THE OFFICIAL PUBLICATION OF THE AMERICAN SOCIETY OF PROFESSIONAL ESTIMATORS
E S T I M AT I N G
T O DAY November 2005
Austin Company Tackles
Mailing and Administrative Office:
2525 Perimeter Place Drive
Nashville, TN 37214
675 S. Washington Street
Alexandria, VA 22310
Look inside this
issue for an
analysis of the
Photo of General Services Administration building, courtesy of The Austin Company
see article on page 7
PERMIT NO. 713
Estimating Today is the
official publication of the
American Society of
Professional Estimators. It is
the policy of the Society that
October 2005 all materials submitted for
publication become the
property of the Society and
may or may not be published,
in whole or in part, at the
Contents discretion of the editor.
Opinions and views expressed
by contributors do not
necessarily reflect the position
President’s Corner 3 of ASPE, Estimating Today or
Direct from the Executive Director 4
Project Feature -- The Austin Company’s Estimating Today (ISSN 0895-
6294) is published monthly by
Federal Building Seismic Upgrade Challenge 7 the American Society of
Professional Estimators. Bulk
rate postage paid at Nashville,
Impact of Katrinia on the Construction Market 8
Economics, Overhead and the Importance of Dues 11 Send submissions to
Patsy Smith, Editor
Is Your Construction Software a Profit Center or Overhead Expense? 14 Society Administrative Office
Developing Accurate Estimates on Excavating Projects 16
In the News 18
Career Center Classifieds 20
A Look Back at ASPE inside back cover Send all advertising
A Look Back...
Phone: (800) 578-3216
Fax: (919) 882-9082
The History of ASPE
ASPE is looking for photos or memorabilia from the Patsy M. Smith
Director of Administration
early years of ASPE. We are putting together a
American Society of
tribute to the society for the 50th Convention 2525 Perimeter Place Drive
celebration and need your help. Please send all Nashville, Tenn. 37214
Phone: (888) 378-6283
Fax: (615) 316-9800
items to Patsy Smith at the Administrative office or www.ASPENational.org
email photos to firstname.lastname@example.org. 675 S. Washington Street
See our first installment of Your suggestions and
“A Look Back... The History of ASPE” in this issue. comments are always
welcome. Let us hear from you.
This is your magazine.
P r e s i d e n t ’ s Corner
According to a report prepared • Discounted member rates on the Estimating Proficiency
by the U. S. Department of Labor exams
Bureau of Statistics, there were • Free Membership Directory
99,640 construction estimators • Free subscription to Estimating Today
working in the United States in • Free employment services through ASPEnational.org
2002. The report expected those • Discounts on publications including the Engineering News-
numbers to grow steadily until at Record and all books published by Walker’s Technical Books
least the year 2012 so it should • Free web advertising for estimating consultants
By Robert R. George, CPE be safe to say there are now, in
the year 2005, more than The dollars you save make membership a no-brainer. The dues
100,000 construction estimators. we pay are small in comparison. Membership also makes a lot of
sense if we consider
The report also says that "Voluntary certification can be valuable
to cost estimators because it provides professional recognition of • Certification
the estimator’s competence and experience." • Fellowship
The surprising thing is that most of those 100,000 estimators are
• Estimating education
not members of the American Society of Professional Estimators
(ASPE). The ASPE’s mission of professional advancement,
Finally, the opportunities for professional advancement will
education and certification of construction estimators should be
motivate any ambitious estimator to put a high value on
viewed as an attractive enticement for estimators anywhere in the
membership. How many job offers I have received over the years
world yet our membership rolls, while constantly growing, are
because of the fellowship and networking at both the local and
nowhere near six figures.
national levels of ASPE. Too many to count!
Many reasons are given for not joining but the two most
My advice to any estimator looking for a job is to attend as many
common reasons are that they just have not heard of us or they
ASPE meetings as possible. It does not matter whether the person
don’t know what we can do for them.
is looking for a first estimating job or to advance to a more
Getting the word out responsible position, the best resource is always the ASPE.
Executive Director Ed Walsh is doing a very good job of Do your part
publicizing ASPE. His efforts are just now, after two years of hard
Do you know any professional estimators who are not members?
work, starting to make an impact. You can find ASPE represented
Do them a favor and introduce them to the benefits of membership
at trade shows and construction industry events across the country.
in ASPE. When they decide to join, they will be taking a giant step
Ed is also coordinating his efforts with other industry organizations
forward in their career and, at the same time, helping your chapter
where cooperative agreements can help us get more exposure.
Our Standard Estimating Practice Manual is now advertised in
mainstream industry magazines. Our website traffic is growing at
an amazing rate. Our Estimating Academies continue to grow in Let me finish with a small reminder that we are now in our 49th
popularity within the construction industry. year of existence and looking forward to the 50th anniversary
celebration at Convention 2006. I can’t share the details but I can
When Ed Walsh first came to work for us two years ago he said
tell you that Convention 2006 will be spectacular. See you there!
that the ASPE was the construction industry’s best-kept secret.
Well, that situation is changing very rapidly as more of our peers Please let me know your thoughts on any issue by sending an
hear about ASPE and what we have to offer. email to me at President@ASPEnational.org.
What a value!
I am often caught off guard when asked why an estimator should
join the ASPE. I have been a member for so long that the many
good answers to that question seem obvious to me, but of course,
they are not obvious to a non-member who is looking for a good
reason to join.
