2005 National Repair & Remodeling Estimator

How To Use This Book

The descriptions and cost data in this book are arranged in a series of columns, which are described below. The cost data is divided into two categories. Costs Based On Large Volume and Costs Based On Small Volume. These two categories provide the estimator with a pricing range for each construction topic.

The Description column (1) contains the pertinent, specific information necessary to make the pricing information relevant and accurate.

The Operation column (2) contains a description of the construction repair or remodeling operation being performed. Generally the operations are Demolition, Install, and Reset.

The Unit column (3) contains the unit of measurement or quantity which applies to the item described.

The Crew Size column (4) contains a description of the trade that usually installs or labors on the specified item. It includes information on the labor trade that installs the material and the typical crew size. Letters and numbers are used in the abbreviations in the crew size column. Full descriptions of these abbreviations are in the Crew Compositions and Wage Rates table, beginning on page 15.

The Manhours Per Unit column (5) is for the listed operation and listed crew.

The units per day in this book don't take into consideration unusually large or small quantities But items such as travel, accessibility to work, experience of workers, and protection of undamaged property, which can favorably or adversely affect productivity, have been considered in developing Average Manhours per Unit For further information about labor, see "Notes - Labor" in the Notes Section of some specific items.

The Average Material Unit Cost column (6) contains an average material cost for products (including, in many cases, the by-products used in installing the products) for small volume. It doesn't include an allowance for sales tax, delivery charges, overhead and profit. Percentages for waste, shrinkage, or coverage have been taken into consideration unless indicated. For other information, see "Dimensions" or "Installation" in the Notes Section.

If the item described has many or very unusual by-products which are essential to determining the Average Material Unit Cost, the author has provided examples of material pricing These examples are placed throughout the book in the Notes Section.

Average Daily Production and Average Material Unit Cost should assist the estimator in:

1. Checking prices quoted by others.
2. Developing local prices.

You should verify labor rates and material prices locally. Though the prices in this book are average material prices, prices vary from locality to locality. A local hourly wage rate should normally include taxes, benefits, and insurance. Some contractors may also include overhead and profit in the hourly rate.

The Average Labor Unit Cost column (7) contains an average labor cost for small volume based on the Average Manhours per Unit and the Crew Compositions and Wage Rates table. The average labor unit cost equals the Average Manhours per Unit multiplied by the Average Crew Rate per hour. The rates include fringe benefits, taxes, and insurance. Examples that show how to determine the average labor unit cost are provided in the Notes Section.

The Average Equipment Unit Cost column (8) contains an average equipment cost for small volume based on both the average daily rental and the cost per day if owned and depreciated. The costs of daily maintenance and the operator are included.

The Average Total Unit Cost column for Small Volume (9) includes the sum of the Material, Equipment, and Labor Cost columns. It doesn't include an allowance for overhead and profit. The Average Total Unit Cost column for Large Volume (11) has the same information, although you don't see those columns in the book. The National Estimator CD in the back of the book does include the Material, Equipment, and Labor Cost columns for Large Volume Check it if you want to see how we arrived at the Total Unit Cost and Price Including Overhead & Profit for Large Volume.

The Average Total Price Including Overhead and Profit columns (10 and 12) result from adding an overhead and profit allowance to Total Cost. This allowance reflects the author's interpretation of average fixed and variable overhead expenses and the labor intensiveness of the operation vs. the costs of materials for the operation. This allowance factor varies throughout the book, depending on the operation Each contractor interprets O&P differently. The range can be from  15% to 80% of the Average Total Unit Cost.

Estimating Techniques

Estimating Repair/Remodeling Jobs: The unforeseen, unpredictable or unexpected can ruin you.

Each year, the residential repair and remodeling industry grows. It's currently outpacing residential new construction due to increases in land costs, labor wage rates, interest rates, material costs, and economic uncertainty. When people can't afford a new home, they tend to remodel their old one. And there are always houses that need repair, from natural disasters or accidents like fire. The professional repair and remodeling contractor is moving to the forefront of the industry.

