Profit Matters

Digital Makeover of Job Costing Enables Competitive Bidding

A better understanding of individual cost elements that make up bids is enabling Mohawk Valley Materials to expand nationwide.

Mohawk Valley Materials is a woman-owned business with strength in site clearing and forestry that is now aggressively pursuing its ambition to double its revenue by getting to know its business at a new level of detail. What had been a $10 million company working on federal and state site jobs in its home of New York and a couple of neighboring states has spread nationwide and is now chasing heavy civil and infrastructure projects.

“We’re everywhere from California to the East Coast, and do most of our revenue on federal contracts for DoD (Department of Defense) funded work on military installations, national forests and a lot of Army Corps of Engineer work,” says Fred Brooks, chief of operations at Mohawk Valley. “The owners of the company are very open to embracing technology and growing our technology along with the business.”

Brooks has been driving technology into company practices. “When I got here, like a lot of small companies, we were doing everything with paper and pencil and Excel spreadsheets, and there wasn’t a whole lot of granular detail that went into putting estimates together,” he comments. “With my background as an operations manager, I need detail. I want to make sure that when we bid a job, we have the proper costs in there for equipment and labor and materials and all the backend stuff, the overhead, profit, taxes and fuel.”

Up to that point, bidding primarily federal contracts as a woman-owned small business limited the competition and left a bit of room in margins to accommodate imprecise project accounting. But Mohawk Valley lost much of that cushion when it started bidding less-specialized work in new markets against larger local contractors.

“We found ourselves not winning as much work,” says Brooks. “About June or July of last year, we had burned through all of our backlog. We were having a great year, and then we kind of hit a wall because we hadn’t won anymore contracts.”

Coincidentally, the team was working hard to integrate B2W’s software suites in strategic segments of the company’s business to feed the B2W Estimate platform. Brooks very quickly issued the first bids using the software.

“We started seeing that we were a lot more competitive with contractors who were operating in their home markets,” he says. “Coming from New York, we know little about, say, the Texas market. We’re competing against local contractors that know the market, know the labor and know the margins. Through B2W Estimate, we’re able to hone in on our actual costs and put proper margins in there and compete against local contractors.”

EQUIPMENT WAS AN ISSUE

The new business insight quickly started revising Mohawk Valley’s understanding of individual cost elements that make up their bids.

“We recognized that equipment was, by far, our biggest issue,” says Brooks. “In the forestry market, it’s mostly specialized equipment that you can’t rent, so we were able to just name our price. Once we got into the civil side of things, there’s an infinite number of companies out there who already do it or can just go rent a dozer, loader, excavator and do it themselves.

“We knew what the payments were on our equipment, but there was no calculation of actual ownership and operating rate for individual pieces of equipment,” he adds.

So, Mohawk Valley chose to take on B2W Maintain, as well as take a close look at its equipment fleet. “We calculated precisely what our ownership and operating rates were — including repairs, maintenance, fuel, wear parts, etc. — and then loaded those into B2W Estimate,” says Brooks.

Much of the company’s problem had been not capturing the full cost of the equipment in the rates it was using to price construction work. “A lot of costs were being thrown into an overhead bucket and not really tracked at the job level. So the job may look like it’s doing well, but our overhead rate was really, really high,” Brooks explains.

Fuel invoices, repair and maintenance invoices and financing installments for under utilized machines had simply been paid and their costs accrued to overhead instead of showing up in project ledgers. The company didn’t have an efficient way to track actual equipment costs or utilization, so project managers had been making equipment decisions based on rates that were very different from the company’s actual costs.

Doing the accounting to implement B2W made a big difference. “We calculated actual operating costs for each piece of equipment and started adding them into our bids and tracking that cost at a project level,” says Brooks. “Now, we have project engineers and project managers monitoring fuel usage and the cost of repairs and maintenance, whereas before, our project cost reports were basically just labor and materials.”

Most machine repairs were due to lack of maintenance because there was no system or manager driving a preventive maintenance program. Mohawk Valley hired an equipment manager and he and Brooks input the OEM preventive maintenance programs for each piece of equipment into B2W Maintain. They get notifications every day of routine maintenance to be performed.

“Right now, we’re at 81% planned and preventive maintenance vs. 19% unplanned, and it was the exact opposite when we first started tracking this — pretty close to 80% unplanned repairs vs. 20% planned and preventive maintenance,” says Brooks.

