Plumbing & HVAC Manhour Estimates
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Estimating plumbing and HVAC is
more than just a mathematical exercise; it requires decision-making, sound
judgment, attention to detail - and occasional guesswork.
The equipment, material and
subcontractor services are the easy part of your bid. You're simply
offering to sell them for a known cost, plus over-head and profit. If
you've made a careful take-off, there's very little risk involved in
bidding this part of the job. You just add your markup to your actual
Here's the high-risk part of your
bid. You're also proposing to sell your company's installation expertise,
or labor, for a fixed price. That's a lot harder to estimate. To minimize
your risk, I recommend that you assign a carefully-selected manhour value,
or labor unit, to each activity.
This book lists thousands of
competitive manhours that mechanical contractors have used successfully
for many years. But they won't be accurate for your jobs if you use them
indiscriminately. So please read the following sections carefully
before using these figures in an actual estimate.
What is Manhour?
The manhours I use in this book
indicate the time required to receive, unload, stockpile, distribute,
install and test a piece of equipment or material under normal
conditions. These manhours assume that all work will be performed by
qualified tradesmen, under conditions that include installation not more
200 feet from the storage area
two stories above or below
10 feet above a reasonably-level
If the job you're estimating
doesn't meet these criteria, you have to adjust these manhours to make
your estimate accurate. To do this, you multiply them by an appropriate
Applying Correction Factors
Make a careful evaluation before
you use these manhour correction factors. If you adjust your labor prices
too high, your bids won't be competitive. If you don't adjust them enough
and they're too low, you'll lose money on the job.
Figure 1-1 shows the correction
factors I recommend to adjust your manhour estimates for conditions that
will decrease or increase your installation time. It's best to note the
appropriate correction factors on the plumbing or HVAC drawings during
your initial review, before you begin the detailed take-off. For example,
you might make this notation on the third through fifth floor piping
drawings: "Use 1.05 C.F." Occasionally you may have to combine correction
factors. If the third through fifth floors consist of large open areas
calling for a factor of 0.85, and you estimate a task will take 0.45
manhours, here's the calculation:
(.45 x 1.05) x.85 =.40
Construction specifications don't
always define who does what. You have to decide which portions of the
specified work will be included in, or excluded from, your bid. In many
cases you'll have to ask for clarification. This isn't a good place to be
|Working in large
open areas, no partitions
Prefabrication under ideal conditions, bench work
|Large quantities of
Very skilled tradesmen
|300 feet from
400 feet from storage area
|500 feet from
3rd through 5th floor
|6th through 9th
10th through 13th floor
|14th through 17th
18th through 21st floor
|Over the 21st floor
Congested ceiling space
|Above a sloped floor
Congested equipment room
|15 feet above floor
feet above floor
|25 feet above floor
feet above floor
|35 feet above floor
feet above floor
The most efficient method is to
prepare a master list of tasks that your company does not normally
perform. Then you can highlight or check off specific items to exclude for
the current bid. Make exclusions and clarifications a part of the bid form
or letter, with a statement like "Our price does not include the
Here's a list of exclusions and
clarifications that you can use as a starting point if you haven't
developed your own list:
Final cleaning of
fixtures and equipment
Backings for plumbing
Toilet room accessories
including furnishing motor starters
Line voltage (over 100
volts) electrical wiring and conduit
Painting, priming and
Fire protection and
landscape irrigation systems
Cutting, patching and
repairing structural members
Surveying and layout of
Removal or stockpiling
of excess dirt/spoil
drainage and site dewatering
including forming and rebar
furnished by others
Equipment and personnel
Wall and floor
Costs for payment and
Trash pickup by us,
haul-away by others.
We include site
utilities from building to property line only.
We include piping to 5
feet outside of building only.
We include plumbing and
HVAC permits for our work only.
