Tender Mercy

Supporting estimators will help ease the pain of the bidding process.

By Joseph Caouette

 

Ask any estimator: the lowest bid is not necessarily the best bid.

Lance Simonin, project manager at Cutting Edge Landscaping, saw this principle in action several years ago after putting together a $2-million bid on a retaining wall project. Hours before the bidding closed, he received a call from the general contractor. Something was not right.

“Lance, this other company is at $1 million,” his contact warned. “Are you sure your number’s still good?”

Simonin was confident it was. He had called up suppliers, as well as alternative suppliers. He had considered the potential risks and worked hard to find every possible competitive advantage for his company. Moreover, he knew that the project’s material costs alone exceeded $1 million. He urged the general contractor to proceed with caution, because there was a chance that the other subcontractor had only achieved its beguilingly low bid by overlooking an important detail somewhere.

Unsurprisingly, the lowest number won the job. By the time the general contractor discovered the bid had indeed missed some significant expenses, it was too late. The company was saddled with a $1-million budget. The general contractor had to self-perform the work and try to find savings elsewhere to make up for its lost margin on the retaining wall. By the time the change orders were all added up, the final project cost was probably at least $2 million, if not more. Some bargain.

Simonin believes more communication between all of the parties involved—including the owner, general contractor, and bidding subcontractors—might have helped catch the problem earlier on. “I know we’re all competing for work, but at the same time we should be able to have an open dialogue. My philosophy is that there’s enough work to go around, so why can’t we collaborate? Why can’t we pick up the phone and talk to each other?” he says.

Calling up a colleague at a competing contractor to amiably discuss potential red flags on an open tender is easier said than done. That’s one of the reasons Simonin got involved in the Edmonton Construction Association’s Professional Estimating Group (PEG), which launched last year. As part of the group’s leadership team, Simonin wants to encourage people working in estimating to discuss common challenges.

“There’s obviously certain information you’re not going to want to share—like specific pricing or margins—but that doesn’t mean you can’t troubleshoot as a group to come up with the best solution for the owner or client,” Simonin says. “There’s no reason why estimators from Clark Builders and PCL can’t be friends.”

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Attendees at the Estimator’s Fair on April 5, 2018. Left to right:
Carolyn Aumiller (Pagnotta Industries), Jeremy Langevine
(Pagnotta Industries), and Amrit Kaler (Pagnotta Industries).

Those estimators can’t be friends if they never meet one another, though. There are plenty of networking and professional development opportunities for those on the project side of the business, but the PEG will help fill the gap of events targeted to estimating professionals.

“It’s designed to be a connection point for those in estimating, risk management, quantity surveying, and project management,” says Matt Schellenberger, the ECA’s director of corporate development. “They’re often seen as a bit of a forgotten group. People joke sometimes that the estimator’s the last one to ever get out of the office because they’re always busy keeping the project pipeline full.”

To help lure those estimators out of their offices, the PEG has begun hosting events like the Estimator’s Fair. Early in April, it held the second-annual edition of the event, where people from across the local construction industry can come together to share ideas and learn from each other’s experiences. Other events, such as a summer golf tournament, are also planned.

The value of networking should not be overlooked, particularly for those in estimating roles. There are a lot of people who have to work to keep the project pipeline flowing smoothly, like the consultant drawing up specifications and the quantity surveyor developing the tender packages. Information is moving back and forth between numerous people and across multiple organizations. Relationships are being formed (and occasionally tested) all throughout the process and bringing everyone together in person can help build up trust and encourage stronger working relationships, Schellenberger notes.

“If those relationships are going well, then projects tend to go much better, no matter what the delivery model,” he says. “If those relationships don’t exist or if they’re based on confrontation, then projects tend not to go well.”

Julie Williams, an estimating manager at Scott Builders and another member of the PEG leadership team, has found that the group is helping her finally put faces to the names she has dealt with for years over the phone or through email. It’s a lot easier to call up a supplier to ask about getting a price on a tight deadline when you know who’s on the other end of the line.

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Attendees at the Estimator’s Fair worked together to fill out a
giant-sized construction engineering terminology crossword.

“In estimating, communicating and meeting people is so key,” Williams says. “With project staff, there are a lot of meetings, so people get to see each other more often. In estimating you’ll be talking to subcontractors, but you never actually get a chance to meet people and know who you’re talking to.”

