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E L E CT R I C AL CONNE CT I ON
W I NT E R 2 01 5
ESTIMATING
The tender trap
I
n the world of competitive tendering,
the profitability or otherwise of the
project depends on the skill of the
estimator, or the estimating team.
Competitive tendering cannot be
reduced to a ‘price per point’ process, in
which everyone is aiming for a price that is a
fabrication cultivated by developers looking
for the cheapest option.
As a teacher of electrotechnology
estimating for many years, I was surprised
to hear an ex-student remark that the
estimating process hasn’t changed in the
past couple of decades.
If you are a ‘count and measure’ clerk,
that may be so. Whether you use a manual
or electronic system, all the accessories
have to be counted and all installation
materials have to be measured. None of
that is rocket science.
The estimator’s duties and responsibilities
include the physical counting of all
accessories and measuring of all cable,
conduit and bus-bar duct for mains,
sub-mains, lighting, power, security, fire,
telecommunications and specialised services.
Any trained electrician should be able to
list these materials. This is the very basics of
the trade, yet I come across so many would-
be estimators who don’t even consider the
items that many call ‘sundries’.
These are materials such as fixings,
connections and making good, which may
only carry a small material cost. Then there
is extensive labour cost, such as installing
a Loxin into a concrete slab (material cost
$2.06, labour cost about $17). Not a big deal
if the entire project involves only one or two,
but for a couple of hundred the $50 allowed
for ‘sundries’ won’t go far.
TENDERING
This term comes from the French word
‘tendre’ (to offer), and one of the estimator’s
essential duties is to search for opportunities
to make an offer on acceptable jobs.
The procedure generates offers from
various bidders competing for business
activity in contracts, supply or service works.
Open or advertised tenders invite bids
from all contractors that can guarantee
performance.
Restricted or invited tenders are aimed
at selected qualified contractors. Restricted
tenders differ in scope and purpose and are
called because:
>
there is essentially only one suitable
supplier of the services or product;
>
there are confidentiality issues, such as
in military or specialised government
contracts;
>
there are reasons for expedience such as
emergency situations; or,
>
there is a need to eliminate bidders that
don’t have the financial or technical
capabilities.
Once the duration is over, the tender box
is closed and sealed. It can be opened only
by the tender or bid evaluation committee
or a member of the procurement team with
at least one witness.
COST CONTROL
All projects need to be guided
throughout in order to receive the
required and expected output at the end
of the project.
The team is responsible for the project,
and most importantly the project manager,
needs to effectively control costs. However,
there are several techniques available for
this purpose.
Efficient cost monitoring depends
on an estimate constructed in bite-size
pieces that can be identified easily and
that measures ‘estimate against actual’ as
it occurs. Many a genuine variation has
been discovered when cost monitoring is
in lock step with the estimate. Any marked
discrepancies in labour or material costs
will readily show up.
Counting and measuring
are central to accurate
estimating, but there’s much
more to it.
Brian Seymour
outlines the detail.