What is Electrical Estimating? Overview, 5 Facts

Electrical estimating is the process of estimating the cost and scope of work necessary to perform electrical services for a project.

It entails calculating the cost of labor, materials, equipment, permits, taxes, etc., in order to estimate the cost of the project. Click on each section below to view additional details about it. 

What is Electrical Estimating?

Electrical estimating is utilized by electricians, construction managers, and engineers to determine the amount and cost of electricity required for a specific site or activity. There are two primary methods for generating accurate estimates of electricity usage: computer software and manual calculations.

Each strategy has merits, benefits, and risks. Initial software alternatives for electrical estimating were relatively difficult to use, but subsequent advancements have drastically simplified this tool.

What is Electrical Estimating?

The popularity of electrical estimating software has increased as its quality and functionality have improved. This tool is for electricians, architects, and electrical engineers. There are options for residential, commercial, and prototype construction.

How to Electrical Estimating Work

It is necessary to estimate and submit bids in the electrical contracting industry to win contracts and remain in business.

This requires submitting a proposal that is low enough to compete with other electrical contractors, but high enough to cover all project expenses, including labor, materials, equipment rentals, subcontractors, and indirect expenditures, also known as overhead, required to run a business.

And don’t forget to include sufficient earnings for risk-taking and business expansion. In the subsequent steps, we describe an established method for estimating electrical work.

Choose the Right Work to Bid

Choosing the type of work to estimate is the first step in the electrical estimating procedure. You should avoid bidding on electrical construction projects if you lack the necessary expertise and are more likely to make mistakes during the estimation process and project execution if you are the successful bidder. There is a learning curve for electrical estimators and your field employees when taking on a new type of work, which could reduce your profits.

Review the Specifications

Examine the Division 01 general specifications in addition to the Division 26 specifications, paying close attention to contractor qualifications, payment terms, bonding capacity, and insurance requirements, and ensuring that, should you win the construction project, you can adhere to the legal language and meet the qualifications.

What is Electrical Estimating?

After completing the general specifications, proceed to Division 26 requirements and take note of the material grade, installation methods, and cost allocation responsibilities (who provides fire alarm, communications, etc.)

Typically, the specifications determine the material quality, while the designs determine the material quantity. It is essential to highlight anything out of the ordinary and to include these aspects in your bid.

Several contractors have lost money on otherwise profitable projects because they bid on a lower-priced material grade, only to discover that it was significantly more expensive during project execution. If you wish to provide an alternative option, it must be approved in advance and in writing, as you will be held to the specified material grades.

Review the Drawings

Examine the drawings at a high level to comprehend the breadth of the work in its entirety. In order to comprehend the effects of working heights and elevations on labor costs, material costs, and equipment requirements, you must evaluate architectural designs in addition to electrical drawings.

Once you have a general understanding of the construction (imagine a bird’s-eye view of the project), it is time to examine the Division 26 drawings, taking note of any technical details displayed and keeping an eye out for conflicts between the designs and requirements.

Perform a Quantity Takeoff

Using highlighters, a scale master, or your preferred takeoff program, commence the process of counting and measuring the items indicated on the electrical drawings, such as light fixtures, receptacles, conduit lines, panels, and equipment.

What is Electrical Estimating?

Before proceeding to the next item, start with one item (we recommend light fixtures) and sheet-by-sheet count and total each item. If you discover an item that was previously overlooked, immediately count it and adjust the previous total.

Now, total your page quantities and transfer them to a quantity takeoff sheet, as demonstrated in the following Excel example.

Request Supplier Quotes

One of the reasons we recommend lighting counts first is to expedite the process of obtaining a price for these goods, which are frequently quoted separately from your other supplies. Take note of the designations used to identify the light fixtures on the blueprints, such as A1, B1, C1, etc., rather than the light fixture specifications.

The lighting company will review the lighting plan, investigate the item specifications, and provide a lump-sum estimate. It is in your best interest to cultivate relationships with local lighting companies in order to obtain competitive quotes quickly.

Create your Estimate

After determining the quantities, the unit cost of each item must be determined. To accomplish this, you must determine the material and labor costs associated with each job and multiply those costs by the number of jobs. A quick phone call to your supplier or pricing service will provide the cost of the materials.

To calculate labor costs, however, you must know how long it takes to install the materials. If you lack production history and have limited field experience, we recommend obtaining the NECA’s Manual of Labor Units as a resource.

Once the labor unit has been calculated, it is multiplied by the burdened labor cost to determine the labor cost for the task. Listed below is a simple example of an Excel quantity takeoff sheet that includes the material and labor costs for each activity, as well as the totals.

Now, you must summarize the total material cost and total labor hours for each item and multiply the labor hours by your fully burdened hourly labor cost to calculate the total labor cost for the project. These two values represent the total direct expenses for the project and the basis of your estimate.

Remember to include line items for any additional installation-related direct expenses, such as equipment rentals and subcontractors.

