How often do contractors and their teams spend hours and hours scoping out a new project with a seasoned team of professionals, only to learn near completion that the estimates were way off base? Even though it is 99% complete, it still needs two more weeks and 20% more budget than what was planned.
It Starts with Job Estimates
Part of many project methodologies is the concept of “percent complete,” and it is pervasive throughout the many areas of construction—it’s used in other industries such as technology, too. Too often, this methodology doesn’t actually work. It’s virtually impossible to spec out a project 100% accurately because it’s also nearly impossible—and most of the time not worth it—to have all of the information that would make estimates completely precise. Those estimates are then used as the basis for how much work has been completed or “percent complete.”
The truth is, estimating is first and foremost done by making many assumptions—assumptions including what might be inside walls that are slated for demolition, where electrical lines are run, what might have been added in later stages following initial work and so on. And, the work done by those individuals providing estimates are almost always based on previous projects—but no two jobs are exactly alike, so there’s built-in inaccuracy from the very start. Also, when reporting on how much work is completed, they are comparing to previous work.
So, when they say they have one more day until they are done, they are assuming this job is like the last one. Then the excuses start: “Oh, you want the wood floor to run down the hall, too?” This means additional materials, additional time and cost. By the way, that sub is booked until next month after today. Thanks, percent complete.
We Fail to Break Down the Work to Properly Estimate
We also often fail to give proper size across project steps by estimating at too high a level—if there are five steps, each might be accorded 20% of the time—when a much more granular level of task breakdown would likely make a much more accurate estimate. It’s not unusual to find that when estimating is complete at a high level, the low-level detail tasks that weren’t considered quickly add up to far more than that original estimate.
You Don’t Know What You Don’t Know
It’s important to simply accept that there are things that can’t be known in an initial project estimate and recognize that time will be needed to deal with what is learned as the project unfolds. These unknowables might also completely change the project—another way of saying: “you don’t know what you don’t know.”
Let’s say a contractor is bidding on a planned basement remodel, and the estimator knows he will need to knock out some walls, perhaps rebuild a load-bearing wall, and will likely need to reroute plumbing and electrical systems. Since he can’t see inside the walls, and most building owners don’t know how their structure was constructed, the estimator makes educated guesses about what is there, what it will cost and how long it will take to complete the project.
What if old water damage is found, or even wood rot when those walls are removed? Or what if additional pipes are discovered that need to be rerouted. The plan is immediately impacted by both time and cost to remediate, but it just has to be done.
Why “Percentage Complete” is Unreliable
In the scenario above, days—even weeks—may be required to adjust the plan to deal with the changes in the project. But let’s say that the project was 50% complete according to the plan when the issues were discovered. With the new discoveries, steps are being added to the plan that were unaccounted for in the original estimate as a function of lack of information. The lack of information—what can’t be known—has just dealt a death blow to the original estimate, and that “percent complete” figure.
Avoiding the Issue
Fortunately, there are tried-and-true ways to avoid big issues that can bubble up in remodeling projects—or any kind of project—with clients. Following these suggestions can make your estimate, and actual project, go more smoothly.
- Try to avoid assumptions and comparisons to previous work in estimating.
- Get as detailed and granular as possible in recognizing and setting out all of the tasks that will lead to successful completion. Make sure workers understand the size and scope of their tasks.
- Make allowances for what you can’t know (the wall example above).
- Prioritize each task or set of tasks to make the best possible use of budget and time.
- Regularly report back on any anomalies or changes.
- Make sure to involve all stakeholders and allow them to participate in the choices available when issues arise—even if there’s only one real choice.
Don’t get caught in the “percent complete” trap—take the time to capture as much detail as possible, and recognize that there will always be unknowables. Set expectations with workers and project stakeholders at the start and communicate regularly. These approaches might not eliminate all the unwelcome surprises but they will greatly reduce them and make those that remain easier to handle.
