Superior Air

Handling

ESTIMATING
MANUAL

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 Superior Air Handling
Estimating Procedures

A. Project Qualification:

The Management Team determines whether a project will be proposed or not.

Negotiated work is always considered a higher priority over hard bid work. The estimate
process is the same for both negotiated and hard bid work. The sales engineer has to
fill out a Project Qualification Form which is turned in the Vice President in charge of
sales and marketing. The Vice President then evaluates the project and submits it to the
home office for approval.

See the attached Project Qualification Form and Guidelines for Sales Qualifying.

B. Plans, Specifications and Addenda:

Plans and specifications are ordered by sales engineer or estimating manger. Drawings
are sent to the Clearfield office for distribution to the estimator in charge of the project.
All project documents are placed on the estimating ftp site for distribution to potential
subcontractors, vendors and additional Superior staff. Deposits are tracked and plans
returned as necessary. Addenda are also sent to the Clearfield for distribution to the
project team.

C. Estimator Assignment:

The Estimating manager is responsible for assigning an Estimator to a project.

Assignment is influenced by the following factors:

1) Type of work
2) Proposal date

On large projects, multiple Estimators are assigned but we will assign a lead estimator.
However, in order to be more efficient with resources and establish individual
accountability, it is more desirable to assign one (1) Estimator to a project.

D. Review of Specifications:

All estimators working on a project are required to read the documents. The sales
engineer, estimating manager and estimator in charge are required to read all of the
contract documents and review all of the drawings. Estimators performing take-off are
required to read at a minimum the mechanical specification and RFP, and familiarize
themselves with the proposal forms to see what kind of breakouts or alternates are
required.

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After the documents have been reviewed the Estimating Check List is reviewed and
duties are assigned. The salesman and the estimator in charge will use the check list to
make sure all requirements are fulfilled such talking to the union in the state which the
project will be constructed, getting sales and use tax information, unemployment tax
rates etc. The Estimating Checklist is living documents and is revised frequently revised
do to project requirements.

See the attached Estimating Check List.

E. Bid Bond:

If a Bid Bond is required for the project the sales engineer in charge is responsible for
filling out the forms, getting all required signatures and making arrangements for delivery
of the Bid Bond and proposal.

F. Preliminary Budget:

Prior to starting take-off and after reading all the specification the estimator in charge of
the project is required to complete a square foot budget with all equipment and
subcontractors plugged with in-house budget numbers. This is a very preliminary
number that is calculated using historical data. This allows our sales staff to have an
idea of the magnitude of the project, how it fits into our current backlog, have the
information needed to request a Bid Bond and also discuss strategy with our clients.

G. Proposal (Scope) Letter:

The proposal letter can be written by the sales engineer or the estimator in charge of the project.
When the documents (specification and drawings) have been reviewed the proposal letter is
drafted. After the preliminary draft is complete the salesman and estimator review the letter. This
letter is a living document and may have many versions throughout the proposing process. The
earlier the letter can be sent to the client the better. Each time there are changes made to the
latter the changes are bold and italicized and a revision number is attached. This letter is used
through all the negotiations and updated as needed.

When proposing as a total mechanical a letter is produced with and equipment matrix so the
scope of work can be determined between the subcontractors proposing.

See the attached sample copy of a Proposal Letter.

H. Take-Off:

Take-off is compiled using QuickPen AutoBid Sheet Metal. Take-off is broken down by
systems, floors, zones, risers, mechanical rooms, and by alternates or breakouts
required. These key parameters allow further analysis of the project during estimating
and project management.

After the take-off is complete the reports are run, analyzed and added to the final
spreadsheet. The Estimator is responsible to review detail reports to ensure
construction standards comply with the specification requirements.

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Equipment, fire stopping , sound wall penetrations and any miscellaneous items that are
not taken-off in QuickPen our taken off by hand and priced, labored and added the final
spreadsheet.