The reasons for joining fall into three categories: Dollars, Sense
The dollar value of membership far exceeds the dues we pay Visit www.aspenational.org for
even when we disregard the beneficial influence membership has
on our income as we advance professionally in our careers.. more information
Our annual dues can be paid with the dollars we save on:
• Discounted member rates for online courses
• Discounted member prices on the Standard Estimating
Direct from the E x e c u t i v e D i r e c t o r
News from National – November I said I could not imagine an architect not promoting his
2005 membership in AIA, a doctor not having allegiance to the American
Medical Association or a dentist to the ADA. Professionals should join
Happy Holiday season, I hope
and support the organization which supports them. ASPE is the only
you all have enjoyed the fall so far. I
organization that puts estimating professionals front and center.
hope the chapter meetings and
events are going well. I look forward By putting "member of ASPE" on your card, letterhead or in your
to hearing about all the programs company literature you are telling the industry: "I support the ethics,
around the country which have education, standards, certification and fraternity promoted by my
By Ed Walsh taken place in the last few weeks. fellow members." I also told the group that any company that employs
ASPE Executive Director ASPE members and doesn’t promote that fact in its literature is really
missing an opportunity. The individual who asked the question and
(Please remember because of publishing deadlines I am writing this a number of others took applications and said they had plans to join.
well in advance of a number of upcoming events. My reports to you
NEW CHAPTER PRESIDENTS: Please call me as soon as time
will focus on results of what has transpired since I last wrote and an
allows. I have tried to make it a practice of calling as many of the
outlook of what is to come.)
chapter leaders as I can. I hope to keep the tradition going with you.
I had the opportunity to attend a meeting of the start up chapter in (877) 273-5679.
Rochester, N.Y. The turnout for the "core group" meeting was
MEMBERS AT LARGE: Join the "virtual chapter" started by your
amazing, with more than 20 estimators from the area. This kind of
fellow member Gordon Gadow CPE. Visit:
turnout is evidence of what a partnership with a Builders Exchange
http://www.aspenational.com/members-at-large.html for all the
can mean to our chapter growth and long-term success. I was
promised by the core group in Rochester that a new chapter would be
in place by Halloween. The Builders Exchange of Rochester president HOLIDAY MIXERS are GREAT opportunities to bring prospective
is exceedingly generous to ASPE and welcomes us to use their members out of the woodwork. I welcome any chapter that is
facilities, etc. interested to ask us to make up an "e"- flyer that can be sent to
hundreds of prospective attendees. Many people will take the time to
At this meeting I had the occasion to once again answer a question
go to a holiday mixer to socialize this time of year.
from a prospective member who asked "why should I join?" It is a
good question, but one that is easy to answer. I told him that WEBSITE: have you visited lately? Have you seen the employment
membership in the Society itself is the #1 benefit. section, signed up for a free listing with the "Find an Estimator"
service, learned about the new estimating proficiency exams? Does
your human resource director know about the exams and that they
can post a job on our website? Did you see the new press release Well, it is simple: if the event is for the benefit of the other association;
section? Have you visited the new special interest group (SIGs) pages? they will make it a real point of getting the information to their
Did you know you can join a SIG? member company estimators. Just raising awareness of the Society
encourages many estimators to join.
NEW INDUSTRY STANDARD & RECOGNITION: Our Education
Board has taken our online estimating program to a new level. THINKING ABOUT JANUARY & 2006?
Beginning in September any student who completes five of our
Preplanning is the heart of success for chapters that "get things
courses can apply for a "Certificate in Construction Estimating." I
done"… November & December can be the time to get the details
believe this is one great step forward for the Society can take as we
worked out, which could make January and the rest of 2006 run more
lead the industry’s standards for estimator education and recognition.
ESTIMATING ACADEMY INSTRUCTORS: Do you have interest
Estimating Proficiency exam information:
in teaching/presenting at a local academy? Just interested in hearing
more about becoming an ASPE instructor? Send me an e-mail and I 1. We believe employers will want to see an applicant take the
will fill you in. Our Education Board is looking to help develop a "EP2" as part of the hiring process.
larger group of instructors around the United States.
2. We think 2+ years experienced estimators will want it on their
INDUSTRY ACTIVITIES: I met with Brenda Romano, executive resumes.
vice president of the BX network in San Antonio. We had a far-ranging
3. When it is finished we think the "EP1" [a test for entry level
discussion of how our groups can work together. She told me that the
estimators], might become a pre-requisite for starting an
network executives who own and run builders exchanges across the
estimating career on the right track.
country are ready to start working with our local chapters whenever
we are. They plan to help with: 4. Of course we also hope that the ultimate effect of our offering
these exams is that an industry standard is created to "quantify"
1. Promotion of our estimating proficiency exams, our
what estimating skills truly are.
certification, online classes, and estimating academies for BX
members. 5. We hope that EP1 & then EP2 exam takers will move up to take
their CPE at some point after they gain five years on-the-job
2. Possible co-hosting of our national academy next summer in
experience. The exams will be a financial resource for the Society
that will prove vital for the continued growth of ASPE.
3. Develop new chapters of ASPE and assist our current chapters at
6. There is no other organization with the credentials of ASPE to
their locations if they seek help.
"tell" the industry what a qualified estimator is.
Some may ask why we are so keen on our new friends. We are a
2006 -- Our 50th Anniversary Year- National Estimating Academy &
natural fit. Estimators are front and center for both groups.
1. The Builder’s Exchange network has 50,000 company members
From Disneyworld and Knott’s Berry farm to Catalina Island and
in the United States, which I would guess represents probably
Newport Beach, the activities outside the hotel are numerous. I’d
75,000 estimators! They could be a huge catalyst for growth just
recommend any of you coming to convention really make a vacation
by working with us and exposing their members to who we are
of it; there is just so much to do and see. Please review the Convention
and what we do.
2006 section "Looking Ahead" of my column for more information.
2. Ninety-five percent of the users of the BX locations (plan rooms One website I found www.la.com has many listings. Keep checking
primarily) are construction estimators. the ASPE website for more and more news.
3. Ninety-nine percent of the marketing we can gain through them Look for some of the following [and more] this year….a reminder:
will go DIRECTLY to estimating professionals.
