Work Breakdown Structure Work Breakdown Structure Early compilation

Work Breakdown Structure • Work Breakdown Structure – Early compilation of significant work items w/ associated cost and schedule considerations – Overview of project – First look at drawings – Familiarize self with drawings – F 4 -7, F 4 -5

Work Breakdown Structure • Need to know what work will be in-house and what will be subbed • Usual GC work: • • • Hand excavation and backfill Concrete formwork Concrete reinforcement placement Concrete slab finishing Structural steel erection Rough carpentry Finish carpentry Siding Window placement

Work Breakdown Structure • Criteria for deciding if GC does work • Labor – use subs if the trades needed are not employed by GC • Specialization – Sub may be faster/cheaper if that is what they do • Quality – problems with quality become subs problem not GC’s • Price – Sub can do work fixed price for lessthan GC • Work load – If labor tied up another jobs – give to subs • Schedule – GC can control schedule better with own workers

Subs • Use Sub call sheet to get interested subs – Give general details about project – Make sure subs do their own estimate – F 4 -6

Quantity Take offs • Measure and count each item of work that GC will perform • Time consuming • What get counted? – 20% of work accounts for 80% of cost – Don’t count nails • Start at bottom and work up

Quantity Take offs • Forces Estimator to think like builder – makes scheduling easier • Quantities recorded and then extended out • F 4 -8

Good Estimating habits – Clear paper trail is important – Neat and professional • Others will review and must follow logic – Mark up drawing with colored pencils and highlighters indicating what items have been taken off • Minimizes errors – Quantities should be measured, extended and summarized as they will be purchased – Waste factors for all quantities should be included – F 4 -10

• Once quantities are taken off – Group all like products together – Transfer to pricing pages – Only one line per product – F 4 -9 – F 4 -10

Pricing self Preformed Work • Productivity • Labor productivity – Man hours per unit of work – Productivity probably does not change by location – wage rate does – Determine man hours and round up to next hour - not exact science – F 4 -11

• Wage Rates – Davis Bacon for prevailing wage rates • F 4 -12 – Labor burden • 30 – 60% of wage – Cover worker’s comp, union benefits, unemployment, FICA, med ins – Depend on location, craft, accident history – Material prices come directly from suppliers • Written quote if possible but can use estoppel • F 4 -13

Pricing Subbed Work • Do quick estimate as a check on sub bids – Subs should be close to what you estimate – If too low or high don’t take • Always use subs price • Analyze F 4 -14

Pricing Job Site General Conditions • Job site admin costs – 5 – 10 % of project bid – Need to know how long project is scheduled for – How many labor hours – Project duration vs size

Pricing Co Overhead Indirect Costs • Accounting, marketing, officer salaries, home office supplies • 2 – 5% of project • Depends on how many projects and total $ value • Profit – 7% of project cost

Estimate Summary • F 4 -16 • Remove estimates and replace with sub prices – – Material tax – sales tax Contingency Insurance - liability insurance is volume related – depends on safety record 0. 5 – 2% – Business tax – Bonds

• Homework • Ch 4 review questions 1, 6, 8, 9, 12, 14, • Exercise 1