ENVIRONMENTAL REMEDIATION · CIVIL AND EARTHWORK · FIXED BY STEP 02

An open hole is rented equipment with no production

The cut is finished, the sidewalls are trimmed, and your crew and your machines wait there while a lab decides whether you're allowed to backfill.

WHY IT'S AN ENVIRONMENTAL REMEDIATION PROBLEM

Every other trade on the site is waiting on you, and you're waiting on a laboratory. Weather and sequencing are arguments you can take to the OAC meeting, while a pending confirmation result has no committed return date and no one to escalate to. Machines on a remediation hole also can't be shuffled to another job easily, because pulling decon'd equipment out of an exclusion zone costs more than leaving it parked.

WHAT IT COSTS

The size of it

Idle crew and rented equipment wait on a job that bills by the ton, and the second and third mobilization get absorbed as overhead unless the contract includes a standby clause and a per mobilization unit price.

OVERHEAD AT $1M to $5M

16%

CFOS target 15% for environmental remediation.

GROSS MARGIN AT $1M to $5M

23%

CFOS target 25.5% for environmental remediation.

NET PROFIT AT $1M to $5M

CFOS target 10.5% for environmental remediation.

Remediation goes first on a site and comes back repeatedly, and the trade can't close its own work. The consultant pulls floor and sidewall confirmation samples, the lab tests them, and one sidewall exceedance means another cut and another round of sampling. While that plays out you're holding HAZWOPER qualified labor, exclusion zone setup, air monitoring, decon, and consumables, all of which cost money per mobilization. Find a hot spot mid dig and you demobilize and come back, which the lump sum line item paid for one time.

WHAT TO DO

Three moves, in order

STEP 01

Build an hourly and daily standby rate for every piece on the site, excavator, plates, shoring, dewatering pump, and air monitoring gear, off your own ownership and rental cost, and attach it to the contract as an exhibit.

STEP 02

Price mobilization as its own unit item with a per event price, so trip two and trip three bill instead of reducing the margin on trip one.

STEP 03

Log confirmation sample wait days against the job in ControlQore so the standby cost is charged to that job rather than smearing across the whole fleet.

THE FIX

Step 02: Equipment cost basis

A correct internal rate per machine covering ownership, maintenance, fuel, and transport, charged to the projects that used it.

CFOS-02 · CHAPTER 2

What your equipment really costs per hour

What this step changes, what it depends on, and how to tell it's installed.

BENCHMARKS

Environmental remediation by revenue band

All 7 bands are published. The CFOS target is beside the figure up to $10M to $25M, and the 4 bands above that are labelled modeled.

ACROSS EVERY TRADE

Your equipment is reducing the margin

The machine is paid for, so the jobs use it at no charge. Then the transmission goes and the year is gone.

SAME TRADE

What else costs environmental remediation contractors money

ENVIRONMENTAL REMEDIATION · CFOS-06

Your disposal outlet is booked before the dig starts

You mobilized, the excavation is open, and the only permitted facility that will take the material is 400 miles away and booked three weeks out.

ENVIRONMENTAL REMEDIATION · CFOS-04

One TCLP result can multiply your biggest cost line

You priced the dirt as non-hazardous off borings somebody else drilled, and the TCLP came back failing for lead.

ENVIRONMENTAL REMEDIATION · CFOS-01

Closure letters come quarters after your crew leaves

The soil left in the spring, the crew has been on three other jobs since, and your final draw is stuck behind a state agency's review.

ENVIRONMENTAL REMEDIATION · CFOS-07

The landfill gets paid in 15 days, you get paid in 90

You wrote checks to the landfill, the hauler, and the lab inside three weeks, and the pay app covering all of it is still with the consultant.

ENVIRONMENTAL REMEDIATION · CFOS-01

Task caps on fund work turn good hours into bad debt

The fund approved a set number of hours and tons, the site turned out to have more, and you kept going because the excavation was already open.

SAME MECHANISM, OTHER TRADES

The same mechanism in other trades

CIVIL

Four mobilizations, one mob line item

You clear and grub in month one, come back for wet utilities, come back again for paving subgrade at closeout, and the contract still has one mobilization line.

CONCRETE

Six Trips Back for Pads and Sidewalks, One Unit Price

You were first on the site and you're still coming back for stairs, pads, curbs, and exterior flatwork, all priced inside a per-yard number that assumed you never left.

DRYWALL

You Go Back Six Times And No Ticket Gets Signed

You finished the corridor in March and you're still sending a guy back in June, one hole at a time, on somebody else's dime.

QUESTIONS

What environmental remediation owners ask

How to charge standby waiting on confirmation samples before backfill?

The cut is finished, the sidewalls are trimmed, and your crew and your machines wait there while a lab decides whether you're allowed to backfill.

What does it cost?

What do I do first?

What are environmental remediation contractors supposed to be making?

Environmental remediation has 23% gross margin, 16% overhead and 7% net profit after taxes at $1M to $5M. The all-trade average is 7%, so this trade is right on it. The CFOS target is 10.5%.

Which part of the system fixes it?

The step is number 02, equipment cost basis. A correct internal rate per machine covering ownership, maintenance, fuel, and transport, charged to the projects that used it. It comes from chapter 2 of CONTROL: C.F.O.S. Construction Financial Operating System.

OR HAVE IT HANDLED

Everything on this page is something you can install yourself, and CONTROL is the order to do it in. If you would rather buy the finished result, SPM The Construction CFO does this work for environmental remediation contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, led by the same author.

What a fractional CFO does for environmental remediation contractors

AUTHOR

JOSH LUEBKER

MASTER ELECTRICIAN · 150+ PROJECTS · $2.1B+ MANAGED

Wrote CONTROL, the 8 step system behind these figures. More about the author.