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id, title, tags, daily
| id | title | tags | daily |
|---|---|---|---|
| 2026-05-25T15:02:03-0400 | 2026-05-25 15:02:03 | 2026-05-25 |
2026-05-25 15:02:03
The perceived value of detailed takeoff is baffling because its single advantage over reference class forecasting (which offers innumerable advantages over detailed takeoff) is in itemized pricing, but this advantage is nullified by the known phenomenon that the precise selection of particular items and their quantities can not be trusted to be exactly accurate due to uncertainty of project conditions, and by the observation that material pricing at the time of bid is not representative of the cost of buyout.
The inevitable retort is "It's an estimate, not an exactimate," or some other such reductive dismissal. True enough, this method is a way of getting close to the true answer of project cost and schedule, but it's not an intuitive one.
For an organizational process to be economical it must contribute value greater than its cost. Reduction of loss (risk mitigation) is a form of value, and is the vector by which detailed takeoff is expected to be economical: a more confident estimate (a narrower high-confidence interval) allows the organization to bid more aggressively (bid lower) without increasing their assumed risk in project execution. A lower bid increases the probability of award, decreasing the risk that estimating resources will have been wasted. We can assume that this is not the vector by which conest is expected to generate value, both because it does not appear to be effective in this regard1 and because the ConEst estimate is not used as basis to decrease the bid.2
As an estimating method, detailed takeoff is not more precise (its use does not significantly decrease our certainty), but it is more granular. An estimate based on detailed takeoff can be easily3 subdivided for use in earned-value-management, but its most immediate use is in identifying variation from the expected case. In other words, deciding when overruns can be blamed on mismanagement, and when they are simply bad luck.
The last case is where I'd bet the perceived value of ConEst is found.4 I can't help but feel that this effort is misplaced. If pdi-operations is like pdi-estimating, I have no doubt that they could all benefit from training. Identifying who exactly needs it more, then, is pointless. As well to identify which cases of great project success can actually be attributed to exceptional management and not simply the-failure-of-risk-management#Red Baron Effect.
Working exclusively in multifamily for this time has lead me to spend a lot of time thinking about the question of how estimating resources are best allocated. My understanding of the industry is that, despite the apparent focus on cost, executive focus is usually on maintaining a consistent volume of work. Because as contractors we are thinly-capitalized,5 failing to do so seems to represent a larger risk than a low-margin contract. Under these conditions, estimating has very little to do with the project itself, so we can make assumptions about it that might not normally seem appropriate. It is because of our narrow market that we get to have these much more interesting discussions.
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See 2026-05-22_11-57-18. ↩︎
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This may be missed opportunity. My baseless (and perhaps naive) speculation is that a "Hey, we took a closer look and got our price down a bit more" may indicate to the customer a stag-hunt behavior that is more valuable than the real decrease in expected profit. ↩︎
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Depending on the takeoff software. ↩︎
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Crew loading and schedule are important points in estimating, and EVM is a fine solution there, but it would be straightforward to apply the same RCF principles that we use for Bid estimates for these as well. That we use detailed takeoff in lieu of such methods suggests that it is believed necessary for other reasons. ↩︎