Repair and remodeling spawns three occupations. The contractor and his workers, the insurance company property claims adjuster, and the property damage appraiser. Each of these professionals shares common functions, including estimating the cost of the repair or remodeling work.

Estimating isn't an exact science. Yet the estimate determines the profit or loss for the contractor, the fairness of the claim payout by the adjuster, and the amount of grant or loan by the appraiser. Quality estimating must be uppermost in the mind of each of these professionals. And accurate estimates are possible only when you know exactly what materials are needed and the number of manhours required for demolition, removal, and installation. Remember that profits follow the professional. To be profitable you must control costs - and cost control is directly related to accurate, professional estimates.

There are four general types of estimates, each with a different purpose and a corresponding degree of accuracy:

• The guess method "All bathrooms cost $5,000." or "It looks like an $8,000 job to me."

• The per measure method (I like to call it the surprise package) "Remodeling costs $60 per SF, the job is 500 SF, so the price is $30,000."

These two methods are the least accurate and accomplish little for the adjuster or the appraiser. The contractor might use the methods for qualifying customers (e.g., "I thought a bathroom would only cost $2,000"), but never as the basis for bidding or negotiating a price.

• The piece estimate or stick-by-stick method.

• The unit cost estimate method.

These two methods yield a detailed estimate itemizing all of the material quantities and costs, the labor manhours and wage rates, the subcontract costs, and the allowance for overhead and profit.

Though time-consuming, the detailed estimate is the most accurate and predictable. It's a very satisfactory tool for negotiating either the contract price or the adjustment of a building loss. The piece estimate and the unit cost estimate rely on historical data, such as manhours per specific job operation and recent material costs. The successful repair and remodeling contractor, or insurance/appraisal company, maintains records of previous jobs detailing allocation of crew manhours per day and materials expended.

While new estimators don't have historical data records, they can rely on reference books, magazines, and newsletters to estimate manhours and material costs. It is important to remember that the reference must pertain to repair and remodeling. This book is designed specifically to meet this requirement.

The reference material must specialize in repair and remodeling work because there's a large cost difference between new construction and repair and remodeling. Material and labor construction costs vary radically with the size of the job or project Economies of scale come into play. The larger the quantity of materials, the better the purchase price should be The larger the number of units to be installed, the greater the labor efficiency.

Repair and remodeling work, compared to new construction, is more expensive due to a normally smaller volume of work Typical repair work involves only two or three rooms of a house, or one roof. In new construction, the job size may be three to five complete homes or an entire development. And there's another factor a lot of repair and remodeling is done with the house occupied, forcing the crew to work around the normal, daily activities of the occupants. In new construction, the approach is systematic and logical - work proceeds from the ground up to the roof and to the inside of the structure.

Since the jobs are small, the repair and remodeling contractor doesn't employ trade specialists Repairers employ the "jack-of-all-trades" who is less specialized and therefore less efficient This isn't to say the repairer is less professional than the trade specialist. On the contrary, the repairer must know about many more facets of construction: not just framing, but painting, finish carpentry, roofing, and electrical as well. But because the repairer has to spread his expertise over a greater area, he will be less efficient than the specialist who repeats the same operation all day long.

Another factor reducing worker efficiency is poor access to the work area. With new construction, where building is an orderly "from the ground up" approach, workers have easy access to the work area for any given operation. The workers can spread out as much as needed, which facilitates efficiency and minimizes the manhours required to perform a given operation.

The opposite situation exists with repair and remodeling construction. Consider an example where the work area involves fire damage on the second floor. Materials either go up through the interior stairs or through a second story window. Neither is easy when the exterior and interior walls have a finished covering such as siding and drywall. That results in greater labor costs with repair and remodeling because it takes more manhours to perform many of the same tasks.

If, as a professional estimator, you want to start collecting historical data, the place to begin is with daily worker time sheets that detail:

1. Total hours worked by each worker per day.
   
2. What specific operations each worker performed that day.
   
3. How many hours (to the nearest tenth) each worker used in each operation performed that day.

Second, you must catalog all material invoices daily, being sure that quantities and unit costs per item are clearly indicated.

