A few people asked me privately last week how to estimate or account for the of Job Supervision. First of all asking how to estimate the cost is really the wrong question. That is going to depend up the Real True Cost per Hour to your company of the personnel doing the production supervision. BUT you can make some reasonable estimates of how much time that supervision will take so this afternoon I created a little sample Excel tool to help with that task PERT Estimating Project Supervision v1.1.).
Via anecdotal non-scientific polls and surveys I have conducted over the years I have found that 2/3 of SMB (small and medium-sized business) contractors say Job Supervision is a Direct Job Cost but are unclear about hw to go about estimating those costs. Most of them just use what seems to me to be a vague and arbitrary percentage to cover everything. The problem I have with that is not all projects require the same percentage of Job Supervision.
For example I can recall one project we were doing when the supervision of our roofer consisted of me meeting him at the gate one more and giving him an access code than driving a couple hundred yard up the driveway and pointing out to him the cabana down the hill saying “There it is.” taking all of maybe a hour of my time. Meanwhile a year or two earlier we remodeled a bathroom inside the main house where I had to have someone there 4-8 hurs a day for a couple of weeks to deal with all the issues.
Estimating Project Management and/or Project Supervision is highly subjective and situation dependent. It’s highly unlikely that you can look up a standard Unit Cost in your Cost/Price Book for estimating purposes so what do you do? How do you estimate around such uncertainty?
There are some pretty sophisticated methods such as the Root Sum of Squares Method but I think for most SMB (Small & Medium Business) Contractors the PERT methodology is simple and accurate enough and can be combined with a modified Fibonacci Sequence like is used in AgileProject Planning to make some pretty good estimates. In a PERT estimate you make three point estimates for a task as follows:
- Optimistic estimate – Estimate when all favorable things will happen (all opportunities happen and no threats take place)
- Most Likely estimate – Estimate when both favorable and unfavorable conditions will happen
- Pessimistic estimate – Estimate when all unfavourable conditions happen (all threats happen and no opportunities take place)
PERT then calculates a weighted average as the PERT estimate by using the formula : Pert Estimate = (Optimistic + (4 X Most Likely) + Pessimistic)/6.
While yeah you could just do a PERT type estimate for the whole project’s Supervision element you will get a more accurate estimate if you estimate each Work Package, or Phase/Category or Week separately so that is why I set up the sheet the way I have.
On the last worksheet I also illustrate what is called a Fibonacci Estimating Sequence. The idea behind using a Fibonacci Sequence of number for Labor Hours is that the larger the number of hours is the less accurate your estimate is going to be so instead of 1,2,3,4,5,6,7,8,9,10 use the sequence 1,2,3,5,8,13,20,40. Think of like this,…can you tell the difference between lifting a 10 lb. bag of grout vs. a 12 lb bag of ground. Probably not but you can certainly tell the difference between a 10 and 15 lb. bag.
The sheet protection is on for each worksheet but there is no password required so feel free to modify it to fit your own use requirements.
(I created the workbook in Apple’s Numbers because one my client contractors who asked about this uses Apple’s Numbers. I then converted it into Excel to add the cell coloring and cell protection which is just one of the big reasons why I recommend Numbers users switch to Excel)