Mohawk Valley Materials started as a New York woman-owned business doing federal and state contract work with more specialized equipment.

MORE AND BETTER BIDDING

The new rates Mohawk Valley began using were substantially lower than the rates that it had been using for bids.

“That was probably the biggest factor that brought us onto the playing field in a lot of these different markets,” Brooks states. “Without B2W Estimate and the effort that we put into it, there’s no way we could have been that competitive, and we wouldn’t have been able to bid the job to begin with.”

B2W Estimate allows Mohawk Valley to produce a lot more bids, with higher accuracy than before, at much lower

overhead. Prior to the implementation of B2W Estimate, executive management, including the vice president, business development manager and chief of operations were creating bids on Excel spreadsheets and it was consuming a lot of their time. Now, a chief estimator and junior estimator are able to put together more bids, with higher accuracy, in less time, at a lower cost.

“I think the biggest lesson we learned in the process is that, to be sustainable, you have to make sure that all of your true costs are covered,” says Brooks. “With an Excel spreadsheet, it’s very time consuming to update current labor rates and equipment rates. The tendency is to just keep using some arbitrary rates. The risk, obviously, is that you’re not paying for your equipment, or you’re not covering all of your labor.”

ACCOUNTABILITY DRIVES EFFICIENCY

“Before we implemented B2W, we would bid a job with pencil and paper and Excel spreadsheet, not really having a detailed budget for what this operation is going to cost. Then we would send some people out there with some equipment, and they would do the job. At the end of the day, we’d either think we made money or think we lost money. And then we were on to the next one,” Brooks comments.

“With B2W Track, for instance on our contract down at Fort Hood, the superintendent is logging his time and equipment and quantities daily. He’s looking at numbers we expect on our schedule and it’s motivation for him to do better because there’s incentive for him at the end of the year to perform. So he’s able to see his daily cost,” Brooks points out. “Plus, it’s easier for management to see the production and make quicker changes to our operations, rather than just get to the end of the job and hope that we made money.”

A couple of Mohawk Valley project engineers verify quantities every day and that data stream drives monthly invoices to the company’s clients, so the information has to be correct.

“A couple of the operations down at Fort Hood were expected to take eight or nine months. You give a guy nine months to do something, he’s going to take 10. But if you incentivize him based on performance, and he’s able to see his performance on a daily basis... well, those operations are now going to be done in four or five,” says Brooks.

“If you don’t give them that kind of visibility, they’re just going to go out there and collect the paycheck,” he continues. “With bonuses and promotions tied to their performance, now they’re able to have some accountability and responsibility for delivering.” ET Mohawk Valley is on a path to double its revenue, diversifying into civil earthworks and expanding nationwide. B2W Estimate is aiding in this process by providing a better understanding of equipment and other costs on projects.

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DRONE TECHNOLOGY ELEVATES JOBSITE OPERATIONS UAVs are quickly establishing a foothold In a very short time period, unmanned aerial vehicle (UAV) technology, often referred to as drones, has gained a secure foothold on construction sites across North America. There are many different applications with new uses continuing to emerge. As the technology continues to evolve, it can be a challenge to keep up. Equipment Today has compiled a on construction jobsites as new synopsis of recent drone-related content. To learn more, the URLs listed will take you to the complete article. Many podcasts and videos are also applications continue to emerge. available to keep you on top of the latest developments.

DRONE PROS CLARIFY NEW FAA RULES

In December 2020, the Federal Aviation Administration (FAA) announced new rules scheduled to go into effect for drone operation. Those rules apply to flying at night, operations over people and remote identification (ID) of drones.

According to FAA’s 107.29, drones and other small unmanned aircraft cannot be flown at night unless the operator obtains a waiver. It’s also illegal to fly a drone during twilight hours unless the drone is equipped with anti-collision lights visible for 3 statute miles.

Currently, to fly a drone, operators are required to take a test every 24 months. As of March 16, 2021, the test is no longer required. Instead, operators will need to take a free online course, available at https://www.faasafety.gov.

