STRUCTURAL STEEL · ENVELOPE AND STRUCTURE · FIXED BY STEP 02

Out of tolerance anchor rods bill you by the crane day

The crane is rigged at six in the morning, the rods are out of tolerance, and no one on that site wants to sign a ticket before your crew starts drilling.

WHY IT'S A STRUCTURAL STEEL PROBLEM

Your start date is controlled by a concrete sub's tolerance and your biggest daily cost is a rented machine that bills the same whether it moves or not. No other trade commits equipment of that size before the predecessor's work has been verified by anyone. That's why equipment cost on a steel job has to be coded by day and by job, so a standby day is visible the week it happens and not at year end.

WHAT IT COSTS

The size of it

Idle crane days plus a second mobilization run into tens of thousands on a mid size job. Unticketed, that cost goes to equipment with no job and no change order attached, and at month end it reads like your crane is too expensive.

OVERHEAD AT $1M–$5M

15%

CFOS target 14% for structural steel.

GROSS MARGIN AT $1M–$5M

23%

CFOS target 25.5% for structural steel.

NET PROFIT AT $1M–$5M

CFOS target 11.5% for structural steel.

Erection can't start until foundations are cured, surveyed, and anchor rods are within AISC 303 tolerance. Your erector finds out of tolerance rods the morning the crane is rigged, because no GC gives you a survey of somebody else's concrete a week ahead. Crane rental bills by the day or the month with mobilization and demobilization each way, so an idle day burns at full rate against zero production. The fix, field drilling, repair plates, and EOR sign-off on the repair, is change order work, and it has to be ticketed while the crew is still on site or it gets absorbed.

WHAT TO DO

Three moves, in order

STEP 01

Require a written anchor rod survey from the GC before crane mobilization, and put the date you need it on the two week look ahead.

STEP 02

Give the foreman a standby ticket pad with the crane's daily rate printed on it and one rule: signed or photographed before the repair starts.

STEP 03

Code crane standby to its own cost code, separate from erection hours, so idle days appear as their own number in the monthly review.

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

Structural steel 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 structural steel contractors money

STRUCTURAL STEEL · CFOS-06

Missing the roll date puts your W24s on a premium buy

You won the package in March, shop drawings cleared in June, and the mill had already rolled that section. Now the W24s come off a service center floor at a spread you never bid.

STRUCTURAL STEEL · CFOS-01

Detailing burns cash for two months before a piece ships

Sixty grand of Tekla time and delegated engineering calcs are already spent, the engineer is on his second round of comments, and your schedule of values has nothing to bill against.

STRUCTURAL STEEL · CFOS-04

Your erected ton and your mill buy are two different prices

You bid dollars per erected ton in January. You buy hundredweight plus size, grade, length, and freight extras in May, and the months in between belong to you.

STRUCTURAL STEEL · CFOS-07

Retention on steel is held a year after you top out

You topped out in May and demobilized in June. The building gets its certificate of occupancy next spring, and that's when your last five to ten percent finally moves.

STRUCTURAL STEEL · CFOS-03

The recoat argument comes back to you at closeout

The frame was open through a wet winter, there's rust bloom on the columns, and now the question is whether shop primer was supposed to hold up that long.

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 structural steel owners ask

Who pays for crane standby when anchor bolts are out of tolerance?

The crane is rigged at six in the morning, the rods are out of tolerance, and no one on that site wants to sign a ticket before your crew starts drilling.

What does it cost?

What do I do first?

Require a written anchor rod survey from the GC before crane mobilization, and put the date you need it on the two week look ahead.

What are structural steel contractors supposed to be making?

Structural steel runs 23% gross margin, 15% overhead and 8% net profit before taxes at $1M–$5M. The all-trade average is 7%, so this trade is 1 point above it. The CFOS target is 11.5%.

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

What a fractional CFO does for structural steel contractors

AUTHOR

JOSH LUEBKER

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

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