Estimate Materials

Hi Sparkstation,

I was always impressed by your good reponses!

I am civil Enginneer located in UAE, my position is material Engineer. Evaluate rates based by vendors quotations in purpose to give the right part of estimation (Civil) to the owner. The other parts (MPE, HVAC...) are done by others engineers.

Regards :)

Its free market economic.

Look at petroleum, the raw oil take off up to 60%. who can predict? Baffet may be.

whats future? its business secret.

Give a time frame for your estimates by adding clauses like:

Quotation are good from Mov. 20, 2008 to Nov. 30, 2008.

Same also applies to your suppliers. Ask time frame for thier prices.

When getting quotes you have to consider what your priorities are.

Cost, time or quality.

You also have to do a little research on the vendor. How much of that cost is going into overhead.

Some vendors are used to getting big contracts and getting paid premium prices.

Availability of materials.

The best way to get the best pricing is to have at least three vendors that you've established a relationship with and have them compete with each other for pricing.

With establishing a relationship you will have vendors that understand your needs and requirements and a little about your financial situation and will tailor their pricing as much as they can to win your business.

With the economy slow like it is, you'll have a lot of vendors giving you prices just to get your business and break even.

With raw material, you're getting what you paid for. A sales rep for a raw material vendor, such as with metal will keep you informed about the rise and falling of prices on materials.

If you're a regular customer these sales reps will take you to lunch sometime.

Just remember with raw materials, if you go with the cheapest, you just might not get something that's straight, or flat or clean from rust or square.

When you go too cheap, you're sacrificing something and often times that sacrifice is from the quality. It's a pain trying to work with angle iron that has a big bow in it, especially when you need long pieces. It's a pain working with 1/4" Mild Steel Plate that has to be flat for bolting flange bearings to and the plate is warped.

Your best bet is to go with one of the mid range quotes, unless you have a good relationship with your vendor with the lowest quote.

The vendors usually give you a exstimate that is good for 60 days. So Youy usually want a new commitment from the vendor prior to submitting a bid as a contractor, as you may not know that you have won the contractor for 60 days. Additionally, if the market is dropping for the material , you could get a new estimate before bidding just to get a lower bid in and be more competitive. As an engineer who prepares design contract drawing for government agencies, I usually estimate costs based on current cost at the time + some percent for my anticipation in the market. However this is for the engineers opinion of cost, and does not represent the actual contract cost? You really need to do some analysis of the market and get a feel for which way it will go. You will have to make some educated adjustments to costs based on your prediction and take some risk associated with those adjustments (over estimate, cost estimate go up, risk goes down, probability of not winning contract goes up). A good source of general trends in the US for materials is Engineering News. Additionally, as an engineer you should consult with a number of reputable local contractors, as they work with the materials on a daily basis. As a qualified contractor, well you whould be knowledgeable of such things due to the daily exposure to the market.

Purchasing 101 "You don't buy gold nails when galvanized meet the specification!"

Thus, make sure you have really good specifications, so that bidders will all be bidding on the same materials that really meet your needs.

Have somone in your organization provide a checklist of contract elements that meet your needs and will work in the area where you do business.

Know you suppliers and have them know you.

Not too smart