Construction Estimating Labor Using a Subcontractor Lump Sum Quote

This discussion assumes that you are acting as a General Contractor, Home Builder, or Construction Company Reviews Manager that does NOT self perform labor in specific areas of work.
This process is very similar to the Subcontractor System unit cost approach. However, in this discussion, you have absolutely NO pricing histories from Subcontractors, just a Lump Sum quote, making it almost impossible for you to qualify the quote. Possibly, the only way to qualify quotes, is to compare quotes across all Subcontractors in a specific specification section or category hoping that none of the subcontractors or vendors left something ( material, equipment or labor) substantial out of their Lump Sum quote. Another MAJOR concern is, what happens when you do not get any or enough quotes in a specification section or category? Needless Journeyman Electrician Job Description to say, this method is very risky for your company. Whereas, in the Subcontractors System Unit cost process, you could possibly have some pricing histories from some subcontractors who have bid to you in the past for specific types of work of past performance. But equipped with only system unit pricing histories from those or some contractors probably will not provide you the time or pricing analysis to help reduce risk to your company or make your bid more competitive. That is mainly due to your mindset being in the Lump Sum quote expectation mode, in lieu of thinking about or preparing your analysis in a scope or system outline.
Now don’t be offended here, but this process is probably one of the most used processes, so it is highly suggested that you explore a hybrid estimating process, scope estimating process, or subcontractor system unit cost process. Those areas expand on the concept of checking Subcontractor quotes in a little more detail that will help you to qualify quotes. One of the reasons this Lump Sum Quote process is so popular is not because it is efficient or accurate for that matter. It is strictly a time saver, since you are just soliciting for quotes or bids from vendor or subcontractors. So this process does not allow you to have an understanding of (what is in the job or bid) the bid items (or complexity of the project) or of the way you expect bids or quotes are going to be coming in to you in the last two hours or twenty minutes of a competitive bid to an owner. So essentially, most people land up taking the low subcontractor lump sum quote without really understanding the extent or scope of the quote, where the volatile risk to your company is really high. Some would agree that bidding like that is just like flying blind, so please research the other estimating processes mentioned above.

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