Winning bids and compelling proposals start with accurate and complete construction cost estimates. Proper cost estimates help your teams fully visualize successful execution of your projects and establish financial baselines by which to manage accountability and measure performance. This Getting Started Guide will help you create cost estimates for all of your projects and change orders managed in RedTeam Flex.
About this Guide
This Getting Started Guide covers the fundamentals of cost estimating, robust capability, and time saving features built into RedTeam Flex. Preparing cost estimates using RedTeam Flex ensures that your investment of time and energy into the process is captured as a valuable source of information and insight that can be leveraged by your team to deliver successful projects.
Cost estimates and associated pricing are regularly prepared for various purposes as part of ongoing relationships with customers or potential customers. Cost estimates may be prepared in support of conceptual pricing for discussion, others for bottom line numbers to be presented as hard bids, or proposals for potential changes to work in progress.
The risk of confusion regarding “numbers” you share with customers or other third party project participants is the primary reason contractors incorporate cost estimates and pricing into formal customer proposal documents. Your proposal documents memorialize the context and qualifications regarding your intentions and commitments in providing cost estimates and pricing.
RedTeam Flex supports three primary Proposal Types, including:
Time and Material (“T&M”)
Fixed Price (“FP”)
Construction Management (“CM”)
RedTeam Flex’s proposal forms enable you to include or exclude itemized details, describe qualifications and alternates, and attach detailed cost backup for T&M and CM Proposals (with pricing based on extensions of negotiated unit prices, overhead markups, fee and supplemental markups).
RedTeam Flex can also be used to compute and link a Schedule of Values from your cost estimate, with various options to allocate either overhead costs and/or fee. All proposal forms allow you to quantify time over which proposal may be accepted, and the duration of the anticipated work.
RedTeam Flex’s Cost Estimating features an innovative spreadsheet-style user interface and supports industry-standard cost structures including project phases, cost codes and cost categories, making it flexible and well suited for all construction markets and fully compatible with industry leading job cost accounting systems, including Sage 100, Sage 300, Sage Intacct, Acumatica and Intuit QuickBooks. RedTeam Flex therefore supports best practice of estimating the cost of work in the same manner that job costs are to be managed.
Project Phases are optional, user-definable and project-specific distinctions that enable grouping of estimated and actual costs by clearly definable elements of your projects. They are flexible and may be created for discrete building elements, structures or building efforts over time, location or by resource.
Project Cost Codes
Project Cost Codes are industry standard alphanumeric codes that describe specific building processes or components published by the Construction Specifications Institute (CSI) help AEC professionals organize expenses into common categories. Companies may use either their own customized list or the traditional 16 or newer 48 division MasterFormat lists to organize specifications and other written information for commercial and institutional building projects in the U.S. and Canada.
All cost estimates are started by adding one or more Cost Codes into your cost estimate. For a new project, cost codes should be added manually from your review of the project plans and specifications and your experience performing similar work. For change orders, identification of the Vendors affected by a particular change automatically inserts the Cost Codes associated with their existing commitments and creates draft Requests for Quote in order to obtain their pricing impacts.
Cost Codes may or may not be assigned to a Phase.
Project Cost Categories
Project Cost Categories are required, user-definable categories are selected from a master list configured in your instance of RedTeam Flex. Project Cost Categories are assigned and summarized based on a broader grouping of Cost Types (also known as Elements of Cost for procurement and construction accounting purposes) - Labor, Material, Subcontract, Equipment and Other.
Cost Code Assemblies
Each Cost Code will have one or more associated Assemblies, which may be thought of as a collection of itemized elements of work within that particular code. For example, an Assembly for Tile Flooring might include Assembly Items such as labor (layout and installation) and material (ceramic tiles, thinset and grout).
Cost Code Assemblies help your team understand the fundamental cost drivers for work as typically performed by your team. If an Assembly is saved as a Master Assembly in RedTeam Flex, they may be reused on future estimates, in which case the Item quantities may be scaled proportionally to the Assembly quantity to quickly estimate costs for different quantities of similar work.
When adding a Cost Code, users may select from one or more Master Assemblies associated with each Cost Code. The Cost Code Assembly will be inserted into the Cost Estimate with a zero Assembly quantity. Therefore, the Item Quantities, including both variable and non-variable Items, will also be zero. Entering an Assembly Quantity (other than zero) will activate the calculation of the extensions of amounts for estimated costs.