Third, maintain a record of overhead expenses attributable to the particular project. Then, after a number of jobs, you'll be able to calculate an average percentage of the job's gross amount that's attributable to overhead. Many contractors add 45% for overhead and profit to their total direct costs (direct labor, direct material and direct subcontract costs). But that figure may not be right for your jobs.

Finally, each week you should reconcile in a job summary file the actual costs versus the estimated costs, and determine why there is any difference. This information can't immediately help you on this job since the contract has been signed, but it will be invaluable to you on your next job.

Up to now I've been talking about general estimating theory. Now let's be more specific. On page 8 is a Building Repair Estimate form. Each line is keyed to an explanation. A filled-out copy of the form is also provided, and on page 10, a blank, full-size copy that you can reproduce for your own use.

You can adapt the Building Repair Estimate form, whether you're a contractor, adjuster, or appraiser. Use of the form will yield a detailed estimate that will identify:

• The room or area involved, including sizes, dimensions and measurements.
  
• The kind and quality of material to be used.
  
• The quantities of materials to be used and verification of their prices.
  
• The type of work to be performed (demolish, remove, install, remove and reset) by what type of crew.
  
• The crew manhours per job operation and verification of the hourly wage scale.
  
• All arithmetical calculations that can be verified.
  
• Areas of difference between your estimate and others.
  
• Areas that will be a basis for negotiation and discussion of details.

Each job estimate begins with a visual inspection of the work site. If it's a repair job, you've got to see the damage. Without a visual inspection, you can't select a method of repair and you can't properly evaluate the opinions of others regarding repair or replacement. With either repair or remodeling work, the visual inspection is essential to uncover the "hiders" - the unpredictable, unforeseen, and unexpected problems that can turn profit into loss, or simplicity into nightmare. You're looking for the many variables and unknowns that exist behind an exterior or interior wall covering.

Along with the Building Repair Estimate form, use this checklist to make sure you're not forgetting anything.

Checklist

• Site accessibility: Will you store materials and tools in the garage? Is it secure? You can save a half-hour to an hour each day by storing tools in the garage. Will the landscaping prevent trucks from reaching the work site? Are wheelbarrows or concrete pumpers going to be required?
  
• Soil: What type and how much water content? Will the soil change your excavation estimate?
  
• Utility lines: What's under the soil and where? Should you schedule the utilities to stake their lines?
  
• Soundness of the structure: If you're going to remodel, repair or add on, how sound is that portion of the house that you're going to have to work around? Where are the load-bearing walls? Are you going to remove and reset any walls? Do the floor joists sag?
  
• Roof strength: Can the roof support the weight of another layer of shingles. (Is four layers of composition shingles already too much?)
  
• Electrical: Is another breaker box required for the additional load?

This checklist is by no means complete, but it is a start. Take pictures' A Polaroid camera will quickly pay for itself. When you're back at the office, the picture helps reconstruct the scene. Before and after pictures are also a sales tool representing your professional expertise.

During the visual inspection always be asking yourself "what if" this or that happened. Be looking for potential problem areas that would be extremely labor intensive or expensive in material to repair or replace.

Also spend some time getting to know your clients and their attitudes. Most of repair and remodeling work occurs while the house is occupied. If the work will be messy, let the homeowners know in advance. Their satisfaction is your ultimate goal - and their satisfaction will provide you a pleasant working atmosphere. You're there to communicate with them. At the end of an estimate and visual inspection, the homeowner should have a clear idea of what you can or can't do, how it will be done, and approximately how long it will take. Don't discuss costs now! Save the estimating for your quiet office with a print-out calculator and your cost files or reference books.

What you create on your estimate form during a visual inspection is a set of rough notes and diagrams that make the estimate speak. To avoid duplications and omissions, estimate in a systematic sequence of inspection. There are two questions to consider. First, where do you start the estimate? Second, in what order will you list the damaged or replaced items? It's customary to start in the room having either the most damage or requiring the most extensive remodeling. The sequence of listing is important. Start with either the floor or the ceiling. When starting with the floor, you might list items in the following sequence: Joists, sub floor, finish floor, base – listing from bottom to top. When starting with the ceiling, you reverse, and list from top to bottom. The important thing is to be consistent as you go from room to room! It's a good idea to figure the roof and foundation separately, instead of by the room.

