Posted on March 5, 2018
To obtain work you must submit a bid price. To arrive at a bid price, you must first prepare an estimate low enough to get the job and high enough to cover all costs. Two of the five essentials in preparing competitive estimates to meet these requirements are realistic material prices and proven labor units. These two essentials become even more important in a slow economy reminding us of the old adage “as the jobs out for bid slows the competition for those jobs grows.”
What are the sources for realistic pricing?
- Previous invoices from your suppliers are one source but prices are constantly changing which could result in being too high and losing the job or too low and losing profit. Or worse.
- Receiving spread sheets from your suppliers are limited as they only give you prices on what they have in stock. You can’t bid work with a partially priced estimate.
- Services with listings of hundreds of thousands of items boast that they can give you material prices at your buy-level but the results aren’t even close. No matter how large their item list is they still fall short in covering everything needed to complete an estimate.
What are the sources for proven labor units?
- Historical data is an excellent source but not all jobs and job conditions are the same. Keeping detailed records of completed jobs is a monumental and time-consuming task.
- Personal experience helps as long as you understand that labor units contain direct and indirect labor. The direct labor is the actual installation. The indirect labor is getting the material to where it needs to be installed, reviewing pertinent information, preparing the material for installation and cleaning up afterwards.
- Publications of labor units are available but limited in scope and coverage of everything needed to completely labor an estimate. Some published labor units include built-in supervision resulting in too many hours estimated to prepare a competitive bid price.
Where is a source for realistic material pricing and proven labor units?
- The best source to provide you with realistic material pricing and proven labor units comes from companies that provide professional estimating services. It’s the responsibility of these companies to prepare competitive and potentially profitable estimates for their clients, therefore their material pricing will be current and their labor units will be field-proven.
- The most complete and comprehensive source of realistic material pricing and proven labor units is published by Electrical Resources, Inc. Electrical Resources is a 42-year-old company that has prepared more than 32,000 electrical estimates. Their service consists of the National Electrical Price Guide and EPS+ Software. Both provide material price updates as prices change.
- The online NEPG is fully illustrated with a complete hyperlinked index consisting of @ 30,000 individual items, comparative manufacturer listings, four levels of labor units and 9,000 assembles. It is available for desk tops, tablets and smart phones.
- EPS+ also contains @ 30,000 individual items, @ 40,000 comparative manufacturer listings, 9,000 assemblies and can link to your estimating software to keep your material prices current or function as a stand-alone to instantly price and labor bills of material.