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In Retrospect- Tough ’10, Uncertain ’11

Here we are in mid-December 2010, hard to believe another year has come and (nearly) gone. For good measure, we're in the second year of the second decade of the Twenty-First Century, A.D. Time flies when you're having fun- or are we? To say the year's been difficult for construction is obvious. Nonetheless we know companies doing very well in spite of the general economy and the sad state of lending that's holding back private construction. Department of Defense and Economic Stimulus work are still propping up most of the work that we're involved with. Small business set-asides and 8-A contractors are enjoying advantaged positions on highly-profitable work. We're still seeing public construction going at deep discounts, as good companies are  taking turns "winning" jobs seemingly at cost or 1-2% margins. It's clearly an unsustainable pattern that can't continue. It can't continue, right? (Please tell us it can't continue). We are grateful in our small niche that business is up considerably from last year. Those companies with the wherewithal to be profitable through the recession are tweaking their systems, improving productivity and process to stay a step ahead, which has helped us. The SAME conference in Seattle back in October revealed the [...]

Job Costing – the quest for accuracy a.k.a., “what really happened on the site?”

Job Costing is the third crucial element in the "Golden Triangle" of Construction Operations: (Estimating / Project Management & Execution / Job Cost Accounting). We need to do all three extremely well in order to justify the risk we routinely take in the contracting business. For this article, I'm going to focus on the heart of that risk, self-performed labor. How well does your company account for what happens onsite? The answer is inexorably tied to our old friend and nemesis, level of detail. If cost codes are too high-level, (i.e., "concrete formwork" for a company that does a lot of it), you're mixing oranges, apples, and likely squashes and rutabagas into a mix that becomes so bland that the individual important flavors are unrecognizable. In plain english, that information is useless because it covers too many different types of work, all with different productivity factors. If cost codes are too detailed, (i.e., "staking slab forms", separate from "placing slab forms", separate from "stripping slab  forms"), you're gathering minutiae, and even worse, placing the guys in the jobshack doing timesheets in the position of having to lie to you. Why's that, you ask?  Because they can't possibly cost code to [...]

The “right” level of Estimating Detail (according to whom?)

An age-old issue in construction estimating is determining the "right" level of detail in the estimate. In my 30 years of estimating construction projects, it's a question I still deal with, and am not convinced I've  found the answer yet.  I've spent years on both sides on this chicken-and-egg question. One side subrcribes to the  the idea that a  well-designed estimating system can and should develop a full materials list right from the initial estimate. Full-featured estimating database systems such as Timberline, WinEst, and US Cost have detail databases with assemblies fully capable of doing so. But is it efficient on bid day to have that low-level material information in the bid day spreadsheet, when all you're doing is pricing subs and vendor quotes, and verifying scope with the bid clock ticking and the pressure on? The other camp wants to know why you would clutter up your estimate with that extraneous detail, when we're only successful on one in ten anyway. Less is more on bid day, and cut length framing lumber and steel studs, sheets of plywood and drywall are only in the way, distracting crucial focus at the critical moment an important sub price comes in with [...]

October in the Northwest, SAME conference in Seattle

We're keeping busy working on Timberline Estimating database projects and Oracle | Primavera P6 project schedules and training. But it's an uneasy busy at best. Talking with our clients, the bid market is still brutal, with a few bright spots, most of those  Federal Stimulus-funded projects.  Missing from the current construction economy is momentum of any kind. A few companies we know do have a solid backlog, one even with more work than ever:  a large  US Military contract plus strong private healthcare projects adds up to a rare success formula in these times. For every company like that, we see ten with less backlog than they're used to. I'm attending the SAME conference (Society of American Military Engineers) in Seattle 10/14 - 10/15. It's a good time for some professional training and networking opportunities. Seminars include Integrated Project Delivery, sustainable energy engineering, business development in these difficult times, the direction of  BIM, and numerous others. If you're in the area and have an opening in your schedule, it offers a great opportunity. For more information: Basic conference info & Registration Technical Training Session Schedule Hope to see you there!

