Contractors With Solid Project Data Write Better Construction Proposals

In 2022, electrical estimating consultant Stephen Carr wrote a piece in Electrical Contractor magazine about construction proposals and how steep his professional learning curve had been.

Over the decades, as Carr learned how to estimate increasingly complex projects, he found himself overwhelmed or blindsided by the particulars of a project.

On one project, Carr writes that when he was reviewing plans at a major international airport, he initially underestimated conduit support costs so much that the customer called him up and told him to triple the figure. At that particular airport, the customer told Carr, there were stringent codes for the support racks, and this was an important factor in the labor and materials cost calculations.

Carr’s point in the article is that good estimates require good estimators, people who can grasp all of the work that goes into a given project.

What makes a good estimator? Experience. People who estimate progressively larger projects gain progressively deeper knowledge of the work.

Trade contractors gain experience with each project they work on, too. And the ones who document that experience in detail are the ones who will be able to make better decisions and more accurate estimates on future construction projects.

That’s what construction project data is ultimately used for — capturing your experiences on current projects so your teams are even better prepared for future projects and write better construction proposals.

And what makes a good proposal? Preparation.

Here’s how the best trade contractors use their construction project data to inform their estimates and write better construction proposals for new work.

They Have a System for Managing Construction Project Documents

Good document management is the foundation for building smarter.

You and your team need to know where all of your documents are at any moment, and have immediate access to those documents, so you can pull whatever relevant data you need.

The team at Proposify, which makes software that lets you drag and drop data into proposal templates, writes at Construction Dive about the importance of a content library “where you can store all of your different proposal sections in one place so anyone on your team can access them at any time. No more hunting for bios, images, case studies, or pricing tables.”

Ideally, bios, images, case studies and pricing tables would already get stored in a cloud-based document management system along with all of your other construction project documents. As we’ve written before, such a system should give your team a way to:

• Centralize all construction project data in one repository.
• Let people send files to one another easily.
• Capture, log and track everything relevant to each construction project.

They Can Run Instant Reports on Project Costs

Job costs can be difficult to calculate even as the money is going out the door. Predicting future costs is even more difficult.

That’s why job costing software is so important. These tools can track job costs at different levels of specificity so you can see how expenses match up to phases of a project or to certain cost codes.

By tracking and storing this data from project to project, you’ll develop a more accurate picture of what future projects will look like, what the work will cost and what profit opportunities are available.

You may be able to track costs like labor, services, tools and materials in a spreadsheet. But this only gives you a place to organize your costs. You won’t have the analytics and reporting necessary to generate real-time business data or to inform future decisions.

They Have Up-to-Date Prices for Material Costs

Historical project data can be useful for estimating costs that don’t vary too much — labor costs and overhead, for example.

But for costs that are more volatile, it’s necessary to have up-to-date pricing data.

Chris Hendrickson, a researcher and professor of engineering at Carnegie Mellon University, wrote a textbook on the fundamentals of construction project management. In that textbook, he notes that construction companies frequently underestimate certain costs for a variety of reasons:

• Prices rise faster than expected.
• Changes in design.
• Companies being too optimistic about their cost estimates.

Furthermore, there are some cost fluctuations that construction businesses often overlook. Fuel is a good example, as the New Jersey DOT Project Management Office writes in its cost estimating guidelines. “There are times when fuel prices may be considered as volatile. The types of work that are most fuel intensive are excavation and embankment, aggregate hauling and paving.”

The lesson? Always check prices at the point of writing an estimate or a bid. You can check your purchase orders if prices and availability are unlikely to have changed since that order. From there, external data sources (e.g. price data from your suppliers) will be necessary to find this information.

They Track Team Productivity

Labor costs become useful inputs when you have the ability to run more complex analyses and reports.

For example, with a tool like eSUB Cloud, you can track both productive work hours and lost hours via the daily reports. When creating new estimates, you can pull that data automatically to see how a construction project progressed against its budget, as well as any change orders that came through.

By understanding your team’s productivity in the context of other business concerns — e.g. project timelines, budget constraints, change orders — you can make much more accurate forecasts for future projects.

Learn More About Getting Project Data to Write Better Construction Proposals

If tracking and managing costs are routinely challenges for your business, have a look at our webinar Go Mobile to Get Your Costs Under Control.

In that video, we go into detail about how digital tools like ours help trades businesses forecast more accurately and respond quickly to unforeseen costs.

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