A lot of plant construction work is customer-requested, and customers get to share in some or all of the cost. While a few rare utilities have a flat rate policy, in most cases customer contribution is based upon job cost. Property developers and homeowners alike are generally unwilling to give a blank check to a contractor – whether it is a home builder, landscaper, or interior decorator. And at construction time, utilities are just another type of contractor in the eyes of a customer. So a job cost estimate is usually in order.
Regardless of any disclaimers attached to an estimate, most customers, especially individual homeowners, will view an estimate as an absolute statement of the cost of work – with no allowance for overruns in either their budgets or their expectations of the extent of work. Customers will gladly accept a partial refund of their contribution if the cost of a job is overestimated. But successfully going back and asking for more, while not entirely out of the question, can prove to be expensive in terms of collection, public relations, and possibly even litigation costs.
Conversely, frequently refunding partial contributions can cast a shadow of doubt in the minds of board members as to the ability of utility management. Job cost recovery needs to be as complete and incident-free as possible.
All of these potential problems are alleviated with accurate cost estimation – and the best way to get there is with the right software tools.
For estimating software implementation to be successful, three criteria must be met:
- It must be accessible and integrated into the existing job planning and work flow. The best software in the world is useless if it does not get used properly. To ensure that it is effective, it needs to fit seamlessly into job planning without hampering personnel with extra steps to complete their jobs.
- It must be inclusive. Estimating proposed labor and material cost is not enough – a good estimating tool will take into account the equipment usage, transportation, the number of trips to the job site, and a myriad of third-party costs. Such considerations for costs should include excavation, boring, right-of-way clearing, and government fees.
- It must be flexible. Accuracy in the job estimating process is all about leveraging feedback from actual cost capture to adjust standard labor times, material costs, component usage, and overhead factors, for use in future estimates. A worthwhile estimating system needs to be able to factor in contingency adjustments for weather, terrain, and other environmental factors. All of these things should be considered and included into the estimate so it is as accurate as possible.
Accurate job cost estimation is a readily obtainable goal with the right tools. And investing in such tools will go a long way toward upholding the image of a utility to its governing board, and its rate payers.
PlantWorks and MapWorks from Terraspatial Technologies provide robust job estimation tools within a complete work order solution that integrates into your existing job estimation process. You can schedule a demo and see if TST is a good fit for your utility.