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Understanding Labor Units

Published:January2000
ByGeorgeHague

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hefirstdistinctionanestimatormustacceptis
thatalaborunitisnotabsoluteitisa
benchmark,orstartingpoint.Thisstatement
maysoundodd,butaskyourself,ifthreeelectrical
contractorsundertookthesamejob,wouldallthree
completethejobinthesametime?Obviously,the
answerisno.Ifthisisthecase,thenhowcana
standardsetoflaborunitsworkforallthree
companies?Thiscanonlycomethroughfactoring.

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Theestimatormustbecomefamiliarwiththecompany'sproductivity.Thiscomesfromstudyingjobcosting
records.Theselettheestimatorknowhowthecompany'slaborunitscomparetothebenchmark.Asuccessful
electricalcontractorkeepsaccuraterecordsofjobcostsandisconstantlyrevisingthefactorsaccordingly.This
conceptallowstheestimatortouseanyofthenationallyrecognizedlaborunits:NECA'sManualofLabor
Units,MEANS,oranyoftheotherdatabasesavailabletoday.
Usingastandardsetoflaborunitsgivesestimatorsconsistencyintheirestimating.Howcanseveral
estimatorsusethesamedatabaseoflaborunitsifeachestimatorhasanindividualconceptofwhateach
laborunitrepresents?Eachestimatorusesthelaborunittohisorherowninterpretationofitsmeaning.The
unitsarestandardaslistedbutindividuallyinterpreted.Forexample,twoestimatorsareusingthesamelabor
unittoinstallaloadcenter.Thefirstestimatorusesafourhourlaborunittorepresenttheentireinstallation
includingmounting,terminations,andtheinstallationofbreakers.Thesecondestimatorusesthefourhours
pluslaborunitsforeachinstalledbreaker,arrivingatatotalofsixhours.Whichestimatoriscorrect?

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Atthispoint,bothare.Jobcostingfactorsarethenapplied,correctingthetotallabortorepresentthe
company'sabilitytoproduceagainstthebenchmark.Assumethatjobcostinghistoryindicatesthateach
companytypicallyinstallsthisloadcenterintwohours,includingbreakers.Thefirstestimatorwillapplya50
percentdiscountfactortohisorherlaborestimates,whilethesecondestimatorwilldiscounttheestimateby
twothirds.Bothestimatesnowarriveatthesamelabortotal,becausebothadjustedtheestimatebyfactoring
intheirinformationfromjobcostingrecords.(Notallfactoringisdiscountingitispossiblethatamarkup
applies.)Eachcompanyshouldselectadatabaseoflaborunitsasitsstandard,beitpublishedorcompany
created.IrecommendtheNECAManualofLaborUnits,asthesearethebenchmarkoftheelectrical
constructionindustry.Theyareperiodicallyupdatedtokeepcurrent.Mostpublishedlaborunitdatabases
availabletodayaredirectlyaffectedbyNECA's.Whateveryouchoose,usingtheprescribedmethodherewill
giveyouaccurateestimates.
TheremainderofthisarticlewillreferencethethreelaborcolumnsestablishedintheNECAmanual:
"Normal,""Difficult,"and"MostDifficult."Itwouldbeimpossibletorelatealltheinfluencesthatenterinto
consideringlaborunits,yetthreeprincipalfactorsaffectalaborunit:*Thejob'sdegreeofdifficulty.*The
installation'sdegreeofdifficulty.*Thecompany'sabilitytoperformagainstthelaborunit.Thejob'sdegreeof
difficultytakesintoaccountthetypeofprojectandtheworkingconditions.Sovastarethevariationsinthe
electricalindustrythatbeforeselectingalaborunitonanyproject,theestimatorshouldhavestandard
proceduresinplacetodeterminewhichcolumninNECA'sdatabasetouseforaparticularestimate.These
standardsshouldberigidlyadheredtoforconsistency.
Thesimpleoutlinebelowprovidesgeneralconstructionclassificationsinboldfacetype.Itismeanttohelpyou
todeterminetheinfluenceonselectingalaborunitfornew,unoccupiedareasofbuildingconstructionwith
suggestedNECAcolumnsforeachclassificationinquotes.
TheauthorlistsfiveconstructionprojectsbelowwithhissuggestionsforNECAclassifications:

