Most general contracting firms use the CSI Masterformat coding scheme for their cost codes, to generally match project specifications. For any General Contractor contemplating revising its cost codes, we strongly recommend using the 2004/2010 Masterformat, (50 Divisions), rather than the tried and true 1995 Masterformat (16 Divisions). Time marches on, and despite the familiarity and comfort zone of the old format, the new system is gradually replacing the familiar one. Don't make the mistake of ignoring this progression (unless you're retiring next year). We've recently worked on job cost codes for two of our clients. We're sharing a more generic list of 2010 Masterformat Sample Cost Codes here, as a guideline for mid & smaller GC's. It's no secret that without solid historical job cost reporting, companies fail to close the information loop critical to profitability and effective company management. This sample set of codes is only that, and each company will require its own focused differences from this list. We're offering this up simply to help provide a good start. In our experience designing Job Cost systems over the past 15 years, we find between 200 to 500 codes is a realistic number. The trick is to find that balance point [...]
All the smart guys predicted the downturn would last through the end of 2010. So that means it should be getting better, right? Wrong. AGC's recently published market data lend perspective to that vague hollow feeling that we have all learned to live with over the past few years. Material prices are up sharply this year, a full 4% in just these three short months of the new year. Contract price? You guessed it, dead flat, (at historical ten-year lows). Volume? right again, down. (1.4% from last year's abysmal numbers). I don't know how it is your company, but we're pretty tired of this ever-worsening, bottomless recession. I tend to lean toward optimism even in trying circumstances, but these times test even the most cheeful of us. If you have any good news, please send it along, we'd love to share some. In the meantime, all we can do is hang in there. Vin Scully, the hall of fame Dodger's broadcaster would remind us, "only suckers beef." Well said. I'll stick with my optimism, and head back to work.
Twice in the last week, long-time clients asked us about the optimum implementation of Primavera P6 to best benefit their project management needs. As is most often the case, there is simply not a single right answer. However, the question is a common one, so I talked with the expert team at Stenstrom Group Inc, our Oracle | Primavera Business Partner, and came up with this list of options to shed light on the solution: Server install Requirements: adequate SQL server resource availability Typical platform: MS SQL Server (option: Oracle, only recommended for larger installations, and if client has access to Oracle DBA). Location: centralized server Advantages: centralized Enterprise database, accessible via Internet regardless of user’s location, centralized IT management, more reliable data backups , (if configured by Client in MS SQL). Disadvantages: only accessible with Internet connection. Internet connection issues: Fragile Internet connections can cause data loss / corruption issues. Recommended Options: install P6 on Citrix server, Terminal Services, or RDP with a VPN connection for security. This creates a more stable connection between the client and the server. (dependent upon the type of Internet connection available to the client). Workstation install Requirements: SQL database engine on remote machine Typical [...]
I found three apparently unrelated facts in my email last week : Nationwide, 1 in 9 homes (11%) with a mortgage is under water, worth less than the balance due. The Las Vegas area is the poster child of the debacle. Lend Lease on Oahu is in the process of starting its $ 2.3 Billion worth of work on Oahu’s military bases. A bridge in North Carolina was awarded in the beginning of the month to the lowest responsive bidder for 50% of the Engineer's Estimate. The sum of these elements seem to typify our current marketplace, and speaks volumes about the economy. Clearly the residential market's predicament is much deeper than anyone saw at the onset of the crash. It appears headed for years of uncertainty on the whole. Some regions are already regaining strength, but it's hard to envision a broad, smooth nationwide upswing anytime soon. Despite the rocky situation of the commercial market as a whole, military spending remains strong, and buoys the economy in select markets where the armed forces have a strong presence. Likewise some stimulus projects are still creating jobs and sustaining the companies working on them. But overall, both public and private construction [...]
We've been fortunate to be very busy throughout the last quarter, with the advantages and disadvantages inherent in a packed work schedule. On the one hand, it's our favorite problem to have, although it's been very difficult to keep up and produce the volume of work we've landed. On the other side, perspective is tough to achieve when you're giving it all you've got in the trenches, just trying to get the work done. Having solid strategic partnerships is critical in these situations, and we're fortunate to be able to count on some truly talented resources. Stenstrom Group Inc., N-Visions LLC, and PCATT are among those who have provided us with crucial support in these trying times. Stenstrom Group Inc is the authorized Oracle | Primavera Business Partner for the Pacific Northwest and Pacific Rim. Through SGI we represent Oracle | Primavera in one of our core markets, supporting NAVFAC and US Army Corps of Engineers contractors. We work together to meet the demand for software, training, and scheduling services as NAVFAC and the Corps are adopting P6 to replace the now-obsolete SureTrak and P3 for their projects. Why Projects Fail is a link to a useful white paper I [...]
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 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 [...]
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 [...]
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!
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 [...]