I. Material/Equipment Pricing:

The materials contained within QuickPen are based pricing that is updated at the
beginning of a new year and escalated on the final spreadsheet as required. Exotic
materials are price for the specific jobs.

In general, a minimum number of three (3) prices are desired for each equipment
package. The estimator in charge and the sales engineer will determine who is
responsible for contacting and gather the equipment quotes. On the proposal day the
estimator will put the equipment quotation in the Equipment Pricing tab. After all the
numbers are collected and reviewed the apparent low proposer will be moved to the
used column of the spreadsheet. “Plugging a number” for equipment pricing is not an
acceptable practice.

J. Subcontractor Strategy:

Many projects are won or lost based on subcontractor pricing Superior attempts to align
with subcontractors as necessary to gain a strategic advantage over the competition.
Communication with the appropriate subcontractors is made as early as possible in the
proposal process. In general, a minimum number of three (3) prices are desired for
each subcontracted trade. “Plugging a number” for subcontractor pricing is not an
acceptable practice.

K. Schedule Analysis:

After take-off is completed, the construction schedule and sequence of work are
reviewed to identify potential problems, raises and/or manpower requirements.

L. Final Spreadsheet:

The project estimate is compiled on an Excel workbook containing multiple

spreadsheets. The Estimator is responsible for setting up the final estimate spreadsheet
and entering all data. Project costs are broken down into the following categories:

1) QuickPen Fests (Reports)

i) Material quantities, pricing and labor (shop and field).

2) Labor
i) Labor hours based on SMACNA and project conditions.
ii) Labor rates based union wages, period of work, out of state wages and crew
mix.

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 3) Material & Equipment
i) Material pricing based on QuickPen values and escalated on the final
spreadsheet
ii) Equipment Pricing – Vendor quotes

4) General and Administration Cost

i) Project Staff including subsistence and travel.
ii) Office trailers, supplies, furniture, phones, faxes and FedEx.
iii) Equipment rental spreadsheet – Lifts, welders, forklifts, scissor lifts etc.
iv) Truck charges including gas and maintenance.
v) Mobilization and cleanup.
vi) Crane
vii) Sales tax for supplies and equipment in the G & A.

5) Subcontractors
i) Subcontractor quotes are listed, analyzed and moved to the used column.

6) Freight
i) Quotes are solicited from trucking firms, analyzed and escalated as required.

See the attached copy of a final estimate spreadsheet.

M. Proposal Strategy:

On the day prior to the proposal, the Vice President and proposal team (sales engineer,
estimating manager and estimators) review opportunities/concerns with the project. The
final estimate spreadsheet is reviewed and Proposal day strategy is established. Final
assignments are made to address open issues.

Proposal day success in directly related to our project teams preparation. The Project
Team strives to have all controllable items resolved prior to proposal day. Invariably,
unforeseen issues arise that require strategic decisions. Upfront planning and
preparation allow to the Team to focus on opportunities/problems rather than scrambling
on controllable issues.

N. Project Pricing and Mark-Up:

The Vice President of Sales makes final pricing and mark-up decisions. The mark-up is
determined based on size of the project, complexity of the project, perceived
risk/opportunity and competitive pressure. In addition to Harris Company mark-up
guidelines, as a general rule, overall mark-up should be in accordance with the following:

1) Overall mark-up should not be less than 10% of total cost.

2) Overall mark-up should cover 30% of total labor costs.
3) Mark-up on Superior work (Total Cost less subs) should not be less than 12%.

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O. Bid Archive:

Estimate workbooks are stored in network directories (i.e. J drive and a hard copy of the
Proposal books). Proposal books for unsuccessful bids are typically archived for a
period of 2-years, and then discarded.

P. Attachments:

1) Project Qualification Form

2) Guidelines for Sales Qualifying
3) Estimating Check List
4) Sample Copy of a Proposal (Scope) Letter
5) Sample Copy of a Final Estimate Spreadsheet.

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