The following is a guest post from Sunbelt Rentals, Inc.
When contractors provide estimates that include a sewer bypass, accuracy is essential—each project is unique, and accounting for these nuances is critical to maintaining margins. Failure to plan on the front end may lead to an influx of change orders and a big hit to the bottom line. Damages could go further than money alone: An estimating mistake might lead to a sanitary sewer overflow (SSO). Following an SSO, you can expect large sums for cleanup and DEQ penalties, along with negative PR and a ripple effect that could impact future projects.
Before submitting a bid, it’s critical to cover all the bases and avert potential problems on the job. The following lessons learned can help contractors avoid estimating mistakes, win bids, and complete projects at a profit—and without visits from the DEQ.
Lesson 1: Take a bottom-up approach to estimating.
Often estimators have little choice but to use unit costs, like cost per foot of pipe, for an estimate. But that doesn’t eliminate the need to check the latest prices. Inserting the cost from the last project without checking it seldom produces a safe number. Even if a job appears to be the same size and complexity as a previous project, treat every job individually and get a current price for every item.
Lesson 2: Always visit the project site with a knowledgeable individual.
Unforeseen site conditions are the largest contributor to project change orders and increased costs. Plans and drawings alone do not provide the information needed to route pipe, situate pumps, and manage flow for a sewer bypass. Avoiding this mistake is easy: Always visit the site with the engineer or a representative from the municipality—whoever has the most in-depth knowledge of the project. The sewer bypass subcontractor should also attend to explain the capabilities, as well as the limitations, of the pumping system. Consulting with the entire team will help ensure a solid quote for that portion of the contract.
Lesson 3: Insist on backup detail for subcontractor quotes.
Contracting firms often use subcontractors to design a sewer bypass for a larger project. Even if the subcontractor has complete confidence in the system as designed, never take their word that it will handle the sewer bypass flow for the cost they plan to charge. Instead, request the engineering calculations and system drawings, and then ask the design engineer to review them. Based on the information the subcontractor provides, the scope of equipment, system layout, and performance should be clear.
Lesson 4: Do due diligence on labor costs.
Labor costs often comprise the largest portion of a sewer bypass budget. Costs for prevailing wage and certified payroll add up quickly. Different project conditions can impact labor costs significantly, even for the same task. For example, a team working on a city street with heavy traffic may install less bypass piping each day than one working in an open field. Therefore, it’s critical to examine labor costs in detail over the project timeline, including hours and types of labor for each task. Then, make sure your bypass subcontractor offers a firm commitment on the cost.
Lesson 5: Factor in risk and the potential for lost revenue when accepting a low bid.
Although selecting the subcontractor with the lowest bid can be tempting, ultimately the project may cost more. Never assume a subcontractor will take responsibility for problems that result from lack of experience or expertise. Instead, consider all the worst-case scenarios that could occur, such as a sanitary sewer overflow. Ensure the subcontractor can manage each and every problem that may arise. Double check contract limitations and exclusions, the safety plan, and the spill and emergency response plan. In addition to liability considerations, it’s critical to review a bypass subcontractor’s bid to ensure it is complete. Have they included enough in labor costs to complete the project? Are fuel costs included, or even tax? Low bids may leave out these important components which can result in lost profits.
Lesson 6: Review the engineering submittal with the subcontractor.
To ensure all the estimate information is correct, always review the engineering submittal against the specifications with the subcontractor to make sure it matches the information in the request for quote. As a best practice, the engineering submittal should include not only the information required within the specifications, but also all the pertinent details about the temporary pumping system. It should be clear and concise so anyone who reads it will fully understand how the system is designed, set up, and operated. It should also have all the supporting documentation such as fluid calculations, drawings, and specification sheets on the equipment being used.
Checking the engineering submittal against the specifications will help to reduce or eliminate the engineer sending the submittal back for changes. Until the submittal is approved, the job cannot go forward, so in order to keep the project on track, it’s important to cross-check the documents before sending to the engineer.
Lesson 7: Assume the cost quoted can never be modified.
Do not count on subcontractors to take responsibility for problems and resolve them in a timely manner. The contractor is ultimately on the line and will be held to the amount put in every box on every bid. To be competitive, a firm’s margins must remain as low as possible while still providing a profit. If a quote does not include every item down to the last fitting and bolt, the margin and profit will suffer. The bypass subcontractor and firm should work together to determine the right costs to put into the bid tabulation sheet. Also, to avoid being buried in unanticipated invoices, be certain to incorporate a billing schedule with the bypass subcontractor that indicates when invoices will be received and what they are for.
Abiding by these seven lessons learned should avert many potential problems that occur in sewer bypass and ensure a winning bid that leads to a profitable and successful project.
For more information, visit www.sunbeltrentals.com or call 800-736-2504.