Consider Cost When Choosing
Most construction specifications
allow you to use alternative equipment and materials. When they do, it's
your responsibility to select the most cost-effective products. Don't just
arbitrarily choose familiar materials or equipment just because "We've
always done it this way." Compare your costs before making any decisions.
Make sure you know the local
construction codes before choosing plastic products such as PVC, ABS and
polypropylene. Most codes don't allow their use inside of public buildings
like hospitals, care centers and schools.
It's generally best to select 100
percent factory-packaged equipment. Beware of products labeled "Some
assembly required." Field labor costs for mounting loose coils, drives,
motors and similar accessories are very high. What you save on the
materials you'll most likely more than lose on the extra labor.
Understand Quotes and
Except for the installation of
underground utilities, most plumbing and HVAC construction doesn't begin
for six months to a year after you bid a project. That makes it important
to obtain price protection, in writing, from proposed suppliers and
subcontractors before you bid a job.
Be aware exactly what the
equipment and material price quotes by vendors include. They're usually
conditional, don't include sales tax and are subject to specific payment
and shipping terms.
It's important for every estimator
to understand shipping terminology because it defines who pays shipping
costs and who has the responsibility for processing freight-damage claims:
F.O.B. Factory (Free On Board
Factory): The title passes to the buyer when the goods are delivered
by the seller to the freight carrier. The buyer pays the freight and is
responsible for freight-damage claims.
F.O.B. Factory F.F.A. (Free On Board Factory,
Full Freight Allowed): The title passes to the buyer when the goods
are delivered by the seller to the freight carrier. The seller pays the
freight charges, but the buyer is responsible for freight-damage claims.
F.O.B. City of Destination
(Free On Board to your city): The title passes to the buyer when the
goods are delivered by the seller to the freight terminal in the city, or
nearest city, of destination. The seller pays the freight and is
responsible for freight-damage claims to the terminal. The buyer pays the
freight and is responsible for freight-damage claims from the terminal to
the final destination.
F.O.B. Job Site (Free On Board
job site, or contractor's shop): The title passes to the buyer when
the goods are delivered to the job site (or shop). The seller pays the
freight and is responsible for freight-damage claims.
F.A.S. Port (of a specific
city) (Free Alongside Ship at the nearest port): The title passes to
the buyer when the goods are delivered to the ship dock, or port terminal.
The seller pays the freight and is responsible for freight-damage claims
to the ship dock, or port terminal only. The buyer pays the freight and is
responsible for freight-damage claims from the ship dock, or port
terminal, to the designated delivery point.
Obviously it's to your advantage
to instruct vendors to quote all items F.O.B. the job site or your shop.
Most engineering drawings are
two-dimensional; they show length and width only. Auxiliary or elevation
details are sometimes used to clarify what can't be clearly
depicted in a plan view.
Architects and engineers often use
another method of drawing which shows objects in all three dimensions:
length, width and height. Such drawings, depending on the specific method
used, are called either perspective, axonometric, oblique or isometric.
Designers of plumbing and HVAC
systems usually use isometric drawings to show details of piping systems.
An isometric drawing simply uses 30-degree angles from the horizontal to
indicate length and width.
A plumbing or HVAC estimator,
however, doesn't need to understand the complexities of mechanical drawing
to make a simple freehand sketch that shows pipe, fittings and details
that are hidden in a plan view. That helps assure that all the relevant
items will be included on the detailed take-off.
Figures 1-2 and 1-3 are basic
isometric sketches showing details of typical DWV and water piping
required for a bathroom consisting of a lavatory, water closet and shower.
The Estimating Procedure
There never seems to be enough
time to carefully prepare an estimate - but somehow you've got to meet the
bid deadlines. If you're not organized, preparing a cost estimate under
that kind of time pressure can easily lead to carelessness, and costly
Remember, your nuts-and-bolts
take-off isn't the only part of the estimate; there are scores of
suppliers and subcontractors who must have time to prepare their pricing
and proposals for you.
