BC’s Blog- Cassell Consulting

With the hot summer weather and long daylight hours here in the Pacific Northwest, the livin’ is easy. For those with overhead under control, it’s a good time to enjoy some outdoor activities and vacation time with family and friends. Between the slumping economy and the enticing lure of summer, we took some time off in July. Just before heading back East for a 4th of July break,  I attended the AACE conference in Seattle, whose membership is mostly engineering-industrial firms. Business in those sectors is down from last year, but stronger than what we’re seeing in commercial segments. Those firms were guardedly optimistic; plus they’re getting a discount on their projects due to depressed material and subcontractor pricing.

Not unexpectedly, there’s still plenty of bad news: ENR’s construction revenue data (updated through second quarter) show the commercial market still declining, especially in retail and office construction. While health care and education revenue is less dismal, it’s still following the same downward trend. For the first time this year however, there’s a small seed of optimism sprouting in the dirt. Power and fuel-industry construction rose last quarter, compared with 2008. And a surprising (shocking?) 11% uptick in housing starts last month is another glimmer of hope that we might have already experienced the worst.

Still, the cutthroat bid market persists. An Owner expecting 8 bidders received 40 proposals for a project in the Midwest. A Southwest Owner awarded a $2.8mm contract last month, when a similar project cost $4.2mm 18 months ago. I don’t think any of us expects anything better than a long, slow slog back toward  better market conditions. One thing we’ve learned from our many years in construction, is that all you can do is produce fair bids for work that fits your company. You can’t beat stupidity, and most of us don’t need the practice, (apparently unlike some companies). With manageable overhead and efficient internal systems, we will live to bid and build another day.

August finds us headed down to Phoenix mid-month, to finish up an environmental contractor’s new Timberline estimating system. The following week we’ll be down in San Diego, assisting with some US Cost Success Estimator training for NAVFAC (Naval Facilities) engineering personnel. On the calendar for next month is Success Estimator advanced training for the SeaBees in Port Hueneme, California. We’re also planning to introduce Seedorff Masonry’s new estimating database in September or October in Iowa. A bright spot of the down economy is the number of proposal requests we’re seeing. While firms are being conservative with precious cash, many recognize it’s a good time to invest in the future.

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March finds the bid market slowing in many areas, but holding its own in a few areas. Job prices continue to plummet as marginal contracting firms fight for survival. However some of our clientele reports that it’s still possible to bid a job with some profit, and actually get awarded the job. Starting that project on time is often problematic however, as Owners and Developers report that bank funding remains inordinately tight. ENR’s forecast for 2009 shows continuing declines in nearly all sectors of industrial, commercial, & residential markets, with modest growth only in public works highway and infrastructure work in 2010.  Some rebound in health care, education, and agriculture is forecast for next year, but private development and residential construction is predicted to continue its decline. Therefore the companies with solid presence in public works, and negotiated markets are best-positioned for the current recession.

Just as surely as spring breezes blow in a different direction from those in winter, the new season has brought significant changes at Cassell Consulting. After fifteen years as an Independent Timberline-certified Estimating consultant & trainer, we declined to renew. This is not to suggest that our support for our loyal Timberline clientele will diminish. In fact, we have more freedom to pursue creative solutions with our valuable Timberline customers than we would have under the new restrictions to be imposed upon us. For years, the Sage dealers have been consolidating their power base within the company’s political structure. This year they finally succeeded in pressuring Sage to eliminate all Independent Consultants. (companies like ours) For years there was an agreeable tension, or balance, between sales and consulting. In our opinion, the winner of these two very different roles in the Sage software channel was you, our customers. Because we were independent, and not controlled by the sales sector, we could give honest opinions, and act strictly in your best interests. With all Sage-certified Timberline consultants now required to work directly, (and exclusively) for its Dealers, we think this will inevitably cease to be true.

How will this change affect you, our valuable customers? Simply stated, very little- our aim is to make this change as invisible as possible. There are (were?) nearly 150 independent Sage-certified consultants last year. More than 100 have formed a group that is working together to continue supporting our clients. We’re working on our own, independent consulting accreditation process. On the one hand, while Sales is trying to squeeze us out of business, fair competition is good for the marketplace. We say bring it on! Sage Dealers will be directly competing with us for your consulting and training business. We appreciate your loyalty, and intend to earn the privilege to continue working with you. We pledge to do our utmost to anticipate your business needs, and to serve your company with the valuable expertise you’ve counted on from us.