Night waivers are no longer going to be as restrictive. “They’ll still be around for a couple of different aspects, but to actually FAA obtain the approval to operate at night, the only thing you have to do is complete either an initial aeronautical knowledge test or recurrent training that has been updated to include night opera- Drone manufacturers must be Remote ID compliant by September 16, 2022, and in operation September 16, 2023. tions,” says Spencer Schrader, an Unmanned Aircraft Systems (UAS) flight instructor at Kansas State Polytechnic. “We have not seen any commercially available UAS that fits this Category 1

Existing rules dictated that drones cannot be operated over non-participating yet,” says Schrader. people unless the individuals are under a covered structure or in a stationary vehicle. Drones also cannot be flown over assemblies of people, such as an outdoor conThe new rules add an additional caveat: drones cannot be operated over non-partic- cert or parade. However, on a construction site, where there is controlled access and ipating people unless they are under a covered structure, in a stationary vehicle or if everyone on the site is aware of the drone operating, sustained Category 1 drone the UAS is in one of four categories, which are spelled out in the FAA rule. operation is allowed, according to the FAA rules.

The categories refer to the risk of injury to humans via weight and propel- The remaining categories require equipment or waivers to fly over non-particlers. Category 1 requires the aircraft weigh less than 0.55 lbs., or 250 grams, and ipating people. Those aircraft require declarations of compliance, which Schrader that there be no rotating parts capable of lacerating the skin. Category 1 drones says will most likely be issued by the manufacturer, not the operator. can fly over people if the aircraft meets these requirements and is remote ID To find out more, read the complete article at compliant. www.ForConstructionPros.com/21295776.

Drones have gone far beyond being a toy for technophiles. The construction industry has increasingly embraced these tools as an invaluable ally for site surveying prior to the first dirt being shoveled, with numerous other applications available thereafter.

Here are the top considerations for construction companies wanting to add UAVs to their business plan.

1. Remote Safety in Action

Drones can help perform a vital role in site safety, monitoring various site hazards and safety concerns. They can quickly inspect buildings and other structures under construction, finding defects such as leaks or cracks, and alert site managers to take early corrective actions. Using drones to perform building inspections avoids the need to place workers at risk.

2. Construction Site Aerial Monitoring

Drones also allow far more frequent surveying of construction sites to monitor progress.

“You can check the construction site on a weekly basis and make critical decisions much faster,” says Samantha Burns, TraceAir Technologies, which employs drones to obtain site data for a cloud-based construction planning and management platform.

She added that the ability to quickly receive updated information enables all stakeholders in a project — from upper management to site workers — to have access to the same data.

3. Cross-Platform Data Availability

Drone software and hardware producers are ensuring the data yielded from their analytic software is available in construction software applications. Leica’s solutions include the flight planning software, the aircraft and sensor hardware and the image processing software. The solutions are integrated with other construction applications, so that data can be shared across various applications.

“For example, the extent of a proposed or existing construction site can be exported from CAD or Google Earth to our flight planning software, which can then be used to construct an aerial collection mission for the drone,” says Leica’s Bryan Baker. “After the mission, our software processes the imagery into three-dimensional points on the ground from other collection sources. All of those points can be used back in CAD to generate 3D surfaces, contour lines, surface features, 3D models, site progressions, documentation and volumetrics for earthwork calculations.”

Improvements in drone hardware and software are making it easier and more cost effective to obtain accurate, consistent information that users can rely on to produce status reports and make appropriate decisions.

4. Advanced Technology for Drone Data Processing

With new advances in drone technology, construction companies are able to receive better data more quickly than in the past.

“Processing times are coming down all the time, which makes time to actionable insights faster,” says Agtek’s Matthew

Desmond. “Artificial intelligence is being used to eliminate unwanted data, and LiDAR (aerial laser scanning) systems can see through vegetation to make a more accurate model without interaction required.”

The greater use of autonomous technologies in future drones is likely. “Remote ID and Unmanned Traffic Management are technologies that will make flights beyond visual line of site more possible,” says Baker. “Being able to take an operator completely out of the loop and have the mission flown, data transferred, processed and system recharged is already possible.”

5. In-house vs. Outsourcing of Drone Fleets

One decision facing construction companies is whether to invest in buying and developing their own drone fleet or outsourcing drone services to a company that provides them. The answer lies in which is the best way for a company to allocate existing manpower and financial resources.

“It is very time- and laborintensive to process data from drones,” says Burns. “What construction contractors must consider is how to manage their drone program. Outsourcing these services to a firm with expertise is a much more efficient allocation of company resources.”

