Understanding the authorities

There is often a sentence near the beginning of an electrical specification that goes something like this: “The work shall be in accordance with, but not limited to, the requirements of the following.” This sentence is followed with a long list of authorities, such as the state, county, city, AABM, ADA, AIA, ANSI, ASTM, BICSI, CBM, ETL, FM, IBC, ICEA, IEEE, IES, IRI, NBS, NEC, NECA, NEMA, NESC, NETA, NFPA and UL. 

Do you have access to the requirements of all of these authorities? If you don’t, do you know where to find out what they are? While many of them seldom affect a project, not knowing the requirements could be costly.

Keeping up with the changes

Change is the only constant in our industry. For instance, the International Building Code (IBC) recently updated its seismic restraint requirements, and, of course, the new requirements cost more. Do you have a process for your continuing education? I am surprised by the number of contractors I have spoken with who have not updated their knowledge of the changes in the 2014 edition of the National Electrical Code (NEC), which many jurisdictions have already adopted.

Is it legal?

This is a difficult issue for many estimators and companies. Before signing a contract, many electrical contractors have a qualified person review it. Some do that before starting an estimate. Analyzing risky language during an estimate and putting in allowances for that language is a good way to prevent losses. I have often seen requirements in a contract that make it impossible to profit from change orders.

Sometimes, a contract contains illegal requirements. For example, a major airport recently issued a project labor agreement (PLA) that violated state law. Another legal problem I heard about is the no-damage-for-delay clause that is being added to contracts. Imagine being on a one-year project that takes two years to complete. Then imagine not being able to get paid for your costs associated with that delay! (For more info on no-damage-for-delay clauses, see our up coming blogs)

Project selection

Assessing risk factors before selecting a project to bid is very important. For instance, if the contract specifies major liquidated damages and the general contractor or owner has a reputation for not finishing projects on time, you may not want to bid that project.

Project duration can be another problem. I recently worked on a major project where the electrical work did not really get going until about four years in. After meeting with his bonding company, my customer canceled the bid because it would have tied up his entire bonding capacity for five years. Since almost everything he bids is bonded, he would not have been able to bid anything else until the project was completed. He would have risked going out of business while waiting to do the work.

Bad engineering

Not long ago, I bid on the addition of an electric fire pump to a building. Fortunately, I was familiar with the requirements of NEC Article 695. The engineer had designed the installation for a standard motor, while a fire-pump circuit is substantially more expensive to install. Because there was a specification requirement to make all installations in compliance with the NEC, we could have been in for an extensive fight if we had bid this incorrectly.

The preceding are only a few examples of problems estimators and their managers should identify during the bidding process. Unfortunately, we sometimes learn the hard way. We usually survive, hopefully learn, and add another item to our growing list of exclusions and qualifications. ecmag