Originally Posted by
Edwin Santos
Lots of interesting discussion on pricing and bidding on the front end of a job.
I'm interested to know how many of the pros make a habit of evaluating the profitability of a project after the fact. In other words, tracking and allocating hours, overhead, materials, unforeseen costs and then comparing them against the revenue collected on the job. Basically this would be creating a mini P&L on the job itself.
Does anyone do this or work for someone who does this?
You have to or you're just throwing darts at a board.
A contractor has labor hours figured for each job performed on site and attached codes to each of those jobs. These labor hour estimates are arrived at over time. How it works is on the job, the foreman is given job codes for pulling wire, installing conduit, demolition, installing panels and switchgear, etc. There are dozens of job codes and it's the foreman's responsibility to attach those codes to the man hours worked every day.
All that goes back to the shop where the estimating department actual compares labor hours to estimated labor hours. From there they estimating department can make adjustments to their bidding or look into why the numbers are off. That's the theory anyway.
I've worked for contractors where they give you access to their bidding program and all the labor hours are already plugged in. There are even adders for working on higher floors in a building. All the estimator has to do is perform a take off from the drawings submitted for bid - How many fixtures, how many feet of each size and kind of conduit, how many feet of wire, etc. Plug them into the program and the program spits out the number.
If the contractor has good numbers from the field and a good feel for the market at a given time, they will usually be successful. Most contractors that have been in business a while know there's a feel one has to have about bidding jobs. The hard numbers for labor hours attached to a given task may have to be fudged in order to get a job. The whole thing is part science, part crystal ball.
“Travel is fatal to prejudice, bigotry, and narrow-mindedness..." - Mark Twain