Bidding Elements: How Labor Plays A Role

A reader writes: “I am looking for a good estimator that can help me to bid contracts of any size or nature. Do you have any recommendations?”

As I have stated before, there are some excellent products on the market, some of which are advertised in the publications parenting this website. I do not endorse any particular product so can only respond by providing some suggested guidelines.

It has been my experience that there probably is not one product that can address every need in bidding and estimating simply because different customers will be asking for different numbers and pricing. For instance, one customer may just want a bottom line price whereas another may require a complete breakdown of the process in developing the proposal.

In this and following articles, I will attempt to deal with some of the elements I believe are essential to a good estimator. The first and foremost number to determine is labor and benefits since these two elements can consume from 55-90 percent of a given contract based on what else is required in a particular offering. It would not be wise to simply use percentages to determine most proposals since it can vary for so many reasons.

If you are looking at a relatively small opportunity (under 50,000 square feet) you may be able to arrive at your DLH by multiplying how long you think it will take to clean the facility one time and then multiplying that number times the number of times you will service the facility in a year. Example: 5 hours per event x 52 times per year = 260 DLH per year. Of course, you need to factor in daily tasks as well as any project work (think annual carpet cleaning, stripping/recoating, etc.).

There are several well respected custodial time standards available that can assist with determining what your DLH (direct labor hours) will be for a specific opportunity. Ultimately you should develop your own time standards based on your own experience for different facilities. Please remember that the larger the contract, the more important it is to get this number right since it can drive all your other costs.

We will be looking at larger contracts that can benefit from an estimator to capture all the data correctly.

Your comments and feedback are always appreciated. I hope to hear from you soon. Until then, keep it clean...

Mickey Crowe has been involved in the industry for over 35 years. He is a trainer, speaker and consultant. You can reach Mickey at 678-314-2171 or CTCG50@comcast.net.