Here is the reality of our construction estimating software industry. Approximately 80% of estimators in all disciplines in the world of construction use Microsoft Excel® to estimate construction projects. The primary reason is so that estimators can customize an Excel® spreadsheet for takeoff of materials or even construction labor & equipment items. With such a disproportionate amount of estimators using Microsoft Excel®, we have come across a fantastic electronic plan takeoff program that automatically PLUGS right into your customized Excel® spreadsheet. It launches directly from your spreadsheet and saves directly to your spreadsheet. So you can perform your take-off of measuring areas, lengths, and counting, etc right into your custom Excel® spreadsheet. All your thoughts, take-offs and quantities are in one place. One Project, therefore One Spreadsheet. Once all that is complete you can then continue with your newly defined construction estimating process.

The Electronic Plan Takeoff Software program we found that would be a huge benefit for Microsoft Excel® spreadsheet users can be found at:

Reiter & Company, Inc. 1-800-482-1014         www.reiterandcompany.com/takeoff

You can even try out the program with a 14 day FREE Trial.  It is a win win for you.

ALSO: Read an in depth Review of Takeoff Software for Estimating Construction at:  Review Takeoff Software

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For instance, any contractor must look at their hit ratio on win or lose of bids or quotes.  If a contractor has a 50% successful bid hit ratio, the first question must be asked, "Are you making money with such a HIGH hit ratio or losing for example 15% profit? Likewise, if you are making money at the bids you are winning, then the question begs to be asked, "What is your hit ratio or is it for example as little as 3% ?" Those two comments are probably the most important question for ANY type contractor in any trade or specialty.

Ironically, one of the most important beneficiaries of accounting Job Cost analysis would actually be the construction estimating department. For example, the construction estimating determines that a slab on grade should COST $25,000 for all the material, labor, equipment &/or subcontract. Project Management schedules, performs, or buys out all the parts for the slab on grade. Invoices and or payroll are received (or labor performed) and paid for. So then a
budget to actual job cost report is created and the variance is discussed by all the departments, but most importantly the construction estimating department. The main focus of cost analysis comparison is: did the actual cost exceed/or cost less than the estimated cost. Whatever the answer is, the construction ESTIMATING department must make the appropriate adjustment (if any) for future estimates. The comparison can also be a cost per unit of measure like square foot instead of a lump sum cost comparison.  Over time, system historical costs will probably guide you well. So in this slab example, the system estimated cost of all the parts comes to say $3.00 SF, BUT the construction accounting department may report that the actual cost was $3.25/SF, or maybe $2.85/SF for example. That type of reporting is ESSENTIAL on becoming much more competitive while improving profitability and / or the success of your bid hit ratios. That is an area of construction operations management that is often sadly overlooked.

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The construction estimating department creates the estimated anticipated cost and then applies a markup to determine the selling price, bid, or quote. Estimating also recaps the very detailed estimate into a manageable series of job cost codes (approx 50- 250 master job cost codes on average) that may be used if the job is awarded to your company. Then, project managers, purchasing managers, or production managers, buyout (or schedule self-perform labor) the job and eventually receive invoices to pay (approval) per the respective purchase order/subcontract, as well as per the job cost code. (self-performed field labor reporting aka: time cards, are also tracked per the respective job cost code) Then the construction accounting department PAYS the approved invoices and / or approved payroll which creates the ACTUAL job cost data.  That complete process is an effort to compare the estimated job cost versus the ACTUAL job cost. As said earlier, the only EFFECTIVE way to produce Budget to Actual Job Cost Reports is to pay invoices by using a construction estimating software program or construction estimating process, AS WELL AS a construction job cost accounting software program.

For example: if you are an electrical contractor, the job cost code for 2×4 lighting fixtures can be code 12345; so all ESTIMATED COST of the materials, labor & equipment can go into that code as the job cost budget estimate. Likewise, the same would be for the ACTUAL cost of the materials, labor & equipment can go into that code as the job ACTUAL cost when the construction accounting department pays job invoices. So here is the flow how both BUDGET and ACTUAL data could be gathered. Budget code would include the 2×4 fixture, the conduit, the wire, the terminations etc., all going to budget code 12345. Now, as material is being delivered (2×4 fixtures, wire, conduit, etc) it is coded as ACTUAL job cost code 12345. As ACTUAL labor time (timecard) is being recorded not only to the job number but also to the job cost code activity, or task 2×4 fixtures 12345. The labor and equipment time would/could also be for setting the 2×4 fixture, running wire, running conduit, etc in one Job Cost Code.  OR, if you are a concrete contractor the job cost code for a slab on grade can be 12345, or if you are a masonry contractor the job cost code for CMU exterior walls is 12345, so hopefully you get the picture here.

