FIBER · ELECTRICAL AND TECHNOLOGY · FIXED BY STEP 04

Standby for locates has no line on your rate sheet

The crew rolled at seven, the gas marks weren't there, and by three you had paid eight guys for a day with no footage on it.

WHY IT'S A FIBER PROBLEM

A plumber who loses a morning still bills hours. You bill footage, so a locate failure produces nothing to invoice and the loss gets absorbed into the price of the feet you did produce. Congested urban routes are where it compounds, because six or seven facility owners can be on one ticket and any single one of them can stall the whole crew.

WHAT IT COSTS

The size of it

One to three unbillable crew days a week on tight urban routes get buried in the footage price. You see good production numbers and can't explain why the money isn't there.

OVERHEAD AT $1M–$5M

15%

CFOS target 14% for fiber.

GROSS MARGIN AT $1M–$5M

22%

CFOS target 24.5% for fiber.

NET PROFIT AT $1M–$5M

CFOS target 10.5% for fiber.

Every bore is gated by a ticket you don't control. State one-call law gives facility owners about two working days to mark, and the ticket itself has a life, commonly two to three weeks, so a long linear route gets re-ticketed in sections as the bore advances. When marks come in short, get put in the wrong place, or never come at all, the crew either stands down or bores blind, and both of those cost you real money. Your rate sheet pays dollars per foot of bore, so nothing on it describes a day the drill never ran.

WHAT TO DO

Three moves, in order

STEP 01

Log every ticket by number with the date called, the date marked, and the facility owners still outstanding, so late marks become a written record tied to a company.

STEP 02

Code standby to its own cost code by ticket and route, and bring weekly standby hours to the monthly meeting next to footage produced.

STEP 03

Load last quarter's standby hours into your dollars per foot build so the next rate you sign covers the days the drill isn't turning.

THE FIX

Step 04: Estimating system

The estimate maps one to one onto the job cost codes, so variance means something the day it appears.

CFOS-04 · CHAPTER 4

Make the estimate and the job cost report match

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

BENCHMARKS

Fiber 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

The estimate and the actual never match

You can compare the estimate to the job cost report, but the two use different words, so the comparison means nothing.

SAME TRADE

What else costs fiber contractors money

FIBER · CFOS-06

Make-ready is months of cash out before a billable foot

You applied in the spring, wired make-ready money to the pole owner, and the transfers still aren't done while the bucket crew waits.

FIBER · CFOS-04

A frozen MSA rate sheet bleeds a point a quarter

You signed the same rate sheet two years ago, diesel and wages went up, and the P&L looks busier and thinner every quarter.

FIBER · CFOS-05

Placed footage isn't money until QC accepts the package

You put forty thousand feet in the ground and the traces pass, but you can't send the invoice because the redlines are still in review.

FIBER · CFOS-07

Retainage releases per work order, and you're third in line

Your money is stuck behind a carrier, a turf vendor, and a QC desk, released a few thousand at a time on work orders you finished last year.

SAME MECHANISM, OTHER TRADES

The same mechanism in other trades

CIVIL

The grading permit clock isn't on your schedule

Third resubmittal on the grading permit, the power pole relocation is six months out, and your crew and iron cost money while no party in your contract chain is at fault.

CONCRETE

The 28-Day Break Decides a Pour You Already Billed

You poured in March on an approved mix, the cylinders came back low in April, and two floors have already gone up on the slab in question.

DEMOLITION

Four Clocks Own Your Start Date And You Own None

The machine is on the pad, the crew is standing around, and everyone is waiting on a letter from the gas company. None of the clocks that release your start belong to you.

QUESTIONS

What fiber owners ask

Can I bill standby when locates aren't marked?

The crew rolled at seven, the gas marks weren't there, and by three you had paid eight guys for a day with no footage on it.

What does it cost?

One to three unbillable crew days a week on tight urban routes get buried in the footage price. You see good production numbers and can't explain why the money isn't there.

What do I do first?

Log every ticket by number with the date called, the date marked, and the facility owners still outstanding, so late marks become a written record tied to a company.

What are fiber contractors supposed to be making?

Fiber runs 22% gross margin, 15% overhead and 7% net profit before taxes at $1M–$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 04, estimating system. The estimate maps one to one onto the job cost codes, so variance means something the day it appears. It comes from chapter 4 of CONTROL: The Construction Financial Operating System.

OR HAVE IT HANDLED

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

What a fractional CFO does for fiber contractors

AUTHOR

JOSH LUEBKER

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

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