Estimating turns the job over and the PM starts cold
The estimator knows why the numbers are what they are, and the PM finds out in month three.
The handoff is a meeting, and it comes once the team is chosen. Operations assigns the PM, a superintendent and a field team, and estimating tells operations the estimate is won. The PM, the estimator, the business developer and the superintendent are required. Assistant PMs, project engineers, foremen and junior estimators can attend to learn. The estimator does a page flip: what's being installed where, how it was bid, the thinking behind manpower and execution, holes in the estimate, risk, low bids from subs and vendors, and the estimated equipment. Estimating then introduces the PM to the client.
Three moves, in order
Step 04: Estimating system
The estimate maps one to one onto the job cost codes, so variance means something the day it appears.
Learn this part of the job
SPM The Construction CFO publishes this course. It's a separate company from this one, and the course is on its own school site.
Other problems step 04 solves
Other things that go wrong
What owners ask
Who is responsible for estimate to project handoff in construction?
The estimator knows why the numbers are what they are, and the PM finds out in month three. The handoff is a meeting, and it comes once the team is chosen. Operations assigns the PM, a superintendent and a field team, and estimating tells operations the estimate is won. The PM, the estimator, the business developer and the superintendent are required. Assistant PMs, project engineers, foremen and junior estimators can attend to learn. The estimator does a page flip: what's being installed where, how it was bid, the thinking behind manpower and execution, holes in the estimate, risk, low bids from subs and vendors, and the estimated equipment. Estimating then introduces the PM to the client.
Which part of the system fixes this?
The step is number 04, estimating system. The estimate maps one to one onto the job cost codes, so variance means something the day it appears. It's drawn from chapter 4 of CONTROL: C.F.O.S. Construction Financial Operating System.
Is this normal for my trade?
Across the 48 trades that publish a figure, net profit at $1M to $5M averages 7% after taxes. If you're well under that and this page describes your month, the two are usually the same story. The published average tells you where the pack is, and your own job costing tells you where you are, which is the number that pays payroll.
Where do I start?
Schedule the handoff meeting as soon as operations chooses the project team.
Can I fix this without touching anything else?
You can try, and it doesn't hold. Step 04 depends on step 01, job cost structure and step 03, overhead calculation. Install it ahead of those and it produces numbers the field won't trust, which is worse than the problem you started with.
Wrote CONTROL, the 8 step system behind these figures. More about the author.