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Likewise, for the construction project or program management software search. It really is just like the construction estimating software pursuit; you must think of who you are representing as a company.  There are really huge software differences based on the different corporate hat you may be wearing such as: owners or owner’s representative, government agencies, general contractors, developers, specialty contractors, program managers or construction management firms.  Software that is tailored to a specific type of construction management is critical since one size never fits all. Once you determine who you are  representing, you then determine what construction management features are needed based on that representation.

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"I have 15 years experienced in the construction industry as a production manager with a leading "—-"  contractor. Once I got laid off I started online classes to get certified as a construction cost estimator through the American Society of Professional Estimators (ASPE). I have an opportunity with a leading builder as an estimator, I have little experience working with the software PRIMAVERA for estimating. I was hoping you could give me some information regarding this software that would help me better understand how the process works through this software that would help me on my test…."

Here is my response:
Thanks for sending in a question.  It is very important to note that Oracle Primavera is strictly a project management tool for scheduling and project documentation in their various products. To the best of my knowledge, it is NOT designed for construction estimating to produces bids or quotes.  It sounds like you are encountering a 3rd party piece of software that somewhat integrates into the scheduling portion of  Oracle's Primavera. My suggestion is to contact the Primavera software dealer in your area to explain what they have and what 3rd party estimating software integrates with Primavera.   The main question you have to ask in preparation for your test is:  Is it an estimating test  or  is it a scheduling test on Primavera?  If it is on estimating, then you have to find out which estimating program are they going to test you on.  I'm guessing they are going to test you specifically on standard estimating concepts instead of a construction estimating program.  As you have learned in listening to our estimating videos, there is a wide range of construction estimating techniques, so you have to explore with your possible new employer what kind of estimating they perform on order for you to prepare for the test. Learning any estimating program takes months to learn not days. It is not about how to click icons or pressing buttons on-screen; moreover it is about how to approach the takeoff and how to maximize the use of the estimating program to complete an estimate.  All estimating programs are NOT the same and do not accomplish the same tasks. ASPE is a great organization to be associated with; they have superb estimating information and is a great estimator networking group.
So as you can see, it is really easy to confuse construction project management software with construction estimating software.  We will soon add a post that discusses some estimating programs that approach the construction estimating process solely by addressing resources like labor crews and equipment.  Detailed material takeoff is not usually at the forefront of those types of solutions.  The type of contractors that are attracted to those types of solutions are usually grading / sitework, heavy, highway heavy contractors.  Thanks Again for visiting AskTheEstimator.com

1) Assume at this point we are speaking about general construction.

2) Corporate philosophy regarding internal processes on how to price jobs.

3) Company sales volume does dictate how a company operates in terms of overhead staffing

4) Estimating projects to bid versus estimating change orders.

Without hesitation, it is critical for anyone starting a new company as an owner to first determine how the construction estimating process will be conducted to produce bids or quotes (hard or negotiated) or even change orders.  Therefore, it will be crucial to watch & listen to any of the free 12 construction estimating processes videos on www.AskTheEstimator.com .   That way you can move forward with clear policies on how to bid work efficiently , consistently, & profitably.

So let's take a look at company size as measured by annual sales volume.  Often times, general contracting construction firms with annual sales between $4 million and $25 million, usually have their construction estimators perform the detailed estimates that become bids. If the bid is successful, there is less confusion on passing the estimate detail to a project manager.  But the main reason is overhead; most firms of this size can not afford having separate construction estimators from construction project managers.  Estimators in this type of company have to wear BOTH hats, and very often have the ability to perform construction project management.  However and  unfortunately, many project managers do not have the same ability to perform detailed estimating.  For firms with annual sales greater than approximately $25 million, you will often find that there is a clean break between the construction estimating department and the construction management / project management departments.

Often times when a company performs construction estimating, they are taking off the quantity of construction materials and labor whether self performed of subcontracted out to specialty contractors. Then they apply construction costs to the quantities to determine the construction estimate. After that, various overheads and profit are applied to develop a retail construction bid or quote. However, when a project manager estimates change orders, he or she often think of the various tasks of construction changes and which subcontractor will need to price the change. Project Managers are used to managing the jobs which entails managing subcontractors which are so often thought of as tasks or activities that usually figure into a construction schedule.  So as you can see here, there really is somewhat of a disconnect between an construction estimating department and the construction management / project management department.