Companies that have their own drones may offload the data analytics to software providers.

6. Staying Abreast of Regulations

As drone usage grows, companies need to realize that steady investments are needed to ensure compliance with federal and safety regulations.

“Larger companies that started with the idea of having a drone on hand at a site have evolved into having a dedicated team of drone professionals that travel from site to site as required,” says Baker. “Drone manufacturers are working on making drones more autonomous. Keeping the drone within visual line of site of the operator to avoid other aircraft is challenging and limiting. Terrain and obstacle avoidance needs to be better addressed. One of the largest challenges for companies is maintaining FAA compliance and still being able to be productive.”

Safety is also a key consideration. “There is a huge difference in the safety, quality and accuracy of drones, drone data and drone pilots,” Baker states. “Drone operations are regulated by the FAA and require strict adherence to the limitations set forth in Title 14 of the Code of Federal Regulations regulating aviation activities. Additionally, there are OSHA implications [when] operating a drone on a construction site. As aircraft, drones require different insurance from other construction vehicles.”

To find out more, read the complete article at www.ForConstructionPros.com/21295561.

© Gorodenkoff – stock.adobe.com

DRONE-BASED SITE INTELLIGENCE MAXIMIZES GRADING EFFICIENCY AND PROFITS

Independent Construction Company, headquartered in Concord, CA, has chosen to leverage technology across its portfolio of projects to maximize efficiency of its grading operations and empower its team. One such technology is TraceAir, a software solution that uses drone data to help construction teams streamline projects.

Independent began using the technology in December 2016, when drones were used for a first test flyover on a project at Faria Ranch in San Ramon, CA. The contractor has since used it on 44 projects. Independent now captures

TraceAir

Independent Construction captures weekly surveys using drones then uses TraceAir’s software to measure, track and visualize projects from the field or in the office.

weekly surveys using drones and uses TraceAir’s software to measure, track and visualize projects. It is able to measure site balances at a fraction of the cost of traditional surveys, as well as course correct when something goes wrong.

Take a project for Skyline Ranch, a 500-acre development site. The developer wanted 27 million cu. yds. of total cut moved in just 16 months. With some approvals still pending and model homes designed to be in the middle of the site, the job had to be built out of sequence — at the risk of a serious dirt imbalance. Independent saw the opportunity to use technology to not only bid competitively to win the contract but to address the project challenges as they arose.

TraceAir provided the team with cut/fill maps of the project every week, which showed an accurate dirt balance of the site and enabled Independent to calculate an average for the bulk/shrink coefficient of excavated dirt. Using this information, the construction team was able to see early that, with the current final grade design, the project would end up long by 600,000 cu. yds. By identifying this issue early, the team was able to revise the design to avoid substantial added cost to the project.

To find out more, read the complete article at www. ForConstructionPros.com/21427525.

©Scanrail – stock.adobe.com

If your engineering, construction or architectural firm is evaluating drone adoption or expansion, here are some of the top value factors to consider.

1. New insights from drone data not captured before

To effectively use 3D data, businesses need to capture accurate models at various stages of planning and construction. Drones are well suited for quickly modeling buildings and large areas. Using drones for photogrammetry can enable faster and more frequent modeling at a lower cost than current mapping methods.

Some companies are using drones for up-close thermal inspections to spot structural defects and cracks. Others are looking into 3D location tracking of moving objects (such as people, equipment and materials) on construction sites using a point cloud-vision hybrid approach.

2. Added productivity from drone workflows

Often, drones can save a significant amount of time when replacing existing processes. And over time, drone programs can expand with more use cases to derive even greater value. A drone program that begins with inspections may later grow to help with inventory management and 3D modeling.

3. Performing risky jobs with drones for improved worker safety

Drones can help improve jobsite safety by taking the place of humans for certain hazardous tasks, such as: ˜ Inspections of assets at dangerous heights ˜ Exploration of areas containing hazardous materials, temperatures or gases ˜ Identifying electrical hazards and utility lines From data collection and mapping to safety and environmental monitoring, today’s drones fly all types of missions on the jobsite.

4. Fewer workers’ comp claims

Drones can improve worker safety. This in turn can decrease the frequency and severity of onsite incidents and save construction companies significant workers’ compensation costs.

