When it comes to accurately estimating the cost of a demolition project, a host of data must be taken into account. The best way to go about cost accounting was the topic of a panel discussion during the National Demolition Association’s (NDA’s) Demolition 2017 Convention & Expo in late January in Las Vegas.
The panel, consisting of high profile demolition companies in the U.S. walked people through the demolition bidding process and approaches that work for them.
Scott Homrich, president, Homich, Carleton, Michigan, said, “I take the approach of where we are starting and where we are going to end up.” As he goes through that process he said he works his way back to the start to so he has a thorough understanding of all the information needed. This process includes looking at tons of material and tons processed by each piece of equipment per day.
Both Dennis McGarel, vice president, sales at Brandenburg Demolition, Chicago; and Scott Knightly, founder and president, EviroVantage, Epping, New Hampshire, said they take similar factors into account.
McGarel emphasized machine hours, quantities, schedules and materials, while Knightly said, “We are really looking at the quantities man days and production. That is how we put the bid together.”
Knightly added that quantities of material are the most important aspect of the bidding. He recommended a sales representative do a walk though of the site so see how debris would be taken out and those in the office can estimate take offs. “The sales person looks at quantity production and makes adjustments based on conditions.”
McGarel said, “Our best estimator is our database.” He said Brandenburg uses data from past projects in order to make accurate estimates.
Homrich said he sometimes will decide not to bid on a project if the company does not have historical data. “I am a terrible guestimator,” he said, noting that this approach “may hinder me, but I guarantee I haven’t lost money on a job either.”
Brandenburg keeps schedules that records costs per day, week and month. “We leave it up to our project managers to see how it goes,” McGarel said. The project data are broken down into quantities and production costs.
Homrich also keeps daily records. “We try breaking the jobs down into a multitude of phases,” he explained. He will break each phase out and later extract the production for each modules and break down each component of the job.
Knightly said the three major things EnviorVantage tracks every single day are labor, equipment and waste. “If we let those items slip on a project there is no way we can change things,” he said.
Analyzing the data is another key component. Knightly said the company reviews “the good, the bad and the ugly” every Thursday. It could be looking at why one machine is processing 10,000 square feet of material per day while other is only processing 3,000 square feet per day.
Tracking data has become a necessary part of the job with Leadership in Energy and Environmental Design (LEED) requirements, McGarel notes. Having sophisticated ways to track data for clients who are demanding LEED and other environmental initiatives “kind of gives you a leg up,” he said.
Going from the estimating of the job to the actual costs, is where you can track how accurate the estimating was. Knightly described it as “a hand off between estimating and project management team.”
He said it is important to have checks and balances with the estimators, and after that it comes down to process. “Train your management,” he advised, “If we know within the week if we aren’t meeting our numbers, it gets very simple from there on out. Try and break it down as best you can. Labor and communication is the hardest thing on the big jobs.”
McGarel said, “When I finally looked at estimating projects, I thought means and methods was first. That is almost the last thing.” He explained estimators should look at historical data see where they should be. Once they are comfortable, then it is time to focus on means and methods, he added.
Knightly also advised taking the schedule into account. “Take the estimate and build it based on the schedule and addendums and line items. That may change how you are going to do the project.”
Demolition 2017 was Jan. 29-31 at The Mirage, Las Vegas.