In this episode, we will look at how to properly review, scope, and estimate building automation projects.
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Phil Zito 0:00
This is the smart buildings Academy podcast with Phil Zito episode 308. Hey folks, welcome to episode 308 of the smart buildings Academy podcast. And in this episode, we're going to be discussing how to properly review scope and estimate bas projects. So while we will be using the whiteboard during this live stream slash podcast, don't worry if you're listening, we're still going to cover it in great detail. So this is important. It's something that often is taught but it's taught in silos. In my experience, when I see new sales folks getting on boarded, where they're taught how to review, they're taught how to scope. And they're taught how to estimate. But oftentimes, they're not taught these things in a logical series. And in such a way that as you're going and doing this process, you see how the things interrelate. Because really doing the review scope and estimation process, especially for construction projects, is an iterative process. Okay. So what that means is that you iterate through, usually several times, where you will perform a review. And then after you perform the review, you will then go and do a scope based on that review. And you'll do an estimate. And as you're doing that, you're going to find yourself having to typically re review, adjust scopes and adjust estimates as you discover more information. And we'll get to this a little later in the podcast. But more importantly, as you go through, especially with new construction projects, there's this thing called SDS DVDs and CDs. And these are the types of documents and the phases of the documents that are being created in a construction environments. So basically, you have a project that gets tendered, and once the project is funded, then you you know, you have GC, you have an engineer, you have an architect, and you're creating these design documents, the two primary design documents we're going to focus in on are going to be your MEP, so your mechanical, electrical plumbing drawings, and then your specifications. Now I'm going to be focused on Masterformat CSI, which is used here heavily in the United States. So I'm going to be focused primarily on division 23, which is our primary division for building automation. That being said, as these documents are developed, basically, you start off with a building intent, then you you get a little bit more definition on that building intent. And by the end, by the time you hit this CD phase, this construction drawing phase, what you end up with is actual documents that tell you what you should be doing in regards to how you're going to build the actual project, how you're going to execute everything from installation details, sequence of operations, equipment, schedules, bill of materials, all those kind of fun things, notes, details, etc. And if you are starting, especially like in a design build scenario, or maybe you're early on a project, you became part of a capital plan team, and so you you got an early on a project, well, then what we're gonna see, I'm actually gonna crank this sound down just a little bit. It was spiking a little. So hopefully this sounds a little better. We're still figuring out the acoustics of this room. So like I was saying, though, if you are going and you are engaging in SDS, then your scopes are going to be pretty loose, your estimates are going to be pretty loose. So what's going on is sorry, I'm getting slack terramin To shut slack so I'm not getting it.
Phil Zito 4:24
You put on your your slack that you're in the middle of a podcast and people still send you slack messages. I don't know. Anyways, so as I was saying, You're in SDS, you're in DDS, and you're in CDs, right? Well in SDS, your scope and your estimates are going to be really loose, okay. And then as you move closer to that CD phase, your scopes and your estimates are going to get much tighter. So you need to be cognizant of that. Now typically during a new construction project, you're going to be In 50, to 75, to almost 100% CD's when you're estimating. Now what does that mean? Well, from a percentage perspective, there's this thing called, oh my gosh, I always mess this up POC, I want to say, point of completion. But you know, the beauty of going and recording when you can't exactly remember. It always, it always slips me up. Point of completion, right? It's it's not percent of completion, it's point of completion. All right, let's take a look. It's always, why is this coming up as proof of concept? Because it's not proof of concept. It's point of completion, billing. Project, percentage of completion. Why do I always want to say point of completion? You know, I always feel like saying that it just kind of rolls off my tongue. And then I get folks who are like, no, it's percent of complete. I don't know why I still do that to this day. But it's neither here nor there. So you have this thing called percentage of completion. And this can be it's kind of loosey goosey, right? It's all over the place. This can be based on billings this can be based on actual like tangible execution of tasks. So you can say, when the equipment schedule is built out that is a certain percentage, when