Steve owns Quik Contractors, a mid-size general contractor specializing in commercial projects. Over the last several years, his company has grown to over $16 million in annual sales, with an average project size of $500,000 to $1,500,000. He has three key project managers who estimate and manage the jobs Quik builds.
Steve had been working hard to attract new customers and land bigger projects. Finally, he generated exciting opportunities to bid and propose on two new larger projects valued at $3,000,000 and $4,500,000 each. Both jobs had bid proposal due dates in three weeks. As was usual, Steve assigned the estimating, bidding and proposal assignments to his top two combination project manager(PM)/estimators Joe and Sam.
The three met and reviewed each project’s scope, details, bid requirements, and agreed on plans to prepare accurate cost estimates, ensure there was adequate and plenty of subcontractor and supplier bid coverage on both jobs, and the proposal packages would be complete and compelling enough to hopefully win the contracts. They decided Steve would meet with Joe and Sam every Monday to review their estimating progress, and then two days before the bid date, review the draft estimate and proposal package. All was set for a successful bid process. And then the reality of impending workloads became evident.
And the Work Goes On!
Both Joe and Sam also were assigned four jobs each as project managers, which were nearly full loads for them to handle. Now they were also tasked with estimating and preparing these major bids as well. With the project challenges, pending issues and demands, neither estimator had enough time to properly prepare the bids.
Without complete undistracted focus on estimating or dedicated time to obtain numerous subcontractor and supplier quotes, combo PM/Estimators can’t do the job required to be competitive and win profitable work. Additionally, no one person is in charge of maintaining an accurate job cost history with bid versus actual costs and crew hours required to perform the many tasks needed to build projects. Overworked estimators also don’t have enough time to review the complete set of bid plans and specifications and tend to miss multiple items. They may also overlook or miss opportunities to gain proposal advantages and other options to save money.
Are Your Job Descriptions Clear?
To do an excellent job as a PM or an estimator requires a clear description and understanding of what each position’s requirements include. Performing less that what each position demands lowers your potential profitability and chance for construction companies to improve their bottom line.
Estimators are accountable and responsible for:
- Accurate and complete estimates and bids
- Nothing missing in bid
- Reviewing bid documents, terms and requirements
- Maintaining subcontractor and supplier database
- Great subcontractor and suppler bid coverage
- Performing take-offs and get material quotes
- Accurate field crew production and equipment rates
- Developing bid strategy and winning proposals
- Updating and maintaining a cost history library
- Reviewing completed job costs versus estimates
- Attending pre-bid job walk
- Holding pre-job turnover meetings
- Maintaining estimating schedules and bid-hit tracking
- Maintaining standard estimating template
- Preparing subcontractor scopes for subcontracts
Project managers are accountable and responsible for:
- Completing projects on budget and on schedule
- Meeting and managing contracts and documentation
- Procuring and managing subcontracts and material orders
- Change order management and documentation
- Managing payment process to get paid for all work
- Managing field supervisor and team to meet goals
- Managing customer, communication and meetings
- Maintaining project documentation and correspondence
- Managing submittal and approval process
- Updating monthly job cost reports and cost to complete
- Managing project close-out requirements
- Approving timecards, invoices and cost codes
As the bid dates approached, Steve noticed both of his combo PM/estimators were not spending enough time on estimating, subcontractor bid coverage seemed light, and there were many trades still void of suppliers to offer firm bids. With only two days left, Joe reluctantly came to Steve and admitted he likely wouldn’t be able to complete an accurate bid estimate by the due date. Sam also asked Steve for help to finish his bid assignment. He admitted his projects needed more of his time and therefore hadn’t been able to prepare his month-end project invoices or get customers to approve pending change orders they’d already performed work on. Now what?
Is Your Top Priority to Get Work or Do Work?
Steve had worked hard to get new customers to agree to let Quik be on bid lists. Therefore, he wanted these two large bid opportunities to be a top priority. But he failed to realize it takes project manager’s constant focus to manage their current projects, keep them moving forward and finish on budget. He finally admitted the combination PM/estimator job description was not working well.
What about the project manager and estimator positions for your company? Should they be combined, or should you separate them into two distinct positions focused on the accountabilities and responsibilities necessary to do an excellent job? The combo PM/estimator position creates a bid priority problem. Which should be the top priority? Jobs under construction or the potential to win another bid? Accurate and complete estimates or crews standing around waiting for materials or decisions? Or more subcontractor and supplier bids to make your company more competitive or getting paid for properly documented change orders?
What’s Your Decision: Combo or Not?
Normally, current projects must take priority. As you already have executed contracts, you are committed and legally obligated to get them built, and therefore can’t postpone or delay projects while you bid more jobs. As a contractor BIZCOACH, I work with numerous construction businesses who manage their operations with separate and/or combo PM/estimators. I see which way works the best, delivers complete estimates, allows companies to win more profitable work, and then get them built faster and more efficient. You decide—when your project manager is working on a bid, he is not watching or managing the job.
George Hedley, CSP, CPBC, helps contractors grow and profit as a professional business coach, popular speaker and peer group leader. He is the author of “Get Your Construction Business to Always Make a Profit!” and “Hardhat BIZSCHOOL Online University” available—on his website. Visit www.hardhatbizschool.com for more information.
