UNDERGROUND UTILITY · CIVIL AND EARTHWORK · FIXED BY STEP 06

The lowboy goes back out three times after you're done

You priced one mobilization and the job needs four: deep utilities, structures and tie-ins, adjust-to-grade after paving, and then closeout CCTV and punch.

WHY IT'S AN UNDERGROUND UTILITY PROBLEM

Almost no other trade leaves the site and comes back three times on the same contract, and the return trips are the ones priced per each. A price written for a single mobilization has to absorb every one of those equipment moves. On top of that, everything you installed in month two lies under 14 months of other trades' traffic, so when the closeout video shows a crushed or silted line, there is no proving who ran over it and the repair falls on you.

WHAT IT COSTS

The size of it

You recover three to five mobilizations inside a price built for one, and you eat repair work with no change order behind it. Mobilization and remob is routinely the most under-bid line in this trade.

OVERHEAD AT $1M–$5M

15%

CFOS target 14% for underground utility.

GROSS MARGIN AT $1M–$5M

18%

CFOS target 24% for underground utility.

NET PROFIT AT $1M–$5M

CFOS target 10% for underground utility.

Bid mobilization as a count of trips and write that count into the schedule of values before the subcontract gets signed. Deep utilities go in with mass grading, structures and tie-ins follow, and months later you send a lowboy, an excavator, a saw, and a crew back out to bring manhole rings, valve boxes, inlets, and cleanouts up to final grade. Adjusting covers is a separate pay item priced per each, often a few hundred dollars, against a trip that costs a full crew day plus equipment moves. Closeout video and punch make it four.

WHAT TO DO

Three moves, in order

STEP 01

On your next bid, count the site visits out loud: initial install, structures, adjust to grade, CCTV, and punch. Price each visit as its own line.

STEP 02

Photograph and date every structure the day the crew leaves the site, so the closeout video has a documented before to argue against.

STEP 03

Track mob hours and lowboy moves per job in job cost so next season's mobilization price comes from your own history.

THE FIX

Step 06: Project management

Billing dates, change orders, and notices, written as standards that work without anyone chasing them.

CFOS-06 · CHAPTER 6

Billing and change orders that hold without chasing

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

BENCHMARKS

Underground utility 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 change orders you did and never billed

The field did the work. The paperwork never caught up. Ninety days later there is no record that proves it happened.

SAME TRADE

What else costs underground utility contractors money

UNDERGROUND UTILITY · CFOS-06

3,000 feet of main can wait on one tapping valve

Thousands of feet of main are in the ground with the cost fully spent, and there's no pay app until a 12-inch valve clears the foundry.

UNDERGROUND UTILITY · CFOS-01

A failed bac-T is a crew week with no pay app

The line is in, backfilled, and the spec says it can't be mandrelled for 30 days. Everything that happens in those 30 days is your cost with no bid item behind it.

UNDERGROUND UTILITY · CFOS-07

You're first in the trench and last off the bond

Your crew left in month three of a 20-month build, and the money waits behind three separate clocks: retainage, municipal acceptance, and a maintenance bond that hasn't started.

UNDERGROUND UTILITY · CFOS-05

Bond, fees, and pipe get paid before quantity one

Bond premium, tap fees, permits, traffic control plans, lab fees, and stockpiled pipe all clear your bank before there's one measured foot to invoice.

UNDERGROUND UTILITY · CFOS-08

Trench settles in linear feet, bills back in square yards

You billed linear feet of pipe. Eighteen months later the backcharge comes back in square yards of asphalt, with the paver's mobilization stacked on top.

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 underground utility owners ask

How should I price adjusting manhole rings and valve boxes to final grade?

You priced one mobilization and the job needs four: deep utilities, structures and tie-ins, adjust-to-grade after paving, and then closeout CCTV and punch.

What does it cost?

What do I do first?

On your next bid, count the site visits out loud: initial install, structures, adjust to grade, CCTV, and punch. Price each visit as its own line.

What are underground utility contractors supposed to be making?

Underground utility 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 06, project management. Billing dates, change orders, and notices, written as standards that work without anyone chasing them. It comes from chapter 6 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 underground utility contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.

What a fractional CFO does for underground utility contractors

AUTHOR

JOSH LUEBKER

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

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