The Golden State: Where & How to Live, Secure, Visit, Enjoy and Thrive in California
Plumbing Heating And Piping
The jobs secured on the basis of these estimates were used as a sounding board to determine the value of the method as well as the tables. In each case a labor budget was established for the job before work was commenced and in practically every case the amount of labor used to complete the project was very nearly that figure established as the total labor budget. In cases where this was not true, investigation was undertaken to determine why. The answer was usually one of the following:
1. The tables or methods were not properly used.
2. Construction methods contemplated at the time the estimate was made were not carried through.
In either case action was taken to rectify these discrepancies on future bidding.
This discussion is made a part of the text only to show that the system or method and the tables have produced satisfactory results. It is reasonable to assume that the same method will produce satisfactory results for others making estimates for similar types of projects. It is also reasonable to assume that another estimator may not agree with the labor factors we have established as average, that is, E = 1.0. He may be just as right in his opinion, which is based on his experience and his locality, as we are in our opinion, which is based on our experience. In this case, it is a relatively easy matter to revise any of these tables to suit conditions as they may be. To do this, the estimator will reestablish the values set forth in the column E = 1.0, and then by calculator multiply these figures by the E heading of each column, thereby revising the entire table. It is strongly recommended that revisions be made to bring the tables into conformity, should they be found to be not in keeping with local experience.
Overhead Expense
2.1. General Discussion of Overhead Expense
It is a strange fact that many plumbing contractors believe that they have no overhead expense connected with the operation of their business. This philosophy prevails particularly among the contractors who are just branching out from a one-man shop or operation. Men who have been successful in contracting for residential work which they can do themselves with the help of an apprentice usually have, at some time, an opportunity to do one of those larger jobs. These are the men who should be wary of such a philosophy.
Overhead expense is an element of cost which will be very much in evidence on the year-end financial statement whether it is included in the job estimate or not. The estimator should be aware of this element of cost and how it will affect each project for which an estimate is made.
Since this is an estimator's guide and not a guide to the management of a business in general, overhead expense will be considered here from the standpoint of the estimator.
