How contractors employ tech solutions to help mitigate pricing woes

By Robyn Griggs Lawrence | Originally posted on

Firms like Boldt and DPR have embraced using data and BIM for detailed cost breakdowns on project bids.

When The Boldt Co. was asked to submit a proposal for a new building’s structural steel package based on very limited drawings of an existing one, the estimating team didn’t flinch. Using BIM software Autodesk Revit, Boldt designers were able to model the building in a matter of hours and send a detailed cost breakdown of the required tonnage to a fabricator, which sent back a price within a day.

“The typical way of doing it — sending documents to the subcontractor and having them do takeoff and pricing — would have taken a minimum of a week,” said Mark Nolta, corporate director of estimating and preconstruction for Boldt.

Over the past two years, Boldt has “made leaps and bounds to harvest technology” as it MacGyvers a system using several different software products to not only speed up estimating exponentially, but also make it more accurate, efficient and dynamic throughout a project’s life. Nolta said Boldt deems this effort crucial “to help us understand and keep in front of the ever-demanding pace.”

Similarly, at DPR Construction, the days of “Here are the drawings, go takeoff the job, bid it and submit a number” are over, said Philip Bartkowski, national preconstruction leader for the Redwood City, California-based contractor.

“There is a deeper expectation of preconstruction service from our clients,” he said. “The management of the entire process and guiding client/design decisions has become paramount — not just counting things and assigning a unit cost, though that’s certainly still important.”

Like Boldt, DPR uses estimating and bidding software from several different vendors, filling in gaps with in-house applications and development solutions. “The current toolset can get complex due to the expectations that have progressed in the past few decades,” Bartkowski said.

Having access to accurate and up-to-the-minute estimating capability is more crucial these days than ever, as material prices and availability fluctuate due in part to global supply chain instability. The rapid escalation of material prices, a crisis that revved up last spring, shows no sign of slowing down for at least another year, Anirban Basu, chief economist for Associated Builders and Contractors, told Construction Dive.

“Starting in March of this year, it just became all-consuming,” added Brian Perlburg, senior counsel of construction law and contracts for Associated General Contractors of America. “It hasn’t let up. It’s become an evergreen issue.”

Data-rich and ready

Boldt and DPR are exceptions in an industry that has been one of the slowest to digitize. When it comes to estimating, most contractors are struggling, according to a recent report by Dodge Data & Analytics and construction management software company Procore Technologies. They need solutions that can integrate final cost estimates into project budgets, track every aspect of a job’s impact on overall project costs, forecast critical costs with real-time data from the field and dynamically track every dollar. Technologies exist to address those challenges, the report found, but “only a fraction of the industry is currently taking advantage of them.”

Many contractors dismiss the importance of construction estimating software because they see it as a back-office function, said Kevin Sturm, senior director of product marketing for Procore, whose software connects field teams, office administrators and developers in one platform.

“People think, ‘Oh, that’s accounting,’ but it’s not. It’s real-time financials connected to what’s actually happening in the field,” Sturm said.

Using pre-built templates, construction estimating software creates material and labor lists, projects estimated costs, calculates margins and integrates with resource-planning workflows, eliminating humans’ tendency toward optimism bias and strategic misrepresentation. When estimating systems such as Autodesk’s Revit are connected to BIM, a widely used technology that creates a digital representation of a structure before it’s built, costs can be automatically calculated down to the minutest details and instantly updated whenever plans change throughout construction.

BIM-connected platforms determine the exact quantities of all materials and components a project needs, shaving estimating time from days to hours. And thanks to BIM, companies now have immense sets of historical data that can be combined with external factors like cost and quantity metrics to accelerate and improve estimating.

BIM’s next evolution, the digital twin — which uses AI and machine learning to create virtual models — is spawning even more data, which contractors can continue to use for scheduling and procurement throughout the design and construction process.

“We can analyze historic information to make better decisions going forward about what subcontractors we select, how we price work and how we look at our own staffing costs and schedules,” said Chris Mills, president of New York-based Plaza Construction, which enhances its BIM efforts with several virtual applications, including Revit for estimating. Relying heavily on data analytics, the company is able to identify potential problems in addition to streamlining the estimating process.

“From my seat, that’s really meaningful use of technology to deliver a better product to our clients,” Mills said.

Into the cloud

Patrick Murphy, executive vice president of his family’s firm, Miami-based Coastal Construction, launched in 2019 because he saw the repetitive, onerous estimating process as ripe for automation.

Murphy knew the construction industry had some catching up to do when it comes to technology, but he had no idea how far behind it was. When he set out on his tour introducing Togal to fellow contractors, he was shocked to find out many were still using legacy software that wasn’t connected to the cloud.

“I didn’t realize how many customers would be moving to us from other software just because of that,” he said.

Using an artificial intelligence-based engine based on AIA measurement standards, Togal calculates and accurately prices jobs in seconds, eliminating the need for weeks of manual and computer labor and hundreds of pages of reporting.

“People say it takes five, maybe eight years to train a good estimator,” Murphy said. “With all the work happening right now, they can’t do it.”

COVID-19 has forced slow-to-adapt contractors to seek out technology solutions they didn’t need or want before, said Murphy, whose team is onboarding several top U.S. construction firms and in conversations with many more.

“Now, especially in markets like Florida and Texas that are so strong, everyone we talk to seems to be behind and can’t get caught up,” he said. “When we introduce Togal, they say, ‘Holy cow, you mean I can get 15 weeks of my life back?'”