Today in construction, so many general contractors contract out the labor if not a complete turnkey solution. There is usually a philosophical difference on how a company is to proceed with the construction estimating function, especially if most everything is contracted out.  That's why it bears repeating: it is CRUCIAL to watch & listen to any of the free 12 construction estimating processes videos on www.AskTheEstimator.com .   That way you can move forward with clear policies on how to bid work efficiently , consistently, & most importantly, Profitably.

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Here is a response from an Estimator named Nick:

"Your points are very good ones especially for the small to medium sized contractors. Just because of limitations in resources they have to have their estimators do the entire job, including project management.
Obviously, in the smaller companies the estimator/project manager is the owner of the company."

How to REview a Construction Estimating Software Program for Scope Estimating

How to Evaluate a Construction Estimating Software Program for Detailed Estimating with a Subcontractor System Unit Cost

Evaluate a Construction Estimating Program for Detailed Estimating with a Subcontractor Lump Sum Quote

How to Choose Construction Estimating Software for Labor System Unit Cost with Detailed Estimating

Labor Unit Cost based on the takeoff quantity of the Material part

Detailed Estimating Material Quantity with Cost and Labor Quantity with Labor Hourly Cost

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Now once you have determined your construction estimating process, then you will need to determine if you really need an construction estimating software program all together.  In most cases, the answer is yes, BUT, it is important to note that not all estimating programs are anything remotely the same as each other and price should absolutely not be considered. You really have to review the various construction estimating software programs to see  how "easy to use" are the features to accomplish YOUR  PROCESSES of construction estimating.  So we have now posted a few ways of reviewing construction estimating software, please click here. If you would like to discuss privately with AskTheEstimator.com which estimating program would be best for you, please click here Services Page to schedule a one on one consultation.

Check out all the features needed based on your internal construction estimating processes, and see which construction estimating software program matches your requirement.  Thanks for visiting AskTheEstimator.com

So many contractors think that by using a construction takeoff measuring program that measures areas, lengths and counts, is all that they need to produce retail proposals.  Those types of technologies are Great and Saves time for sure, but all that they do is measure, that's it. Measuring drawings is not estimating a cost and then producing a proposal price. It is just estimating an area, length or count.  Good and reliable Construction Estimating Software usually and should incorporate the electronic measuring technologies with the construction estimating program.  So as you can see, Construction Takeoff Software is just a component of producing an estimated cost that should convert into a bid or retail priced proposal.

On our Construction Operations postings page, we have numerous postings on how to review Construction Estimating Software along with Electronic Construction Takeoff systems. Please check them out and let us know how we can help you. If you need any help with the evaluation of any estimating program or would like to discuss this subject further, please review our services page.  Or if you would like to see a free demonstration of what you need to expect from a construction estimating software program or construction takeoff program (electronic plan or paper plan with a digitzer), please CLICK HERE.  Thanks for visiting AskTheEstimator.com

There are two schools of thought regarding the path you follow regarding estimating technology .  One being that: a) do you need a construction cost estimating software program or  b) just a manual spreadsheet since the concept is fairly simple.  That choice is ultimately yours, but an issue you really need to consider, most importantly, is accuracy of the math.  That has been the number one problem with manual spreadsheets (computerized or not) ; not really the problem with the manual computerized spreadsheet, but really the human operator of the computerized spreadsheet. Since computerized manual spreadsheets are so customizable, they are really easy to destroy the formulas, macros, etc., without even knowing that you have corrupted its' math calculations.  Who needs that!!!!!  With a mainstream construction estimating software program, you want to do what you know best, Producing a Cost ESTIMATE and not have to sweat the math computations.   However, even with mainstream construction estimating software programs, still the old adage applies: "garbage in = garbage out".
So now onto the material quantity takeoff portion that focuses on the features needed for efficient takeoff with a construction estimating software program. Any construction estimating software program must have features that breaks down a material item COST into material, equipment, vendor, miscellaneous cost category, and labor for those who self perform labor. All of these cost categories must have the ability to apply a custom unit of measure along with cost for the material item.  There should also be a feature for applying a waste factor as well as having the ability to create your own formulas with your own wording. Often times you takeoff materials by one unit of measure but price by another, therefore you must have the ability to have one quantity takeoff unit of measure that will convert of a different unit of measure for pricing purposes. Good example is sand for masonry; you take it off in cubic yards, but then you convert it to tons for pricing.

