National Plumbing & HVAC Estimator 2008

This 2008 National Plumbing & HVAC Estimator is a guide to estimating labor and material costs for plumbing, heating, ventilating and air conditioning systems in residential, commercial and industrial buildings.

Inside the back cover of this book you'll find an envelope with a compact disk. The disk has National Estimator, an easy-to-use estimating program with all the cost estimates in this book. Insert the CD in your computer and wait a few seconds. Installation should begin automatically. (If not, click Start, Settings, Control Panel, double-click Add/Remove Programs and Install.) Select Show Me from the installation menu and Julie will show you how to use National Estimator 32. When Show Me is complete, select Install Program. When the National Estimator program has been installed, click Help on the menu bar, click Contents, click Print all Topics, click File and click Print Topic to print a 40-page instruction manual for National Estimator.

Costs in This Manual will apply within a few percent on a wide variety of projects. Using the information given on the pages that follow will explain how to use these costs and suggest procedures to follow when compiling estimates. Reading the remainder of this section will help you produce more reliable estimates for plumbing and HVAC work.

Manhour Estimates in This Book will be accurate for some jobs and inaccurate for others. No manhour estimate fits all jobs because every construction project is unique. Expect installation times to vary widely from job to job, from crew to crew, and even for the same crew from day to day.
There’s no way to eliminate all errors when making manhour estimates. But you can minimize the risk of a major error by:

1. Understanding what’s included in the manhour estimates in this book, and
2. Adjusting the manhour estimates in this book for unusual job conditions.

The Craft@Hrs Column. Manhour estimates in this book are listed in the column headed Craft@Hrs. For example, on page 15 you’ll see an estimate for installing a 6 gallon hot water heater. In the Craft@Hrs column opposite 6 gallon you’ll see:

P1@.500

To the left of the @ symbol you see an abbreviation for the recommended work crew.

Page 7 (Table 2) shows the wage rates and craft codes used in this book.

To the right of the @ symbol you see a number. The number is the estimated manhours (not crew hours) required to install each unit of material listed. In the case of a 6 gallon hot water heater, P1@.500 means that .500 manhours are required to install 1 hot water heater.

Costs in the Labor $ Column are based on manhour estimates in the Craft@Hrs column. Multiply the manhour estimate by the assumed hourly labor cost to find the installation cost in the Labor $ column. For example, .500 manhours times $28.96 (the average wage for crew P1) is $14.48.

Monthly price updates on the Web are free and automatic all during 2008. You'll be prompted when it's time to collect the next update. A connection to the Web is required

Manhour Estimates include all productive labor normally associated with installing the materials described. These estimates assume normal conditions: experienced craftsmen working on reasonably well planned and managed new construction with fair to good productivity. Labor estimates also assume that materials are standard grade, appropriate tools are on hand, work done by other crafts is adequate, layout and installation are relatively uncomplicated, and working conditions don’t slow progress.

All manhour estimates include tasks such as:

• Unloading and storing construction materials, tools and equipment on site.
• Working no more than two floors above or below ground level.
• Working no more than 10 feet above an uncluttered floor.
• Normal time lost due to work breaks.
• Moving tools and equipment from a storage area or truck not more than 200 feet from
  the work area.
• Returning tools and equipment to the storage area or truck at the end of the day.
• Planning and discussing the work to be performed.
• Normal handling, measuring, cutting and fitting.
• Regular cleanup of construction debris.
• Infrequent correction or repairs required because of faulty installation.

If the work you’re estimating won’t be done under these conditions, you need to apply a correction factor to adjust the manhour estimates in this book to fit your job.

Applying Correction Factors. Analyze your job carefully to determine whether a labor correction factor is needed. Failure to consider job conditions is probably the most common reason for inaccurate estimates.

Use one or more of the recommended correction factors in Table 1 to adjust for unusual job conditions. To make the adjustment, multiply the manhour estimate by the appropriate conversion factor. On some jobs, several correction factors may be needed. A correction factor less than 1.00 means that favorable working conditions will reduce the manhours required.

Table 1 Recommended Correction Factors

Supervision Expense to the installing contractor is not included in the labor cost. The cost of supervision and nonproductive labor varies widely from job to job. Calculate the cost of supervision and non-productive labor and add this to the estimate.