this is done is a certain percentage. So it can be defined as certain tasks, it can be defined as billings, etc. So once that percent of Completion is, you know, near 75% or greater, the amount of scope change that you're going to be running into, isn't that great. Now, I will tell you that in the SD and DD phases, in my experience, changes in the percent of Completion can have dramatic effects on scoping. But when we get to the CD phase, typically all the equipment selected, and now we're just talking like placement, so location, or routing of ductwork, things like that. And that doesn't significantly affect our bill of materials, as well as the selection of our products. So our scope does not change substantially. Now, there are issues that can come up and CD phase related to things like integration of BACnet via gateways on chillers, things like that. Okay, so now with that whole premise kind of defined, and I feel like we are all on the same page, in regards to our project flow, the different phases of projects, the different types of delivery models, projects, now we can go and we can look into how do we actually go and execute our process. So with that being said, I'm going to switch us over to the whiteboard, I'm going to switch mics real quickly. And we should be good to go. Let's see, okay. There we go, you should be hearing me on the other mic, it looks like you are. And I'm going to switch over here and we're going to go through review, we're going to go through scope, and we're going to go through estimate. But before I do that, I'm just gonna throw up the Google and make sure that no one is getting kind of lost. So as I mentioned, we have kind of this circular process. So for those who are listening to the process, or the podcast, what I'm drawing right now is kind of a circle with arrows on it. And that circle with arrows on it has review written on it. Right? It has scope written on it, as estimate written on it. And I'm actually going to make this text a little bit a little bit smaller. So it's got review scope and estimate on it. And this is what I like to call the basically the selling or estimating, like basically it's our quote, development process. That's, that's probably the better definition for it is, quote, development process.
Phil Zito 9:25
So let me go here. So quote, development process. And what happens here in this development process is first we have review. And as part of the review, whether you're a new construction or whether you're an existing construction or existing building, you're going to want to do document gathering, right? So document gathering, and what do we want to gather? As I mentioned earlier, we want to get our MEP set So we want to have those, and those MEP sets will have our core sets, and then they'll have any addendums. And I always spell addendum wrong, but whatever. So we'll have our core set. And we'll have our addendum. And then we'll have our spec. And with our spec, we will, it has three categories in it. It has one, which is gen two, which is material or products, and three, which is execution, some specs have four. And the fourth would be typically around validation of the actual implementation. Okay. So now, right, we've got a corn addendum. And what we're specifically focused in here with the MEP corn addendum from our gathering perspective, and our review perspective, is we want to focus in on our equipment schedule. And our equipment schedule is going to list out like our terminal unit schedule, it's going to list out our air handlers or chillers. Typically, we'll have model numbers, especially if we're in the CD phase and equipments been selected. And once we have that information, then we're able to really start to build out our scope, which we'll get to in just a second. But we have our equipment, and then any addendums to that equipment. Specifically, we also want to focus in on the notes. Because notes will typically call out the division that's responsible things that people who are newer to sales don't tend to catch is like actuators are furnished by controls contractor installed by mechanical. So you have to cover the product cost for the actuators, but the actual installation is potentially covered by the mechanicals. So that affects your costing. Additionally, things like factory package terminal units, where you're going to send the controls to the terminal unit manufacturer. And then they're going to go and actually go and say, Hey, this is our terminal unit. And here's the controls, we're going to put it all together and ship it out to you. So now all you have is the terminal unit cost or the controller cost rather. And you don't have that installation cost. In specification, this is going to be really specific when we get into our estimating. Because this is typically going to call out. I mean, it calls us so many things. If y'all are interested in like a super deep dive go to our scoping and estimating course, I think it's called our sales mastery boot camp. Now they changed the names on me. But um, to do an overview of this, the general is going to call out things like these are the products, these are the related sections that you need to refer to that may have scope that you're held liable to, you know, this is where you'll find general conditions, all this information, then