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Residentialconstructionincludesspeculationhomes,highendhomes,andapartmentbuildings.UseNECA
"Normal."
Commercialconstructioninvolvesofficebuildings,R&Dbuildings,stores,malls,andtheaters.UseNECA
"Normal."
Institutionalconstructionincludesschools,hospitals,andasylums.UseNECA"Difficult."
Industrialconstructioninvolvesmanufacturingfacilitiesandpowerplants.Specialprojectsareperformedon
sewageandwatertreatmentplants,mines,andfoundries.UseNECA"MostDifficult."
Consideringthatthesejobtypeshaveindividualcharacteristics,itwouldbeineffectivetosetupasingle
columndatabasethatisuniversallyapplicable.Theinstallation'sdegreeofdifficultytakesintoaccountspecial
installationdifficultyfactors,suchasweather,mountingelevations,weight,occupancy,andduplication.Notall
difficultyfactorsaddtothelaborsome(suchasduplication)reducethelaborunit.Laborunitsareestablished
forcertainconstructionperiodsandconditions(usuallythemostfavorable).Unusualweather,bothcoldand
hot,affectsproductivityonthejob.Highertemperaturesaffectworkersaccustomedtocolderclimates,and
viceversa.Thisfactorcannotbeanalyzedfromtablesoflaborunitsandisbestappraisedbasedontraining
andexperience.Mountingelevationstakeintoconsiderationsuchthingsasceilingheightsandthefloorsofa
building.Allincreasethelaborunit.Thestandardlaborunitisincreasedby5percentformountingelevations
over10feetand10percentforinstallationsof16to20feet.Consultalaborfactoringchartforaddition
factors.
[Ifyouwouldliketoobtainalaborfactoringchart,sendyourrequestbyemailtojthayer@conest.com,orcall
(800)6627687,ext.316.]
Forceilingheightsgreaterthan20feet,anadditionalallowancemustbemadeforscaffolding.Rememberto
includeliftrentalchargesinyourestimate.Notetoday'sstandardoffactoringisbasedonmotorizedmanlifts
forover20feet.Ifyouareusingrollingstaging,anallowanceforagroundmantosupplyandpushthestaging
mayberequired.Considerationshouldbegiventothenumberofstagingsetupsthatwillbeincloseproximity
toeachother.Thesuggestedfactorwouldbetoadd5percentperfootforthatportionover10feet,usingone
groundmanforonetopsideelectrician.
Weightisalwaysanimportantfactorinlaborunits.Estimatorsshouldobtainweightdataonallspecial
equipment.Timestudiesforinstallationsonhoursperpoundarenotconsistent.Theestimatorshoulddevelop
criteriausingjobexperiencedataforspecificequipment.Equipmentmanufacturersareagoodsourceforlabor
requirementsonspecialequipment.Occupancyshouldsometimesberecognized.Consideranadjustment
factortocompensatefortheexcesslaborrequiredwhenworkinginoccupiedareas.Thestandardlaborunits
(forunoccupiedareas)shouldbeincreased50to100percent.
Duplicationoccurswhenmultipleinstallationsoflikeproductscansaveinstallationtime.Fixturesinthesame
concentratedarea,parallelconduitruns,andconductorsinaracewayareallexamplesofpossibledeductions
forduplication.Mypetduplicationismultipleconductorsinaraceway.Mostlaborunitsthatyouseearefor
oneconductorinaraceway.Ifyouarepullingfourconductorsinthesameconduit,doesittakefourtimesas
longasitdoesforoneconductor?Mostcontractorswilladmitthatfeedersarewheretheymaketheirbiggest
profit.Thequestionalwayscomesup,whyfactor?Whyadjustsomeitemsupwhileothersareadjusteddown?
Itallcomesoutinthewash,right?Projectmanagementistheanswer.
Aftertheestimatorwinsabid,someonehastoproducetheproject.Withamoreaccuratebid,theproject
managerhasdocumentationforcreativemanagement.Allocatinglaborresourcesiscritical.Underorover
staffingtypicallyaffectsthebottomline.Projectmanagersneedtoknowspecificlaborrequirementsforeach
phaseandtaskofthejob.Accuratehoursaveragedfortheentirejobarenotenoughintoday'scompetitive
market.Thecompany'sabilitytoperformagainstthelaborunitiswheremanycompanieseithermakeorbreak
it.Everyelectricalcontractingfirm'sproductivitystartswithmanagement,andmanagementstartswithan
accurateestimate.Informationandcommunicationwithfieldpersonneliscritical.Factorstoenhance
workforceproductivityinclude:
*Submittalsareapprovedinatimelymanner.
*Therightmaterialsareavailableintherightquantitiesattherighttime.
*Toolsandequipmentareonthejobwhenneeded.
*Drawingsareaccurateandmarkedup,withdocumentation.
*Jobprogressisproperlytracked.
*Thebetterelectriciansthroughoutthecompanygettrainingsupport.
*Theofficeprovidestimelyadministrativesupport.
*Thefirm'sworkiscoordinatedwiththegeneralcontractorandallsubcontractors.
Competitiveconstructionbiddingisoneofthebiggestgamblesinelectricalcontracting.Whataretheworking
conditions?Whichgeneralcontractorandsubcontractorswillbeengagedintheproject?Thesearejusttwo
pertinentfactorstheestimatormustconsiderwhenanticipatingjobconditions.Whenselectingasoftware
package,considerthejob'sdegreeofdifficulty,theinstallation'sdegreeofdifficulty,andthecompany'sability
tomeetthelaborunitasdistinctandseparateissues.Oneadjustmentfactorislikehavingonecolumnof
laborunits.Itworksforsomejobs,butnotall.
Estimating, Software

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