Multiple Float Paths in P6

We got a call yesterday from a company working on an Army Corps of Engineers design-build project with a tight schedule. The Corps' project manager expressed concern that the project would finish late. With the most recent (fourth) pay app, negative float was appearing, primarily due to delays in receiving approvals for the mechanical design.  We were already working with this Contractor on another USACE design-build project schedule, so Bob called me to request a couple reports for analysis of the schedule. He requested a critical path Gannt chart report, and asked me if I had any ideas for another report that would help their team review the schedule. I chose a multiple float path report. When I first noticed the multiple float path option in P6, it seemed like a complex software feature that would be difficult to understnad and work with. That couldn't be farther from the truth. The P6 multiple float path feature simply starts with the Critical Path (FP1), then calculates additional float paths in descending order of importance, based on calculations derived from the project's logical network. So FP2 and FP3 are not as crucial as FP1, but more than those assigned larger float path [...]

Masterformat ’04 for Timberline databases

We recently completed indexing an Island GC's Hawaii and Guam databases to CSI Masterformat '04 using WBS codes. This allows estimates to be viewed and sorted in either the traditional 16-division Masterformat (MF) '95 sequence, or the new MF '04 48-division system. We also designed accompanying Item Sort Sequences, so Takeoff can be done in either format as well. We've done this for several clients over the last few years, and find most US Government projects and  even a fair share of private AE firms using the new  numbering sequence. The primary decision is whether to re-index the entire phase code scheme, (Timberline Estimating's primary database index), or  to simply use WBS  codes for MF '04 sorting.  Either way you get the best of both worlds in your estimate sort sequences and reports. It typically requires one to three days' effort depending on the method selected and the complexity of the phase coding structure. Please email or call us for more information on getting your company's database MF-04 compliant.

Cheer up, it could be worse…or could it?

We know the current market is challenging, but   2010 first half construction volume is even worse than we could have foreseen back in January. According to ENR, total construction volume is down 11% from 2009, with private construction  down 14%. The commercial Office sector is down nearly 40% from 2009's abysmal first half, and  commercial Hospitality down a whopping 60% from 2009. Ouch. Only slightly less dismal are Manufacturing -22%, Schools -20%, and private Health Care -19%. To make matters worse, we're still seeing inflated bid lists, jammed with contractors competing out of their traditional strengths and geographic areas. These fish out of water are offering work at a deep discount to experienced firms bidding at home. We can only wonder how long this can last, and how many firms will go under? The single bright spot for first half 2010 is residential, up 4%. Forgive us if our enthusiasm seems subdued.

From the Bid Room: Estimating emergency handled

I had an urgent support call last week from one of our Montana contractors who use Timberline Estimating. Here's the scenario: It's Bid Day,  getting down to the last hour before the bid is due. The system kicked them out of the estimate, and when they try to reopen the  file, they get an error  the message:  "Estimate is open on another computer or marked as Read Only. Yikes! The good news is that this is easy to fix.  Here's how: Make sure EVERYONE is out of Timberline, (both Accounting and Estimating). This is important if you want the payroll checks to be correct next Friday! On the file where the estimate file resides, (usually the Server), open Services, and stop both the Pervasive Services. Then restart both. This 5-minute procedure will clear the "Read Only" flag and allow the file to be reopned. With this simple procedure, Steve & his team were  back up and running in just a few minutes, to close the bid successfully. The bid market is tough enough out there without computer problems! Let us know if you have a question, and we'll answer it for you and post it here.

Upcoming Training P6 in Honolulu: January 10-11, 2011

Our next P6 Training opportunity available for open enrollment is scheduled for January 10-11 in sunny Honolulu, Hawaii. Please register soon if you're interested in attending, to guarantee the class will happen. Cost for the two days training is $1,295, with a $100 Early Bird registration discount if registration is received by December 31st. Discounts are also available for 3 or more attendees. Please contact us via email at barry@cassellconsulting.com, or Mark Stenstrom, our sponsoring Oracle | Primavera Certified Business Partner: mark@stenstromgroup.com.