At the regional caucus meetings at convention 2005 we talked
It is great to find another organization that puts estimating about setting up fund raisers at every chapter and asking each chapter
professionals at the top of their list. to contribute their utmost to the Society. These funds would not be
pegged so much for current expenses, but instead to be used as a
TRADESHOWS AND EVENTS: I recently purchased a back-up
resource to Society growth over the next 50 years. I called this effort
banner display for our Society booth. The back-up banner will cut the
"The NEXT 50 Fund", but we’ll see if the Board might have another
wear and tear on the main booth display. We expect to use it for the
idea. You’ll see the 50th logo on all Society correspondence, letterhead,
shows where there is a conflict of dates. Exposure generated at these
etc. We’ll be inviting special guests from the construction industry and
events is a great benefit for the Society: one-on-one contact with
even possibly a few politicians to come help us celebrate. We plan to
prospective members and sponsors is a key to our growth.
publish a special 50th anniversary wall calendar. A commemorative
1. In October we were at Metalcon in Chicago, IEC in Baltimore, series in the Estimating Today starting in January is in the pipeline...
US Cost training events in Atlanta and On Center user’s PLEASE let us know if you have historical materials to contribute.
conference in Houston.
Next report comes in December - I look forward to the months
2. In November I’ll be at the DBIA convention in Las Vegas and ahead as much of our planning will be coming together.
maybe another show. We take a breath in December, but show
Happy Thanksgiving, and enjoy the time you spend with family
up again at World of Concrete in January as well as other events
and friends. We Americans have much to be grateful for. All the best
and the ABC convention in February. We also plan to attend
to you, please write!
several regional shows as well.
MEMBERSHIP GROWTH THROUGH PARTNERING: Your
Executive Director ASPE National
chapter presidents can tell you I have been emphasizing the
importance of partnering with other associations and putting on
estimating academies for their members. In addition to our own
events, sponsored by us, we need to reach out and offer to be the
"supporting role" player for some academies. Why, you may ask?
The Austin Company’s
Federal Building Seismic Upgrade Challenge
Having nothing more to Another challenge was the fact that the tenants for the building
work with than the changed during the project. "Every tenant wanted something
program to create an different," so Austin processed a number of change order requests,
estimate for a $25 million Rutlen says. "Before we even started construction, there were new
Federal Building seismic tenants. We had to constantly manipulate the estimate." Despite
upgrade project in Santa the change orders, Austin stayed close to its original estimate: the
Ana, Calif., presented initial estimate was $22 million; the project completed at $25
some unique challenges for million with change orders.
estimators at The Austin Company’s Irvine, Calif. based office, but
Many of the building tenants remained in the building during
the estimating team proved up to the challenge, says Austin’s
the construction process, which was completed in three phases.
Paulette Rutlen, CPE. The company managed to complete the
"We were drilling through three-foot beams and running rebar
design/build project virtually on budget and on schedule, despite
from floor to floor for the new sheer walls and had to build it
frequent change orders from the client.
quietly enough that [the tenants] could still work."
"All we had to bid from was the program—there were no
Rutlen notes that Austin was not the low bidder. "GSA liked
plans," Rutlen says. "There was nothing more than 8 1/2 by 11"
our engineer’s solution to their seismic upgrade problem and the
sheets of paper with a block plan for each of the floors, room data
team that Austin proposed for the project. The fact that we were
sheets, and a general description of the scope of work."
going to have to be doing a number of estimates all during the
Austin also upgraded and modernized the interior of the design and construction required the estimators remain involved
258,800-square-foot, cast-in-place General Services in the project until the end."
Administration building while performing a comprehensive
seismic upgrade for the 1975 structure. Each of the 10 floors had
to be completely gutted, seismically upgraded, all new mechanical Paulette R. Rutlen, CPE is ASPE 3rd Vice President and member of
and electrical distribution systems installed, all new tenant spaces Orange County Chapter 3.
created, and all in an occupied building. For the seismic upgrade,
Austin placed intermittent interior concrete sheer walls between
existing perimeter columns. The walls, rather than being formed,
were placed using Shotcrete. Austin also performed a complete
electrical and mechanical upgrade, and modernized the elevators
within the building.
To create the tenant improvement portion of the estimate,
Rutlen created a spreadsheet that included all of the information
from the room data sheets to arrive at the quantities for the
various types of walls, floor finishes, ceilings, etc. "I structured the
spreadsheet and to give me average square footage of walls for the
various rooms. That gave me my quantities to price," Rutlen says.
"The structural concrete work was easy to estimate compared to
the tenant work." Austin created estimates for the mechanical,
plumbing and electrical work in a similar fashion.
Because the project was a design/build project, Rutlen worked
closely with the design team so she could control the costs. "At
every stage of design, I worked closely with the designers and
project manager to make sure we stayed within the budget. It
really required constant monitoring, and I had to make sure we
stuck to the program."
In addition to working with the design team, the estimators
also bought out most of the project. "We controlled the scope of
work so that the spread between the bidders on the various bid
packages were very tight. We also monitored the subcontractor
change orders, stepping in to help negotiate when needed, further
controlling the costs."
Impact of Katrina on the
As the Gulf Coast region slowly considering risk management strategies, such as escalation clauses,
recovers from the devastation of and dedicated schedule float.
