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Hey folks, Phil Zito here and welcome back. In this post, we are going to be talking about how to perform takeoffs and re-estimates.  

Okay, so let's begin! And in order to do that, we have to go back to the last post, which was Performing Sales to Operations Handoffs. Okay, so picture this, you're sitting in your little conference room, your salesperson has just brought in a job that they've set down, you've went through the sales to operations handoff, and you've identified the scope of the work. You figured out exactly what's in scope, what's not in scope, and you figured out a lay of the land for the mechanical systems, what you're going to be taking care of.  

Now you are moving into the first step of almost every building automation project, which is creating your project submittals and project documents. We’ll talk about this in greater detail in the next post, but right now, we are focused on doing that last critical step of the sales to operations handoff, which is to perform a complete takeoff, and then to perform a re-estimate, which so few people do.  


What is a takeoff? 

Now, what is a takeoff? A takeoff is reviewing the documents within the project and then getting information from those documents. For takeoffs, we have a seven-step process of which three of those steps are optional.  

The 7 Steps of a Takeoff 

  1. Perform a proper equipment count 
  1. Create a material list 
  1. Fill out a scope matrix 
  1. Identify specialized equipment* 
  1. Identify integrations* 
  1. Identify additional labor* 
  1. Identify the specification to construction document disparities 

*These 3 steps are optional, but when performed, complete the 7-step process of a takeoff 

So, as we approach this, here's the mindset I want you to be in, and I'm going to paint a mental picture for you as I believe this will help you visualize it, which will then help you internalize it, which will then help you to apply it.

So, picture this: 

You're in that same conference room. You've painted out these 24x36 mechanical plans. Can you feel the paper? Have you ever touched a mechanical plan? Can you feel kind of the weight, how you're concerned, when you're turning that page, you don't want to rip that page, right? So, you have this massive chunk of information just sitting in front of you on the table. Then you have the sequence of operations printed out, and you also have it in electronic format so that you can search it. You start turning those pages to about the middle of the mechanical drawing set, and you come to the equipment schedule. It's here that we begin to perform our equipment count.  

What I like to do, is to first start with the terminal units and the smaller individual systems and work my way up. Some folks like to start with the major utility systems and work their way down. The reason I like this is it starts to paint a picture of how the building's going to be built, of how things are going to interlock, how things are going to interface. So, as I figure out, “VAV's 1-12 are served by air handler 1, and VAV’s 13-22 are served by air handler 2. Air handler 1 and air handlers 2 are served by chiller 1 and boiler 1.”  

So, I start to paint this picture of what exactly is going on on this jobsite, and when I start to understand that, I start to also see, “Oh, there's exhaust fans. There are fan coil units. These exhaust fans are located right next to VAV 10. Well, guess I can do a different VAV controller and get some additional IO so that I can map in those exhaust fans.”  

At this point, I'm starting to create a material list. So, I start to look at the terminal units, I write down, Zone Temp, Zone Temp Setpoint. Maybe I need a set point adjust, per the spec. This is where I'm bouncing between my equipment schedule and my specifications section 2, which is going to be materials or products. Section 2, material or products, are going to specify what kind of sensors, valves, actuators, control devices, flow sensors, etc, so that I can start to build out my material list.  

So, I'm building out this material list. And you might say to yourself, “Isn't that the point of submittals?” This is where things get a little bit different. This isn't for everyone, I will admit, some folks only want to build the material list once and they build it in the submittal phase.  

What I like to do, personally, is perform an equipment count, build my material list, build my scope matrix, make sure it's in line with what the salesperson has in their estimate and in their proposal letter, and then I hand that off to the designer. The designer, literally, is validating one-lines, validating network risers, creating network risers, they're going to be validating sequences and doing any RFIs and RFCs on sequences. They're more so focused on the function of the systems, knowing that the parts and pieces have already been selected, and this also will make submittal submission much faster. 

Now, I know this may seem like a lot of work, but actually building the material list is not very difficult, because a lot of systems are typical. So, you may have 400 VAV boxes, but they're typical of three types, cooling only, a reheat, and maybe a series fan power reheat. So, you really only have to create three material lists for your terminal units.  

So, we create this material list, we build it out and then we move on to our scope matrix and start to build out that. This is where we understand our scope is an air handler and then we compare that air handler sequence to the specifications sequence. We see if there are any disparities and we really start to submit our RFI and our RFCs to clarify those disparities, because those disparities are much easier to clarify early on, before you've ordered material, before you've submitted submittals.  

I will tell you, oftentimes, if you want the cheap man or the lazy man's way out of submittal submission, with a lot of engineers, you can simply copy the sequence of operation that is in the specification, hand it off to them in the submittal, and they will stamp it good. As long as you follow their material list to the letter in Section 2, and you followed their sequences in Section 3, execution to the letter, and you've used the snipping tool to grab those and put them on a Visio diagram for the submittal set, you'll get your submittals approved. It's one of the easiest ways to get your submittals approved. It's also one of the easiest ways to also get hosed and bent over when you're doing commissioning, because the commissioning agent is going to have a different interpretation of the sequence of operations.  

Which brings us to our three additional categories: identify specialized equipment, identify integrations, and identify additional labor. Specialized equipment and integrations are typically going to be in Part 1 General of the specification. You will typically find them on the first or second page of the specification, where it's going to call out any additional integrations, or any specialized equipment and any related sections that you need to tie into. Additional labor, like test and balance, commissioning and training is typically going to be covered in Section 3, Execution.  

