When a tender/bid has been unsuccessful it is wise for the estimator/contractor to analyse his/her estimate and to see if anything could be done differently which may result in it becoming the winning tender/bid.

It is reasonable to assume that all tender/bid will have similar material costs; it is also reasonable to assume, based on the economic climate that a respectable profit margin has been added. The difference in tender/bid prices will most likely be in the labour cost, due to the large variation in opinions as to "how long it takes to carry out a given task".

It is important for a company to have a set of labour times, which remain constant and are able, to be adjusted on a degree of difficulty basis. In the case of an unsuccessful tender/bid the labour can be adjusted down by a small percentage and the tender/bidre-assessed.

There are three main methods of calculating labour times.

Method One
A Time and Motions Study: This is by far the most accurate; where a particular task is observed and timed from start to finish. However if the task is timed only once a true record will not be achieved, the time taken for transporting tools and equipment from the work vehicle to the location on site, must be included in the study.

A time and motion study is carried out in a similar manner as nominated below, it should be over a period of time taking into account the repetitiveness of the task, thus arriving at an average and taking into account productivity losses.

Method Two
Walking through the process: In this example "A 100mm /4" copper pipe is to be fixed to a concrete ceiling in a commercial building, the process is:

1. Taking delivery of the pipe on site. (Ordering the pipe is not part of the install time)
2. Transporting the pipe to the required location in the building.
3. Transporting the as bottles and equipment, scaffolding, electrical cords, power drill, brackets etc to the location.
4. The time taken to set out with a string line where the pipe and brackets are to be placed.
5. Drill and place the anchors, fit the brackets, lift and fix the pipe in position.
6. The time to clean and complete one soldered joint.

   Note: At the end of the day the tools must be returned to the work vehicle or site shed.

7. There is also an allowance for mistakes where materials must be fixed or replaced, also the retrieval of tools, which may be left behind. While such productivity losses are not clearly defined in hours, there is a consideration built in to the labour time.

A question I ask in all my seminars is "if there were 100 hours allowed to complete a job, is it accurate to say two people will take 50 hours? The answer I get is mostly no, however in estimating terms the answer must be yes, this method demonstrates how that happens, if it were not the case you will go broke.

Method Three
Comparisons: Most contractors are capable of looking at small projects, including a residential house and nominate the total labour hours required to complete the job. Eg. Three tradespeople, four days, giving a total of 96 hours (3 people x 4 days x 8 hours).

While this method is acceptable, it is extremely restrictive. It limits the estimator to his/her own imagination and ability to assess the total hours. If one has to stand outside an industrial building, a shop, a set of home units or a hotel it is unlikely the total labour hours could be assessed accurately due to the larger scale of the project.

A good idea is to break the project down to small quantities such as pipe by the metre, fittings, fixtures and equipment by numbers or each. There is an oft' told story of an old fisherman who always tossed back the big fish and kept only the small ones. When asked why he did this he replied, "I only have a 225mm/9" frying pan". The message is: when we do not appreciate the complexity of a project, simply dissect it into smaller components we understand then let the multiplying factor take over.

Using the procedures described in Method Two, allocate a labour time to each task. It is important to use a small project where the labour hours are known before starting, calculate the total hours which have been allocated to each task using the new methods, the result will no doubt be that the total hours calculated individually are more than those which are a fact. Simply compare the two results and calculate the percentage difference, reducing the individual times to arrive at the correct result.

The benefit of using a labour time in hours per task is that it removes all limitation on the size of a project a contractor can estimate, it is possible to accurately calculate labour where there are 200, 500, 1000 or even 10,000 labour hours.

It is reasonable to say, "no two projects are the same", therefore by adopting the methods of using standard labour times "projects are not as different as first thought".