THE PROBLEM · FIXED BY STEP 04

Mobilization you never got paid for

Moving equipment in and getting the first crew productive costs real money that no line item on your bid covers.

DIRECT ANSWER

Mobilization is a fixed cost that doesn't scale with the size of the job. That makes it brutal on small work and easy to miss on any bid built from unit rates, since a unit rate spreads a fixed number across a variable quantity. Trades that move equipment and set up site infrastructure have the most exposure here. If you can't say what it costs you to start a job, you're absorbing that cost on every one you take.

WHAT TO DO

Three moves, in order

STEP 01
Price mobilization as its own line, separate from the unit rates.
STEP 02
Know your fixed cost to start a job, then set a minimum job size from it.
STEP 03
Bill mobilization on the first pay application wherever the contract allows.
QUESTIONS

What owners ask

Construction mobilization cost recovery?

Moving equipment in and getting the first crew productive costs real money that no line item on your bid covers. Mobilization is a fixed cost that doesn't scale with the size of the job. That makes it brutal on small work and easy to miss on any bid built from unit rates, since a unit rate spreads a fixed number across a variable quantity. Trades that move equipment and set up site infrastructure have the most exposure here. If you can't say what it costs you to start a job, you're absorbing that cost on every one you take.

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: The Construction Financial Operating System.

Is this normal for my trade?

Across the 48 trades that publish a figure, net profit at $1M–$5M averages 7% before 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?

Price mobilization as its own line, separate from the unit rates.

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.

AUTHOR
Josh Luebker
JOSH LUEBKER
MASTER ELECTRICIAN · 150+ PROJECTS · $2.1B+ MANAGED

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

8 Steps 60 Days

CONTROL is the full system, written for commercial subcontractors from under $1M to $100M. It's out now. 8 steps, 6 working templates, and the order they install in. $9.99 ebook, $24.99 paperback.