For a typical project, I recommend
following these procedures, in the order listed:
Get an additional set
of drawings and specifications for your potential vendors and
subcontractors to use.
Study the plans and
specs carefully and highlight important items. Make a list of specific
activities where you'll have to apply manhour correction factors. Make
sure you know and understand the local construction codes.
Ask the general
contractor for a copy of the proposed construction schedule and the
subcontractor laydown (storage) areas. Both of these will have an effect
on your price decisions. There are correction factors for increasing
distance from the storage area, but the effect of a compressed schedule
is less clear-cut. If you're facing an unusually fast time frame, you'll
need additional installation and supervisory personnel to meet the
completion date. This increases your labor costs and reduces efficiency
because of congested construction areas when several trades are trying
to work at the same time. These increased costs can go as high as 10
percent. Compare each situation separately and compare it to your normal
working conditions to estimate how much it will impact your costs.
Schedule all potential
suppliers and subcontractors to come to your office to make their
take-offs from the extra set of bid documents.
After you've taken these
preliminary steps, it's time to begin your detailed take-off. You can use
a pad of ruled paper, a preprint- ed form or a computer to assemble your
take-off. The method you use isn't important; the results are.
Follow these guidelines for taking
off materials and equipment:
Take off all piping and
ducting by system, floor and building and clearly label each section on
your take-off. Don't combine systems such as chilled water, heating hot
water and domestic water, even if their specified materials are
identical. If there are changes in one system, you don't want to have to
redo your entire estimate.
Use the engineer's ID
numbers to identify listed equipment. Terms such as "pump" just aren't
Use colored pencils or
highlighters to line out items you've taken off and listed. Use a
different color for each piping and ducting system.
Don't forget to apply
manhour correction factors!
Don't jot telephone
quotations or other important data on scraps of paper or desk pads. Use
a preprinted form to make sure you ask for and record all the important
Job Site Expenses
|| Temporary power
|| Core drilling
| Preplan layout
|| Temporary water
| Material take-off
|| Equipment rental
|| Small tools
| Equipment setting
|| Permit/inspect. fees
| Startup/test equipment
|| Storage trailer
|| Site utilities
| Test of systems
|| Sand & gravel
|| Water treatment
| Valve charts/tags
|| Water/air balance
| Pipe identification
|| Special insurance
| As-built drawings
| Punch list work
|| Truck expenses
|| Cylinder gases
| Warranty reserve
|| Welding supplies
|| Temperature control
|| Fire protection
|| Safety supplies
|| Office supplies
Additional Job Costs
Perhaps the easiest part of
estimating a job is taking off and listing the various items of hardware
shown on the drawings, then assigning their related labor costs. But there
are many miscellaneous costs that can - and will - cut into your profits
if you ignore or forget them. Figure 1-4 is a checklist you should review
before finalizing your bid price.
A Sample Estimate
Figure 1-5 is an isometric sketch
of a simple two-pipe reverse-return hot water heating system. The
specifications call for Type L copper pipe with wrought copper fittings
and brazed joints. Let's assume you have vendor prices for the boiler,
pump, expansion tank, fan-coil units and valves. You also have prices from
specialty contractors for the thermal insulation and temperature controls.
Now your job is to prepare a cost estimate and a competitive bid price.
I recommend using a four-step
First, study the
specifications and drawings and note any conflicts, building code
violations, required labor correction factors and other data that could
have a significant effect on our pricing. Any major deficiencies should
be brought to the attention of the architect or engineer, in writing.
Then make a detailed
take-off of all material and equipment, following the guidelines we
discussed in the section called The Estimating Procedure. List and total
all quantities, with the prices and estimated labor manhours, in the
Material and Equipment Take-off. See Figure 1-6.
Now list and price the
estimated labor manhours and additional cost data on the Labor and Other
Job Costs form, as shown in Figure 1-7. Go over the Additional Job Costs
checklist to make sure you haven't omitted anything.
