the M-factor

published by M cKay/ M oore Construction Cost Control Consultants (WBE/DBE)

Feature Article:
by Pat Moore and Venne Beauchamp

Incomplete Drawings - effect on estimates, on contractors' bids

Recently, we reviewed architectural drawings for a project due to go out to bid in a few weeks and found that they had:

1. No dimensions
2. No sections
3. No details
4. No existing conditions drawings
5. No drawings for basement
6. No drawings of area
7. No finish schedule

Our lead estimator's comment was blunt: "Contractors are gamblers, but...! If I were considering bidding on this project as a general contractor, I would send the plans back or double my bid."

If plans and specifications are incomplete, any contractor bidding the project will probably add a margin to cover himself. Our estimate, in such a case, will reflect this, and design contingencies and percentages allowed for overhead and profit will need to be increased.

The estimator in this instance was Venne Beauchamp, an "old pro" with thirty-five years of experience, whose background includes twenty years as the owner of a company specializing in site development, heavy construction, and in commercial, educational, industrial and municipal buildings, treatment plants, dams, and reservoirs. With a degree from University of Washington in Forest Engineering with minors in Civil and Industrial Engineering, his strengths lay in estimating - in particular, earthwork, site utilities, commercial, residential, multi-family, and industrial buildings -; plan review; construction management; and claim analysis. Venne's experience also includes over twenty years of earthwork and site development projects for schools and large commercial developments, and project management on a wide variety of projects. He knows what he is talking about when it comes to "reading the contractor's mind" on bidding a project.

The following are some of his observations and suggestions on this subject.

For the Owner:

  1. "Give your consultants enough fee to prepare a good set of documents. The more complex the project the more money they will need to do a good job for you. Poor documents will result in higher bids and more costly change orders. Nobody makes money on change orders.
  2. "Set a schedule very early in the design; that sets the completion time and sets milestones for completion of design phases. Give the contractor adequate time to complete the work.
  3. Do not set unrealistically high liquidated damage penalties. If completion time is critical, make sure the design phases do not cut into the construction time. Bonding companies panic at high liquidated damage amounts.
  4. "If a delay in completion will cost the owner money, set a bonus for early completion, based on the advantage to the owner."
    5.

For the Architect/Engineer:

  1. "Very early in the project design, work with owner and your consultants to prepare a milestone schedule for the phases of the work, including a reasonable construction time. Keep on schedule.
  2. Do not accept a fee that is too low for you to prepare a complete set of documents; no one will benefit from cutting corners.
  3. Make sure your owner understands the importance of spending the small amount of extra money to prepare a set of complete documents as compared to the cost of high bids and change orders.
  4. Contractors base their bids on your documents and their perception of risk in the project. The more questions they have, the higher their bids."
    5.

For the Contractor:

  1. "Examine the documents as soon as you receive them and ask for clarifications promptly.
  2. "If the documents are incomplete and confusing, and clarifications are not sent out promptly, do not bid on the project. Do not bid a project with the idea that you can get change orders to make up for the poor documents. The result will probably be cost overruns and lost money or a lawsuit over claims.
  3. "If you decide the risk in the project is too great, do not waste money and time bidding high; some damn fool will underbid you and lose his shirt. Go on to another job with better documents.
  4. "Make sure you include enough money in your bid to cover your overhead, a factor for risk, weather, labor availability, and an adequate profit margin. Do not plan on change orders to cover possible incomplete document problems."

- Venne Beauchamp

 

[We invite feedback on this or other articles in our quarterly newsletter. To respond to the Editor, write mckaymoore@strabo.com. To respond to the author directly, write ravenven@gte.net]

 

 

Editor's Note:

On a personal note

First, I want to thank all my clients and associates who have been so supportive over the last few months during my mother's terminal illness and subsequent death. It has been, of course, a difficult time. I tried to be responsive and available to all of you throughout that period and I appreciate your patience when I wasn't totally "with it".

Secondly, I am going to take a few days away to "re-charge my batteries" (in other words, go sit in a tent in the woods). It has been a while since I was able to get away. I will be out of the office for ten days, from September 7th through 17th. If any of you foresee that you will need estimating services, marketing information, or the like, during that time, please contact me immediately and I will arrange for your needs to be covered and for you to have a contact person while I am away.

Thank you,

Pat

 

C O M P U T E R and W W W Hints: Microsoft Binder

[This month's topic is taken from "Running Microsoft Office 97, Updated Edition" by Michael Halvorson and Michael Young.]

