A Takeoff Is a Takeoff – or Is It?

From a distance, looking at a set of plans, a project might seem like a sequential process: owner seeks desired result; architect designs blueprints based off the desire; blueprints are converted into plans; quantitative measurements are done against the plans; estimate is submitted; bid is won; project is built. It’s pretty simple, right? No, not exactly.

Trust but verify. Check and recheck. Measure twice; cut once. These may be overused clichés, but isn’t it interesting that everyone follows them? Does this duplication of effort fit in with everyone wanting to do the best work for the least cost to get the most profit? In this respect, is duplicating work ever beneficial? The definitive answers are yes, yes, and yes! The best example of where replicating work pays off is the takeoff. A takeoff done to sell the business isn’t the same as a takeoff done to build the job. Not understanding the difference may mean losing money instead of making it.

An estimator’s responsibility is really that of a salesperson. The takeoff and pricing completed by the estimator are intended to cover all of the known costs for the sole purpose of securing the contract. Generally speaking, there is a very short amount of time to gather all of the available information and complete the work to assemble a winning bid. Experience shows that almost never – no, let’s be honest – NEVER is all of the project information available to the estimator during the initial takeoff and bid estimation.

If the project manager uses the estimator’s takeoff and budget as the project benchmark, the likelihood of success is severely curtailed. This, of course, is not the estimator’s fault – it’s simply a result of “not knowing what you don’t know” at the time of the bid.

In order to bring the estimate up to date, project managers must conduct their own analysis. After winning the contract, at a minimum, the project managers should thoroughly review the quantity takeoff and the material and labor budget. The best practice is for the project manager to deploy Value Engineering (VE) to save on materials, labor, and equipment.

Although Value Engineering has its roots in manufacturing, it has been utilized in the construction industry for a number of decades. Value Engineering is a focused, innovative way to review project requirements to achieve the end result at the lowest total cost over the life of the project. It is not intended to be a process for a project manager to review the work of a peer (such as an estimator) or purely that of a cost cutting process. The earlier in the lifecycle of the project that VE is employed, the higher the probability of project success

Project managers who complete their own independent takeoff and pricing exercise do so at a greater level of detail. There is more information available to them, as well as more time to dive deeper into the project specifications. Project managers who take the time to utilize this method of takeoff achieve a higher gross margin. A project that begins with detailed scrutiny provides a solid foundation for avoiding cost overruns.

There really is no better way to learn and understand a project than to do a takeoff and price it yourself. The resulting depth and level of understanding is significantly greater than that received from reviewing someone else’s work on the project. During this process, the project manager may find anomalies or errors in the original bid. If he finds an error, the best time to identify the issue is during the project set up, not when the job is 20%, 30% or 50% complete. The earlier he identifies the error, the less it will cost to resolve it, and the less impact it will have on other project phases.

Project managers should set a personal goal of finding, at minimum, a 5-10% cost saving as part of setting up the job and doing their own takeoff.  When they do a thorough review of the specifications, they may find inherent risks or rewards previously undiscovered. These might have been overlooked, or may not have existed at the time of the original bid. Specific items for inclusion in the project manager’s takeoff are material substitutions, pre-ordering material at custom lengths, and potential prefabrication.

Extensive analysis before start of construction is useful in developing a construction-ready budget. The best budgets are collaborative, credible, and measurable. This collaboration/teamwork starts between the estimator and the project manager and is then carried over between the project manager and the site foreman.

The budget deliverables include a color-coded takeoff, detailed color-coded labor costs, a solution to keep track of the budget, reports for additional material, scope, and change order updates.

The takeoff and pricing is done with the foreman. This collaboration ensures that when the foreman receives the color-coded plans and corresponding stock list and labor budget, it’s easier for him to track and manage the job. Unless the project manager completes an independent takeoff, all of this information would be built on what was known at the time of the bid – and everyone knows that is a far cry from the post-win process.

A takeoff is a takeoff trivializes the value of quantitative measurements done after the contract is signed. Don’t take the easy way out – which is also the riskiest. Trust but verify. Check and recheck. Efficient and accurate takeoffs result in effective winning bids. Detailed and documented takeoffs result in on-time and profitable builds. So, do the quantitative measure twice – you won’t regret it.