Hurricane Katrina, the question of
Short Term Disruption of the Supply Chain — Short-term
how this will impact construction
impacts are expected due to the effect of Katrina on supplies of certain
prices has been raised.
key construction materials, most notably forest products, the energy
While it is extremely difficult to sector, and shipping capacity. While other construction related
estimate the true impact on cost businesses were damaged or destroyed by the hurricane and flooding,
until the full extent of damage to these are not expected to pose any significant impact to the cost of
the region is known, initial construction for the rest of the country, due mainly to the fact that
research suggests that there will be other suppliers are more than capable of picking up any slack, and
By Peter Morris, an impact on construction costs, that much of the infrastructure that was damaged or destroyed served
both in the short term, and over regional demand, which will be depressed in the short term.
the next several years. These
Forest Products — Louisiana, Mississippi and Alabama are major
impacts come at a time when the construction industry is already
forest product producers, and there is extensive damage in the forests
stretched tight due to the unprecedented spike in prices seen for steel,
wood products, and concrete, as well as in the demand for skilled of all three states. The Mississippi Forestry Commission1 estimates
laborers. that trees equivalent to over 3 billion board feet of lumber have been
destroyed in that state alone. This, added to the damage to production
There are four main areas of impact, three of which tend to increase and distribution facilities, means that there will be significant
construction cost, and one that tends to depress construction costs. reduction in the amount of forest products coming from the region for
These are: the next one to two years. An additional fear is that all of the fallen
· The short-term disruption of the supply chain timber is now creating a major fire hazard, since it will both act as
· The short-term demand for emergency repair and accommodation fuel, and hamper any future firefighting efforts. A number of lumber
· The long-term reconstruction process mills in the Gulf Coast were shut down in the wake of the hurricane,
· The disruption to the regional economy nearly shutting down the supply of Southern Yellow Pine, and
consequently driving up demand for alternative woods from other
The total impact of the hurricane will depend greatly on the mills around the country, many of which were not prepared for the
interplay of all four of these factors, and, perhaps to a greater extent,
the way in which the markets manage the risk and uncertainty over
prices. Overall there is likely to be a short-term imbalance in supply and
demand, leading to increases in material prices of up to 20 percent for
Overview — Overall, we expect that the hurricane will have a
the main forest products, such as dimensional lumber and panel
substantial impact on the residential construction market and a
products. It should be noted, however, that prices have been lower
moderate impact on the non-residential and infrastructure market,
this year than last, and these increases should be within the normal
both within the region and nationally. The impact will be felt most in
range of movement of price for these products. For a wood-framed
the availability of contractors and laborers to undertake the massive
building, this would translate into an increase in the range of $1.00 -
amount of reconstruction that will be required in the years to come.
In addition, it is important to note that, due to the sheer number of
persons displaced as well as the length of time necessary to rebuild The impact on concrete and steel-framed buildings should be
some of the most damaged areas, much of the reconstruction — significantly less.
especially in the residential construction markets—is likely to be
The Gulf Coast is home to a number of large drilling wells and oil
spread out beyond those areas actually hit by the hurricane as some of
refineries, and the full extent of damage to those facilities - and thus
the displaced population settles elsewhere.
the long term potential impact on the country's oil and refined oil
We anticipate that there will be an overall increase in cost for product supplies - is as yet unknown. It would appear, however, that
residential construction in the region in the range of 10 to 15 percent, the impact on oil, gasoline and gas prices will be relatively moderate
and 5 to 10 percent nationally over the next two years. We expect after the initial shock is absorbed. Overall, energy is unlikely to
non-residential construction to experience a smaller cost rise overall, increase in cost by much more than 10 percent in the mid-term as a
with increases in the 5 to 10 percent range locally and less than 5 result of the hurricane. Energy is a key component in many building
percent nationally. materials, from production to transportation to installation. Increases
in energy costs will therefore tend to increase the cost of construction.
Individual materials and trades will see cost increases, with rises of
The total energy component of a building is typically in the range of
10 to 20 percent in key materials such as wood, gypsum board and
$2.00 to $4.00/SF This would translate into a cost increase for
concrete. The effect will be felt nationally, since most materials are
construction in the range of $.20 - $.40.
part of a national market, but the supply and cost problems will be
most acute in the gulf region. Shipping — The area impacted by the hurricane is home to some
of the country's largest ports, including the Port of New Orleans,
The increases could be exacerbated by the uncertainty over prices.
which is the fourth largest port in the world. Major U.S. imports to
We would expect that contractors will be very wary of committing to
this port include iron and steel products, forestry products such as
projects if they believe they could experience sharp price increases.
logs, lumber, boards and plywood, aluminum, and natural rubber and
For this reason, we expect that projects bidding in the next two
months could see much higher bids, simply as a reaction by the coffee from Latin America3. In the wake of the hurricane, thousands
markets to risk and uncertainty. In such cases, we would recommend of tons of goods waiting at the docks for processing were damaged or
destroyed. Ships carrying goods from other countries have been Non-Residential Construction
forced to seek alternate ports, which is expected to increase
Non-residential construction is likely to have experienced
transportation costs and possibly result in some time delays for
significantly less total loss, but will, nonetheless, need extensive
materials to reach their intended destinations. In addition, dama ge to
repair to non-structural elements. This will include both wind and
the major transportation routes, including roads and train lines,
water damage. There are no published estimates of the extent of the
means possible delays in the shipment of materials and goods to the
damage, but based on the areas affected, we would expect that the area
entire region4. of buildings seriously affected could be in the range of 15 - 20 million
The port disruption will have a marked effect on the availability square feet. The overall repair cost is therefore likely to be in the $2
and cost of materials that would normally pass through the port, and billon to $4 billon range, which is in the range of 5 to 10 percent of
the shipping costs for materials can certainly be expected to climb for the average annual construction volume in the three states, but only
the near future. It is likely that this effect will be relatively moderate about 0.5 percent to 1 percent of the total U.S. non-residential
and short lived, however. market.
