- - AGRICULTURE CORE CURRICULUM - - (CLF6000) Advanced Core Cluster: ORNAMENTAL HORTICULTURE (CLF6700) Unit Title: LANDSCAPING ____________________________________________________________________________ (CLF6706) Topic: ESTIMATING AND BID Time Year(s) PREPARATION 1 hour 3 / 4 ____________________________________________________________________________ Topic Objectives: Upon completion of this lesson, the student will be able to: Learning Outcome #: (M-5) - Prepare a simple bid on a completed landscape drawing. Special Materials and Equipment: An enlarged version of the simplified takeoff sheet shown in LANDSCAPE DESIGN (Hannebaum, 1981) on page 280; a simple landscape plan with specifications as described in the activity below. References: Hannebaum, Leroy. (1981). LANDSCAPE DESIGN: A PRACTICAL APPROACH. Reston, VA: Reston Publishing Company. Ingels, Jack E. (1987). LANDSCAPING (3rd ed.). Albany, NY: Delmar Publishers. Wilson, Scott. (1976). LANDSCAPE CONSTRUCTION MANUAL. San Luis Obispo, CA: California Polytechnic State University, Vocational Education Productions. Evaluation: Unit Exam and evaluation of student activity described below. ===================================================================== *** INSTRUCTORS PLEASE NOTE *** The detail of this topic presentation goes beyond the scope necessary to meet the requirements of the Core Cluster in this area. It will take longer to teach than indicated above if covered entirely. It is included for local enrichment as appropriate to the class. ===================================================================== TOPIC PRESENTATION: ESTIMATING AND BID PREPARATION Developing accurate cost estimates for landscaping is a necessity if a landscaper is to survive in business and remain profitable. Preparing competitive bids requires careful attention to detail, and an intimate knowledge of material and labor costs. Much of this knowledge comes only with experience, but the information below will help the beginning landscaper conduct the essential business end of landscaping. A. Plans and Specifications: Before accurate landscape costs can be developed, plans and specifications for the project in question must be available. Costs are developed based on the requirements of the construction documents, and what the contractor knows will need to be done to accomplish the job. 1. Purpose of Plans: Plans show visually the dimensions of required construction and the areas that will require landscaping. a. With the use of an architect's scale, the contractor can measure, for instance, the area planned for turf, and determine how much sod will have to be purchased to complete the lawn. b. Likewise, areas of paving, decking, and ground covers can be calculated, and the cost of the required materials determined. 2. Purpose of Specifications: Written specifications state in words the quality of materials and the requirements for construction. a. The specifications protect the interest of the owner by stating the minimum quality of work. A contractor will be required to perform the job as specified and use the quality of materials specified. b. Specifications protect the contractor against claims that work performed does not meet expectations. If specifications are met or exceeded, no legitimate claim can be lodged against the contractor. 3. Effective Specifications: Landscaping specifications should be written in clear, precise language, and should cover contingencies common to the trade. Some guidelines to follow when reading or writing specifications: a. Content: Specifications should cover details such as scope of the work, material specifications, installation specifications, maintenance requirements, guarantees and warranties, timetables for completion of the work, and method of payment b. Contingencies: While the contractor will use the material and installation specifications directly in preparing his or her cost estimates, contingencies such as follow-up maintenance or plant replacement guarantees must be taken into account and costed for. c. Style: Specifications should be clear, but written in as simple terms as possible, to promote understanding between all parties. B. Methods of Price Quoting: There are many ways for landscapers and owners to agree on prices and payments, but the three described below are among the most common. 1. Time-Plus-Materials: This is perhaps the easiest approach to pricing a job, and is well-suited for smaller jobs where less money is involved. a. The client agrees to pay for all materials. The contractor may or may not charge a markup on material. This should be agreed on in advance. b. The contractor keeps track of all hours spent on a job, and charges an agreed-on hourly rate to the customer. c. Extra labor, rental machinery, and subcontractors are paid for in the same manner as materials. The contractor must charge a high enough hourly rate to cover his or her overhead costs and profit. d. This is a conservative approach to pricing, protecting the client from paying too much more than the job costs to accomplish, and protecting the contractor from "going in the hole" on a job inaccurately estimated. 