Besides all these features, it is the opinion of AskTheEstimator.com, that you MUST be able to create your OWN data. With our 20 years experience consulting with thousands of companies in the world of construction trades/industries, the most successful users of construction estimating software programs are the ones that create their OWN data, their way.  However, we are very well aware that many companies out there are not well equipped with either experience to create their own appropriate data or time to create their own data, therefore, any construction estimating software program must have a large library of prepackaged data for the various types of trades.  BUT, be aware that most of the prepackaged data will need to be customized to your way of doing business.

It is also extremely important to note that NOT all construction management or construction estimating software programs are the same.  There are major differences you will need to consider. Here are some features that you will need for Detailed Estimating Material Quantity with Cost and Labor Quantity with Labor Hourly Cost using man hours, man days, man weeks, man months, crew hours, crew days, crew weeks, crew months.

Needed Features (minimum) for :

• Must be able to create your OWN data
• Must be able to create your own estimating code numbers like specification (spec) book sections (divisions/subdivisions)
• Must be able to create your own cost item numbers or letters
• Must be able to create your own user definable formulas with your own wording
• Must be able to apply user definable formulas to any cost item
• Must be able to create user definable work:  systems, or kittings, packages or assemblies
• Must be able to over-ride any original cost item formula in a work system, and have the ability to apply a more logical user definable formula for the cost item in the logical work system for that cost item (CRITICAL)
• Must be able to create your own cost items
• Must be able to perform very fast takeoff of items to equate to 4-6 (400%-600%) estimators production
• Must be able to interface with electronic digitizers for paper plans or electronic plan measuring programs
• Must be able to automatically total the estimate
• Must be able to manipulate unit cost or lump sum cost AND description of an estimate item on the fly without having to touch the master item in the database.
• Must be able to add a miscellaneous item on the fly for any estimate without having to create it in the master database list.
• Must be able to add user definable markups
• Must be able to create independent estimates EASILY
• Must be able to view estimates in a user-definable format
• Must be able to print estimates in a user definable format
• Must be able to sort estimates in a user definable format
• Must be able to export data to a variety of output formats
• Must be able to add user definable columns that may or may not be part of a calculation
• Must be able to view cost as well as selling price on-screen as well as in print
• Must be able to create material, equipment, vendor, misc. cost cat, and labor cost categories for a material item
• Must be able to create your own unit of measure for a material item
• Must be able to apply a waste factor on a material item
• Must be able to convert a material takeoff item from one unit of measure (UOM) to another UOM
• Must have a prepackaged library of databases for various trades or general contractors, although, your OWN customized data will make you much more successful and competitive.
• Would be a beneficial if you can compare past quotes/pricing from multiple previous estimates from subs to get an average for that type of system
• Must have the ability to calculate labor by the unit cost, man hour, man days, man weeks, man months, crew hours, crew days, crew weeks, crew months
• Must have the ability to use labor rate tables for the master database.
• Must be able to build user-definable craft members for user-definable crews for the database as well as an estimate
• Must be able to manipulate crews in an estimate without changing the master database
• Must be able to manipulate rate tables in an estimate without changing the master database
• Must be able to build a crew on the fly for an estimate
• Must be able to crew rate table on the fly for an estimate
• Must be able to use different rate tables on different items in an estimate
• Must have the ability to manipulate the unit cost as well as the description of the quoted system.
• It would be beneficial if a construction estimating software program could check multiple estimates on a single Labor unit cost item that includes production rates as well as hourly cost.

If you need any help with the evaluation of any estimating program or would like to discuss this subject further, please review our services page.  Or if you would like to see a free demonstration of what you need to expect from a construction estimating software program for Detailed Estimating Material Quantity with Cost and Labor Quantity with Labor Hourly Cost, please CLICK HERE.

Recently, we came across a really good estimating takeoff software program for screen takeoffs of construction systems.   It is not an estimating software system, but a compliment to the estimating process for take-off of construction systems. Essentially, it is a measuring takeoff program of electronic plans that are in pdf, tiff, jpeg, cad formats, bmp, cpc formats, etc. The Estimating Takeoff Software program for screen takeoff would be a huge benefit for Microsoft Excel® spreadsheet users since the program starts and saves your takeoff in Excel®. You can be find it at: Reiter & Company, Inc. 1-800-482-1014         www.reiterandcompany.com/takeoff

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