Is Hiring an Independent Estimator right for my firm?

From fellow CERT member Carl Cathcart, CPE’s post on his LinkedIn page, posted this question 01/18/16.
This is a question I receive at least 3 times a month , it could be from a small general contractor a sub-contractor, developer or architect. The answer usually ends up being, “Well… what is it you need assistance on?” It seems that they are contemplating it and they happen to find me or one of my associates while doing a search on line for estimators.

The reasons are numerous: they may just need help with quantity surveys (take-offs), they don’t have the funds right now to hire an estimator as an employee or they have had no luck finding a qualified estimator just yet, they are jammed up with “Invitations to Bid’ and cannot get to them all. Regardless of the purpose, they are on the fence and not quite sure how the independent process would work for them and their company.

I would like to address some issues of fear: Consider that the independent estimating firm would be like an employee down the hall except you don’t have to supply them with an office, no need for a computer with 2 or more screens, no expensive software to purchase, no need for benefits such as healthcare, retirement funds, paid sick/vacation days and when your company is not busy there is no need to pay that person for being down the hall not busy either.

Independents are there when you need us and when you don’t…no need to keep paying a salary if work is slow or unsteady. Yes…but what if I hire your firm and your quantity or estimate is not right…what is your skin in the game? Remember this…an independent estimator has as much to lose as the full-time employee down the hall if not more…they don’t want to lose you as a client just as much as the employee does not want to lose you as an employer.

Mistakes are meant to be minimized for that same reason…if the employee misses a takeoff badly they will most likely be terminated…just like the independent estimator should be. The difference is if an employee is terminated there may be compensation coming from personal time or possibly unemployment benefits and the process starts all over again in hiring a new employee.

If you think you cannot afford the fee of an independent, consider what that employee was costing your firm a year with salary, benefits, office expenses, software, vehicle expenses and sick days…if you do the math, the independent will most likely be less than the qualified estimator you need to hire full time.

In regards to conceptual or hard bid estimated costs, most independents fees are actually 1% or less the estimated cost. If your firm does 6 million a year that independents fees may only be $60,000 or less for the year…have you attempted to find a qualified estimator with experience for that amount?

I will be the first to admit that hiring an independent estimator is not for everyone or every firm…but if you need assistance for a special project, need to get an unbiased “opinion of probable cost” or you & your estimating department do not have enough time to perform a takeoff…an independent could be a good short time relief…you may just need to have a different set of eyes review the project.

When interviewing an independent estimating firm make sure you ask the following questions:

  1. Is this your full-time job?…( you do not want to hire a “kitchen table” estimator that moonlights when not on his full-time job)…their allegiance is with their daytime employer…when you need a question answered you certainly do not want to hear “I can’t talk right now my boss is in the room”.
  2. Do you share your estimate information with any others?…this should be a resounding NO. You hired them to work with you on your project and they need to be loyal to that.
  3. Do you provide back up with your calculations?…this should be a YES, you need to see what pages and details were used for the take-off and the worksheet submitted back to you should be clear and understandable…ask them to see a few samples of their work.
  4. What are your credentials?…are the associated with any estimating organization, are they a Certified Professional Estimator, or equal?
  5. What is your fee ?…all projects are different, there could be 1o pages of plans or 100 pages, you need to allow the independent estimating firm time to review the documents (via a FTP site) and set their fee. Some firms work strictly by the hour and will estimate the hours it will take while others like myself will set a “not to exceed fee” based on the information you send and what scope is required. This way you have a set fee and can determine if it works within your budget.

Qualified estimators are hard to find and getting harder…the seasoned pros have retired or will be soon, the up and coming do not want to estimate, they want to be project managers…it takes a certain mind set to be an estimator and you need to make sure the one you hire is qualified and works full-time in their trade. They LOVE estimating…as weird as that reads, it is true.

More and more independent estimating firms are created each year and just as many fold up and close their doors…they cannot give work away for so low maintain quality & expect to stay in business…we all know that scenario. Cheap, Fast, and Right…no two will ever equal the third.

For a great site to find independent estimating firms that are committed to professionalism across the U.S, try www.certusa.org. Call and talk to an independent estimating firm when you are ready….you may be surprised to find that it makes sense in some cases.