2. Cost Estimation: This method of price quoting is similar to a bid in that a predetermination is made by the contractor regarding the cost of the job. a. This cost estimate is shared with the customer, and is agreed to as a preliminary figure. b. If substantial savings or cost increases become apparent during the course of the work, alterations can be made in the price charged. c. Cost estimates allow clients to make informed decisions about the scope and quality of work they want completed before the job is begun. This tends to be more important when the project is large or complicated, and cost overruns could jeopardize the project. 3. The Bid: A bid is a FIRM PRICE quoted for the work to be done per plans and specifications. a. The contractor takes the risk of having to absorb cost overruns, but reaps the benefits of a job completed under estimated cost or ahead of schedule. b. Bidding is the procedure used most often when the job is costly and complicated. Competing firms will submit bids for the same job. c. Competition applies downward pressure on prices quoted for a job. The need to cover actual and potential costs and make a profit create an upward pressure. It is easy to see why developing competitive yet profitable bids requires considerable experience and knowledge. d. Preparing a Bid: There are several categories of costs that need to be considered when preparing a bid. To discuss each of these in detail goes beyond the scope of this lesson, but should be researched by the student serious about conducting a profitable landscaping business. In the meantime, the beginning landscaper should recognize the following categories as inevitable business costs. 1) Cost of Materials: a) Account not only for the materials that go into the finished product, but for waste, trim, and other extra materials that aren't used. b) Any "stock on hand" that will be used for a job must be considered part of the cost. c) If the job will take place very far in the future, account for possible increases in material costs. 2) Cost of Labor: This is the most difficult part of a job to accurately gauge. a) Labor costs can change with unforeseen factors such as difficult soil or weather conditions. b) The contractor must remember to charge for self- labor, in addition to any hired help. (Self-labor, however, is not a deductible expense for the business.) c) Remember to include costs related to hiring employees such as workers' compensation insurance. d) It is easy to underestimate labor costs. Remember to account for break times, employees going to the bathroom, and travel time to and from the job when calculating the amount of time a task will take. 3) Cost of Equipment: a) Even the well-established landscaper has to rent equipment from time to time. This cost must be accounted for. b) Also, when a contractor uses a piece of his or her own expensive equipment, such as a tractor, the cost of buying, maintaining, and using that equipment must be accounted for somehow. It should be charged against the job it is being used for at an hourly rate. 4) Cost of Subcontractors: Few contractors have the expertise and equipment to tackle all phases of a complex project. The cost of a subcontractor plus the associated administrative costs must be charged for. 5) Overhead: This is a category of costs often overlooked by the beginner. A few examples of costs which must be recovered are: a) Travel and vehicle costs associated with a job. b) Bookkeeping and accounting costs. c) Phone bills and office supplies. d) Interest on loans, bad debts, and even downtime for machinery should be budgeted for. 6) Profit: If profit is not budgeted, the business will not make any money. a) Building profit, beyond any salary the contractor pays him or herself, is important if the business is to expand or survive tough times. (The landscaping business is cyclical like many construction trades.) b) A common way of determining profit is to charge a percentage of the total job cost. The percentage charged for profit is often where a bid is won or lost. Experience will teach what the market will bear. c) Large, expensive jobs will generally command smaller profit percentages. e. Submitting the Bid: 1) Once all costs have been calculated and profit determined, everything is added up and the total bid is submitted in a sealed envelope to the client. 2) If the client chooses the bid, the contractor is obliged to complete the specified work for the price of the submitted bid, even if there are cost overruns that cost the contractor his or her profits. f. Change Orders: Change orders allow for some flexibility in the construction phase after a bid has been accepted. 1) In the course of construction, the owner may decide he or she wants some work performed that is not detailed in the plans and specifications. 2) Of course, this work can be done, but the contractor and client must agree in writing on the price of the modified work. This is called a change order. 