GRADING · CIVIL AND EARTHWORK · FIXED BY STEP 01

Five Trips To Site, One Mobilization Line Item

Clearing, mass grade, trench backfill, subgrade, and final grade are five separate visits spread across the GC's whole schedule, and you bid them as one number.

WHY IT'S A GRADING PROBLEM

A trade that comes to the site once brings a van and stays until the work is done. This trade drags a fleet on trailers back to the same site five times, at another company's convenience, against a mobilization budget funded in month one. Returning costs more here than it does for anyone else on the job, and it's the cost most often bid as a single event.

WHAT IT COSTS

The size of it

Five machines moved four extra times at $600 to $1,200 per lowboy leg is $24K to $48K of unbid transport on one job. It charges to a mobilization code that emptied itself before the second trip.

OVERHEAD AT $1M–$5M

16%

CFOS target 15% for grading.

GROSS MARGIN AT $1M–$5M

18%

CFOS target 25% for grading.

NET PROFIT AT $1M–$5M

CFOS target 10% for grading.

A grading contract is four to seven distinct site operations, and lump sum sitework prices a single mobilization. Clearing and grubbing, mass grade, utility trench backfill, building pads, subgrade under paving, and final grade with topsoil and stabilization each fall at a different point in the general contractor's schedule. Every one of them is a lowboy leg per machine in and back out for the dozer, excavator, roller, water truck, and skid steer, plus a crew day to reset survey and grade control. Trips three through seven have no money behind them. The spacing belongs to the GC, so you can't batch the work to save the moves either.

WHAT TO DO

Three moves, in order

STEP 01

Split the mobilization cost code into one numbered code per site visit, so the third and fourth trips have somewhere real to post.

STEP 02

Count the planned visits off the GC's schedule during takeoff and put a priced mobilization line against every one of them.

STEP 03

Add a remobilization rate to your subcontract exhibit so a trip caused by someone else's delay gets billed at a number both sides already agreed to.

THE FIX

Step 01: Job cost structure

Seven cost categories and three levels of granularity, built so the estimate and the ledger use the same words.

CFOS-01 · CHAPTER 1

Job cost codes that match how you bid the work

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

BENCHMARKS

Grading 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

Cost codes the field ignores

You have 200 cost codes. The crews use four of them, and one is called Miscellaneous.

SAME TRADE

What else costs grading contractors money

GRADING · CFOS-02

You Ordered The Dozer Before You Won The Job

You signed a five year loan on a machine waiting in a factory build slot, betting on backlog that had not been awarded yet. The job slid nine months and you rented the whole time.

GRADING · CFOS-06

A Density Tech's Calendar Runs Your Fill Schedule

The next lift doesn't go down until the lab comes out and shoots it, and that lab answers to the owner's geotech, not to you.

GRADING · CFOS-07

Earned In Month Two, Retention Paid In Month Twenty-Two

Mass grading is finished before the foundation is poured, and the retention on it stays out until somebody else's building reaches substantial completion.

GRADING · CFOS-08

When The Vertical Trades Slip, Your Silt Fence Pays

You installed the BMPs in week one and got paid for them once. The seven day inspection clock keeps running until the site stops being a construction site.

GRADING · CFOS-03

The Low Spot Appears Two Winters After Closeout

Fill settles and lots pond on a delay measured in seasons, so the call comes after the retention is collected and spent and the job file is closed.

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 hung 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 grading owners ask

How do I price remobilization on a sitework bid?

Clearing, mass grade, trench backfill, subgrade, and final grade are five separate visits spread across the GC's whole schedule, and you bid them as one number.

What does it cost?

Five machines moved four extra times at $600 to $1,200 per lowboy leg is $24K to $48K of unbid transport on one job. It charges to a mobilization code that emptied itself before the second trip.

What do I do first?

Split the mobilization cost code into one numbered code per site visit, so the third and fourth trips have somewhere real to post.

What are grading contractors supposed to be making?

Grading runs 18% gross margin, 16% overhead and 2% net profit before taxes at $1M–$5M. The all-trade average is 7%, so this trade is 5 points below it. The CFOS target is 10%.

Which part of the system fixes it?

The step is number 01, job cost structure. Seven cost categories and three levels of granularity, built so the estimate and the ledger use the same words. It comes from chapter 1 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 grading contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.

What a fractional CFO does for grading contractors

AUTHOR

JOSH LUEBKER

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

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