My musings frequently harken back to the time when I was operations manager for a small to mid-size commercial drywall outfit in Southwest Colorado. It was something of a gravy train during that period of plenty before the crash, but even those days of prosperity had their difficulties. One of the many tangles I found myself struggling with included being constantly short-handed in the estimating department. It seemed that the one or two bidmeisters in my employ could never quite keep up with the burgeoning opportunities that were cropping up on a daily basis.
Yet the proposition of simply adding another exactimator to that tiny stable of number-crunchers had its drawbacks. First, the surplus bidding prospects were not quite numerous enough to justify a full-time position. Moreover, operating in a small mountain town meant recruiting a qualified commercial drywall estimator with a good working knowledge of our program. This would entail a costly long-distance search and, along with it, the likelihood of underwriting the relocation of a promising candidate—a prospect that gave me great pause. Then too, the unpredictable nature of a boom economy made me gun-shy (rightly so, as it turned out) and therefore reluctant to make any permanent commitments. The short-term remedy was for me to personally pick up the estimating slack for a month or so (at the expense of my field management responsibilities) until a more palatable resolution eventually dawned on me.
Now, I’m fairly certain that my dilemma was, and is, not so unique. I’ve overheard literally dozens of subcontractors bemoaning the missed opportunities associated with an understaffed estimating department. Many scenarios resonate with my predicament described above—i.e., a dearth of qualified candidates during an unstable market period. But there can be other circumstances: an unexpected vacancy, a sudden flurry of localized bidding activity by a favored GC, or the case of a small startup firm in which the owner, who had been shouldering the estimating load, lands some awards and must now focus on project management but can’t yet afford to replace himself with a full-time estimator. These and similar situations cry out for a stop-gap remedy, and with a little thought, it becomes clear that one is readily available: outsourcing.
Many commercial drywall subs don’t realize it, but there are estimating consultants available who specialize in servicing our segment of the industry by providing a relatively painless resolution to the quandaries previously mentioned—that is, stop-gap coverage of temporary overload. After a frustrating month of exploring possible alternatives to searching for a new-hire, the notion of farming out some of my surplus bid-load finally occurred to me, and the advantages to taking this path gave me the instant relief from the above-cited predicament that I was searching for. The benefits to outsourcing are manifold, but I will touch on just a few.
Foremost of the benefits of using an estimating service lie with its temporary nature—that is, one uses it on an as-needed basis. This provides a custom remedy for all the scenarios described above, and then some. For my own circumstance, using a service allowed me to cover a temporary onslaught of added work, including budgets from preferred general contractors, and invitations to bid from prospective new clients—ITBs that I would have passed over otherwise. This allowed me to keep my full-time employees focused on hard bids and selected projects. Once the flurry of added activity died away, I simply curtailed the use of my chosen consultant, knowing that I could depend on their service again for future overloads. Best of all, there was no nasty downsizing involved when the workload returned to a normal level. “As-needed” also refers to the degree to which I would utilize the service. Clearly the time-consuming takeoff was what I was in need of, as the final pricing (production rates, burden, markup) would fall incumbent on me.
Of course, the cost advantage of utilizing a consultant over taking on a new-hire cannot be overstated. In my experience, I was able to avoid not only a costly search but also the risk of hiring an under-qualified candidate. But beyond that, I circumvented the residual costs of an added employee—payroll taxes and employee benefits. I simply paid for the service at a reasonable hourly rate (less than an average estimator’s salary) and included the indirect cost in my overhead. Easy peasy.
Another advantage I discovered in my dealings was the professional expertise that was demonstrated. The service I engaged provided bidmeisters with many years of experience, not only in the specific aspect of our trade but in their proficiency with the same estimating program that I used was peerless. I assume most consultants demonstrate a similar level of professionalism.
I cannot overstate the benefits of outsource estimating for those oft-occurring work overloads. For me, the remedy seemed almost heaven-sent.
Vince Bailey is an estimator/project manager working in the Phoenix area.