We have taken this opportunity to expand our business relationships. And we found some very exciting opportunities in the construction software market.  For one, we maintain our Primavera SureTrak authorization. I expect to be expanding our Primavera services to include p6. Please let us know if that’s a priority at your company. Additionallly, we’ve seen some exciting products and fresh directions from WinEstimator (Kent, Washington), and US Cost (Atlanta, Georgia). We’ve established relationships with both, and are very excited at the possibilities:

WinEst’s new Model-Logix software enables all your company’s historical estimating data to be stored in a single, highly searchable SQL database! (Yes, you read that correctly). You can quickly search all your old estimates, (even those created in Timberline or Excel), filter for criteria to much the requirements of a project for which you need a quick budget, and see the comparative results (adjusted for inflation and location), in just a few minutes. It’s a very powerful and intuitive tool for conceptual budgeting, and historical estimate tracking.

US Cost has an exciting, web-based estimating application; US Cost Enterprise is not only Internet based estimating software, but also allows you to quickly search all your historical estimates, and copy components from those projects into a new project estimate. Enterprise also includes powerful search and filtering tools, and is also SQL-based. Enterprise is designed to be hosted on your company’s server, so your own IT department has full control over security. Due to its SQL structure, Enterprise security is as granular as needed.

But wait, there’s more- you also get a set of knives, that never go dull! (just kidding) Both US Cost and WinEst have released their own applications that interface with cutting-edge BIM software models. (We’re not talking about “in development”- this software works today. (Now!) Both companies have introduced these fresh, powerful, state of the art products, indicative of what the truly innovative software companies are doing for their clientele. Please don’t hesitate to ask us to introduce you to these exciting new estimating solutions.

Despite all the changes, it’s business as usual at Cassell Consulting. While much of our work can be done remotely from our office in Washington, we’re traveling frequently again. This month’s stops included Hawaii, (Fukunaga Electrical and Hawaii Community College), Seattle, (Absher Construction and WinEst),and California, (PBC Companies). At PBC we just finished merging their separate concrete and masonry databases, (newly indexed to Master Format 2004), and redesigning their cost code system (cutting standard cost codes from 7 pages to 1-1/2), and installing and configuring Explorer for its chief Estimator. We’re updating all of Absher’s structural assemblies, starting with our specialty, concrete, to reflect their own successful estimating methods and historical production rates. We started out the month in Honolulu at HCC, designing upcoming classes, and in Hilo working with upgrading software versions, and new crew assignments in Fukunaga Electrical’s extensive database. And in our spare time, we’re working on building a brand new, ground-up database for Seedorff Masonry’s complex brick and block work. In my more than twenty years building and working with databases for nearly every trade in the industry, I find piping and masonry databases & assemblies to be the most complex, due to the number of sizes, pieces, & material spec options in those disciplines.

Work in April also includes new projects for a couple long-time customers in Montana, Wadsworth Builders and Yellowstone Traditions. We’re traveling out to the Treasure State in early April. At YT in Bozeman, we’re rolling out the new 2004 Master Format version of our General Contractor database, and updating their training for the new software versions. Wadsworth in Great Falls has us building new, and improving its existing assemblies in its sitework, concrete, and framing disciplines. Daren Baldwin at DB Data has us getting started with one of its clients, Tel Tech Networks, a leading communications and data cabling in Phoenix. Our project will be another ground-up database build, and subsequent training for its five estimators.

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Feb. is here, and we’re not sure whether we should be celebrating or lamenting its arrival. We’re seeing some upticks from our customers, but most indications are still headed in the wrong direction. Hard work and good controls are the hallmarks contributing to the limited successes of our clientele- nothing new. We attended the World of Concrete in Las Vegas. All in all the show appeared to me to be successful, with somewhere between 66%-80% of the anticipated 85,000 attendees. That’s not bad  by this economy’s standards, (although it clearly would have been viewed as a disaster in recent years past).

Also at World of Concrete: when we spoke with Steve Watt, president of WinEstimator Inc. of Kent, WA he showed us Modelogix, its new conceptual modeling component.  In our opinion, it’s the best, easiest-to-use parametric estimating tool that we’ve seen.  Don’t own WinEst? No problem- as long as you can export your estimates to Excel, WinEst’s new tool can intelligently sort, query, and evaluate your entire historical estimate library, weighted for estimate date AND locale, in just minutes!! Finally, we can’t leave our WoC review without offering our congratulations to Adam Vaske, of  Seedorff Masonry of Strawberry Point, IA, for his performance at the World’s Best Bricklayer Contest. We were among nearly 5,000 people jammed into the stands in ideal, 75-degree  sunshine on Wednesday in Las Vegas. So how many bricks do you think the best guys in the world can lay in an hour? (and yes, we’re talking within a 1/4″ inch of plumb and level)- 150, 250, 400? Not even close- Adam laid over 750, in ONE hour- and didn’t finish in the money! (these guys are GOOD!)