After completing your visual inspection, go back to your office to cost out the items. Talk to your material supply houses and get unit costs for the quantity involved. Consult your job files or reference books and assign crew manhours to the different job operations.

There's one more reason for creating detailed estimates. Besides an estimate, what else have your notes given you? A material take-off sheet, a lumber list, a plan and specification sheet - the basis for writing a job summary for comparing estimated costs and profit versus actual costs and profit - and a project schedule that minimizes down time.

Here's the last step Enter an amount for overhead and profit No matter how small or large your work volume is, be realistic - everyone has overhead An office, even in your home, costs money to operate If family members help out, pay them Everyone's time is valuable!

Don't forget to charge for performing your estimate. A professional expects to be paid. You'll render a better product if you know you're being paid for your time. If you want to soften the blow to the owner, say the first hour is free or that the cost of the estimate will be deducted from the job price if you get the job.

In conclusion, whether you're a contractor, adjuster, or appraiser, you're selling your personal service, your ideas, and your reputation To be successful you must.

• Know yourself and your capabilities
  
• Know what the job will require by ferreting out the "hiders."
  
• Know your products and your work crew.
  
• Know your productivity and be able to deliver in a reasonable manner and within a reasonable time frame.
  
• Know your client and make it clear that all change orders, no matter how large or small, will cost money.

Inside the back cover of this book you’ll find an envelope with a compact disk. The disk has National Estimator, an easy-to-use estimating program with all the cost estimates in this book. Insert the CD in your computer and wait a few seconds. Installation should begin automatically. (If not, click Start, Settings, Control Panel, double-click Add/Remove Programs and Install.) Select Show Me from the installation menu and Julie will show you how to use National Estimator. When Show Me is complete, select Install Program. When the National Estimator program has been installed, click Help on the menu bar, click Contents, click Print all Topics, click File and click Print Topic to print a 28-page instruction manual for National Estimator.

Preface

The author has corresponded with manufacturers and wholesalers of building material supplies and surveyed retail pricing services. From these sources, he has developed Average Material Unit Costs which should apply in most parts of the country.

Wherever possible, the author has listed Average Labor Unit Costs which are derived from the Average Manhours per Unit, the Crew Size, and the Wage Rates used in this book. Please read How to Use This Book for a more in-depth explanation of the arithmetic.

If you prefer, you can develop your own local labor unit costs. You can do this by simply multiplying the Average Manhours per Unit by your local crew wage rates per hour. Using your actual local labor wage rates for the trades will make your estimate more accurate.

What is a realistic labor unit cost to one reader may well be low or high to another reader, because of variations in labor efficiency. The Average Manhours per Unit figures were developed by time studies at job sites around the country. To determine the daily production rate for the crew, divide the total crew manhours per day by the Average Manhours per Unit.

The subject topics in this book are arranged in alphabetical order, A to Z. To help you find specific construction items, there is a complete alphabetical index at the end of the book, and a main subject index at the beginning of the book.

This manual shows crew, manhours, material, labor and equipment cost estimates based on Small Volume work, then a total cost and a total including overhead and profit. Only total cost and total including overhead and profit are shown for Large Volume. For those readers who need it, the breakdown for Large Volume is included on the National Estimator CD in the back of the book.

No single price fits all repair and remodeling jobs. Generally, work done on smaller jobs costs more per unit installed and work on larger jobs costs less. The estimates in this book reflect that simple fact. The two estimates you find for each work item show the author’s opinion of the likely range of costs for most contractors and for most jobs. So, which cost do you use, Low Volume or High Volume?

The only right price is the one that gets the job and earns a reasonable profit. Finding that price always requires estimating judgment. Use Small Volume cost estimates when some or most of the following conditions are likely:

• The crews won’t work more than a few days on site.

  

• Better quality work is required.

• Productivity will probably be below average.

• Volume discounts on materials aren’t available.

• Bidding is less competitive.

• Your overhead is higher than most contractors.

When few or none of those conditions apply, use Large Volume cost estimates.