This edition of Seminars in Print follows on from the last which highlighted the estimator’s responsibility for securing new work. Brian Seymour looks at the mental attacks that can happen when lodging big-ticket tenders.

The pressure and responsibility of an estimator can be huge, especially when working with prominent construction companies collapsing during 2022. At the end of the day, it’s the subcontracting finishing trades, such as electrical, telecommunications and plumbing that are bearing the impact.

A subbie working on a 5% margin and suffering a $10,000 loss from a failed builder would need a $200,000 project to recoup the losses. Experienced estimators know that to “get the job at any price” is not a recommended policy. Therefore, the pressure is on the estimator to choose the projects from builders that have a good history of on-time progress payments.

The inexperienced estimator tries to mitigate these problems by attempting to tender on every project just because you are short of work. This may be more costly in the longer term due to not being focussed on the tenders you can win. The most effective electrical estimators will almost never be out of work, there is high demand for good estimators.

Developing good networking skills is necessary for an estimator to give you access to resources in a specialised field such as tendering. New contractors having difficulty in finding acceptable tenders to price is a common scenario.

To keep a pulse on the market, estimators should be visiting networking events such as industry trade shows, annual dinners, annual conferences, Excellence Awards, Apprentice Awards and community events. Annual sporting events, golf or bowls days, even if you are not a player, can be a valuable networking opportunity.

Connections built up in these ways can open doors and develop reliable resources with industry specialists in state, commercial, municipal, academic or unique segments. It is through these connections that will assist you to get invitations on ‘limited tender’ lists, which offer far more opportunity for success than ‘open tenders’.

The key traits of electrical estimators include:

• To be able to comprehend the essentials of the electrical industry: Most electrical estimators started out as tradies which helped them develop invaluable knowledge of the industry.
• High attention to detail: Accuracy is a core requirement of estimating and attention to every detail ensures a better level of accuracy.
• A good client relationship: You need to be able to communicate with clients, colleagues and builders.
• Good written communication skills: Make sure all details are correct, appropriate, clear and understandable and ensure correct spelling and grammar and level of formality.
• A commitment to learning new techniques and the application of new tools and equipment.

Develop a ‘tendering principle’ – only taking on projects that match the competencies of your company such as:

• Is the deadline acceptable? Short deadlines can spell disaster.
• Does your workforce carry the required capability and skills to complete this project?
• Do you have the required labour to complete the job within the timeline?
• Has your company completed a project of this size, either physically or financially?
• Remote locations have unique problems to consider:
  • Possible extreme working conditions – great heights, all weather, heat, cold, confined spaces, toxic or loud environment, to name a few.
  • Accessibility to skilled labour – a problem finding quality workmanship, and suitable accommodation for own staff.
  • Accessibility to site – by road, air or boat?
  • Delivery of materials and equipment, as above and do you need specialised accessories and equipment for off-loading and lifting?
  • Equipment maintenance – vehicles and heavy equipment may need scheduled servicing and/or repairs.
  • Risk management – unknown site conditions, safety hazards, material and equipment security.
  • Management communication – can cause difficulties, often no mobile phone access.

Read the specification – There are generally four sections of a specification, General Conditions, Scope of Work, Quality of Materials and Standards of Workmanship. However, many inexperienced estimators don’t bother reading the General Conditions and just dive into the take-off.

The General Conditions may carry many elements which must be included in the final submission, and this could be the difference between a win and a loss of the contract. The first step is to understand what the specifier requires in your subcontract.

The tender proposal – is calculated and requires margins to win jobs and yield a profit. It takes an experienced estimator to achieve this equilibrium as there can be a fine line between winning and losing the contract. Price is only part of the successful tender, the submission must include any details of schedules, fees, workplace risks and any supporting documents.

Submitting alternatives – due to the fact your company has had experience with this type of project in the past, you may wish to offer alternatives for the client to consider. This is separately priced to provide options to the owner in determining whether they wish to add, delete or change particular sections of the contract. Often a job can be won by the use of practical alternatives.

Contract negotiation – A subcontractor has a right to negotiate any contract before signing, and both parties must agree to any changes and record them in the contract they sign. However, effective negotiation can only be achieved through good preparation. This may include changes in payment terms, claims and obligations which need to be considered to understand what the goal of the negotiation is and improve the chances of getting a satisfactory outcome.

Get advice – Before signing a contract, especially if you are unsure about the meaning of any of the terms or conditions. Imprecise clauses and conditions will only be open to disputes. Advice from your professional association or lawyer before any signing is advisable.

Disclaimer: The information provided in this article does not and is not intended to constitute legal advice instead all information and content is for general informational purposes only. The reader should consult their own legal experts for specific contractual advice.

Brian Seymour MBE, industry consultant, author of Electrical Estimator’s Labour Unit Manual, Starting Out, Electrical Contracting in Australia(a compendium of articles), and 100 Years Electrical Contracting in Australia.