5. Faster, richer results with connected drones and 5G

As 5G wireless networks continue to be built out, connected drones have the potential to unlock still more new capabilities. Virtual reality applications are emerging, like next-generation inspections and monitoring movement of resources. These capabilities stand to benefit from the power of 5G, which can offer: ˜ Low latency, potentially allowing control of aircraft from miles away in near real time ˜ Rapid data transfer, enabling transmission of high volumes of data ˜ Near real-time analytics during flight with mobile edge computing (MEC) ˜ Up to a million connected devices per square kilometer

Read the complete article at www. ForConstructionPros.com/21295708.

Source: Skyward, a Verizon Company

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The Kespry iPad app walks users through determining the area to survey, identifying flight heights to capture data and completing the preflight checklist to ensure the mission is safe and compliant. Tap the “take-off” button and the drone flies the mission autonomously and returns to the take-off area.

DRONE SERVICE BOOSTS PROJECT COMPLETION, TEAMWORK AND QC

ANDRES Construction understood the customer service value of aerial photography and had monthly helicopter fly-bys, but knew it could get more from drones.

“We got three photos, different angles, each month [from each project site],” says John Andres, the third generation of his family to work at the Dallas-based firm that manages commercial, institutional and mixed-use construction projects across Texas. “We couldn’t really do much with it. Last month’s [helicopter images] would have the perfect angle and this month we wouldn’t even get a shot of the same thing.”

Andres was a drone enthusiast from early in the spread of consumer drones and had thought about how drones could be used in construction. When he discovered the AirMap drone management solution three years ago, the idea became practical reality, right off the shelf.

“Now we get image captures from the same angles each week or as often as we want. And we utilize a drone service provider that can fly in places that we’re not actually located [saving drive time], so that we can get that capture and have it on one platform with all our other projects. We get data in the way we expect to see that data.” Having a drone service fly pre-programmed routes over a site and submit the data to ANDRES’ AirMap account solved the biggest obstacles to applying the immensely valuable aerial photography everywhere in which it can make construction more profitable.

Images are gathered in AirMap’s JobSite app, available to anybody with log-in credentials, and organized on a timeline that allows you to easily find images from the same location at different times and toggle back and forth to compare them.

ANDRES was so convinced by the value potential that the company implemented it enterprise-wide after a single test project. Now, 20 active projects are flown weekly or biweekly and all of the preconstruction projects.

To find out more, read the complete article at www.ForConstructionPros. com/21198556.

DRONE DATA TRANSFORMS MINE PLANNING AND INVENTORY MANAGEMENT

Midsouth Aggregates, part of North America’s largest aggregate materials producer CRH, is using the Kespry drone-based aerial intelligence platform for inventory management and mine planning. Midsouth has granite and limestone reserves in Alabama, Georgia and Tennessee, and produces a range of aggregate and sand products. Key clients include Departments of Transportation in Alabama, Georgia, Tennessee and Florida, the Corps of Engineers and the Federal Aviation Authority.

“Kespry’s drones and software really sped up inventory management,” says Jerry Adkins, senior production manager with Midsouth Aggregates. “It gave us a consistent measuring tool, whereas in the past we’d use other vendors who would do LIDAR and ground surveys. They would come on site, do the flights and it would usually take a couple of weeks to get the data. Then we’d have a different vendor come in later in the year using a different method for measuring.

Kespry

“With Kespry, we brought it all in house and inventory management became something we could do monthly with more consistency and control. Now we get real-time status of our sales yards and pits. We can calculate forecasted blast tonnages in Kespry and verify this with a flight of the muck pile once the shot is on the ground. This gives us an accurate read on our daily production.

Midsouth Aggregates also uses the data captured for comprehensive mine planning, including granular analysis of pits across its operations.

To find out more, read the complete article at www. ForConstructionPros. com/21128523.

FIND MORE ONLINE

[PODCAST] The Benefits of Drone Surveying in Earthmoving Applications: www.ForConstructionPros.com/21130454

[PODCAST] Drone Technology Poised to Take Many Roles in Construction: www.ForConstructionPros.com/21109400

[VIDEO] Propeller Discusses Its Solutions for Surveying Earthmoving Projects: www.ForConstructionPros.com/21130167

[VIDEO] GradeIt! Addition to TraceAir Platform Will Help Grading Contractors Cut Costs by 10%: www.ForConstructionPros.com/21295866