In addition, itemized details become the basis of your bid forms. Requiring your bidders to acknowledge inclusion of itemized details is the first level of inspection/review of your Vendor Quotes.
Steps to add Cost Codes:
In the Cost Estimate click the New button (+)
Select Add Cost Codes
Check mark the box next to the cost codes that are to be added to the estimate
The Search box can be used to filter the list down to find specific cost codes by entering keywords or cost code numbers.
Accessing the Phase option will assign the cost codes being added to that specific phase. Note: The same cost code can be assigned to multiple phases.
Clicking Add will complete the process of adding the selected cost codes to the estimate.
Unit Prices - Unit Prices are commonly negotiated at the outset of all customer contracts, if not for use in the pricing of the original scope of work, but commonly applicable to most change orders.
Labor Categories - An Inventory item can be converted to a Labor Category for onsite labor worked and then assigned under a Cost Code Assembly. Labor Categories will automatically use the Standard Estimate rate and unit of measure that has been created for them. Labor Categories can also be modified as Unit Prices to reflect negotiated pricing.
Overhead Markups - Overhead Markups are applicable only on T&M and CM Proposal Types, as they imply “open book” disclosure of direct and indirect costs to be incurred for the performance of such projects. It should be noted that most change orders fall into this category, even on Fixed Price base customer contracts.
Fee - RedTeam Flex provides two methods for calculating Fee, as either a Percent of Cost or a Percent of Price. Examples of both fee calculation methods are illustrated below:
As a Percent of Cost, application of a fee rate of 10 percent to a cost estimate of $100,000 will yield $10,000 (100,000 cost x 10 percent = 10,000 fee). The “fee” in this case, is exactly 10 percent of the estimated cost, and the total price is $110,000.
Alternatively, as a Percent of Price, application of a fee rate of 10 percent to a cost estimate of $100,000 will yield $11,111 (100,000 cost / (1 - 10 percent) = $111,111 total price). The “fee” in this case, is exactly 10 percent of the total price of $111,111.
Both methods are valid and subject to negotiation with your customers.
Supplemental Markups - Supplemental Markups are negotiated amounts generally applied as percentages of the underlying cost or price of the work. They are typically shown “below the line” as they represent pass-through costs. NOTE: If a supplemental markup is added to the Cost Estimate, the markup will also be added to a PC and from that PC to a new PC.
Allowances and Contingency - Amounts designated as allowance or contingency may be presented to customers as either “above the line” or “below the line” amounts.
RedTeam Flex’s new Cost Estimate is easier to use and even faster than your favorite desktop estimating software, including your “go to” spreadsheets, and delivers a significant improvement in usability over our prior versions. The new Cost Estimate is used in the “Estimate” tab and “Contract” tab when creating Change Orders.
Click-saving features include:
Blue menu icons embedded within the spreadsheet grid provide visual indicators and assist users in easily updating the estimate.
Navigation with arrows and tab to directly editable cells denoted with blue font, simply type to change.
Click to expand cost code assemblies to add or delete items, adjust assembly calculations, and drag-and-drop arrangement of items within the assembly.
All valid changes in the grid are automatically saved.
Using your cursor, click to focus on editable values denoted with blue font.
Changes are automatically saved and your estimate recomputed upon <Enter> or moving focus to another cell in the grid.
Left / Right Arrow
Left and Right Arrow Keys may be used to traverse text or numeric fields to edit individual characters.
Up / Down Arrow
Up and Down Arrow Keys will navigate to a row above or below the current focus.
Holding down the Shift Key causes Left and Right Arrow to change focus to editable cells on the left or right.
Indicates collapsed row, click to expand.
Indicates expanded row, click to collapse.
Drag and Drop
Selecting the numbers within Cost Code Assemblies and reordering.
Shift + →
Shift + ←
Shift + Tab
Shift + ↑
↑ (only for Item cells with Texts)
Shift + ↓
↓ (only for Item cells with Texts)
Editable (only for Items cells with Texts)
Expanded (only for Item cells with dropdowns)
Tab (move focus to any available editable cell to the right)
Cost Code Menu
Bid Item Menu
Unit Price Item Menu
Assembly Narrative Icon
Create Requests for Quote from your Cost Estimate, compare and level to select as best, instantly updating and recalculating your Cost Estimate and Pricing.
