Estimating General Conditions

By Charles Vander Kooi

Every contractor on every job has general condition items. I don't care how small a contractor you are, what kind of work you do, or how small your jobs are, you have general conditions, and you should be including them in your estimates. If you are not, you may very well be losing money.

You may be covering these items in your general or administrative overhead. If so, you are likely accounting for them by fixed percentage of each job. This is not a good idea because these costs vary too much from job to job.

General Conditions Defined

What are the general condition items that should be estimated on a job? Before going into that, let's first define what they are. General conditions are overhead type items that are not applicable to the company as a whole. They can be applied to particular jobs in a reasonable fashion because they are only needed for 1 particular job.

I like to think of general conditions as job overhead . General conditions are things that cost you money on a job but are not a part of the finished product the owner will have when you're done. You pay for them while you are doing the job, but they leave with you when you are done.

For example, portable toilets are general condition items which cost money on a monthly basis. You need them to do a job, but when the job is done, you take them with you. They are not a part of the finished product.

In a set of specifications it is very easy to see what general conditions are. Every set of specifications is broken down into 3 major divisions:

• There is the proposal and bid division in the front of your bid book.
• In the back of the book there is a large section that details technical specifications. This section tells you the details for how you must put this project together, and the kinds of materials you will be required to install.
• Between those 2 sections are 2 other sections called general conditions and supplemental general conditions . In those sections are thousands of dollars worth of items that will cost you money on a particular job, and that you must provide to complete the project.

Now, I'd like to address some general conditions individually.

Since I estimate my labor for each function based on actual production times, I need to pick up unproductive times such as that spent on job lay-out, organizing the workers, meetings, phone calls, paperwork time, etc., somewhere else. I do that in the supervision category of general conditions.

I figure supervision in 2 ways. If I am a general contractor, I put in the number of people (1, 1-1/2, 2, etc.) who will be needed to supervise for the duration of the project. If I am a subcontractor, or a specialty contractor doing smaller jobs, I figure the amount of days I will have people on the job.

For instance, let's say I have 200 man hours on the job with a 5-man crew working 8 hours a day. That's 40 hours per day. Consequently, I will have people on the job for 5 days. I then estimate how many hours I will spend in supervisory tasks per day if I am running the job. If I feel I would be supervising for 3 hours per day for 5 days, I would put 15 hours of supervision in general conditions.

Mobilization is the time spent hauling your equipment to the job and setting up any trailers, fences, or storage yards. It also includes the reverse procedure. Again, I estimate the distance, traffic conditions, and/or unique difficulties in getting to the job. Then I put in the hours for the labor and equipment to perform that function.

This item also comes into play if you are paying 'gas time' or drive time for your workers to and from (or between) projects. If so, the number of people you pay multiplied by the amount of time to get to the project from your office multiplied by 1-way or both ways multiplied by the number of days you are going to the project, will give you your mobilization hours.

Every day, crews stop early to put away tools and clean up their work areas. Sometimes, there are not many tools and the work area is such that it needs little cleaning. Other times, they are using a lot of tools and small materials, or there are sidewalks, curbs, gutters and asphalt to sweep and clean every day. That's why I like to estimate this as a separate item.

Again, the number of men cleaning up (usually all of them) multiplied by the amount of time to clean up (15 minutes, 1/2 hour, 3/4 hour, etc. ) multiplied by the number of days you are on the job will give you your clean-up time.

I remember bidding a job once that was 3 miles long and ran on each side of a small town. When I bid that job, do you know what I saw? I saw a person working on the far end of that job having to go to the potty. I saw him get in a truck, drive through town stopping at every red light before getting to the toilet on the other side of town at the designated yard and staging area. I saw him drive back through town stopping at a 7-Eleven to get a Big Gulp so he could go potty again later. He then drove on to where he had been working.

Do you know what I saw when he got back there? Another person got in the same truck and went through the same procedure all over again. We could have had 1 truck busy solely as a 'potty truck'.

When I saw this, I estimated 5 potties and put them up and down that job in proximity to where crews would be working. That was unique to that job. But, because I was estimating item by item, I could pick it up.

I estimate my equipment in 2 places. I put general job equipment in general conditions. This is the kind of equipment that is going to be at the job every day the job is going on. Pickups are general job equipment. 1-tons or 2-tons can be general job equipment. Bobcats, tractors, generators, and fork lifts can be general job equipment if you know they're going to be at the job for an extended period of time. If the equipment isn't going to be used in those ways, I estimate them as specialized equipment with the function they are performing.

Gophers are people who 'go for this or go for that. ' Some companies have a gopher in general overhead because they have someone who does that sort of thing throughout the company. It might even be the owner of a company.

But some jobs require gophers full or part time on that particular job. That job may be outside of the city in which you are located or be of the size or nature that requires such a person just for that job. Again, I estimate a gopher's time by the amount of hours spent per day gophering, multiplied by the days we will be on the job.

In order to illustrate the importance of taking everything into consideration, I want to share an experience of mine concerning this particular item. I remember estimating and getting a site-development job for a contractor who required us to maintain a large acreage of grass for 30 days. No sweat. I saw that requirement in the technical specifications and included in my estimate 2 men for 30 days to maintain the area.

On day 13, I met the owner's representative to sell him the job. After we shook hands, he gave me a bill from the local water company. It was addressed to our company-and it was for several thousand dollars. I asked, ' What is this? ' The owner's representative opened the specifications to a pre-marked page and showed me these highlighted words in the general conditions, " Contractor will pay for water during construction." This project was on a water meter. Thousands of dollars worth of water had been consumed to run the irrigation system day and night to bring up dozens of acres of grass.

Well, we fought it, wrote letters, screamed and hollered, but after months of no resolution, we finally paid the bill. " Contractor will pay for water during construction" - 7 little words in the general conditions cost us thousands of dollars!

General conditions are easy to distinguish, but you need to take the time to count and cost them, reason them through, and estimate them on a job-by-job basis, regardless of whether you are a general contractor or a subcontractor.

Examples of General Condition Items

This list of general conditions could go on and on because it will vary depending on the job, and on your way of doing things.