the material is going to specify, hey, this is the specific type of material you have to use. Sometimes it'll just be something as simple as, hey, you need to use a four to 20. Or you need to use a zero to 10 type sensor. Other times it'll get like, this is the exact sensor you should need to use. And then execution, this is going to come into your estimating and your materials gonna affect your estimating as well. But execution is going to tell you like, Hey, do I need to support commissioning? Do I need support test balance? Do I need to support? A? What's the word I'm looking for here? So testing balance, I said material? Oh, yeah. So do how do I need to do my submittals? How are things going to be validated as well as it may have sequence of operations. And the execution may actually be opposed to the MVP, and you may have to put in some clarifications in the scenario. So just be aware of that as well. Okay. Alright, so continuing along here, we're going to go and look at the scope. So you've went through, you've done review, and now we're doing scope. So scope is where we're going to build out our scope and our scope is going to come to us from excuse me,
Phil Zito 14:12
from the MEP, core and addendum. equipment lists, typically, and we're going to build out our scope we're going to understand okay, are we attaching to an existing control system, new control system, what material so what systems what material and we're basically going to start to build out a system list. I tend to like to start from the terminal unit level and work up and here's why I like to do that. When I start with the terminal unit level and I work up what happens is that I am going and I have this terminal unit and then maybe I have 50 terminal units on the floor. That didn't helps me sighs my supervisory device Is that then helps me size my server. So I'm able to work up in, I like to do it terminal units, they're supporting air handler. And then once I've got that done, then I'll typically do a chiller and a boiler that support that air handler if necessary. And that will work for the majority of buildings. Once I've done material on systems, then I will do any integrations or any related specifications. Things I like to check for our EMI using BACnet cards, there's the factory package controls, Is there things that are furnished by others, or things I'm furnishing and not installing? I like to understand that. Then once I have all this information, I can go and actually do my estimate. And here's where I do product selection. Right. So I select my products based on my scope that I just built out. And I start to assign the trifecta of labor, material and subcontracted costs. And there's the rule of thirds, which is that on any given project, most of them will break out into a third labor, third material, and a third subcontractor cost. Now, if you self execute, then that labor will typically be combined with subcontractor costs subs typically being the electrical subs, if you don't self execute electrical, then the 1/3 law will typically follow. Now I am seeing the shift, as we tend to move towards more labor intensive and less or sorry, more material intensive via integrations, things like that, and less install labor intensive. So we are seeing that shift. But for an average product, that's a good check point for you to go and say, okay, are my cost wonky. So what you'll also do with your costs here is you'll say, Okay, I've got my labor, I've got my material, I've got my sub, and I'm going to go and then do my miscellaneous costs, your risk your if you have prevailing wages, you'll do that. If you have things like any permits that you have to do, you'll do that. Also any travel costs, all of this will get buckled, buttoned into here. Now, during this scope and estimating process here, you may find that something's unclear. And you may have to go and submit a RFI request for information or an R FC request for clarification. Excuse me, I'm still getting used to this dryer. And that RFI, or RFC is going to then give you further clarity, at which point excuse me, you'll go and adjust your scope and your estimate. So that is the review scope and estimate process. I hope it gives you some clarity around how to approach sales. And definitely if that you are looking to dive deeper into this, we do have a course that covers it. If you have any questions, do not hesitate to reach out in the comments. I'm going to pause and switch mics real quick. Give me one second.
Phil Zito 18:12
So there we go. We're back on the main mic. And like I said, if you have any questions, anything is unclear. Do not hesitate to reach out, let me know. And I'd love to go and answer any of those questions for you. Like I said, this happens every Monday, Wednesday and Friday at 8:30am Mountain Standard Time. Feel free to hop in and interact. I'll try to get here a little bit before 830. So any of you who are in the live YouTube can actually interact. This will go on to the podcast shortly after. Thanks so much for being here. You can find all the resources for this at podcast at smart buildings academy.com Ford slash 308. Once again, that's going to be podcast dot smart buildings academy.com Ford slash 308. Thanks so much for being here. And I look forward to seeing you in the next podcast episode. Take care
