In this episode, we discuss the 4-point method for bidding retrofit work so you can win more deals.
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Transcript
Phil Zito 0:00
This is the smart buildings Academy podcast with Phil Zito episode 312. Hey folks, Phil Zito here and welcome to episode 312 of the smart buildings Academy podcast. In this podcast, we're going to be continuing our series on sales and estimating. And so what we're going to be looking at here is the four point method for bidding retrofit work. So we're going to get a lot more tactical on this. For those of you who are listening to the podcast, I'll do my best to explain the visual aspects of this in audio form. That way you all can kind of understand and see what I'm talking about, at least verbally see it. So that being said, I'm gonna switch us over to the whiteboard, I asked for some forgiveness and grace, we are trying out a new microphone. It sounds good. Hopefully it comes out good. So I'm going to switch us over there right now. Alright, so things should be sounding pretty clear for you all. Hopefully, it's coming through good, probably a little echoey. Because I need to get some sound treatment in this room. But we're always trying to push the edge here. And you know, get the best sounding quality video and audio we can. So let's talk through this four step process to estimating retrofit work. So as we discussed in Wednesday's podcast episode, where in the last podcast episode, if you're listening to the one before this, we talked about how to go about basically figuring out all the risks associated with estimating retrofit work. But now we're going to talk about a couple of examples of retrofit work, we're going to talk about a rip and replace scenario, we're going to talk about a top down scenario, and we're going to talk about a bottom up scenario. So top down scenario is that we are going to be, you could take it two ways you can take the top down, and I interchange these. So if you listen to last week's episode, my explanation of top down is probably different than it was this one because I interchange them in my head and I forget, bottom up and top down, but they're the same premise. So top down, in today's episode, at least, is going to be where we are taking a approach where we are retrofitting the server layer and the supervisory layer and leaving the field layer intact. And bottom up is where we're going to be retrofitting the field layer, but leaving the supervisory layer and the server layer intact. Okay, so let's take a look, you go to a office building. And this office building is part of a group of office buildings that a property management firm owns, they really want to consolidate on a single front end and a single building automation system. Alright, they want to get there. So what we're looking at here is a top down approach. So for this office building, what we have to figure out is, first off, what is the building. So we're going to draw a little building here. For those of you who are listening, I'm drawing a building. And in this building, we're going to have let's just say a rooftop unit. Okay? I don't know what is going on with this rooftop unit. And it we're going to have a VAV box being served by this rooftop unit when you actually have a multitude of vav boxes being served by this rooftop unit, right? Sorry, I'm getting used to this new pen here.
Phil Zito 3:56
I'm going to actually switch pens because this is being goofy. Like I said, one of the benefits of using new technology is that it's new technology. Sometimes it doesn't work. Alright, let's switch pens real quick. So we've got this rooftop unit, and it's got a controller in it, we've got a VAV box with a controller in it. And what this right building is is actually a slew of buildings that this property management which we're just going to call PR O P mg MT firm is overseeing and let's say that building one, two, and three, so I'm drawing three buildings here. Building One has system type a building to a system type B, building three a system type C, we're focused solely on building one with System Type A. Now you could be tritium Johnson whoever you are, right, you're repping that product. So from a scoping or Starting from an estimating perspective, we're going to follow our four steps here that I'm going to list out. And these four steps are going, oh my gosh, did I just seriously write? Three right next to two? Yes, I did. Thank God, you guys and gals listening can't see what I just did. So one is, we're going to clearly identify the outcome. Right? And that outcome is going to drive our strategic approach. So to we're going to define our approach. Three, we're going to identify our risks. And then four, we're going to estimate. Now, you may be like, how is this an estimating process? Phil, you're only talking about estimating in bullet point four? Well, what I see quite often is that these three bullets outcome approach and risks are actually going to develop scope. And the clear and concise answer and accurate or if that's a word that your scope is, is going to lead to a easier estimate. So as we discussed in the previous podcast, we really want to get clear on our outcome or outcome is to have a top down integration, where we are putting a server in place at some undisclosed location, and that server is going to serve up user interfaces for these individual buildings, in which case, we have a built in one, two and three, with three different control systems A, B, and C. So we know our outcome is a single user interface. Okay. Now, as I said, we're only doing one building right now. So our server could be sized appropriately. But at the same time, we want to understand if this is going to spread to all the other buildings that