SITEWORK · CIVIL AND EARTHWORK · FIXED BY STEP 02

Haul Miles Are Your Commodity Price, and They Moved

The rock price held all year. The trucking on it didn't, and then the spoil site quit taking dirt halfway through the export.

WHY IT'S A SITEWORK PROBLEM

There's no drawing revision behind a haul route change, so there's nothing to attach a change order to. The design held still and the truck didn't. Fuel adjustment clauses are standard on DOT work and almost never appear on a private site package, which leaves the sub holding the entire move between bid day and buyout.

WHAT IT COSTS

The size of it

On a 40,000 CY export, adding 15 miles each way is a six-figure swing on one job. Nothing on the plans changed, so the whole thing settles into your cost of work.

OVERHEAD AT $1M–$5M

15%

CFOS target 14% for sitework.

GROSS MARGIN AT $1M–$5M

18%

CFOS target 24% for sitework.

NET PROFIT AT $1M–$5M

CFOS target 10% for sitework.

Your commodity is haul, and haul is priced per loaded mile against a radius you fixed the day you bid. Freight runs 40 to 60 percent of a delivered aggregate invoice. Add a fuel surcharge of 4 to 8 percent that floats with diesel and a $5 to $15 per ton logistics charge on top, and the stone itself is the minority of the ticket. Import select fill and export spoil both get priced off that assumed radius. When the borrow pit runs short, the spoil site fills up, or the county restricts a haul route mid-job, a five-mile round trip becomes twenty and your largest cost line roughly doubles.

WHAT TO DO

Three moves, in order

STEP 01

Write the borrow pit and the spoil site into the bid, with the round-trip mileage and tipping rate you priced, so the assumption lives on the contract and not in your head.

STEP 02

Cost-code haul apart from material on every import and export line so you can read loaded miles per cubic yard rather than a blended delivered price.

STEP 03

Ask for a haul-radius escalation clause on private work the way DOT jobs include fuel adjustment, and check haul cycles against bid mileage weekly while the trucks are still running.

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

Sitework 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 eating 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 sitework contractors money

SITEWORK · CFOS-06

Your Fastest Billable Work Comes Before the Pipe Gets There

You bill five weeks of mass grading, then watch six weeks of operators and iron wait on a wet well that couldn't be ordered until the shop drawing came back approved.

SITEWORK · CFOS-04

Permit Review Rewrites the Job You Already Signed For

The city holds the grading permit, the engineer is redlining the civil set, and your silt fence has to pass inspection before a blade touches dirt. You signed against the bid set.

SITEWORK · CFOS-07

Retention Releases When the Grass Hits Seventy Percent

Your last retention check is stuck behind seed germinating in October, and germination depends on mother nature no matter when the work finished.

SITEWORK · CFOS-06

The Job Needs Five Mobilizations and You Priced Two

You graded that pad once and got paid for it once. The steel hauler rutted it, somebody buried spoil in it, and you graded it a second time on your own dime.

SITEWORK · CFOS-02

You Bid in Cubic Yards and Pay in Machine Hours

You hit the yardage, held the schedule, and still lost money, because yards are what you sold and machine hours are what you spent.

SAME MECHANISM, OTHER TRADES

The same mechanism in other trades

CIVIL

You bid cubic yards and pay by the ton

You bid 40,000 yards of import and every scale ticket comes back in tons. The biggest cost line on the job is measured in a unit your contract never defined.

CONCRETE

Your Ready-Mix Quote Expired Eleven Months Before the Pour

Concrete has about a 90-minute working life from batch to placement, so your supply market is a haul radius with two or three plants. They quoted a market that's gone.

DEMOLITION

Your Bid Locked A Scrap Price The Market Never Honored

You priced the steel credit in February and crossed the scale in October. The market moved and the subcontract had no escalation language for it.

QUESTIONS

What sitework owners ask

How to price haul when the spoil site closes mid job?

The rock price held all year. The trucking on it didn't, and then the spoil site quit taking dirt halfway through the export.

What does it cost?

On a 40,000 CY export, adding 15 miles each way is a six-figure swing on one job. Nothing on the plans changed, so the whole thing settles into your cost of work.

What do I do first?

Write the borrow pit and the spoil site into the bid, with the round-trip mileage and tipping rate you priced, so the assumption lives on the contract and not in your head.

What are sitework contractors supposed to be making?

Sitework runs 18% gross margin, 15% overhead and 3% net profit before taxes at $1M–$5M. The all-trade average is 7%, so this trade is 4 points below it. The CFOS target is 10%.

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: 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 sitework contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.

What a fractional CFO does for sitework contractors

AUTHOR

JOSH LUEBKER

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

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