Hourly Labor Costs also vary from job to job. This book assumes an average manhour labor cost of $32.66 for plumbers and $33.96 for sheet metal workers. If these hourly labor costs are not accurate for your jobs, adjust the labor costs up or down by an appropriate percentage. Instructions on the next page explains how to make these adjustments. If you’re using the National Estimator disk, it’s easy to set your own wage rates.

Hourly labor costs in this book include the basic wage, fringe benefits, the employer’s contribution to welfare, pension, vacation and apprentice funds, and all tax and insurance charges based on wages. Table 2 at the top of the next page shows how hourly labor costs in this book were calculated. It’s important that you understand what’s included in the figures in each of the six columns in Table 2. Here’s an explanation:

Column 1, the base wage per hour, is the craftsman’s hourly wage. These figures are representative of what many contractors are paying plumbers, sheet metal workers and helpers in 2007.

Column 2, taxable fringe benefits, includes vacation pay, sick leave and other taxable benefits. These fringe benefits average about 5.15% of the base wage for many plumbing and HVAC contractors. This benefit is in addition to the base wage.

Column 3, insurance and employer-paid taxes in percent, shows the insurance and tax rate for the craft workers. The cost of insurance in this column includes workers’ compensation and contractor’s casualty and liability coverage. Insurance rates vary widely from state to state and depend on a contractor’s loss experience. Note that taxes and insurance increase the hourly labor cost by approximately 30%. There is no legal way to avoid these costs.

Column 4, insurance and employer taxes in dollars, shows the hourly cost of taxes and insurance. Insurance and taxes are paid on the costs in both columns 1 and 2.

Column 5, non-taxable fringe benefits, includes employer paid non-taxable benefits such as medical coverage and tax-deferred pension and profit sharing plans. These fringe benefits average 4.55% of the base wage for many plumbing and HVAC contractors. The employer pays no taxes or insurance on these benefits.

Column 6, the total hourly cost in dollars, is the sum of columns 1, 2, 4, and 5. The labor costs in Column 6 were used to compute costs in the Labor $ column of this book.

Adjusting Costs in the Labor $ Column. The hourly labor costs used in this book may apply within a few percent on many of your jobs. But wage rates may be much higher or lower in some areas. If the hourly costs shown in Column 6 of Table 2 are not accurate for your work, adjust labor costs to fit your jobs.

For example, suppose your hourly labor costs are as follows:

Plumber $16.00
Laborer $13.00
Total hourly crew cost $29.00

Your average cost per manhour would be $14.50 ($29.00 per crew hour divided by 2 because this is a crew of two).

A labor cost of $14.50 is about 50% of the $28.95 labor cost used for crew P1. Multiply costs in the Labor $ column by .50 to find your estimated cost.

For example, notice on page 15 that the labor cost for installing a 6 gallon hot water heater is $14.50 each. If installed by your plumbing crew working at an average cost of $14.50 per manhour, your estimated cost would be 50% of $14.50 or $7.25 per heater.

Adjusting the labor costs in this book will make your estimates much more accurate. Making adjustments to labor costs is both quick and easy if you use the National Estimator disk.

Equipment Cost will vary according to need and application. It typically is $60 per hour for a 10-ton hydraulic truck-mounted crane.

Material Costs in this manual are intended to reflect what medium- to low-volume contractors will be paying in 2006 after applying normal discounts. These costs include charges for delivery to within 25 to 30 miles of the supplier.

Overhead and Profit for the installing contractor are not included in the costs in this manual unless specifically identified in the text. Markup can vary widely with local economic conditions, competition and the installing contractor’s operating expenses. Add the markup that’s appropriate for your company, the job and the competitive environment.

How Accurate Are These Figures? As accurate as possible considering that the editors don’t know your material suppliers, haven’t seen the plans or specifications, don’t know what building code applies or where the job is, had to project material costs at least six months into the future, and had no record of how much work the crew that will be assigned to the job can handle.

You wouldn’t bid a job under those conditions. And I don’t claim that all plumbing and HVAC work is done at these prices.