this property management firm covers, then we want to size our server appropriately as well. So what is our approach? We've defined that our approach is a top down approach, we are going to implement a server and we are going to retrofit supervisory devices in these buildings. In our case in building one, what are our risks? Well, our risks are that the control system in the rooftop unit in the VAV box may not speak a protocol that works with our supervisory device. Additionally, our risks may be that the rooftop unit and Vav controls are antiquated, or damaged. excetera, there may be interlocks, maybe there is a campus central utility plant that feeds these three buildings. And these rooftop units feed back to that. And maybe we've got hydronic rooftop units instead of dxc rooftop units. These are all things that we need to figure out. Once we figured that out, though, it becomes pretty clear. You know, let's say for simplicity sake, because this is our first example, let's say that our rooftop unit, quite simply is speaking BACnet
Phil Zito 8:18
MSTP, as well as our vav boxes. So what we need to do is we just need to put a supervisory device in that building, most likely in a data closet that will then interact with the rooftop unit and Vav boxes. So we need to account for that. Now, we also have to check out like I mentioned, the controls supervisory logic that may exist, maybe there's trim in response. So the VAV boxes are feeding back calls for cooling calls for heating to the rooftop unit. And we're seeing that kind of sequence be implemented. These are all risks we're trying to identify once we've identified these risks, though, we can go and we can create a scope that quite simply is going to be no
Unknown Speaker 9:11
no provide
Phil Zito 9:15
one server so I'm writing down our scope that covers and this is so dirty the scope I'm writing here, it would be much clearer and better English and would look a lot more professional if I was doing that. But I'm totally doing this on the fly. So realize that's why it looks so dirty. Provide one server that can cover X amount of buildings, right?
Unknown Speaker 9:45
Develop graphics for X buildings.
Phil Zito 9:56
Remember how in the previous episode we talked about testing Balance, functional test, commissioning, etc. So those things tab,
Unknown Speaker 10:07
right CX, etc. Why did I do that?
Phil Zito 10:13
Tab, CX functional tests, training, all of those would be included, if needed. And that is just kind of our server level scope, as well as our execution overall, you can kind of bucket scopes into three things we can bucket into our kind of top level, our labor, kind of overseeing the project, and then our material and system specifics. So system Pacific specifics would be like install supervisory. I'm not going to write out this whole word supervisory device, and map and map, yo HQ, quantity one and Vav, like maybe quantity, Tad
Unknown Speaker 11:07
perform validation.
Phil Zito 11:14
Oh, you know, like I said, this is a pretty dirty scope right here. But it gives us enough to go and be like, Okay, we got a scope. Now we can take this scope, and we can feed it into an estimate. And as I've discussed in many, many, many podcasts, come on, shrink with me.
Unknown Speaker 11:32
Why aren't you shrinking? Alright, that's a shrunk as we're
Phil Zito 11:36
going to get. So as I've discussed, in many estimates, there's the rule of thirds. 1/3 is going to be electrical 1/3 is going to be material. And 1/3 is going to be labor. So we're going to take our electrical, our material, and our labor, and we're going to go and we're going to start breaking these things out. So for our electrical, we're going to say, Okay, we got to install a panel with the supervisory device, we potentially have to run some MSTP. So 22, three, if we can't use the existing, we're probably gonna have to do a 120 drop to the supervisory panel. So we can start to build that out into our material list or our electrical estimate, we can also use our electrical estimate to feed our material estimate, you know, with our materials, we may need a supervisory panel, we may need like a 16 by 20, nema one, especially if it's going in air conditioned space. And then as far as labor, we're going to need to go and create graphics, we're going to need to go and perform potentially test balance, functional tests, etc. So we're going to see an interesting shift here and retrofit work in that in a lot of retrofit work that is top down approach. So top down, meaning replacing supervisory device and server, our materials going to be quite low, and our labor is going to be high, so our materials can tend to go down, and our Labor's going to tend to go up, if it's a bottom up approach where we're replacing controllers, potentially replacing IO. That's where we're going to actually see our material go up and our labor go down. So we start to build out this material list. And then we start to build out our labor tasks. If you've followed us for any amount of time, you know that I am a fan of labor tasks. So we would want to break out like install design,
Unknown Speaker 13:40
graphics, programming
Phil Zito 13:47
and project management. And we would want to break out these labor codes. And then we would want to go and assign labor based on these codes because each code is going to have an associated dollar amount with it. You all still with me is the sound. Okay? Let me know in the comments. Like I said, we're using a new sound setup. So it's probably a little echoey it's going to be that way until I get the room acoustics a little better. Now, we've talked about this scenario, let's talk about a bottom up scenario. So I'm going to take outcome approach risks and estimates let's clear all this off.