A binder created by the Microsoft Office Binder program is like an electronic paper clip--you can use it to store a set of related documents as a collection. Consider, for example, that you've prepared a report that consists of a Word document, an Excel workbook, and a PowerPoint presentation. You can use the Binder program to combine a copy of each of these documents within a single binder. Here's how:

1. Choose Microsoft Binder from the Programs submenu of the Windows Start menu. (If it's not on your Start menu, you'll need to rerun the Office Setup program.)

2. Choose Add From File from the Section menu.

3. In the Add From File dialog box, select the document that you want to add and click the Add button. Note that if you select several documents (by holding down the Ctrl key as you click each one), they'll all be added to the binder simultaneously as separate sections.

And, from MSFT Office News Service, July 1999:


Moving Text with Word's Spike (Office 2000)

"Have you ever wanted to move nonadjacent portions of text to a new location in a Word document? You can do it if you use the Spike. Just select the pieces of text, pressing [Ctrl][F3] after you select each one. Then, move the insertion point to the new spot and press [Shift][Ctrl][F3] to drop all the selections into place."

 

Recent Projects:

McKay/Moore has been busy with a variety of projects these last few months. Our estimating department has continued to provide cost advice on the Palau Neco Center, Koror, Palau, on which we reported in our last issue. Among the projects for which we have provided estimating services are a couple of medical facilities, the Mt. Baker Kidney Center in Bellingham, and the United General Hospital LINAC Room Remodel in Sedro Woolley. One of the jobs we are currently working on is an Artist Housing project in Pioneer Square.

Our "Remote Secretary" has been providing off-site administrative support to a number of local firms, including Start Corporation (Property Management), Lord and Associates, Lafayette Corporation, and Allegis Communications, Inc. Such support includes word processing, spreadsheets, tape transcription, and internet research. Another interesting job we did recently for Trinity United Methodist Church in north Seattle was researching charitable organizations on the Web.

Our Web Site

http://www.strabo.com/mckaymoore/

E-mail address:

mckaymoore@strabo.com

NOTE: This and previous issues of McKay/Moore's newsletter are posted on our web site.

Some recent additions to our "Links" Pages:

http://www.washington.edu/home/maps/

University of Washington Campus Maps, including Access Guide for Persons With Disabilities

A statement from Senator Frank Murkowski:

http://www.senate.gov/~murkowski/commercialemail/S771index.html


The senator was the author of anti-spam legislation in the 105th Congress. This page includes a link to the Federal Trade Commission at uce@ftc.gov. The FTC is beginning to take legal action against these abusers of the Internet and is seeking examples of spam to initiate its investigations and prosecutions. If you have received spam from an Internet marketer that contains illegal and/or offensive material, you are encouraged to forward the spam to the FTC.

Also, see Junkbusters:

http://www.junkbusters.com/ht/en/declare.html
Free Web-based service to reduce your junk mail and telemarketing calls

http://www.internetwk.com/trends/trends041999-10.htm
"Best Public Service Site" by CMP's TechWeb: State of Washington's access.wa.gov
Kristine Marree, the site's news editor, says Washington is the first state to implement online commercial tax filing, including digital signatures. Businesses also can bid on state work. Check it out.

http://www.usawebpages.com/wa/
Washington Web Resource ®
"The ultimate local search engine"

Craftsman Perspective: http://members.aol.com/ac1900/index.html
If you're curious about the Arts & Crafts Movement (known in its various forms as Craftsman Style, Mission Style, and Prairie Style) then you will find this site a good place to start.

http://www.webwinder.com/wwhtmbin/javacalc.html
Free JavaScript Calculators (hourly wage, miles per gallon, interest, etc.)

HUD site index: http://www.hud.gov/search.html

"Mail2Web
is a revolutionary service which lets you to use your POP3 email through an easy web interface. Whether you are travelling on the road or sitting behind a firewall, you only need Mail2Web to read and to reply your email. You can use a Windows PC, a Mac, or a Unix computer. Mail2Web lets you have control of your email without hassle."

http://www.housenet.com/
HouseNet site - click on home improvement for articles on accessible living.

More Y2K information and resources:
http://www.allabouthome.com/tips/y2k/index.html
http://pweb.netcom.com/~ggirod/bookmark.html
http://www.wa.gov/dis/2000/agenrscs/menu1.htm - training
[Year 2000 Preparedness Information from Washington State Emergency Management]

http://people.delphi.com/lody/ldragon.htm
Transportation-related organizations (government and quasi-public)

http://tycho.usno.navy.mil/what.html US Naval Observatory Master Clock

 

 

 

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