IntelliBid User Tip : Direct and Indirect Labor

Each Bid Template in IntelliBid has at least three labor descriptions: Working Foreman, Journeyman and Apprentice. By the way, the Standard and Short templates have two additional user-definable entries (Job Desc 4 & 5), for a total of five and each description can be edited to rename the description field.

Labor hours from your estimate are divided among these workers based on the crew mix you enter.

Labor hours from your estimate are divided among these workers based on the crew mix you enter

For the purpose of this tip, we are basing the following example on a small commercial job estimated at 160 total hours to complete the job including time for meetings, paperwork, etc.

In this example, our Journeyman will, at times, be performing the duties of a Foreman.

We will keep this example simple by using the Basic (Expanded O&P) V5 Template and set the crew size to
One (1)-Journeyman and One (1)-Apprentice. You will see that IntelliBid divides the labor equally between them so that each one is assigned 80 hours for a 2-week job. One factor often overlooked is what the Journeyman is actually doing during those 80 hours. Most likely, he is also managing the job, i.e., spending time talking with customers, chasing material down, completing paperwork, etc. Since the job estimate assumes he will be installing equipment during those 80 hours, the job will likely end up short on time.

Since we don’t want that to happen, here’s a simple way to account for the Foreman’s time. Determine how many hours the Journeyman typically spends on other tasks like the paperwork, etc.

Now look at how the hours have been changed

  1. So let’s say it is 1 hour a day that he needs for other tasks. That means you don’t have one Journeyman installing equipment, you have 7/8 of a Journeyman, or 0.875.
  2. When entering your crew size on the Direct Labor tab, change the 1 crew in column C to 0.875. (IntelliBid will round up to 0.88, but this is OK, the calculation will be correct.).
  3. Now look at how the hours have been changed. Your Journeyman has 74.89 hours and the Apprentice has 85.11 hours.The total is still 160.00 hours. The difference in this case, is 10.22 hours between the two.

 

 

 

 

Now go to the Indirect Labor tabNow go to the Indirect Labor tab. There isn’t a specific line for Journeyman listed so use the one for Foreman and put the 10.22 hours in Column B. The Journeyman gets the same pay for the other tasks, so enter the same Labor Rate, Burden percentage and Fringe Dollars as on the Direct Labor tab. Now you have the correct number of hours for the installation, and have accounted for the additional 10.22 hours task time for the Journeyman.

The Bottom Line: You began the job with 160 hours of labor and after taking into consideration the additional tasks that the Journeyman has to perform, you now have a total of 170.22 hours for the entire job. You almost left some labor hours on the table which can effect your Bottom Line.

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