The PEG is about more than exchanging business cards and sharing war stories, however. The group is helping to raise the profile of the entire estimating profession within the broader construction community. Estimating is not necessarily the first job that comes to mind when students are looking at a career in construction, but the PEG could encourage people to consider it more closely.

Williams was one of those students who didn’t even realize estimating was a possible career path when she first started her education. After taking a few courses, she began to realize that she not only enjoyed it, but she was good at it as well. Before that point, estimating was so unknown to her that she did not even realize her grandmother had been an estimator for years. Williams only found out about her family connection to the profession part-way through her studies.

“If someone doesn’t join the construction engineering technology program, they may not even realize estimator [as] a career option. People that aren’t in construction don’t even have a clue what it is—absolutely no idea,” Williams says. “There could potentially be a lot of people who would be great at estimating who don’t even know it exists.”

Brad Mielke, another member of the PEG leadership team and an instructor for NAIT’s Construction Engineering Technology program, has seen how challenging it can be for some people to gain a foothold in the profession. Industry needs estimators, but there aren’t always enough entry-level positions for those starting out, he believes. Sometimes, even job postings for junior estimators still require a couple of years of experience.

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Brad Mielke, an instructor for NAIT’s Construction Engineering Technology program and
member of the leadership team of the Professional Estimating Group.

“Willingness to be an estimator should be the number-one thing that companies look for, because we just simply don’t have enough skilled estimators. Are people willing to learn, willing to put in the hours, willing to take night courses, and willing to join with the PEG or the Canadian Institute of Quantity Surveyors? All those types of things would be far more on-point in job postings [than focusing on years of experience], really,” Mielke says.

On-site experience is always valuable, but workers plucked from the field do not become an estimator overnight once they are dropped into an office. As bids grow more complex, estimators need to know about contract law and handling documentation. Through educational and networking opportunities, the PEG can help more people get a start in the profession, and once that career path is established, companies can move more and more people through it.

“Estimators are just not going to come into existence in any other way. Companies have to realize that they can buy the raw materials, but they will have to exert effort to shape them into something,” Mielke says. “If they can do that, then they will get a far better result.”

There’s a pressing need for companies to figure out how to find and develop estimators. Many baby boomers are nearing or already at retirement age, and they will take with them years worth of hard-won knowledge and experience when they leave the industry. Thanks to Alberta’s boom-and-bust economy, there are noticeable gaps in the workforce from periodic downturns and hiring freezes.

The PEG will help support the passing down of knowledge through mentoring. The group hopes to host organized mentoring events where younger workers get a chance to pick the brains of more experienced estimators. However, the leadership team is also optimistic that mentoring relationships will develop organically out of other events designed to forge connections between people in the profession.

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Left to right: Diane Madu (Graham Construction), Sam Wong (Graham Construction), and
Carlos Lugo (Silverstone Builders).

“The companies that can extract that knowledge out of the people that are leaving them in the next 10 years are going to be far more successful companies in the future. You’ve got people that have really got to start sharing what they know with this next generation in whatever manner that they can,” Mielke says.

The Alberta Construction Trade Definitions are an example of the kind of valuable knowledge that could have almost been lost as the older generation left the industry. First developed in the 1970s, the definitions were all but forgotten for over a decade before some industry members made a concerted effort to revise them for a new generation of workers. By clearly laying out what is contained within each scope, the trade definitions can save estimators from a great many headaches when deadline crunch looms.

“When a general contractor receives a subtrade’s price 10 minutes before a job closes, he doesn’t have time to figure out if the trade’s not-included items are carried somewhere else in his estimate. He doesn’t want to guess at a sum to cover those costs in his tender at the last minute,” explains Roger Buksa, general manager at Arpi’s North, ECA board member, and chair of the Trade Definitions Committee. “The trade definitions put all the trades on an even playing field.”

Between time pressures and juggling multiple sub-contractors and suppliers, estimators face myriad challenges when putting together a bid. The trade definitions, like the PEG, are one more resource to help ease some of those difficulties. After all, estimators are central to the tendering process, and anything that lets them do their jobs better can only help the entire industry thrive.

“Getting a large group of estimators together in a room to discuss the issues they have allows the ECA to assist in providing solutions or at the very least bring those issues forward,” Buksa says. “The only way to make a change in this very large and dynamic industry is to do it as a group. Many voices are louder than one.”