How Estimating Software Works and How to Succeed With It

Read the article in Construction Outlook, page 59

March 2022

Greg Norris, B2W Software


How estimating software works and how to succeed with it


Success for every utility contractor begins with bidding. There is no doubt that specialized software brings big speed and accuracy advantages to the estimating process but moving away from familiar spreadsheets and manual process can be a daunting prospect. Understanding how software applications for estimating work and the proven processes for implementing and succeeding with the technology can alleviate some of these fears.


The Basics

Capabilities, features and performance of estimating applications vary widely, but the basic premise of how most function is similar. The software allows contractors to pre-populate resource databases with starting-point costs. This could be as simple as the cost per ton of a material like gravel or pipe. Items can also be bundled together into templates and cost structures that align with the type of work a company typically does. A cost structure for a pipe crew, for example, might include the daily costs for the people and equipment associated with that crew.


Pre-populated items, templates and structures become the building blocks for bids. Estimators can plug them in quickly and with confidence, as opposed to starting from scratch on each bid and spending a lot of time researching, verifying, combining and calculating costs. The basic concept of pre-populated data opens the door to more accurate estimating. In addition to the opportunity to turn out more bids, the added speed can leave more time for strategizing.


Estimating software will also do all the calculations automatically through the bidding process, eliminating the dreaded spreadsheet formula errors that can skew the bottom-line price or the totals in individual sections within the bid. An audit trail to document who changed the bid and when, and automatic error checking to catch common errors are additional important software features.


Nice-to-have Features

Beyond the basics, more advanced estimating software applications have features that further streamline the bidding process. These are four that contractors find especially valuable.


Software can send RFQs automatically and then assist in a methodical analysis of the submitted quotes. General contractors can then see and select the lowest bidder or split the work among multiple bidders to get the lowest possible package price. The software also makes it easier to make cost comparisons when they are evaluating the option to self-perform various aspects of a project or sub them out to other contractors.


Changes in scope after the original bid are common across most sectors. The ability to organize change orders within the base bid and have them appear as independent nodes in the menu structure allows estimators to create, manage and track them quickly and easily.


Being able to run reports across selected ranges of previous estimates without a lot of time-consuming manual effort is extremely important to bidding strategies. This allows contractors to analyze historical costs for materials or tasks, margins and variances with actual costs, win-loss ratios, subcontractor performance and a wide range of other data.


Good estimating applications come with specific pay item databases for every U.S. state built in. Once estimators populate them with their own prices, they can download electronic bidding system (EBS) files, conform the estimate automatically to the required DOT format, and upload for submission very quickly.


The Implementation Process

Estimating software suppliers thrive not just on the merits of their technology, but also on their ability to help customers succeed with it. The good ones have extensive experience in assisting construction companies in the transition away from paper and spreadsheets. They deliver a proven, structured process for installation, implementation and training that is balanced with the ability to customize according to the specific work types, needs, expectations and experience level of each contractor.


Implementation typically kicks off with a call to identify estimators and key people on the contractor side that will be involved and to set requirements, expectations and a timeline for the process. IT requirements to run the software and any integrations, such as with an accounting program, should also be covered in this initial phase.


Next, a series of calls is usually held to help contractors build the all-important estimating databases that will be the foundation of their success with the software. This transfer of knowledge from spreadsheets, the personal experience of estimators, and other sources to the software program can seem like the most challenging piece of the transition, but software suppliers provide templates to guide the process. While each contractor will set up these cost databases in a way that meets their specific needs, implementation specialists should guide them and provide best-practice advice to ensure compatibility with the software.


Training should be scheduled once the software and the databases are installed, so estimators can train on their own data and in their own environment. Finally, a software supplier should have a handoff procedure to transition contractors through a go-live phase and to ongoing support resources.


For peace of mind following implementation, contractors sometimes complete bids in parallel with their old methods and with the new software. Those who follow the steps of the implementation process find out right away that the software makes them faster, more efficient and more accurate. From there, they can move on to utilizing more and more of the advanced features of the software over time.

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