Unknown Speaker 14:31
And we'll start together. So how come approach risks estimate
Phil Zito 14:52
my handwriting is atrocious I know. So let's continue along with this. Now we are going to look at a bottom up approach. Now bottom up approach is where we are actually going. And we are looking at replacing the field controllers, and potentially the I O. So from this approach, we are going to identify the outcome. Maybe the customer likes the control system they have, they liked the graphics, maybe they just installed a new control system. And what they're trying to accomplish here is they're looking at saying, Hey, we've got this new control system, we've got graphics, we like, we really want to replace our aging field controllers, and we want to replace our aging. IO. So our approach, what approach do we need here, we need a bottom up approach, what kind of risks do we have? So whereas the top down approach, in my opinion, is less risky, from a Oh, crap, stuff doesn't work perspective. But it's more risky from a customer's not happy with the graphics customer doesn't like how this looks. So there's a lot more customer input. Whereas a bottom down approach, there's much less customer input from a risk perspective. But there's a Oh, we don't have sequence documentation. Oh, we don't have the proper material. Oh, our IO doesn't work, oh, this equipment doesn't work. Those are the types of risks you're going to run into. So what we want to do is we want to get very heavy on validation,
Unknown Speaker 16:32
of operation.
Phil Zito 16:36
And that's going to become very important to how do we do this. As I mentioned in the previous episode, we do this through a couple things through sidewalks, through grabbing the O and M manuals, through doing a system validation, through going and looking at maintenance reports, etc. But what we want to do is we want to build out a clear equipment schedule, we want to understand exactly what we have, we want to understand how it's controlled. And then we want to understand the IO, what can be reused what can't. So let's talk about for example, maybe a school. So I'm just drawing what is somewhat square shaped on the screen. And this school is going to have like a boiler. But vlR is going to have a chiller see HLR, it's going to maybe have some are to use, maybe a unit ventilator. And let's say potentially, like some vav boxes, maybe being fed off of this. So a lot of different systems. So what we need to do first off, is we need to build this equipment schedule, we need to get an accurate list of the systems and that equipment schedule. I'm not going to write all this out this time, it's going to translate into our scope. And it's going to talk about what's in scope, what's not in scope. Next, we're really going to want to figure out how its controlled. Are there are ready sequences of operations that we can utilize. If so, we're going to look at how it's controlled. And we're going to take that SOP and we're going to basically just copy the SOP. If not then we need to make a decision with this is are we going to bring in a Professional Engineer To Engineer these are we going to take the risk of doing them ourselves, we need to understand that I don't recommend taking the risk of doing it yourself, I recommend contracting with a P and getting sequences written. Additionally, we have to consider how are we going to validate these sequences. So validation. And test and balance are going to be really important. Now in an ideal world, we would grab the test and balance like the min and max CFM and all of these things, we would grab them out of the VAV box controllers out of the air handler. Central planning controllers, sometimes you can't access the programming in those controllers. Other times you can't go and actually get any viable information that you need. So you may have to rebalance. Other times even if you can get the information how the other manufacturer is calling they're balancing set points may be different than what your system is and you may not be able to use those set points so just be cognizant of that. Okay, so we got scope we got SOP we got our professional engineer potential you got validation test and balance functional tests, but potentially and now we need to understand what I owe can be used reused. As I discussed in previous episode, we want to go and look at potentially what The IO types are and then based on those IO types, we want to go and say, okay, hey, we've got these types of sensors. Are they commonly one kg nickel? Or are they some proprietary sensor that we can't use? Right? Once we understand that, we can then build out our i o list. Okay, now, we're not going to typically call out our IO list in our scope letter will typically just call out the material will call out any tasks like validation, test, unbalance, professional engineering, training, etc.