Estimating Is an Art, not a science. There is no one price that applies on all jobs. On many jobs the range between high and low bid will be 10% or more. There’s room for legitimate disagreement on what the correct costs are, even when complete plans and specifications are available, the date and site are established, and labor and material costs are identical for all bidders.

No estimate fits all jobs. Good estimates are custom made for a particular project and a single contractor through judgment, analysis and experience. This book is not intended as a substitute for judgment, analysis and sound estimating practice. It’s an aid in developing an informed opinion of cost, not an answer book.

Additional Costs to Consider

Here’s a checklist of additional costs to consider before submitting any bid.

1. Sales taxes
2. Mobilization costs
3. Payment and performance bond costs
4. Permits and fees
5. Storage container rental costs
6. Utility costs
7. Tool costs
8. Callback costs during warranty period
9. Demobilization costs

Exclusions and Clarifications

Neither the job specifications nor the contract may identify exactly what work should be included in the plumbing and HVAC bid. Obviously, you have to identify what work is included in the job.

The most efficient way to define the scope of the work is to prepare a list of tasks not normally performed by your company and attach that list to each bid submitted. Here’s a good list of work that should be excluded from your bid:

Your Bid Should Exclude

• Final cleaning of plumbing fixtures
• Backings for plumbing fixtures
• Toilet room accessories
• Electrical work, including motor starters
• Electrical wiring and conduit over 100 volts
• Temporary utilities
• Painting, priming and surface preparation
• Structural cutting, patching or repairing
• Fire protection and landscape sprinklers
• Equipment supports
• Surveying and layout of control lines
• Removal or stockpiling of excess soil
• Concrete work, including forming and rebar
• Setting of equipment furnished by others
• Equipment, unless shown, and personnel hoisting
• Wall and floor blockouts
• Pitch pockets
• The costs of performance or payment bonds
• Site utilities
• Asbestos removal or disposal
• Contaminated soil removal or disposal
• Major increases in copper material prices
• Fire dampers not shown on the plans

Your Bid Should Include

• Trash sweep-up only. Others haul it away.
• Site utilities from building to property line only.
• Piping to 5 feet outside the building only.
• Plumbing & HVAC permits for your work only.

Beware of Price Changes

There’s no way to be sure what prices will be in three to six months. All labor, equipment, material and subcontract prices in a bid should be based on costs anticipated when the project is expected to be built, not when the estimate is compiled. That presents a problem. Except for the installation of underground utilities, most plumbing and HVAC work is done six months to a year after the bid is submitted. When possible, get price protection in writing from your suppliers and subcontractors. If your suppliers and subs won’t guarantee prices, include an escalation allowance in your bid to cover anticipated price increases.

Material Pricing Conditions

All equipment and material prices quoted by your vendors will be conditional. They usually don’t include sales tax and are subject to specific payment and shipping terms. Every estimator should understand the meaning of common shipping terms. They define who pays the freight and who has responsibility for processing freight-damage claims. Here’s a summary of important conditions you should understand.

F.O.B. Factory (Free On Board at the Factory): Title passes to the buyer when the goods are delivered by the seller to the freight carrier. The buyer pays the freight and is responsible for freight-damage claims.

F.O.B. Factory F.F.A. (Free On Board at the Factory, Full Freight Allowed): The title passes to the buyer when the goods are delivered by the seller to the freight carrier. The seller pays the freight charges, but the buyer is responsible for freight-damage claims.

F.O.B. (city of destination) (Free On Board to your city): The title passes to the buyer when the goods are delivered by the seller to the freight terminal in the city, or nearest city, of destination. The seller pays the freight and is responsible for freight-damage claims to the terminal. The buyer pays the freight charge and is responsible for freight-damage claims from the terminal to the final destination.

F.O.B. Job Site (Free On Board at job site, or contractor’s shop): The title passes to the buyer when the goods are delivered to the job site (or shop). The seller pays the freight and is responsible for freight-damage claims.

F.A.S. Port [of a specific city] (Free Alongside Ship at the nearest port): The title passes to the buyer when goods are delivered to the ship dock or port terminal. The seller pays the freight and is responsible for freight-damage claims to the ship dock or port terminal only. The buyer pays the freight and is responsible for freight-damage claims from the ship dock or port terminal to the designated delivery point.

Obviously, it’s to your advantage to instruct all vendors to quote costs F.O.B. the job site or your shop.