Panic Buying — One further short-term disruption is panic Infrastructure — Infrastructure will need major reconstruction,
buying. There have been indications of this in many of the particularly in the flood-damaged areas. Much infrastructure will have
construction materials, including wood, and steel. This leads to rapid been totally destroyed, or damaged beyond repair. Again, estimates are
increases in cost and shortages of supply, which can become self very sketchy as damage is still being assessed, but the maximum likely
feeding, as the price increases and shortages draw in even more buyers exposure is in the $2 billon to $4 billion range.
seeking to hedge future risks. These panics have already led to Cost impact of damage repair
increases in some materials of 20 to 30 percent. As confidence returns
to the market, we would expect these premiums to dissipate, but it is Contractor Availabilitv — One of the most significant cost
likely that some degree of panic buying will remain in the market drivers will be the availability of contractors to perform the
through at least the early part of next year. reconstruction work, and the premiums they will command for
absorbing the risk associated with the work. Even in the market prior
Short Term Demand for Emergency Repair and to the hurricane, projects were experiencing difficulties in obtaining
Accommodation — In the short term, some areas are already noting adequate bid coverage. With the substantial increase in demand,
an increased demand for heavy construction machinery and particularly for wood framed and residential work, there will be a very
emergency materials. The stock market has responded with a sharp high excess demand for contractors. This demand will allow
increase in stock prices for companies that produce construction contractors to command higher profit margins.
materials and industry supplies, as the business community
In addition, contractors will be more cautious of the pricing and
anticipates a steep increase in demand for those products5. Short-term
delivery risk for materials and labor. Over the past two years,
spikes in the demand for materials and equipment necessary for
contractors have been severely impacted by unprecedented price rises
salvage operations, as well as for the creation of temporary shelter
of key building materials and unavailability of materials or adequate
facilities for the tens of thousands of refugees, are already underway.
skilled labor. They are now unwiling to absorb these risks to the same
However, any short-term impact should stabilize relatively quickly,
degree, and as a result are including greater risk premiums in their
and the initial impact to the system should die down over the next few
weeks. Additionally, any significant reconstruction is not likely to
begin for several months, especially in the New Orleans area where In certain areas, we have seen bid increases in the 10 to 20 percent
even basic repairs to rebuild necessary infrastructure cannot begin range beyond that which can be explained by direct increases in the
until the city is completely drained. cost of labor and material. We would expect that these types of
increase could be common in the region, and in the wider markets.
Long Term Reconstruction Process
Labor — In a time when the construction industry is already
Housing — The long-term impact will have much to do with the
stretched thin by the housing boom that has swept the country, as well
full extent of reconstruction, repair, and rebuilding that will be
as the high demand for new construction in numerous regions, a
required to return those areas to normal functionality. Current
massive reconstruction and recovery effort is expected to only make
estimates by the National Association of Home Builders6 suggest that things worse. One of the critical shortages expected to result from
around 200,000 homes in the New Orleans area alone have been Katrina is in skilled construction workers, a group already in short
destroyed, with possibly another 50,000 homes in the other areas supply even before the onslaught of two major hurricanes in the
hardest hit by the hurricane. We can expect that at least twice this Florida area in previous years, and now from Katrina. Finding enough
many homes, while not total losses, will need significant repairs. To skilled workers willing to come to the area to participate in
contrast the impact of Katrina to earlier disasters, Hurricanes Andrew reconstruction efforts will be compounded by the fact that the areas
and Ivan destroyed only about 20,000 homes each. hardest hit by the hurricane and flooding—and thus in greatest need
Due to the housing boom being experienced in the United States, for construction workers —historically pay less than the surrounding
we have been running at about 2 million housing units constructed regions, meaning that competition for an ever decreasing pool of
each year. The total number of homes severely damaged or destroyed laborers is likely to result in significant increases in construction
thus represents 10 to 15 percent of the total annual new home wages in order to lure workers away from more lucrative areas?
construction market in the country, which is a significant amount. Wood Products — By far the most heavily impacted material is
Experience from previous disasters, however, indicates that the lumber. The total amount of wood products required for repair of the
rebuilding process usually takes two to three years to complete, hurricane damage is in the range of four to six billon board feet of
spreading that impact out over a longer period of time. The extent of dimensional lumber and one to two billion square feet of panel
damage experienced in the region is likely to actually spread the products.
length of reconstruction out even further, due not just to the sheer
volume of work required, but also to home owners unable or These quantities represent a significant portion of the wood and
unwilling to rebuild on their property for longer periods of time. plywood consumption in the United States, in the range of 5 percent
Additionally, there is the possibility that local governments may exert to 7 percent of the total annual market. As a result, there is likely to
eminent domain to control or prevent reconstruction in some of the ....continued on page 10
areas most vulnerable to repeat flooding in the event of future
hurricanes of this magnitude.
Economics, Overheads and the
Importance of Dues By Michael D. Luke
A recent issue of ENR included an article intended for the design unimaginable figure that is not feasible without the help of all of us,
community titled "Market Returns to Prosperity." It starts out: "For acting united as a Society.
designers, 2004 was a break-out year." Another article, in the same
Yes, you get the obvious or tangible benefit of networking with true
publication, reads: "For large design firms, the construction market
professionals. Yes, you get reduced rates to purchase educational,
finally began to break out of recession in 2004 after four tough years."
development & estimating tools. Yes, you get discounts on freight and
As most of us would know, recovery in our segment of the industry
advertising. Yes, you get ENR at an unbelievable price. Plus DCD for
typically follows that of the designers. Moreover, I firmly believe that
free! Both, I believe are exclusive to ASPE. Yes, you have people
recovery in a peripheral "industry" like associations, typically then
working full-time dedicated to making what you do more valuable.
follows beyond that—perhaps even one to three years after
But, the most important thing you get to do with this group is the
construction’s overall recovery.
opportunity to get involved. Show off your skills where otherwise you
Some are just not well informed how national and international may not be in a position that recognizes or encourages your personal
events affect our economy. Don’t be shocked, but our own little ASPE development as we do.
is not impervious to the economy either. In fact, it is a fragile tendon
That help we each can give other to accomplish and continue these
tied directly to it, probably more so than most other groups. We do not
endeavors comes in the form of the dues we all pay. It’s how we
inform our estimators of these economics regularly. It would be in the
combine our efforts. We can get involved and help reduce those costs
estimating profession's best interest if we would do just that. For
through active volunteerism and leadership. Respect our overheads,
example: We do not need to be singled out as a special interest group,
help them work for you. Regardless of what we pay to national, even
when we ALL need to know that if nationwide insurance rates double
a bad estimate would show we get double that in return. Read Ed
or triple, we should consider that in our own estimate pricing. Let’s
Walsh’s report on the convention and you’ll agree with me that it
make the estimated cost or value of critical economic events part of
membership offers ten times the value. Finally if we you want more
our communications & website.
out of it, put more in to it. Get involved at any level you can. If you
Many estimators, contractors, and suppliers including some our don’t have time, donate money. No one will be more rewarded than
own, must not understand overheads & cost evaluations. We have all you.
heard each other complain about our competitor’s lack of such
Luke is president of Mountainlands Area Plan Rooms, Salt Lake City,
knowledge as we review post bid information. We hold meetings and
Utah and is the immediate past governor of the Northwest region of ASPE.
