Network Estimating

Our patent pending estimating technique is certainly quite powerful when employed in a builder environment. But the use of inheritance and shared common data is realized when these technologies can be leveraged into a cloud based ecommerce and coordination marketplace for builders, subcontractors, suppliers and plan designers or architects.

Likewise, our estimating technique will provide such efficiencies so that we can create a virtual lock on the marketplace. How? We will exclusively own and maintain the Resource Objects and the Resource Specifications and lock them down under our control. They are common across the marketplace and are not duplicated at each builder or vendor. This will be important to keep in mind as we describe how our technique works in a marketplace platform that supports multi-tenant functionality. 

PROBLEM

Legacy Estimating

First let’s look at what we may find as practices typically used in the industry. Currently, the takeoff process, pricing, estimating and bidding process is very inefficient. In the case of architects, a takeoff is almost never provided, but on occasion, some product schedules such as windows and doors may be included on the construction drawings.

Architects will typically provide a set of specification documents for the products he is calling for on this particular project. Since architects want to have the highest potential grade of product (and thus the highest potential price for the overall project), those specification requirements are quite subjective.

The current process calls for each general contractor to make a takeoff, produce an estimate and then provide a bid including markup for the overall project. When a general contractor uses certain subcontractors, they in turn are provided with a set of construction drawings and each are making their own takeoff and estimate, thus providing a subcontractor bid to the general contractor.

The general contractor will typically have more than one subcontractor per “trade specialty” to bid for purposes of bid comparisons, hoping that each subcontractor’s bid has the appropriate specification grades assigned to the products included in their bid. Once the general contractor has had time to compile their bid in conjunction with the various subcontractor’s bids they may have incorporated, a bid on the overall project is submitted typically to the project owner.

But many times we see a project that comes in over budget and must be rebid prior to commencement. Typically, you will see the architect make changes or concessions to the specification levels to accommodate a lower price bid from the general contractors bidding for the project. In addition to months that may be imposed on the original bid, now additional time is required to send out the project to be rebid.

In the case of
plan designers, the production home builder will not be provided with either product schedules or specification documents. In this case, the home builder must provide the takeoff information along with what specification grade levels he may require or his customer may require.   

In the case of plan designers, the production home builder will not be provided with either product schedules or specification documents. In this case, the home builder must provide the takeoff information along with what specification grade levels he may require or his customer may require.

SOLUTION 

Network Estimating

One of the goals of our network estimating design, and thus the need to provide a marketplace blockchain solution, is to achieve significant efficiency in data maintenance and flexibility over currently employed methods.

This means Takeoff data is maintained once and at its highest level. When we look at Takeoff data, it would be optimum for the Takeoff data to be maintained at the Design Plan or Design Option level, thus being associated with the architect or plan designer.

If the Design Takeoff is provided, then all general contractors, and thus any subcontractors a general contractor may be soliciting, will be utilizing a common Design Takeoff for a given Project. 

Architects who provide the Design Takeoff will be providing a much improved bid environment for the general contractors bidding on a given Project, with the ability to rapidly modify a series of product specification levels when bids come in too high and must be rebid to accommodate Project acceptance.

In the case of plan designers (versus architects), a plan sold to a production home builder that includes takeoff data that is incorporated into a marketplace environment as we are providing, will be much more desirable to that builder.

For the most part, subcontractors will not need to bid a specific Project since their products are associated with an object resource used with particular Design Plan a builder is considering. “Resource Specification” changes and Vendor assignments are a one click exercise for the production home builder until the right budget and group of vendors are established.

Of course, there will be architects and plan designers that will never provide plan takeoffs. In this case, the platform will need to provide the builder a method to make his own takeoffs. The marketplace platform will then provide the builder with ability to provide for his own Design Takeoff, as well allowing the builder to elect to share his Takeoff to a particular subcontractor or group of subcontractors for their bidding purposes.

Sometimes a builder may call on a subcontractor to provide a Takeoff. The marketplace platform can then let each subcontractor provide their own Takeoff. Or the builder may take his takeoff for the Project and share that Takeoff with the other subcontractors that may be bidding on the same Project. These marketplace inheritance features are a “one click” capability for the general contractor or builder. 

When this marketplace environment is established, the traditional laborious and “error prone” bidding process for general contractors and subcontractors effectively “goes away”. The ease of comparing bids across subcontractors and general contractors is reduced to a “one click” exercise, essentially rendering any previous methodology obsolete.

This will allow general contractors or builders to obtain vendor bid comparisons not only from solicited vendors, but from unsolicited vendors once any vendor posts their product and/or service pricing to the marketplace. This can be a very attractive feature for both vendors and builders in a competitive, cost-conscious environment as we now find ourselves.

And since we own the Resource Objects and Resource Specifications, which is standardized across all participants in the marketplace, our patent pending estimating technique cannot be emulated by competitors. Once many participants have their products and pricing associated with our locked down Resource Objects within the bid environment created by the marketplace. Our platform approach should also obtain a very high level of retention of the participants.

Once many participants have their products and pricing associated with our locked down Resource Objects within the bid environment created by the marketplace. Our platform approach should also obtain a very high level of retention of the participants. 

Now let’s identify the primary players in the cloud marketplace; architects (or plan designers), builders (or general contractors), vendors (subcontractors and material suppliers). The goal in moving these players into the cloud based platform is to optimize data entry and maintenance at its most efficient level. 

Likewise, a key benefit of this arrangement is to minimize or eliminate the current manual estimate/bid process with one that is completely automated with the ability to make “one click” changes to Resource Specification levels, Vendor assignments with immediate reflected costs of those changes.

Effectively orchestrating business process among all the participants in the “blockchain based” marketplace will also become a major factor in realizing additional productivity gains.

In a “blockchain based” approach, business processes are not “siloed” within a single builder’s company borders, but will extend out to all the participants in the marketplace assigned to a given project. Now, workflows can include plan design acquisition and change management, vendor bid solicitation and awards, purchase order distribution and payment approval.

Workflows can also include permit acquisition and inspection requirements, even construction loan request and acquisition from interim lenders. Construction schedules can be seamlessly integrated into the marketplace platform, allowing for the management of the actual construction process. 

And finally, the closing process can be a workflow bringing in all the builder’s participants including mortgage lenders, property appraisers, closing attorneys, even the buyers. The marketplace will provide workflow templates for each of these processes that can be easily modified by each participant in the marketplace as necessary.