+RS Means Estimating Books: Why RS Means

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RS Means Estimating Books: Why RS Means

RS Means is a well-respected provider of construction cost guides. RS Means Cost Data books have been the gold standard for generations of project managers and others who seek to provide accurate estimates in an efficient manner. These RS Means resources are authoritative.

If you bid on a government contract, your RS Means data will not be questioned. That is also true for many other types of bids, such as those for insurance work.

And what happens if someone tries to sue you, claiming you overcharged? Rather than hire an expert witness (at huge cost) to fight another expert witness regarding how you charged the job, you merely need to show your RS Means data. End of dispute.

But if you use "finger to the wind" or "past projects" as your basis for an estimate, bid, cost justification, or whatever--you face an uphill battle you don't stand a great chance of winning.

A similar situation exists when you file your taxes. If you use one of the recognized tax preparation programs, the IRS auditor does not question the program's computations. That issue has already been resolved ahead of time. Likewise, when you use RS Means, your costs for a given unit of labor or other cost input is simply accepted as accurate.

So, the benefits of using RS Means are tangible from the standpoint of keeping you out of trouble. But the benefits are also very real from another standpoint: Managing your costs.

Using RS Means, you know with certainty what your costs should be for labor, material, and various services. You don't have to guess. This means you don't overpay and thus cut into your margin. Nor do you underpay and cut into the quality that keeps customers coming back.

So, don't wonder if you can afford an RS Means guide for your business. The fact is, you can't afford not to have one. An RS Means guide typically pays for itself shortly after you start using it.

Just do the math.

Example 1. You bid on a $90,000 construction project (20% margin, or cost of $72,000). But you bid from a previous project and your costs are low by 6%. On this project, that amounts to $4,320 you simply left on the table. Did you need to bid so low to get the job? Probably not. But how many hours of your wages does that $4,320 represent?

Example 2. You bid on a $90,000 construction project (20% margin, or cost of $72,000). But you bid from a previous project and then develop your own cost increases to come up with your cost data. Consequently, your "costs" are high by 6%. On this project, that amounts to $4,320 you think you need to do the job. Suppose the customer comes back and asks you to cut the price. Will you be willing to do that?

Example 3. You bid on a project, but you miss key elements in your bid--elements covered by RS Means. It's really not your fault, is it? After all, you haven't done a project like this before. But your suppliers and your customer don't see it that way. You made the bid, and you have to eat the difference. The fact is, the folks at RS Means draw on thousands of projects and other resources you don't have access to, then they compile the cost data based on the type of work. If you overlook something because you didn't have an RS Means resource, you have only yourself to blame.

Sure, you saved $116 by not buying that RS Means book. But you took a $20,000 hit on the job you just did and now you have to go get a loan so you can meet payroll. How many times can you afford to do that?

Example 4. You have a time and materials contract to do various construction projects for the city. You just billed the city for work you did. The City Manager comes back to you and says the bill is too high. What are you going to do? You can:

Cut the price, thereby admitting you overcharged this project. That then implies you overcharge other projects. Kiss your profits goodbye.
Refuse to cut the price, thereby forcing the City Manager to look at arbitration or a lawsuit to obtain the price the city has deemed acceptable.
Meet with the City Manager, and walk through the pricing, using your authoritative RS Means as the basis.

The correct choice here is obvious. Isn't it?