RedTeam Flex’s cost estimating Includes essential features and is capable of supporting simple to your most challenging pricing tasks.
Cost estimates can be leveraged to facilitate bid solicitation, bid leveling, and final selection of team members.
Cost estimates automatically update budgets as work is awarded and the project is promoted to “In Progress” status. When the project is promoted to "In Progress" the cost estimate information is transferred to the Baseline Budget and updates the Budget tab.
This process does not occur if the option in Original Contract to Unlink From Estimate is selected.
Cost Estimate Spreadsheet Import/Export
Cost Estimate Export
Cost estimates can be exported to an “xlsx” file for import into another system, a different project, or another RedTeam Flex database. Users can therefore keep a library of cost estimate templates outside of RedTeam Flex, or export discrete cost estimate scenarios for design development engagements.
Cost Estimate Import
To import estimates into the project, the Estimate Template needs to be used. The Estimate Template can be downloaded from within RedTeam Flex from the Import Spreadsheet interface.
Clicking the "Estimate Template" will begin the download of the template.
Filling out the Estimate Template
Estimate Template that can be filled out to import an estimate.
The Estimate Template is downloaded as a XLSX file and must be saved as the same type to be able to import it. The template has three worksheets that are included on it:
Estimate - This is the worksheet that is to be filled out with the information to be imported into the estimate.
Example - Provides the layout of how the information should be entered on the Estimate worksheet.
Tips - Included to provide further ease of use for using the template and understand the features available.
The columns that are required differ based on the information being imported.
Single line cost codes: Columns Cost Code (B), Description (C), Cost Category (D), Quantity (E), Units of Measure (F), and Unit Cost (G) are required.
Cost code with assembly items: Columns Cost Code (B), Description (C), Quantity (E), and Units of Measure (F) are required. The assembly items that are nested under the cost code must be the item(s) on the following rows after the cost code.
Assembly Items: Columns Description (C), Cost Category (D), Quantity (E), Units of Measure (F), and Unit Cost (G) are required.
For the Variable Item Quantity and Inventory Item fields, they are required to be entered “yes” or “no” for the entry line to be designated as either option. Variable Item Quantity means the item quantity changes when the Cost code Assembly quantity changes if yes is entered. Inventory Item is to designate if the line is an inventory item when yes is entered. All available inventory items can be found in the Configuration menu under the Master Inventory Items sub menu. Project phases have to be created in the project prior to being listed on the import estimate. When using phases on the cost estimate, use the phase code and not the description.
When the Estimate template is uploaded, the import process validates the data before it is imported. Values that cannot be imported will be identified by RedTeam Flex and automatically exported with detailed notes. Once all errors have been corrected on the Estimate Template the sheet can be imported again.
Warning message that appears if cost codes with associated requests for quotes or vendor quotes are detected.
If any request for quotes or vendor quotes are found to be associated with the current estimate, a warning will appear in the Import from Spreadsheet screen. The warning will list how many cost codes are associated with quotes. The user will have two options to choose from, to keep the existing cost codes that are associated with any quotes or to delete all the existing cost codes and associated quotes. If "yes" is selected, then the cost codes and their associated quotes will not be removed. This means that the estimate will include the retained cost codes with quotes and the newly imported data. If "no" is selected, only the imported data will appear and all the current cost codes and quotes will be deleted. The Import process will set up Unit Prices (so long as they match up to what is in your Master List), populate project cost codes and project cost categories. Assemblies will be created from item records following the Cost Code Headers.
Assembly Narratives can be used on the Cost Estimate to add more detailed and contextual information about the assembly items (up to 5000 characters) and they can be included on a proposal. This feature is only accessible when the project is in Request status. Only assembly items that are not Unit Price items can have a custom narrative. Assembly Narratives cannot be edited when a vendor quote has been selected as best.
Click the Home button
Click on the Estimate option
Hover your cursor over the assembly item your want to edit the narrative on. Click the narrative button to open the Buyout Item Profile
Add information to the Narrative dialogue box
Check the "Show on Proposal" box if the narrative should be included on proposals
Click the "X" in the top right corner of the Buyout Item Profile to complete the process