"preach to the choir" about some of these low bidders and how
uninformed they must be. I strongly believe that apparently stupid low
bids (as opposed to apparent low bid) are not underhanded attempts
to steal work. They are the effect of uninformed pricing, poor bidding
technique and estimating procedures, inaccurate take-offs and worse
yet, a combination of all of these.
Ironically, while interviewing some of our top estimators in the
country over the last four years, I have been amazed to hear
complaints about the cost of our dues. Yet, if we don’t respect or more
accurately "realize" our own firm’s overheads in many cases, as noted
above, how can we expect our employers to justify something as
ambiguous as dues to our favorite association? Let’s try and help www.ziatek.com
answer that. We do all get asked periodically, including at our own
facilities. 3 La Jara Court Tel: (505) 471-0757
First, let’s agree to a basic premise. We only benefit as a Society if Santa Fe, NM 87508 Fax: (505) 438-8658
we do great things together. Individually or even within the confines
Ziatek® Power Takeoff digitizing program
of our small chapter groups, we are limited by the effect we can make
on our industry. Great staff, producing great information, collected
from all corners of country and even the continent will make us all ï Rapidly digitize paper drawings
greater. Providing tools to industry to improve, inform, train, evaluate ï Includes e-Takeoff! for electronic drawings
and test the individuals within our profession helps make our entire ï 2D & 3D area, perimeter, volume, etc.
industry greater. Ultimately encouraging the owners of buildings and ï Color code your takeoff
facilities to recognize and recommend the use of our firms that ï Interface to any Windows™ application
"certify" their bids with staff our Society has incubated makes us all ï Transfer graphic image to Excel™
greater. ï Draw accurate CAD image from field
To help my chapter president friend answer his colleague’s query: measurements
"What does National do for me," let’s go beyond the intangible ï Specialty features include pitched roof data,
described above. First he should ask him, have you called the Society carpet seam diagrams, floor tile grid, acoustic
Admin Office lately? Each and every call answered, politely & ceiling grid, earthwork contours and more!
professionally. Then lets consider professional recognition at every ï Stunning graphics, accurate quantities!
level of our industry: How much would it cost you as an individual or
30-40 contractors combined as a chapter to spread the message of
producing better bids throughout the country? Well, it’s an
Is Your Construction Software a Profit
C e n t e r o r O v e r h e a d E x p e n s e ? By Sheldon Needle
In the competitive world of contracting, profit margins are tight. mobile communication with technicians that allows for real-
Jobs, service calls, employee productivity, and even your business tools time data exchange
must contribute to company profitability.
While not exhaustive in scope, this article briefly discusses several Reporting — How well does your software deliver the information
critical capabilities that will help you determine whether your current you need to make critical and timely business decisions? Catching
construction software is a profit center or just another overhead problems such as cost over-runs early is imperative to profit. Reporting
expense. should provide easy access to real-time information and offer the
flexibility to customize delivery to meet your unique business
Job Cost — The core of a profitable contracting business is job
costing. The more accurate your cost information is, the better you will
be at managing your job for profitability. • Comprehensive standard reports and inquiries
Capabilities checklist: • Custom reporting options to meet specific needs
• Owner/management overviews available for at-a-glance job
• Job cost projections are easy to produce on a regular basis assessment, with drill down to detail
• Provides early warning system for jobs that are off track
• Real-time access to actual costs is readily available
Integration — Solid communication between your accounting,
operations, and service staff is the glue that binds subcontract
Project Management — Project management is all about detail construction to profitability. Integrating your core technologies makes
tracking. Let a few RFIs or change requests slip through the cracks and this communication possible.
you might find your crew working for free. Software that automates
project management will ensure that changes to the original contract
are documented, approved, and invoiced for profit. • Single database equals single data entry, flexible reporting
Capabilities checklist: • Allows for enterprise-wide collaboration between accounting,
service and operations by putting everyone on the same
• Tracks job details in a single, easy-to-access database financial page
• Change orders are tracked from initial RFI or directive to • Lowers administrative overhead
• Forms provide turn-key production of submittals, RFIs, change
Profit or Expense: You Decide
requests, and more
Take time to evaluate how well your software streamlines workflow,
automates processes, and provides real-time job information for
Service Management — For contractors that perform service work,
informed decision-making. If your program doesn’t provide you with
technology is readily available to support technician performance,
many of the capabilities listed here, it may be time to consider whether
enhance customer service, and automate billings. Taking advantage of
your construction software is a profit center or overhead expense.
this technology can produce a significant ROI while enhancing your
company’s reputation as a cutting edge service provider. Sheldon Needle is president of CTSGuides.com. For more than 20 years,
CTS has been helping construction company owners and managers make
smart technology decisions. For more information, visit
• Dispatching allows for greater technician efficiency www.ctsguides.com or call (800) 433-8015.
• Streamlined billing for fast payment turn-around
• Advanced technology such as GPS tracking of service trucks or
Developing Accurate Estimates on
Excavation Projects By Steve Warfle
How can one engineer, three competing general contractors,
and a dozen excavating contractors all come up with different
numbers in an earthwork take-off of the same project?