3) The collective effect of change orders over the course of a large job can substantially increase the total price. 4) Change orders protect the contractor from a too-demanding client, and help the client dealing with a too-rigid contractor or thinly worded specifications. C. Estimating Procedures: The most basic part of estimating, common to all projects, is the estimation of materials and labor. This is a sometimes painstaking process in which every plant, every cubic yard of material, and every hour of labor must be counted. 1. The Take-Off Sheet: Many landscapers use a long list of landscaping materials and services to use as a kind of checklist when adding up costs. From this the "take-off" list is made up, as materials and labor are "taken off" of the plans and specifications. a. The take-off sheet helps a contractor list in one place all the different things that may have to be purchased to do the job. b. Too much care and detail cannot be taken when preparing the take-off. Forgotten items will have to be paid for by the contractor if they are not accounted for in the bid. c. A simplified take-off sheet is shown in LANDSCAPE DESIGN (Hannebaum, 1981) on page 280. 2. Calculations for Landscape Estimating: Some of the basic arithmetic calculations required for calculating landscape costs are given below: a. The area of a rectangle or square is calculated by multiplying length times width. A triangular area is equal to one half of the triangle's height times its length. b. The volume in cubic feet of a needed material is calculated by multiplying the length times the width times the depth. All units must be in feet. For example, if a three-inch layer (1/4 of a foot, or .25 feet) of soil amendment is to be incorporated into an area eight by ten feet, the calculation would be 8' x 10' x .25 = 80 x .25 = 20 cubic feet. c. To convert cubic feet to cubic yards (the measure most often used for buying and selling materials), divide the number of cubic feet by 27. For example, a pile of topsoil which is to fill a raised planter box 24' long, 2' deep, and 4' wide, would have to be: (24' x 2' x 4') / 27 = (192 cu.ft) / 27 cu ft per yard= 7.11 cubic yards (7 yards) d. Board feet of lumber is calculated by multiplying the required number of linear feet of a material by its width in inches, then again by its thickness in inches, and dividing the entire figure by 12. For example, 24 feet of 2x4 would be: (24' x 4 x 2) / 12 = 192 / 12 = 16 board feet. Many vendors simply quote prices by the linear foot, which simplifies calculations. e. Ground cover requirements can be easily determined by dividing the number of square feet needed to be covered, by the square, in feet, of the spacing specified between the plants. For example, if a 30' x 20' area had to be covered in iceplant, set 8" apart, the calculation would appear as follows: (30' x 20') / (.66 x .66) = 600 / .4356 = = 1377 pieces of iceplant. __________________________________________________________ ACTIVITY: 1. Supply students with a facsimile of the take-off sheet described above. 2. The instructor should prepare a simple landscape plan based on the information below, and distribute copies to students. Information which is not evident from the plan drawing should be supplied in the form of a simple specification sheet accompanying the drawing. 3. Students should prepare a simple bid based on the information supplied to them. Have students fold their papers when done, and hand in their bids. 4. Conduct a bid "opening" to see who got the job. Compare student bids to see who came closest in calculating the correct cost. 5. Have students determine whether it is better to rent the tractor, or do without it. 6. Landscape Plan Information: Lawn area is to be 30' x 60' Redwood deck is to be 10' x 30' Ground cover area is to be 5' x 10' Landscape plants are to be: (2) 15 gallon Pistacia chinensis (6) 5 gallon Pittosporum tobira (3) 5 gallon Agapanthus orientalis (5) 1 gallon Festuca ovina var. Glauca 4" Gazania 'Copper King' ground cover as needed. Landscape Specifications Information: Lawn to be amended with a 4" layer of redwood mulch, incorporated to a depth of eight inches. Ground cover to be set on 6" centers. Pistachia chinensis to be triple staked and tied at planting. Material Cost Data: Sod: $3.00 per roll (1 roll = 9 sq. ft.) Redwood Sawdust : $20.00 per cubic yard 15 Gallon Plants: $45.00 each 5 Gallon Plants: $12.00 each 1 Gallon Plants: $3.50 each 4" Plants: $9.00 for a flat of 16 plants Redwood Decking: $22.00 per square foot, materials and labor included. Peeler Core Stakes: $3.00 each Labor Cost Data: Turf Crew: $20.00 per hour, can plant 600 square feet of sod per hour; they prepare 1200 square feet of ground per hour with use of a tractor, 150 square feet without the tractor. Tractor Rental: $50.00/hr, 1/2 day minimum. Gardener to Plant: $8.00 per hour. Requires 30 minutes to plant and stake a 15 gallon tree, ten minutes for a 5 gallon plant and three minutes for a 1 gallon plant. Gardener can plant 300 4" ground cover plants in an hour. __________________________________________________________ 1/7/91 MH/clh #%&C