put you least at risk? How would you decide? Experience? Years in business? By speaking to them? or perhaps testimonials?

So as the idiom states, “You pays your money and you takes your chances.” A wrong choice will make you wiser but to what cost?

Posted by & filed under Electrical estimating.

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We have recently completed an electrical estimate for an office block toilet refurbishment project where shower circuits were being added and the lighting was being altered.

The drawing called for 50A SP MCB and SWA supply, but didn’t mention that an RCBO should be fitted.

BS 7671 :Reg 701.411.3.3 requires CIRCUITS FOR OR PASSING THROUGH that areas containing baths or shower should be protected by an RCD.

The consultant had missed this new requirement of Amendment 3 which came into effect from

1st July 2015 – From this date it is a requirement that all electrical installations designed and periodically inspected comply with the updated regulations.

Given there is 7 circuits and 7no RCBO required this oversight could cost the contractor £250 to £450 on their electrical estimate subject to the short circuit rating required.

Electrical estimators are well aware  the consultant would probably rely on their reference to BS7671 and all amendments compliance

Posted by & filed under Business Strategy.

Chris Cardell talks about how our Great Expectations can thwart our success when they aren’t met.

Worth a watch.

Cardell Adavanced Thinking

We have used the services of Chris Cardells advanced Marketing Techniques and weather your a seasoned expert or a novice the landscape is always changing, a lot of the material is free and very useful.

Internet Marketing

Find out what’s new and changing in this marketing method.