Keeping Your Estimates Accurate Through Code Changes
Changes to the electrical code are typically viewed as primarily impacting the jobsite, but what every good estimator knows is that anything that affects the jobsite should feed back into the estimate. After all, the estimate’s performance is proven by how accurately it predicts how the job is completed. With this in mind, we will look at some examples from recent changes to the National Electric Code® (NEC)—both this year and previously—that can directly affect the accuracy of your bid and your business.
One of the more frequent changes to the code is in adding or changing devices. A good example from the 2014 update is a requirement for an emergency shutdown system on photovoltaic (solar power) systems that can activate within 10 seconds. As jurisdictions begin adopting this code section (690.12), bids will need to carry this expense and labor. Even if you have not bid solar in the past, expect to see it more frequently as solar energy again appears to be rising in popularity after the recession slowdown.
Contractors handling mostly residential work can be affected by the NEC’s device changes too. For 2014, the past trend of requiring more GFCI- and AFCI-protected circuits continues. The new code now requires GFCI protection on hidden receptacles that are within six feet of a sink (210.8 (A)(7)) and AFCI protection for kitchen and laundry circuits (210.12). The material cost over traditional devices can quickly add up, even if the labor is the same. Miss these new requirements on a large remodel or new house, and your company will end up paying for it through deficiencies and customer callbacks.
Regional Code Issues
A good estimator will help grow the business—and that often means bidding on jobs outside the company’s local area. This situation can present a challenge as code changes such as the 2014 revision are not rolled out at one time in all areas of the country. In fact, some areas may be using the 2008 Code (now two revisions old) and will soon change directly to 2014. For example, the Idaho State legislature, which currently enforces the 2008 Code, will meet in January 2014 to consider enforcing the 2014 NEC in July 2014. If they agree, this means a jump of two revisions at once for estimators to take note of.
In addition to variations in which revision of the code is enforced, many authorities regularly add their own local changes. These regional variations in requirements mean that an estimator is going to need to do some homework when bidding a job outside his or her local jurisdiction if the bid is going to be accurate and competitive against local contractors. Even after the bid is won, the project should be done according to local code, with any extra expense due to missed requirements paid for by the contractor. As usual, accuracy in the bid pays not only in winning more bids but also higher profits once the job is complete.
The last consideration of code changes examined here is related to value engineering. Experienced estimators know that the designs they are provided to bid on may have inefficiencies. Estimators who apply value engineering are usually more successful. A good estimator will not blindly bid what is drawn but think of the job as a series of specifications to be met in the most cost-effective way possible that still meets the specifications and safety code.
A simple example of this is pulling wire—the drawing may show two conduits nearby one another with a minimal number of wires in each. Seeing this, the estimator may recognize that the code allows for one conduit to contain enough wires for both runs, and this is how it will actually be installed in the field. Since the estimate is supposed to predict how the real-word project will be built, the estimator will only carry one pipe instead of the two on the drawing. This is an example of value engineering in simply combining wire pulls.
What does this have to do with changes to the electrical code? The answer lies in the fact that value engineering, by its nature, often reaches the limits of what the code allows. Therefore, the estimator should keep track of even seemingly small code changes to maximize the power of value engineering. For instance, the 2011 NEC for ½” electric nonmetallic tubing (ENT) run with #12 THHN wire is a maximum of seven conductors in a single conduit (Table C.2, Chapter 9). However, the 2014 code allows one more conductor in this situation for a total of eight. For the estimator in this example, the 2014 change means the difference of saving an entire conduit run in material and labor—not just one more wire—if the combination adds to eight conductors.
These types of savings through value engineering can add up across the job and allow for more competitive bids while still keeping to the true cost of how the work will be done in the field. As we have seen, the limits of the code are often reached when maximizing savings in the estimate. Therefore, the successful estimator will perform value engineering along with full knowledge of the code revisions and local variations as they are rolled out across the country in the coming months and years.
All of these issues are important to the success of the electrical contractor. The challenge to the estimator for that company is accurately predicting the real-world labor and materials that the company will use on the job. This means the best estimators will continually learn about what impacts the jobsite—from the local code to value engineering techniques and the historical performance of the company. The 2014 NEC is simply a required part of this knowledge. The results—more bids won, more profits on jobs, and opportunity for growth of the business—are well worth the effort.
George Hague has more than 40 years of experience in the electrical industry and is well known for his expertise in the areas of electrical contracting, professional estimating,electrical licensing, and electrical code instruction. Twenty-five years ago he founded ConEst Software Systems and remains dedicated to creating powerful software solutions for the electrical and datacom industries. ConEst, an IEC Platinum Industry Partner, provides a range of software solutions that help contractors run their businesses more efficiently. ConEst’s IntelliBid estimating software includes features that perform automatic value engineering using the program’s built-in NEC tables. For more information, visit www.ConEst.com.