Finally, transfer all
job costs to the Estimate Summary, assign the overhead and profit
markups, and total the numbers. See Figure 1-8. Most of the items in the
surnmary are self explanatory, but I'll clarify two of them:
Line M. The bond premium
is the fee charged by a bonding company to issue a bond or "insurance
policy" protecting the owner in the event of payment or performance
defaults on the part of a contractor.
allocated for the performance of any service work during the warranty
Preparing the Proposal
It's common courtesy to deliver an
unpriced copy of your bid or proposal to the general contractor three or
four days before the bid deadline. This gives them time to check your
proposal and get prices for any items you may have excluded.
To avoid any misunderstandings, every proposal
should include at least these sections:
- Specification titles and issue dates
- A complete listing of bid drawings and
their latest revision dates
- A complete list of addenda and their
dates of issue
- A listing of specification sections (or
parts of sections) included in your proposal
- A list of your exclusions and
Phone (or fax) your final bid prices to the general
contractor five or ten minutes before the bid deadline. Don't submit them
too early. You don't want to have to revise them because of last-minute
price changes by your suppliers or subs.
Even when you do your most careful, accurate
estimate, there may be a competitor who comes in a little lower. Let's
suppose you've submitted a combined plumbing and HVAC bid for $233,000 and
your competitor's price was $229,000. You've obviously lost the job. Or
Let's further suppose that in addition to bidding
the work according to the plans and specs, your proposal included the
||Deduct for providing pipe hanger
spacings per UPC in lieu of specified spacings:
||Deduct for reducing heating hot
water pipe sizes by changing Delta T from 20° F to 40° F:
||Deduct for providing
pressure/temperature taps at air handling units, pumps and chillers
in lieu of specified thermometers and pressure gauges:
||Deduct for eliminating water
treatment in closed piping systems:
||Deduct for piping chilled and
heating hot water pumps in parallel
in lieu of providing 100 percent standby pumps:
||Total deducts from your base
This is called value engineering. That's
finding ways to reduce costs without reducing the quality, integrity or
performance of the systems you'll install.
If you include value engineering in your proposal,
you increase your chances of winning a contract even though your basic bid
price isn't the lowest. You're sending a message to the owner: "We care
about your project; that's why we've spent additional time and money to
find ways to reduce your building costs."
Don't waste your time offering to reduce costs by
installing cheaper plumbing fixtures and lower-quality equipment. After
all, the owner has already asked for specific quality standards from their
design team. If they wanted a lower-quality installation, that's what they
would have asked you to bid on.
Remember this: When you offer value
engineering deductions that require design changes, you'll probably be
questioned or challenged. You must be prepared to convince the owner and
the design engineer that your recommendations are based on sound
Let's go back and see how you might justify the cost
-saving ideas presented our example:
- Pipe hanger spacings: The pipe hanger
spacings recommended in the Uniform Plumbing Code (UPC) were calculated
by professional structural engineers and include conservative safety
factors. They have been used for many years and have proven to be more
- Changing HHW Delta T: In hydronic
heating, you're pumping British thermal units (Btus) throughout the
system. By increasing the Delta T from 20 to 40 degrees F; you're not
reducing the number of Btus being pumped, you 're merely reducing the
GPM of water. As a result, you can reduce pipe, insulation and pump
sizes without affecting the transmission of heat. You'll also reduce
operating costs because smaller pumps require less horsepower.
- Thermometers/pressure gauges:
Thermometers and gauges installed on vibrating machinery, or on
connecting piping systems close to such equipment, have a short life
expectancy and quickly lose their accuracy. That results in misleading
readings. The use of insertion-type pressure/temperature taps allows
readings to be easily taken with accurate gauges that can be kept in a
safe place when not in use, protected from damage.
- Water treatment: Studies conducted by
ITT Bell & Gossett have shown that corrosion in closed hydronic systems,
having a makeup water rate of no more than 5 percent per year, virtually
stops once the entrained air (oxygen) has been removed by the air
control system, or depleted.