Unknown Speaker 20:34
Excuse me.
Phil Zito 20:35
And then, once we have all of this drafted out, we can actually start to build out an Excel sheet. With a matrix, you know, this is something we use in our courses is we have an Excel matrix that basically becomes the BLM. And this Excel matrix with a bill of materials actually feeds into a scope matrix. So you have a scope matrix that breaks down each system into a bill of materials. And this bill of materials is unique in that it has the material list, the product number, or serial number or SKU, or whatever you want to call it, it has the quantity. And then we actually break out our labor, and our sub as well on this, and this becomes our estimating sheet. And we build this out accordingly. And the nice thing about this is if you do it long enough, and you start to keep track, like for hay commercial real estate, or K through 12, or health care, you can actually come up with some pretty effective swags a swag being a rough estimate, you can come out with some rough estimates pretty quickly by having a database of pre built scope matrixes and excel matrixes for Bill of Materials, because you'd be like, Okay, we've got five rooftops, this is our typical, and then you just tweak, and that makes your estimating so much faster. If you're doing this from scratch each time, you're wasting a ton of time, you should have these databases built out and use them accordingly. Okay, so that was a bottom up approach at a very high level. Once again, using the four step process of really clearly identifying our outcomes approach and risks to build out through my pen. It's so small, you can see this pen, it's so tiny, building out
Unknown Speaker 22:38
our scope,
Phil Zito 22:41
which then feeds into our estimates. And there we go. Now rip and replace is just a combination of the two, top down and bottom up. I'm not going to dive too deeply into that I'm actually going to switch back over to the computer real quick. Okay, Hey, folks, welcome back. There we go. So okay, we talked about a lot of things in this. And what I really want you to take from this right, I want this to be clear here is a couple things. One, it is incredibly important that you lay out your outcome, and you get crystal clear on your outcome. And you need to know that because otherwise, you will never be done with the project. And as I discussed in a previous podcast episode, being very clear with the outcome with the customer, as this is the outcome, this is what we agreed on. This is what's going to be accomplished, we want to make sure that all of that is very clear. Okay, because if you don't have outcome defined, then you will not reach your outcome. The second thing, right, as we look at it, and is oh, you can't see that. Here, let me is the approach, right the approach. So we want to go and make sure we're very clear on our approach. And that is top down, bottom up, or rip and replace. And I've described when we would use those three. From there, we want to get very clear on our risks. We want to identify the risks, and I've talked through the three different types of risks, all of that should package into a scope. And then when the scope comes, then we are able to do our estimate. And when we are estimating, this all comes together. Now I know this is called the the four point method for bidding retrofit work. So you might be like, Okay, how do we bid retrofit work? You've described how to estimate and how to scope I probably should have been more clear in retrospect, but hopefully, you have made the logical connection that if you have a scope and an estimate You can then bid retrofit work. So you have to have a completed scope letter, and you have to have a completed accurate estimate for the cost associated with that scope letter for you to be able to bid retrofit work. So probably should have been more clear in that logical connection. But, hey, do you know when you do 312, these episodes, things start to potentially get missed sometimes. That being said, as we're talking about, right, the three steps up into the estimate, I really want to hammer home this point of building a library. You know, for a lot of folks, doing retrofit work, especially estimates and scopes, to retrofit works can be very, very difficult. People tend to struggle a lot with it. What I want you to take out of this is that it doesn't have to be difficult, you don't have to spend a crazy amount of time, you simply need to go and make sure that you are building a library every time you do these, which is you know what you should be doing with programming what you should be doing with graphics, you should always be looking at how can I repeat and reuse. So if you take that approach of repeat and reuse, you'll find yourself building out a retrofit library pretty quickly. So I hope this helps. I hope it gives you know further clarity to what we covered in the previous episode. And it kind of gives you some more tactical examples. As always, everything's available at podcast that smart builders academy.com For slash 312. I encourage you to ask any questions you have in the chat or wherever you're watching or listening to this. I'd love to answer your questions. I'd love to help you better understand this. So thanks so much for watching and or listening to this episode. And I look forward to seeing you like always we're live on YouTube, Monday, Wednesday, Friday 8:30am Mountain Standard Time, and the podcast releases shortly after that. Thanks a ton and I look forward to seeing you next Monday. Take care
