SOP Templates > Home Builder > Bidding & Estimating > Estimate Review Checklist

Estimate Review Checklist for Home Builder

This checklist is designed to guide the Bidding & Estimating department of a custom home builder through a comprehensive review of project estimates. The purpose is to ensure accuracy, completeness, and competitiveness of estimates. It covers the validation of quantities, subcontractor pricing, inclusions and exclusions, allowances, scope items, labor assumptions, and risk assessment. The checklist also includes internal review procedures, necessary corrections, and communication with sales or project management teams.

Validate quantities for materials and labor

Step 1: Review architectural and engineering drawings

Examine the latest set of drawings to confirm that all dimensions and specifications are up-to-date. Pay special attention to any recent changes or revisions that may impact quantities.

Step 2: Calculate material takeoffs

Use specialized software or manual methods to calculate the precise quantities of materials needed. Double-check calculations for accuracy and consistency with project plans.

Step 3: Verify labor hours

Estimate the labor hours required for each phase of the project. Cross-reference with historical data from similar projects to ensure realistic labor assumptions.

Check subcontractor pricing

Step 1: Collect and organize subcontractor bids

Gather all bids received from subcontractors and organize them by trade. Ensure that each bid includes a detailed breakdown of costs.

Step 2: Compare bids against market rates

Evaluate each bid to ensure it is competitive with current market rates. Use industry pricing guides or recent project data as benchmarks.

Step 3: Confirm bid inclusions and exclusions

Review each bid to ensure that all necessary work is included and that any exclusions are clearly identified. Communicate with subcontractors to clarify any ambiguities.

Confirm inclusions and exclusions

Step 1: Review project scope documents

Examine the project scope documents to ensure all inclusions and exclusions are clearly listed. Pay attention to any special conditions or client requests.

Step 2: Verify alignment with client contract

Cross-reference the inclusions and exclusions with the client contract to ensure consistency. Address any discrepancies with the project manager or legal team.

Step 3: Document any changes

Record any changes to the inclusions or exclusions and communicate these to the relevant stakeholders. Ensure that all documentation is updated accordingly.

Review allowances

Step 1: Identify all project allowances

List all allowances included in the project estimate, such as fixtures, finishes, and appliances. Ensure each allowance is clearly defined.

Step 2: Evaluate allowance sufficiency

Assess whether each allowance is adequate based on current market prices and project specifications. Adjust allowances as necessary to reflect realistic costs.

Step 3: Communicate allowance details to client

Provide the client with a detailed breakdown of allowances, including any potential overages. Ensure the client understands the implications of selecting items outside the allowance range.

Cross-reference scope items

Step 1: Compile a comprehensive list of scope items

Create a detailed list of all scope items included in the project. Ensure that each item is clearly described and accounted for in the estimate.

Step 2: Match scope items to estimate line items

Cross-reference each scope item with the corresponding line item in the estimate. Verify that all scope items are included and accurately priced.

Step 3: Address any discrepancies

Identify and resolve any discrepancies between the scope items and the estimate. Update the estimate as necessary to ensure alignment.

Verify labor assumptions

Step 1: Review labor rates and productivity

Examine the labor rates and productivity assumptions used in the estimate. Compare these with industry benchmarks and historical data from similar projects.

Step 2: Assess labor availability

Evaluate the availability of skilled labor in the project area. Consider any potential challenges in sourcing labor and adjust assumptions accordingly.

Step 3: Update labor assumptions as needed

Make any necessary adjustments to labor assumptions to reflect current conditions. Document changes and communicate them to the project team.

Assess risk factors

Step 1: Conduct a risk assessment

Identify potential risks related to the project, such as weather delays, material shortages, or regulatory changes. Use a risk assessment matrix to evaluate the likelihood and impact of each risk.

Step 2: Develop risk mitigation strategies

Create strategies to mitigate identified risks. This may include contingency plans, additional insurance, or alternative sourcing options.

Step 3: Communicate risk assessment to stakeholders

Share the risk assessment and mitigation strategies with key stakeholders, including the project manager and client. Ensure that all parties are aware of potential risks and planned responses.

Conduct internal review

Step 1: Assemble an internal review team

Gather a team of experienced estimators and project managers to review the estimate. Ensure that the team includes individuals with expertise in different aspects of the project.

Step 2: Review estimate line by line

Examine each line item in the estimate for accuracy and completeness. Pay special attention to high-cost items and areas with potential for error.

Step 3: Document and address any issues

Record any issues or discrepancies identified during the review. Work with the estimating team to resolve these issues and update the estimate as necessary.

Make necessary corrections

Step 1: Update estimate documentation

Make all necessary corrections to the estimate documentation. Ensure that all changes are clearly documented and justified.

Step 2: Verify corrections with review team

Have the review team verify that all corrections have been made accurately. Confirm that the estimate now meets all project requirements.

Step 3: Finalize the corrected estimate

Prepare the final version of the estimate for submission. Ensure that all documentation is complete and ready for presentation to the client.

Communicate with sales or project management

Step 1: Prepare a summary report

Create a summary report of the final estimate, highlighting key figures, assumptions, and any potential risks. Include any important notes or considerations for the project team.

Step 2: Schedule a meeting with sales or PM

Arrange a meeting with the sales or project management team to discuss the final estimate. Ensure that all relevant team members are present.

Step 3: Present the estimate and address questions

Present the final estimate to the sales or project management team. Be prepared to answer any questions and provide additional information as needed.

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