Add Overhead and Profit

Now that we have an estimate of the job’s expenses (direct costs), we must add profit and overhead to calculate the selling price. While profit is relatively intuitive, expenses are not. Overhead is the sum of all indirect expenses, such as office leasing, estimates, sales, marketing, and bookkeepers, that are required to operate your business.

Similar to profit, overhead is a percentage added to the cost of the project to determine the selling price. It is false for small contractors to assert that they have no overhead costs and therefore should not charge for them. You are leaving money on the table, and it is in your best interest to determine the overhead expenses required to manage your small construction company with the help of a construction-specializing accountant.

Build your Proposal

Now that we have a sales price, we must compose a proposal that clearly and concisely describes what is included in our offer. We recommend using language similar to that which appears in the project’s specifications and drawings.

This makes it simple for the General Contractor evaluating your proposal to confirm that you’ve covered everything and that no significant details are missing; he can therefore rely on your pricing. Electrical contractors will typically submit proposals in the form of a flat fee.

This means that you will pay a flat fee to cover everything in your proposal. Once the project has been approved, it is essential to clarify anything that has been included or omitted to prevent misunderstandings.

Double Check Takeoff Quantities & Estimate

Prior to submitting a proposal, it is typically a good idea to have a second pair of eyes from your estimating team review your work to ensure that nothing has been overlooked. This evaluation should include a second takeoff of the project’s primary systems and verification that nothing was missed during the initial takeoff.

What is Electrical Estimating?

We advise keeping a bid log (simple Excel spreadsheet) that details recently completed projects by type and size, as well as the price per square foot, for reference purposes. Although you should never submit bids in this manner, you can compare your current project to a previously completed one to determine if there is a significant price difference. It is worthwhile to investigate the cause of a large delta if one exists.

Submit Bid

After you’ve double-checked your work, it is time to submit your proposal. Today, all bids are submitted electronically, either via the bid site or email from which they were received. We recommend that you reread the Division 01 requirements and search for any bid specifications, then strictly adhere to them.

Review the Results

Initially, it may be challenging to assess your position relative to other electrical contractors competing for the same project. Keep in mind that general contractors rely on numbers from vendors they trust, as well as years of experience working together, more than a low number, so it may take multiple bids to earn their trust.

When you lose a project, you should always ask the General Contractor how you stacked up against the competition. Sometimes they will provide you with the bid tabs of your competitors, and other times they will inform you that your bid was either too high or too low.

They are not required to provide this information unless it is a public bid, but if you politely request it, you will receive feedback that will help you adjust future bids. Nota bene: It is advisable to obtain bid tabs on won projects to determine if you are leaving money on the table by underbidding.

Electrical Estimator Job Description Template

To determine the approximate costs of various electrical installations for commercial and residential construction projects, we seek to hire an experienced electrical estimator.

The electrical estimator’s duties include determining the duration of each contracting job, researching market rates for project supplies and equipment, and consulting with clients to determine the scope of each project.

What is Electrical Estimating?

In addition, you must be able to find ways to continuously improve cost-estimating techniques in order to reduce the differences between estimated and actual project costs.

To be successful as an electrical estimator, you must pay close attention to the smallest of details and have a thorough understanding of electrical codes. In conclusion, an exceptional Electrical Estimator must be capable of deciphering building blueprints and possess exceptional analytical and problem-solving abilities.

Electrical Estimator Responsibilities

  • Examining designs to estimate wire lengths and outlet location in accordance with electrical codes.
  • Identifying the quantity, kind, and price of materials and fixtures required for an electrical project.
  • Determining the labor requirements for each project.
  • Determining the prospective profitability of electrical projects in order to aid management in making intelligent bidding selections.
  • Providing realistic alternatives to improve the profitability of a project.
  • Completing and submitting competitive bids for projects in accordance with predetermined parameters.
  • Regularly revising cost databases to reflect properly shifting material and labor costs.
  • Evaluating labor and material costs to decide if it is more practical to produce electrical components in-house or to subcontract the fabrication of components.

Electrical Estimator Requirements

  • Program completion in electrician training at the postsecondary level
  • Bachelor’s degrees in construction science, engineering, construction management, or a related profession are preferred.
  • Certification from the American Society of Professional Estimators (ASPE) or the Association for the Advancement of Cost Engineering (AACE) International is beneficial.
  • Valid electrician’s license.
  • The capacity to comprehend building plans.
  • Excellent analytical and problem-solving capabilities
  • Superior organizing abilities
  • Competent communicative abilities
  • Outstanding talents in customer service.
  • Detail-oriented.

Conclusion

Electrical estimating is a method for determining the cost of electrical services for a home or business. Electrical estimation enables you to compare your current electric costs to the estimated costs for your new service and determine which option will save you the most money.

It includes a preliminary inspection and consultation with the client, the completion of an estimate form, the preparation and mailing of the estimate form to the client, and the submission of the estimate form to the client. This allows the client to evaluate the work and decide whether or not to proceed.

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Pat Moriarty
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