Hiring a consulting firm to help with construction estimating

04 February 2021 Consulting.us 5 min. read
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There are many reasons to consider hiring an outside consulting firm to assist in what most companies consider to be a sacred core task in the construction industry – estimating.

All companies are aware of the risks associated with allowing an outside consulting firm to become involved in estimating; depending on the access that you allow, the external company may come away with proprietary knowledge about your company’s processes and procedures and could also come away with sensitive information regarding the bid that the company does not want to get out.

Unfortunately, these are concerns that exist even if everything remains in-house as your current employees may leave or share information that they should not. Therefore, a company must balance how much information can be given to employees or external firms to expedite and improve the estimate, versus how little can be given to ensure that sensitive information does not leave the company. Hiring a consulting firm to help with construction estimatingI have personally witnessed both extremes, having worked for a company that allowed all the estimate information into the hands of employees down to the field level to assist with building the project. At another company everything was kept confidential; only the owner knew if a project was making or losing money and was aware of what the actual cost was for the items being bid. 

Mitigating liability and risk is one of the primary reasons any company hires a consultant and weighing the pros and cons must be done prior to any decision; while you do not spend any money not bringing on a consultant, the question you may want to ask is -what are the hidden costs to your company of not bringing in additional help? 

So how can a company benefit from an outside firm?

As mentioned above, when you work with an external company or an employee leaves a company, they take with them experience that they gained working with your company. The reverse of this is also true – when your company partners with a consultant you gain a different set of experiences and insight into how other organizations do business and look at the work. It is always quicker and less expensive to learn from the experiences of others than to have to do it all yourself – if each generation had to reinvent the wheel, the semi-conductor would have never been created!

Along with the benefit of being able to see your bid through the lens of a firm that may have had different historical experiences that your team can draw on, using an external firm can also help you catch common estimating mistakes such as inadvertently excluding scopes of work incidental to specifications, missing quantities that can be caught by having a separate take-off performed, and leaving off critical equipment and supplies needed to perform the work.

Additional advantages to having an external company with estimating, scheduling, and build experience look at the proposal documents is that unique sequencing and constructability ideas can be explored to the advantage of your organization prior to boots hitting the ground, enabling you to assess risk and opportunity before the organization is forced to react to the reality of the contract and field conditions.

A benefit of working with a consulting firm is they often have many subcontractor and vendor contacts within the industry that would enable you to have an advantage on the competition by going into the bid with the best pricing possible.

A firm with scheduling capabilities can also be called upon to put together a preliminary resource-loaded schedule for use by the bid team to help the company determine whether they have the resources for the upcoming project and determine if overtime is a labor consideration that needs to be addressed by the bid. This can also produce a head start on the actual project schedule that will need to be created for the project itself if the job is awarded to the company. 

The bottom line…

Likely the largest benefit a company receives from using a consultant to assist with estimating is that it allows the company to pursue more projects without needing to take on additional full-time staff that normally requires an organization that is willing to sustain a huge amount of overhead. Subcontracting a portion of your estimating work enables a leaner company to pursue multiple projects simultaneously and use the company’s in-house staff to spend more time on the critical projects while only needing to review and supervise the efforts of the consulting firm. 

The consulting firm can be used to either supplement the efforts of the company, or completely estimate or take-off projects. How involved you want the consultant to be in the process is up to you, and can be defined at the outset of the partnership or altered during the course of the bid if resources need to be reallocated as deadlines approach, giving added flexibility. 

Utilizing a consulting firm as a tool in your estimating process will help cut out liability from the process. Projects contain unforeseen circumstances, estimators make mistakes, and you will not win every bid – these issues do not disappear simply by hiring a consulting firm.

However, you will be able to sharpen your bid by catching problems that you may not have by simply relying on your own staff; often the cost savings that may come from catching a single mistake could pay for the cost of the consulting firm over the course of multiple bids. 

An article by Brendan Kokinda, the founder of Saorsa, a consultancy specializing in estimations in the construction industry.