Most construction specifications allow the use of alternative equipment and materials. It’s the estimator’s responsibility to select the most cost-effective products. Research and compare your costs before making any decisions. Avoid selecting any material or equipment simply because that’s what you’ve always done.

Don’t recommend plastic products such as ABS, PVC, or polypropylene pipe or corrugated flexible ducts until you’ve checked local code requirements. Most building codes prohibit use of these materials inside public buildings such as schools, care centers and hospitals.

It’s wise to select 100% factory-packaged equipment. Beware of equipment labeled “Some assembly required.” Field labor costs for mounting loose coils, motors and similar equipment are very high.

Let’s suppose you’ve submitted a combined plumbing and HVAC bid for $233,000. Your cutthroat competitor put in a bid at $4,000 less, $229,000. Obviously there’s no way you’re going to get the job. Right?

Not so fast! Maybe value engineering can help you win that contract — while fattening your profit margin.

Suppose the proposal you submitted had two parts. Part I is the bid for $233,000, based entirely on job plans and specs, just the way they were written. But appended to your proposal is Part II, a list of suggestions for saving money without sacrificing any of the capacity or quality designed into the system. Here’s an example of what might be in Part II:

1. Deduct for providing pipe hanger spacings per UPC in lieu of specified spacings:
   $1,750.00
2. Deduct for reducing heating hot water pipe sizes by using 40 degrees F Delta T in lieu of specified 20 degrees F Delta T:
   $4,600.00
3. Deduct for providing pressure/temperature taps at air handling units, pumps and chillers in lieu of specified thermometers and pressure gauges:
   $875.00
4. Deduct for eliminating water treatment in closed piping systems:
   $1,800.00
5. Deduct for piping chilled and heating hot water pumps in parallel in lieu of providing 100% stand-by pumps:
   $2,900.00

Total deductions:
$11,925.00

Adopting these suggestions would make you low bidder by nearly $8,000. A saving like that will be tempting to most owners, especially if the owner understands that your suggestions result in a system that is every bit as good and maybe better than the system as originally designed.

You’re not offering to undercut the competition. Far from it. You’re using knowledge and experience to create better value for the owner. That’s called value engineering and it’s likely to win the respect of nearly all cost-conscious owners.

Notice that reducing costs is only part of what value engineering is all about. You don’t cut costs at the expense of system quality, integrity, capacity or performance.

Don’t waste your time, and your client’s, by offering to substitute cheaper or lower-quality fixtures or equipment. Any cutthroat contractor with a price list can do that. Recommend the use of inferior materials and you’ll be associated with the inferior goods you promote. Some owners consider even the suggestion to be insulting.

The recommendations you make (like most of those in the example) will require design changes. You can expect to be examined (or even challenged) on these points. Be ready to explain and defend each of your suggestions. Convince the client (or the design engineer) that your ideas are based on sound engineering principles and you’re well on the way to winning the owner’s confidence and the contract.

Now, let’s go back to the list and see how we might justify the five value engineering recommendations.

1. Pipe Hanger Spacing. The pipe hanger spacings recommended in the Uniform Plumbing Code (UPC) are calculated by experienced, professional structural engineers. The safety factors used in these calculations are very conservative. They’ve been widely used for many years and have proved to be more than adequate. There’s no need for more hangers than the UPC requires.
    
2. Changing HHW Delta T. In hydronic heating systems, heat measured in Btus is pumped to terminal units. The proposed change of the Delta T, from 20 degrees F to 40 degrees F, has no effect whatsoever on how many Btus the system delivers. You’re not changing anything but the volume of water being pumped. At lower volume levels, the size of the pump, the pipe and the pipe insulation can all be reduced. Not one of these changes will affect the system’s ability to transmit heat. Furthermore, operating costs will also drop, since less pump horsepower will be needed to run the smaller pump.
    
3. Thermometers/Pressure Gauges. Thermometers and pressure gauges installed on or near vibrating machinery have a very short life expectancy. Gauges quickly lose accuracy under harsh conditions. Readings will become less and less reliable. That’s potentially dangerous. You can avoid this problem by using insertion-type pressure/temperature taps instead. Store these sensitive gauges in a desk drawer or a tool crib when not in use. Safely stored, they’re protected from damage. They’ll give accurate readings longer and won’t need to be replaced as often. And they’re simple to use. Just insert a gauge in one of the conveniently located taps. Make the reading, then remove the gauge and put it away.
    
