Project Estimating: The Art and Science of Bidding a Project

A 154Kb PDF of this article as it appeared in the magazine complete with images is available by clicking HERE

Whenever someone asks me what I do for a living and I reply that I’m an architect, they almost always respond "So, you must like really like drawing houses then." I usually go on to briefly explain that drawing houses is the one thing I haven’t spent a lot of time doing over the course of my career. Although I’m a licensed architect and like all architects tend to wear a lot of "hats" I currently , spend most of my time developing budgets and drafting proposals for potential 3D laser scanning project opportunities.

Completing these budgeting and proposing tasks used to be a pretty arduous process, one that wasn’t very consistent and one that usually included a fair amount of guesswork.

After going through enough of these at ARC we’ve since developed a more systematic process, such that we now spend a lot less time agonizing over proposals for potential projects and more time on other (hopefully billable) work.

Most people probably use some kind of spreadsheet or software for cost / fee estimation. Depending on the scope of the project it may be as simple as assigning costs per square foot and multiplying those by the project size, or as complex as assessing manpower days/hours and multiplying those by the durations for each type of activity in both the field and office while factoring in contingency and profit.

We’ve developed a worksheet that includes project data, project classification, risk factors, rates, expenses, resource allocation and consultant costs. All of these in turn tie into a budgeting page. Formulas are already built-in, but there are a lot of options for making opportunity-specific decisions on a case-by-case basis. If utilized correctly it allows for a lot of information to be entered and factored into the fee in a relatively short period of time.

As a side benefit I’ve found that going through the process of developing the budget helps me to better manage those hours when the opportunity becomes a project. As long as I originally allocated the proper amounts of time (usually by verifying projected timeframes with the appropriate staff member) publishing those hour values as targets makes it more likely that we’ll actually "hit" our budget numbers later.

Most people probably use some kind of proposal template document. In addition to our budget spreadsheets we’ve also created a number of proposal examples that we use as a starting point depending on the type of project being quoted. These different proposal types all share similar elements. All include sections on project and client information, summary of work, definition of scope, identification of Area of Interest / Items of Interest / Level of Development, project approach, assumptions, exclusions, deliverables, schedule, compensation, terms and conditions, and reference exhibits.

Being architects means we’re visual people, plus as a picture can be worth a thousand words it’s often easier to show a graphic of something rather than to try and describe it in words. Therefore, we often include a lot of images both as reference exhibits to explain the Scope of Work Area of Interest as well as examples to help explain Level of Development, Rate Tables, and the like.

Even with all of our effort to make the budgeting and proposing process a more systematic endeavor, there will always remain an element of subjectivity on each job we quote. That allows us to factor in some intangible things like client relationship building, competitive bid environments, and current workload. There will always be at least a little "art" to go along with the "science" of going after a job.

Mick Cunningham, RA is a California licensed architect with 30 years of work experience in existing conditions documentation. He is Director of Production at ARC.

A 154Kb PDF of this article as it appeared in the magazine complete with images is available by clicking HERE