At this point, we have a material list by system, we have a scope matrix detailing out what exactly we should do, and we've identified any specification to MEP document disparities. We've said, “I see your sequence of operations, it's calling for an ERV air handler, but yet, I go into the MEP set and it's a one-line package for rooftop. There's no energy recovery. What is it? What should I account for.” And these are the things that you need to rapidly clarify with RFIs and RFCs. So, requests for information or requests for information that you don't already have, requests for clarification or clarification on information you already have.  

We'll talk much more about RFIs and RFCs and using them as competitive strategies in our sales blogs, which will be in a few weeks. We will also talk about RFIs and RFCs later on in this when we start to look at change orders, and things of that nature.  

So up to this point, we've created a material list, we've created a scope list, we've submitted our RFIs and RFCs to clarify our information. We've gotten our information back, and we've realized that labor's way off, maybe it's way under, maybe it's way over. We've realized material costs are wrong, our subs, we want to get a rough estimate on our sub costs, and we submit for re-estimates.  

Now, a re-estimate does not involve the contractor. Our re-estimate is truly an internal process in which we are looking at our costs and we are truing up our costs by either consuming some of the profit that's in the project, or by adding more profit back to the project by reducing our costs. It's important you do both, because if we notice that these are all factory mounted controls for our terminal units, and all we have to do is send our terminal units to the factory, get our controls mounted, and we realize we can dramatically reduce our installation labor, then we definitely need to do that. At the end of the day, that's additional cost that we should not be carrying.  

So, we need to do two things, one, we need to positively re-estimate the project. We take the cost of that labor, for installing the controls on the terminal units, and we transfer it to profit. Now, you'll probably get some folks who will push back, because either they're not fully confident in their project management processes or they've been burned in the past by bad estimates and they just want to have that wiggle room.  

There are two schools of thought by having that wiggle room. By leaving that cost into the project, at the end of the project, if you don't use the cost, you just positively re-estimate the project. The problem with that is recognizing the profit a year from now versus right away. If you're able to recognize profit right away, and you're able to take that out and apply it to the business, that's good for the business. But if you have to wait until the end of the project in order to recognize profit, that is time of which your business is not operating with that profit at its fingertips. That profit is still trapped in the P&L of the project. 

You're going to notice a lot of things I teach are going to look at things from a realistic way, like, “Hey, let's keep that cost in there so that we can protect ourselves, and let's be real about that. Maybe we don't trust our Ops team, maybe we have a new Ops team, maybe we're still trying to figure things out, or maybe this is a new type of project for us, and we just want to have that extra cost in there.” But at the same time, I also have to balance that reality with being a business owner and saying, “Hey, businesses exist at their core unless they're nonprofits to make profit and grow the profit of the shareholders, whether that's the owner, whether that is actual shareholders, etc.” So, we need to be aware of that when we approach this.  

Like I said, we do our re-estimates, we do either positive or negative re-estimates and then we take that into our feedback loop and feed that back to the sales team. We say, “Well, we remove this much profit, or we added this much profit back to the project because of x, y, z so that the sales team is aware. Hey, I'm in a competitive-bid situation. Now, I know this engineer likes to do factory mounted controls, so I'm going to look for that in the spec. Oh look, I found the factory man of controls in the spec language or in the equipment schedule under the notes. Now that I know this, I am going to remove that cost for my project and hopefully my competitors don't notice this as well. Now I'm going to be at a lower price than my competitors for the actual scope of the project.” This will really help you a lot in selling.  

Now, let's recap real quickly on the take off process. I’ll walk through each one in somewhat of a detail, and then we're going to close out the post.  

So, performing proper equipment counts as going to the equipment schedule, counting out your equipment, and ensuring that that equipment schedule is accurately aligned with the specification and the scope of work.  

Then we create a material list, typically I do all this in Excel, we create a tab for each piece of equipment with their material list. So, this is a bill of materials. Now that being said, you only have to do this for typical systems. So if you have 100 cooling only VAV boxes, and they're typical of one type of system, meaning that there are only one layout for that 100 boxes, each one is the same layout, then you only have to build one bill of material. 

Then we fill out our scope matrix and our scope matrix is going to detail out what is in scope for us and what's not. This is really going to help our submittal team as they move through the submittal document creation. So will that bill of materials and that equipment count.  

Then we solve any specifications, construction document disparities, sequence mismatches, things that are calling for complex sequences, those are things you need to call out and clarify. And then if there is any identified specialized equipment, integrations, or additional labor, you address those as well in your costing, either through positive re-estimates or deductive estimates.  

The re-estimate process is simply comparing the existing cost structure allocation of labor, material, and subcontractors, and comparing that to what you have seen as the actual required allocation of material subcontractors and labor.  

Okay, I hope this helps and I hope this gives you a starting point and a framework for doing takeoff templates. If this is something you'd like to learn more about, I encourage you to check out our BAS Scoping & Estimating Mastery Bootcamp and our BAS Hardware Sizing and Selection Bootcamp courses. Both of those courses will help you in performing estimates and takeoffs.  

Thanks a ton, and take care! 

Phil Zito

Written by Phil Zito

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