The fundamental problem was not how to do the
calculations, (average end method, grid method, digitized or
CAD import) but in the thought process of what needed to be
calculated and the normal steps taken during excavation and
backfill. Below is a list of some common mistakes made during
site design and cost estimating.
1. The topographic data is inaccurate. A 2 inch elevation 4. Over-excavation. Many times the native material is
error across a 900,000 square foot retail center will produce a inadequate for structural stability. The site will need to be over
yardage miscalculation of almost 5,600 yards. The excavated, to allow for placement of structural fill under the sub
access to accurate surveying equipment such as
robotic total stations and GPS equipment makes
spot checking the existing topography for
discrepancies much easier and less costly. Short
changing a site with poor quality topo data will
generally create problems throughout the entire
2. The C & F was calculated from existing
grade. Calculating Cut & Fill by comparing
existing and proposed will guarantee incorrect
earthwork quantities. If the site has topsoil and
demolition (ex. walks and paved areas) this
quantity should be calculated and subtracted from
existing before the cut and fill quantities are
calculated (see cross section fig. 1).
3. The C & F was calculated to proposed grade.
Calculating the earthwork quantities from the
bottom of stripping and demolition to the
proposed grade in paving areas, building pads and
topsoil replacement footprints will guarantee
inaccurate numbers. Each of these features has a
big effect on the earthwork volumes. Consider
topsoil replacement requirement of 4 inches. In a
cut area, the site needs to be over excavated by 4
inches to leave room for the topsoil placed later.
Cut & fill calculations need to be done to the
bottom of the paving footprint and building slab
(see fig. 2).
base for load bearing features like paving and building pads as
illustrated in figure 3. This over-excavated material can either
be placed under the green areas (non-structural) or hauled off
5. The quality of on-site material was poor. The quality of
excavated material plays a major part in the cost of site
development. Oftentimes sites are designed to minimize soil
import or export, but without regard to the quality of the
stripped and excavated material. The material generated for the
Cut operation in fig. 2 may not be suitable for the fill
requirements shown in fig. 4. An expensive haul-off and an
expensive import would be the result. www.aspenational.org
It will be far less expensive to remove poor quality materials
with a design that lowers the site, than replace the poor
material with structural fill. While this cannot always be
achieved within the sites’ design goals (drainage, aesthetics,
etc.), a generous amount of soil borings or test pits will allow
for an accurate prediction of the quality of the cut. Knowledge
of material quality will prevent unanticipated cost overruns in
6. Shrinkage and Expansion. Soils in their natural
undisturbed state will normally expand when excavated and
shrink when used as fill. It is the loss of material due to
shrinkage that can affect a site "balance" tremendously.
Consider a 100,000 yard "balanced site" that does not take a 10
percent material shrinkage into consideration. It will be short
10,000 yards of material when excavated and re-compacted.
Shrinkage of 10 percent to 28 percent and more are not
These are just a few examples factors affecting site quantity.
A good design, which incorporates best use of material and
minimum movement, is a winner for everyone involved in site
development. There is no substitute for excavation experience
in local conditions when calculating sitework quantities.
Steve Warfle, SRW@INSITESOFTWARE.COM. Steve is
product manager of InSite SiteWork Earthwork & Utility
In The News...
Hurricane Katrina emergency’ within the meaning of section 3147 of title 40, United
Devastation Will Affect
Materials Costs, AGC
Economist Says More than 20,000 Have Earned LEED
AGC Chief Economist Ken Certification from Green Building Council
Simonson predicted that the devastation wrought by Hurricane
The U.S. Green Building Council (USGBC) announces that
Katrina will lead to higher costs for a number of construction
more than 20,000 building industry professionals have earned
materials for the rest of 2005 and into 2006 at AGC’s Annual Mid-
Leadership in Energy and Environmental Design (LEED)
Year Meeting in Washington, D.C. this September.
Professional Accreditation. LEED Accredited Professionals (LEED
Simonson estimated that construction materials prices will rise APs) support and encourage integrated design and help project
at least 10 percent next year, instead of the 6 percent to 8 percent teams streamline the LEED Green Building Rating SystemT
percent rise he had expected before the storm.
"Contractors can expect increased diesel fuel costs to
operate off-road equipment such as bulldozers, tower
cranes and trucks," Simonson said. "Fuel cost increases
will also show up as freight surcharges on the thousands
of deliveries to a typical construction job site. Most of
the increased costs in construction materials
throughout the country will result from a reduction in
oil and natural gas production, and not from higher
demand for those materials for the reconstruction
projects in the devastated areas."
Simonson added, "Lost production and imports due
to the storm will result in higher prices and/or supply
disruptions for PVC pipe, other construction plastics,
tires for large off–road equipment, galvanized steel,
gypsum products and cement."
Simonson noted, "The New Orleans customs district
led the nation with 12 percent of total imports, which
accounted for more than three percent of the nation’s
cement shipments during the first six months of 2005.
Therefore, cement shortages are expected to worsen in
some of the 32 states that were already experiencing
shortages and spread to new states. Cement prices are
likely to rise even more steeply than the 12.7 percent
increase that occurred between August 2004 and
In related news, President Bush has lifted Davis-
Bacon requirements on federal funds targeted for
reconstruction efforts in the region affected by
Hurricane Katrina. Under the federal Davis-Bacon Act,
contractors must pay the "prevailing" wage on all
federal projects over $2,000 in value.