4. Water Treatment. ITT Bell & Gossett has done studies on corrosion in closed hydronic systems that have a make-up water rate of no more than 5% per year. These studies show that corrosion virtually stops when entrained air is either removed or depleted. No water treatment is needed in this closed system.
    
5. 100% Standby Pumps. Two pumps piped and operated in parallel are more economical. Even if one pump fails, the other pump can maintain delivery at 75 to 80% of the designed flow rate.

That’s usually adequate for emergency operation. These cost-saving ideas are small, but could tip the balance in your favor. I hope they demonstrate the potential that value engineering has when bidding jobs. Any time you’re compiling an estimate, keep an eye out for ways to save money or reduce the owner’s cost. Jot a note to yourself about each potential saving you identify. Before submitting the bid, make a list of your alternate suggestions. Maybe best of all, markup on your value engineering suggestions can be higher than your normal markup. If value engineering can cut costs by $10,000, maybe as much as $4,000 of that should end up in your pocket!

Every plumbing and HVAC estimator works under deadline pressure. You’ll seldom have the luxury of spending as much time as you would like on an estimate. Estimators who aren’t organized waste valuable time and tend to make careless errors. Try to be well-organized and consistent in your approach to estimating. For most projects, I recommend that you follow the procedures listed below and in the order listed:

1. Get a second set of project drawings and specifications for use by your suppliers and subcontractors. Remember that your subs and suppliers need access to the plans and specs and time to prepare their quotes.
2. Study the plans and specs carefully. Highlight important items. Make a list of specific tasks that require labor unit correction factors. The estimate is never complete until you’re totally familiar with the project and the applicable construction codes.
3. Get the general contractor or owner to identify the proposed construction schedule and subcontractor lay-down (storage) area. Work schedule and site conditions always affect your costs.
4. Contact all potential suppliers and subcontractors as early as possible. Set a time when each can come to your office to make their take-offs from the spare set of contract documents.
    

When this important preliminary work is done, or in progress, it’s time to begin your detailed take-off.

You can compile estimates on a legal pad, a printed estimating form or on a computer. Regardless of the method, these guidelines will apply:

List Each Cost Separately on your take-off sheet. Don’t combine system estimates, even if the materials are the same type. A combined system estimate may have to be completely redone if materials for one system are changed at a later date. Use the Estimate Detail Sheet on the facing page if you don’t already have a good material take-off form.

Use Engineer’s Identification Numbers when listing equipment. The word pump without any other description is ambiguous when there are several pumps included in the project.

Don’t Forget Labor Adjustment factors if your labor costs are significantly higher or lower than the costs used in this book. See instructions on page 7 for adjusting labor costs.

Use Colored Pencils or highlighters to mark the items you’ve taken off and listed. Use a different color for each piping or ducting system.

Log Telephone Quotes and other important phone conversations on a telephone quote form. See the sample on page 14.

Project Estimated Costs for labor, material and equipment to the time when the work is expected to be done, not when the job is being estimated.

The only good estimate is a complete estimate. You’ve probably heard this saying, “He who makes the most mistakes is likely to be low bidder, and live to regret it.”

It’s both common courtesy and good business practice to deliver an unpriced copy of your bid or proposal letter to the general contractor three or four days before the bid deadline date. This gives the contractor time to study your proposal and obtain alternate pricing for items you may have excluded. To avoid misunderstandings, make sure your proposals include, as a minimum, the following elements:

1. The complete name and address of the proposed project
2. Specification title and issue date.
3. A complete listing of drawings and their issue or revision date
4. A complete list of addenda and their dates of issue
5. A list of specification section numbers covered by your proposal
6. A list of exclusions, clarifications and assumptions.

Your final bid can be phoned in or sent by fax, but it should reach the general contractor or owner no more than five or ten minutes before the bid dead-line. Prices submitted too early may have to be revised because of last-minute price changes by subcontractors or suppliers.

Softcover - 417 Pages
8-1/2 x 11 in.

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