3 Overhead Costs to Consider in Construction Project Bidding

In Contract Bidding by kevinLeave a Comment

As a general contractor or subcontractor, general project estimations can seem simple on the surface. You look over a client’s job, run the numbers in your head, and you make a bid for it that will allow you to do the job and walk away with a reasonable profit once the last nail has been driven and the last coat of paint applied. However, as any contractor knows, sometimes the devil is in the details. That’s why it’s important to look over a job several times, and to be sure you’ve accounted for every overhead cost you can think of that might affect your bottom line. These are some of the most commonly overlooked overhead costs:

crunching numbers on calculator with invoices at desk

Travel Time

You need to get your workers, materials, and tools out to the building site. For local jobs, this is a smaller cost, but it still must be factored in. More time on the road means less time spent working onsite, and that can quickly eat into the cushion of your overhead budget.

Indirect Materials

You’ll likely already factor in the costs of lumber, concrete, sheetrock, and most other major materials into your budget, and they will be known quantities. Indirect materials, according to AZCentral, are the things you still need that are harder to pin down exact costs for. Everything from nails and staples, to glue and bolts, it’s hard to know exactly how many you’ll need. And it’s better to have more than fewer, which can be an unexpected cost, so budget with caution.

Power and Electricity

Modern construction projects require use of modern tools, which means there are a lot of power tools on any given site. However, those tools bring their own challenges, ranging from the need for generators, to expenses in battery use. There’s also the need to replace parts, or entire tool sets, when something goes wrong. These costs are very difficult to predict, and they can be quite expensive, depending on the parts.

These are just a few of the overhead costs that can turn what looked like a solid project investment into a budgeting nightmare. For more information about how you can get a better hold on your overhead costs and keep track of your expenses, simply contact us today to learn about PlanHub’s construction project and bid management software. It can help keep all your project dollars in line!

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