In a September 8 proclamation, President Bush said,
"The devastation from the hurricane has resulted in the
largest amount of property damage from a natural
disaster in the history of the nation." The president
continued, “An enormous but undetermined number of
lives have been lost, and thousands of individuals have
lost their jobs and livelihood. An unprecedented
amount of federal assistance will be needed to restore
the communities that have been ravaged by the
hurricane. Accordingly, I find that the conditions
caused by Hurricane Katrina constitute a ‘national
In The News (continued)
application and certification process. The LEED AP program was
designed to recognize individuals who have demonstrated the
skills and expertise necessary to participate in the green building
The LEED Green Building Rating System was developed by the
USGBC in 2000 as a green building design tool and guideline. In
the past five years, more than 2000 projects have registered with
USGBC, declaring their intent to seek LEED certification of their
building. In the past seven months alone, USGBC has launched
two new LEED rating systems: LEED for Commercial Interiors
(LEED-CI) and LEED for Existing Buildings (LEED-EB). LEED-
CI addresses the specific needs of tenant improvement projects,
and LEED-EB deals with sustainable building operation and
"This is an exciting time for green building and LEED," said
Rick Fedrizzi, USGBC President & CEO. "Our members,
chapters, and 20,000 LEED APs are changing the way we think
about buildings. In five short years, LEED has transformed the
way buildings are being built and maintained by giving the
industry a way to verify and benchmark the performance of a
Continuing its efforts with this trend the USGBC is currently
working on rating systems for the speculative development
market (LEED for Core and Shell) and the residential homes
market (LEED for Homes). Both of these rating systems are
currently being pilot tested prior to their official release.
Career Center In Search of
A New Career?
For employment ads in ESTIMATING TODAY, contact
email@example.com. Let Us Help.
ASPE’s Career Center offering
a new job service, using
JobTarget technology. It is the
only national site dedicated
exclusively to the employment
of construction estimators. This
service provides new
opportunities for ASPE
members to post their resumes
anonymously at no charge. The
new job board enables
employers in the construction
industry to post their
employment opportunities ads
electronically. Click on the
"employment" button found
Estimators, Project Manager, Project Enginer, on the ASPE homepage to
Superintendent access the new ASPE Career
The Conti Group offers a unique opportunity for aggressive Center.
individuals seeking careers in the heavy highway/civil/
A minimum of 10 years construction experience with a
construction company is required.
Must be capable of leading an estimate on complicated bids
of $10 million or greater. Computer skills: proficient in HCSS,
Primavera, AGEK, Excel and Word.
Project Manager, Project Engineer, Superintendent
Must be capable of leading a complex project greater than
$15 million in value of series of projects simultaneously with
an aggregate value greater than $15 million. Project
manager computer skills: proficient in Word, Excel,
Primavera, Expedition, and Blue Book, AIA billings. Working
knowledge of AGTEK, HCSS.
New Jersey Pennsylvania
New York Washington, D.C.
Florida West Coast
Mail resumes directly to:
The Conti Group
One Cragwood Road
South Plainfield, NJ 07080
Attn: Kurt Conti
A Look Back...
The History of ASPE
The society that we know today as ASPE., the American Society of Professional Estimators, began in the
megalopolis of Los Angeles in 1951. Five men, who were practicing construction estimators, came together
and began to exchange information of mutual benefit about a profession that, in those days, was a precarious
pursuit. Estimators in the construction industry in the 50’s were used on a short-time basis by their
employers. Job security was non-existent, and the "secrets" of the profession were closely guarded. These men
were "professionals" in every sense of the word and were aware of the fact there really are no secrets in any
professional pursuit only the matter of expertise. By exchanging information on source, technique and
method they could improve each other and improve the competitive climate in which their profession lived
and thrived. From this meeting of the minds a dedication to their profession took shape. It eventually was
translated into the words we now recognize as our motto – "Dedicated to the promotion of the profession of
estimating and to the benefit of the construction industry."
Interest in the development of the society of professional estimators was slow to grow. It was not until 1956
that the society achieved enough strength to apply for incorporation under the California law and it was not
until the mid "60’s that any progress was seen in generating new chapters. Finally, through the efforts of men
like Marvin Hendler, Jim apRoberts, Ernie Lavoie, Howard Riggs, Lowell Elkins, and Charles Luppens the
society began to grow. First the estimators in the San Francisco area were persuaded to join as Chapter
Number 2 and later Orange County formed Chapter Number 3. The activities that were generated by these
groups centered mostly on socializing and exchanging information. Formalized meetings with speakers
related to the profession, were rare, but increased with each passing year.
Today the Society has 53 active chapters throughout the country with 17 chapters in development. Through
the past 50 years the Society has had 20 members step forward to serve as President of the Society with the
same determination and dedication inspired by its founding members. Fellowship awards have been bestowed
upon 26 deserving members and the Society has recognized 29 estimators as being "Estimator of the Year".
The Society has continued to grow with the efforts of its members, the Board of Trustees, the Education Board,
the Certification Board, the Standards Board, and various committees, all of which are volunteers that have
offered their time and efforts to carry forward the vision set by the founders of ASPE.
Does this sound familiar? You want to hire an
You wonder … does your future employee
have all the skills & knowledge they claim??
How can you be sure he or she knows exactly
what they are doing?
The applicant might have some field experience
and maybe even a few years of estimating
experience*, but no document or credentials,
which show what they can bring to the job?
Would you like some type of proof on their
resume or a job application that can give you more assurance? Until now you had to just take a chance.
Maybe you need to consider a prerequisite for these applicants….
Sign them up to take:
The American Society of
P r o f e s s i o n a l E s t i m a t o r ’s
• Developed by the ASPE Certification Board, administered by the Standards Board and
proctored by CPE’s ~ this exam is designed to be a "snapshot" showing the non-
certified** candidate’s general estimating knowledge.
• Exams will be administered at a location near you. Exams will take a few hours, (up to
4 will be allowed). Exam cost to ASPE members $200 / non members $250.
• Candidates will receive a certificate of completion for the "EP2" exam from the
American Society of Professional Estimators
[* minimum of 2 years] [**for information about the ASPE certification of estimators ~ please see our website]
For more information send us an email to:
or visit the ASPE website at www.aspenational.org