When Estimating Costs for your projects you obviously want to include the direct labor costs, material costs & equipment costs required to install the work. But it's important to remember the other costs that are not directly related to specific construction activities such as Project Management, Temporary Requirements, Utilities, Cleanup, Etc. These other costs are generally considered General Conditions and are often overlooked or an after-thought when creating an Estimate.
Neglecting to properly Estimate your General Conditions can be risky considering GCs generally amount to 10 to 15% of the Contract Value.
Here's a breakdown of common General Conditions you should consider in your Estimates:
Project Management staff may work from the office or if the project's large enough they may work on-site in a trailer. Generally, your projects will need Office Personnel such as an Estimator for the initial Pre-Construction and a Project Manager to handle the Project Management and paperwork. If your operation is large enough you may have additional staff such as Project Designers, Project Engineers, & Admins.
Project Managers & Office Personnel can generally work on more than one project at a time, so when you are Estimating Office Personnel time, consider the amount of time they will be splitting with other projects.
Field personnel are the 'boots-on-the-ground' personnel that manage the day-to-day operations of the project directly on-site and may even be performing some of the work themselves. Field personnel are generally Superintendents, Foreman & Project Engineers.
If you are working on a New Construction project or working on a remodel that doesn't have active utilities, you may need to furnish your own temporary utilities such as electrical, gas or water for the project to power tools and equipment.
Temporary utilities are generally estimated based upon the month of usage.
Temporary Project Requirements
Temporary project requirements include items such as temporary trailers, storage containers, temp toilets, scaffolding, floor protection, etc that is temporarily installed to help build the project.
Your project also might need various pieces of equipment to help with construction including Cranes, Trucks, Lifts, Generators, Space Heaters, Compressors, etc.
Rental costs for equipment can add up quickly so it's important to plan out what equipment you may need to rent for your project upfront.
On-going project clean-up and final cleanup are costs that are often overlooked. In order to keep your job site clean, you may need to hire a laborer to clean up the site on a dailiy/weekly basis. Once the project is completed your client, will expect the project to be 'Final Cleaned' before occupancy.
How should you present your General Conditions to your Clients?
Some contractors list all of the General Conditions costs as line items in their Estimate proposal to provide transparency for their clients, while others cover GCs in their markup.
Software for Estimating General Conditions
Our Remodel Estimator software has a General Conditions tool that can be used to calculate your General Conditions on the project.
You can create a General Conditions Report that shows a detailed breakdown of the General Condition cost items on the project, or you can roll your GCs into the Markup on the project.
General Conditions can be a significant portion of your estimate so it's always best to carefully plan-out your General Conditions with your Project Management staff to ensure your Estimate adequately covers the Project Staffing costs, Project Schedule & Temporary Requirements necessary to build the project.