Business Building: Do Project Manager / Estimator Combos Work?

Words: George Hedley

Steve owns SJP Contractors, a mid-size general contractor specializing in commercial projects. Over the last several years, his company has grown to over $16 million in annual sales, with an average project size of $500,000 to $1,500,000, employing 45 office and field personnel. Currently he has three key project managers who estimate and then manage the jobs SJP builds.

Steve had been working hard to attract new customers and land bigger projects. Finally, Steve’s efforts had paid off and he generated exciting opportunities to bid and propose on two new larger projects valued at $3,000,000 and $5,000,000 each. Both jobs had bid proposal due dates in three weeks. As was usual, Steve assigned the estimating, bidding and proposal assignments to his best combination project manager/estimators Joe and Sam.

The three met together and reviewed each project’s scope, details, bid requirements, and agreed on plans of attack to prepare accurate cost estimates, ensure there was adequate and plenty of subcontractor and supplier bid coverage on both jobs, and the proposal packages would be complete and compelling enough to hopefully win the contracts. They decided Steve would meet with each of the combo PM/Estimators every Monday to review their estimating progress, and then two days before the bid date, review the draft estimate and proposal package. All was set for a successful bid process. And then the reality of impending workloads becomes evident.

And The Work Goes On!
Both Joe and Sam also were assigned four jobs each as project managers which were full loads for them to handle. Now they were also tasked with responsibility for estimating and preparing these major bids as well. Within a few days, Joe was called out to a job site by his field superintendent to review a big conflict and problem. This took several hours to tackle. Sam also got called out to one of his projects to negotiate a change order between the project architect, owner, and several subcontractors. In the late morning, Joe got another call asking where the concrete material was while the crew stood by and waited. Sam then got distracted by the need to work out a few demanding subcontract issues holding up another job he was managing. With the challenges, pending issues, and demands, both estimators hadn’t had enough time for several days to download their bid plans, set-up online database requests for subcontractors to bid, or begin to really work on performing material take-offs or get pricing from suppliers.

Ongoing field and project distractions, emergencies, and time suckers continued for both Joe and Sam. Without completely undistracted focus on estimating or dedicating time to obtaining numerous subcontractor and supplier quotes, combo PM/Estimators can’t generally do an excellent job required to be competitive and win profitable work. And to top off these problems, no one person oversees maintaining an accurate job cost history with bid versus actual costs and crew hours required to perform the many tasks needed to build projects. Overworked estimators also don’t have enough time to review the complete set of bid plans and specifications, and therefore tend to miss multiple items. Overworked estimators also can overlook or miss opportunities to gain proposal advantages such as pro-active value-engineering, material substitutions, alternative solutions, and other options to save money.

Are your position descriptions clear?
To do an excellent job as a project manager or as an estimator requires a clear job description and understanding of what each position’s requirements include. Performing less than what each position demands lowers your potential profitability and chance for construction companies to improve their bottom-line.

Estimators are accountable and responsible for:

Accurate and complete estimates and bids with no missed items.
Reviewing bid documents, terms and requirements.
Maintaining subcontractor and supplier database to enable great subcontractor bid coverage.
Performing take-offs and getting subcontractor and material quotes.
Determining accurate field crew production and equipment rates utilizing, updating and maintaining a current cost history library by reviewing completed job costs versus the estimates.
Developing bid strategy and winning proposals.
Attending pre-bid job walks.
Maintaining estimating schedules and bid-hit-ratio tracking.
Maintaining and updating the standard estimating template.
Preparing subcontractor scopes for subcontracts.

Project Managers are accountable and responsible for:

Completing projects on-budget and on-schedule.
Meeting & managing contracts, change orders and documentation.
Procuring and managing subcontractors and material orders.
Managing and approving job invoices and the progress payment process.
Managing field supervisor and team to meet goals.
Managing customer, communication and meetings.
Managing submittals and approval process.
Updating monthly job cost reports and cost to complete.
Managing project close-out requirements
Approving timecards, invoices and cost codes

As the bid dates approached, Steve noticed both of his combo PM/Estimators were not spending enough time on estimating and therefore the subcontractor bid coverage seemed to be light, and there were many trades still void of subcontractors to offer them firm prices or bids. With only two days until bid day, Joe reluctantly came to Steve and omitted he likely wouldn’t be able to guarantee he could complete an accurate bid estimate by the due date. Sam also appeared in trouble and asked Steve for help to finish his bid assignment. He admitted his projects were needing more of his time and therefore hadn’t been able to prepare his month-end project invoices or get customers to approve pending change orders they’d already performed work on. Now what?

Is Your Top Priority To Get Work Or Do Work?
Steve had worked hard to get new customers to agree to let them be on their bid lists. Therefore, he wanted these two large bid opportunities to be a top priority for his company. But he failed to realize it takes project manager’s constant focus to manage current projects, keep them moving forward, and finishing on-budget. He finally admitted the combination PM/Estimator job description was not working well for RJP Contractors.

What about the project manager and estimator positions for your company? Should they be combined, or should you separate them into two distinct positions focused on the accountabilities and responsibilities necessary to do an excellent job? The decision or choice must be to reduce the workload of combo PM/Estimators to make sure their combo position job descriptions can be accomplished. Or split the position into two separate positions. The combo PM/Estimator position creates a bid priority problem. Which should be the top priority? - Jobs under construction or the potential to win another bid? Accurate and complete estimates or crews standing around waiting for materials or decisions? Or more subcontractor and supplier bids to make your company more competitive or getting paid for properly documented change orders?

What’s Your Decision - Combo Or Not?
Normally, current projects must take priority. As you already have executed contracts, you are committed and legally obligated to get them built, and therefore can’t postpone or delay projects while you bid more jobs. As a construction business coach, I work with numerous contractors who manage their operations with separate and/or combo PM/Estimators. I see which way works the best, delivers complete estimates, allows companies to win more profitable work, and then get them built faster and more efficient. You decide - when your project manager is working on a bid, he is not watching or managing the job. If it’s not obvious to you, email me at GH@HardhatBizcoch.com to ask my opinion on this matter for your company.

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ABOUT THE AUTHOR
George Hedley CPBC is a certified professional construction business coach, consultant, and popular speaker. He helps contractors build better businesses, grow, profit, develop management teams, improve field production, and get their companies to work. He is the best-selling author of “Get Your Construction Business To Always Make A Profit!” available on Amazon.com. Watch his educational videos on YouTube. To get his free e-newsletter, start a personalized BIZCOACH program, download online courses, or utilize his contractor templates visit: https://constructionbusinesscoaching.com or E-mail GH@HardhatBizcoach.com.

Business Building: Do Project Manager / Estimator Combos Work?

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