Planning, Estimating, and Scope Control

Welcome

Hello, and welcome. This is Super Structures General Contractors — a national general contractor headquartered in Powhatan, Virginia — here to help you and your clients build something that lasts. We're glad you're with us, and we look forward to connecting with you.

Alright, Planning, Estimating, and Scope Control. Don't let the plain title fool you. Here's the part that actually matters on the job: Estimate from your own history, make contingency a visible line with an owner, and never perform a change before it is priced and approved. Learn it well and the most common overruns on your jobs simply stop happening.

A remodeler priced a kitchen at $86,000. Over six weeks the owner asked for a relocated window, under-cabinet lighting, and a second tile pattern. The crew did all three, no paperwork, because the owner was pleasant and the super wanted to keep it that way. The final invoice came to $97,400. The owner paid $86,000 plus a "goodwill" $4,000, and told friends the contractor went over budget. With a change-order form on the truck and a rule of no change without a signature, the same owner would have signed three change orders totaling $11,400 and told friends the contractor was organized. Same work, same owner, opposite outcome.

Budget from data, not hope

• Your best estimating data is your own job-cost history: actual hours and quantities by cost code from the last twenty jobs. If you do not track them, start now; next year's estimates depend on it. A production rate you measured beats one you remember.
• Supplement with published benchmarks and supplier quotes with firm expiration dates that run past the expected award date. A quote that expires before award is not a price, it is a guess.
• Visit every site you bid. Access, laydown, overhead lines, the neighbor's fence, the slope the drawings flatten out. The things that break a budget are visible from the curb more often than you would think.
• Have the superintendent who will run the job review the estimate and the schedule before it goes out. The estimator prices the work; the super knows what it takes to do it in that order on that site.

Contingency on purpose

Contingency is money set aside for the unknowns you know will come. Typical ranges run from 2 or 3 percent on repetitive new work to 10 percent or more on renovation, site work, and anything with an unknown existing condition. Two rules:

• Show it as its own line in the budget. Contingency buried in unit prices gets spent as padding by every cost code, and when a real surprise arrives it is gone.
• Require a named person to release it, with a one-line note on what risk it covered. At the end of the job the contingency log is a list of what actually went wrong, which is the best estimating data you own. Contingency is not profit held in reserve and it is not a slush fund for scope creep. If the owner adds scope, that is a change order, not a contingency draw.

A schedule the crew believes

Build the schedule with the people who will run the job. Load it with the crews you actually have on the company calendar, not the crews you wish you had. Add weather days from local history. Mark the critical path so everyone knows which activities cannot slip and which have float. Then buy out the long-lead items against it in the first weeks: switchgear, elevators, windows, specialty doors, structural steel. A schedule with a 14-week lead item released in week six is not a schedule, it is a hope.

Lock the scope, then protect it

Before breaking ground, every stakeholder agrees on what is in and what is out. Three tools do most of the work:

• A scope matrix with your subs: who furnishes, who installs, who pays, for every item that could fall between trades. Blocking for cabinets, fire caulking, temporary heat, final clean. One page prevents most "I thought you had that" moments.
• A kickoff meeting where the owner hears the change process before the first request.
• The change-order discipline, every time:
• Someone requests a change: owner, architect, inspector, or field.
• Stop, or continue only on a signed time-and-materials authorization.
• Price it: labor, material, equipment, sub, markup, and schedule impact in days.
• Owner approves in writing.
• Update the budget and the schedule the same day. Changes performed before approval are gifts. Decide deliberately when you want to give one, and write it down as a gift so it does not look like an overrun.

Going Deeper (Intermediate)

Buyout is where a good estimate becomes a good budget. In the first weeks after award, lock subcontracts and purchase orders for the big scopes and the long-lead items. Record buyout gains and losses as variances against the estimate instead of quietly moving money around, so you learn which scopes you price well and which you do not. Put contingency releases in the same log. By mid-job you can see exactly where the budget went and why.

Learn to spot the expensive small change. Two more outlets are cheap. Two more outlets after the drywall is hung and painted are not. Any change requested after the affected work is in place should be priced with the demolition and rework, and the schedule impact should include the trades that have to come back. Pricing the change as if it were new work is how a $900 change costs $4,000.

Advanced / Pro-Level

Pros write the change-order process into the contract and the kickoff minutes: how changes are submitted, how fast they are priced, what markup applies, and that no change work starts without a signature or a T&M authorization. They keep a numbered change log with status (requested, priced, approved, rejected, disputed) and review it at every owner meeting, so the owner sees the running total and nothing arrives as a surprise at the end. They know that a stack of small unapproved changes is a claim waiting to be denied, because the owner will say, correctly, that they never agreed to any of it.

On the estimating side, pros close the feedback loop: every closed job's actual unit costs flow back into the estimating database by cost code. After a few years the estimate is built from the company's own measured production, and the estimator can tell the owner of the company, by scope, where the company makes money and where it does not. That is the single biggest lever on overruns, and it starts with coding time cards correctly.

Practice Challenge

During a tenant build-out the architect emails the superintendent: "Please add two more duplex outlets in the conference room, should be quick." The electrician is on site today and the drywall on that wall is hung but not finished. What does the superintendent do, and what should the price include? (Answer: thank the architect, forward the request to the PM as a change request, and hold the work until it is priced and the owner signs, or get a signed time-and-materials authorization today if the owner wants it now; the price includes the electrician's labor and material, cutting and patching the hung drywall, the finisher's return trip, markup, and any schedule impact; two outlets are cheap, but the habit is what protects the next request, which will not be.)

In Practice

On one job the super has a change-order form in the truck and the owner signs three of them without complaint because the process was explained at kickoff. On the next job a different super does the work on a promise and the company eats $7,400 and a referral.

Common Mistakes to Avoid

• Estimating from memory instead of job-cost history
• Burying contingency inside unit prices where nobody manages it
• Performing change work before it is priced and approved
• Pricing a late change as if it were new work, without demolition, rework, and return trips
• Updating the budget but not the schedule, or the schedule but not the budget
• Leaving long-lead buyout until the material is needed

Takeaway: Estimate from your own history, make contingency a visible line with an owner, and never perform a change before it is priced and approved.

Educational content — not legal, financial, or contractual advice. Every project and contract is different; follow your contract documents, your company's procedures, and the advice of your attorney, CPA, and surety.