- 100 percent standby pumps: Using two
pumps piped and operated in parallel is a more economical choice than
the standby pumps. Even if one pump fails, the remaining pump will
deliver 75 to 80 percent of the design flow rate, which is adequate for
These cost-saving ideas are only a small sample of
the potential of value engineering. When estimating any job, watch for
other opportunities and note your findings. I recommend splitting the
savings 60/40 with the owner. For example, if you can save $1,000 by using
a different type of pipe hanger on a project, you can offer a $600 price
break to the owner, and still pick up an extra $400 profit for yourself.
And this extra effort might help you to land the job you otherwise missed
by a hair!
Managing the Project
During the 1970s and early 1980s, construction
companies were easily able to earn gross profits in the 18 to 22 percent
range, and often higher. But since then, the commercial and industrial
industry has seen a steady decline. Residential building has ranged from a
negative growth rate to a minimally-positive one.
This reduction in construction spending has meant
increased competition between contractors and a resulting drop in profit
margins. Today, if you bid a job at a markup higher than 12 to 14 percent,
you probably won't get the work.
That's why more and more contractors are turning to
a project manager to help boost their dwindling profits. Many others,
however, still expect their job site foremen to handle the complex and
time-consuming paperwork and project management. Of course, this means the
foreman has less and less time to devote to job supervision, which should
be his primary function.
Some small companies assign managerial duties to
their estimators. While this does avoid overloading the foreman, it limits
the time an estimator can devote to estimating future jobs. Perhaps this
is one reason why many small contractors remain small.
Functions of the Project Manager
The primary duty of the project manager is to
organize and supervise the job so it's efficient and profitable, while
fully complying with code and contractual requirements. Here's a list of a
manager's typical duties, listed in order of performance:
- Schedule in-house turnover meetings.
- Order additional copies of plans and
specifications for distribution to field foreman and subcontractors.
- Study the project documents for value
- Set up a project filing system.
- Finalize all major equipment and
- Prepare and mail letters of intent to
subcontractors and major equipment vendors.
- Order the specified number of submittal
data from vendors and subcontractors, plus additional copies for
- Prepare and submit equipment, material
and subcontractor's technical literature to general contractor for
approval by the owner or the owner's representative.
- Prepare and submit construction
- Direct project foremen to prepare shop
drawings if major deviations from contract drawings are anticipated.
Submit for approval.
- Prepare monthly progress billing format
and submit for approval.
- Order all long-lead equipment when
approved submittals are in hand. But don't commit to any purchase orders
until you have a fully-executed contract with the general.
- Prepare and send contracts to third-tier
- Prepare a job site safety program in
accordance with OSHA regulations, and get the required federal and state
statutes to post in job site offices.
- Prepare and submit change estimates to
the general contractor as they occur.
- Prepare and submit the specified number
of project closeout items, such as operation and maintenance manuals,
test and balance reports, as-build drawings and the warranty letter to
the general contractor.
As if that weren't enough, the project manager is
also responsible for handling correspondence, job problems, damage and
warranty claims and attending construction meetings. As you can see, there
are reams of paperwork generated for each job. To be effective, the
project manager has to be able to locate any paper when it's needed.
The Project Filing System
It hasn't been too many years since the paperwork
for a construction project was either stuffed in a gang box with the tools
or in a cardboard box on the floor of a foreman's pickup truck. But that
won't do anymore. Today, each job generates too much paper - and paper
that's too vital to the contractor's success. That means a more
sophisticated filing system is needed.
As a minimum, a project filing system should include
the following categories. Add others as the need arises.
- Correspondence in / Correspondence out
- In-house correspondence
- Prime contract
- Project estimates
- Vendor quotations
- Change estimates
- Change order log
- Project meeting minutes
- Shop drawings
- Punch lists
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