Our travel schedule is busy this month: after attending World of Concrete Feb 2-4, we’re down in Phoenix talking to our customers in the Valley of the Sun. We’re seeing some good signs in commercial concrete, but Todd Stecker of SCP Construction reports that residential starts are down another 50% from last year’s dismal figures. The week of Feb 9th we’re down in Port Hueneme, CA working with the Navy Sea Bees, updating training on their new US Cost Success estimating system. The last week of February we are scheduled to offer our first M.O.B. (Marketing-Operations-Back Office) presentation at the Heathman Lodge in Vancouver, WA. We’re working with Market Accelerators and Golden C.P.A.’s to offer the first in a series of lunchtime programs to help contractors deal with the current economy.

Our fly on the wall at Sage Timberline Estimating has positively ascertained that Estimating will, in early 2010, drop its (temperamental) Pervasive db engine in favor of the industry-standard Microsoft SQL. (is that wild cheering we hear from your IT departments? - I think so!) Also look for:

• direct interface from PJ Change Orders to Estimating
• copy assemblies between estimates
• upgrade estimates, right from Estimating

Also new at Sage - its biggest dealers have decreed that it isn’t in your best interests to work directly with us Independent Consultants anymore. (??) Starting in March, Sage intends that its new, highly-restrictive policy towards its consultants takes effect. Many of us, who have made our living making sure that your Timberline software needs are met, will face punitive action by Sage.  None of us are sure where this will go. But be assured: we’ll be here for you, when you need us- you have our word on it. At the end of the day, you the customer have the right freely choose whom you want to work with, to achieve your company’s goals. It’s all about you, not us- and that’s the way it should be. Stay tuned.

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Despite last year’s residential meltdown (-35%), industrial construction recorded strong growth in 2008, and commercial largely held its own, with gains in niches such as the hospitality and office sectors. Next year’s construction forecasts, released in December haven’t been good; industry experts predict a downturn in every single sector of construction for 2009. The good news is that fuel, lumber, drywall, and steel prices have fallen to their lowest prices in years. However the current AIA Billings index is down to its lowest level since its origin fifteen years ago, and we know that if architects aren’t drawing, we surely won’t be building much in the near future. Major projects in Las Vegas are being mothballed, shutting down mid-stream. (Now that’s an expensive bearish bet on the economy.) The bid markets have slowed, but likely not as much as we’ll see in the months to come. Likewise contractors’ margins are plummeting. We’ve been told by our friends in estimating departments that even uncomfortably low bids are finishing second or third. It appears that the bottom-feeding frenzy is on.

On the Mainland, in order to help our customers survive the downturn, we are now working jointly with Market Accelerators and Golden & Company CPAs in Vancouver, Washington. Our goal is to provide quality Marketing, Operations, and Back Office (“M.O.B.”) expertise. Our first MOB lunch seminar is planned for early 2009. We’ll be rolling out combined service offerings, to analyze and strengthen all three critical aspects of your company’s strategy and operations. I’m certain of 3 things that Contractors need to do to survive in this economy:

1) market effectively to the right target, 2) bid based on our true internal costs, and 3) check those costs with consistent, accurate job cost  tracking… If that is, we want to keep our best people employed, or even survive to build another year.

In the Islands, the big news for Timberline customers in Hawaii is the sale of Ledgerwood Associates Hawaii to Oregon-based Skyline Business Systems. Working with Skyline will be a new, great opportunity for us in the Islands, as well as in Alaska, and the Pacific Northwest. Pat Ledgerwood and I will be continuing in our current roles for Skyline, and we’ll all be working together to help make the transition a smooth one for our customers. The main difference you’ll notice is the letterhead on our correspondence, and the additional depth Skyline’s John Keaton and Jeff Williamson bring to Hawaii’s Timberline clientele. Pat will introduce Skyline to Hawaii’s Timberline User Group on December 11^th.

Early December finds me on Oahu as well, teaching SureTrak at Honolulu Community College, and finishing up Beachside Roofing Hawaii’s estimating implementation and database. This month we’re working on setting up and assigning Material Classes, WBS Codes, and assigning the new cost codes to the Beachside’s new roofing database, as well as creating graphic Assembly help, and setting up Buyout.

Back in Washington in mid-December, we’ll be working in the office with our Support Assurance Plan (SAP) clientele in Iowa, Washington, and Arizona, to renew agreements for the coming year. (SAP clients are realizing a roughly 30% discount in our consulting and support services, when compared to hourly billing.) I’ll wrap up the year with a family vacation, December 20^th – January 4th. Hopefully the snow will hit the Cascades soon, and we’ll be making some powder runs on Mt. Hood or Mt. Bachelor.

All the best Holiday Greetings to all our valued customers and friends!

November is upon us, Election Day is past, and the country voted overwhelmingly for a change in the balance of power. President-Elect Obama has promised us roads, bridges, and schools, and Honolulu voters backed Mayor Hanneman’s Light Rail initiative on Oahu. All signs that construction activity has support top to bottom in very diverse areas of the country. With a little luck, the good intentions will turn into concrete and steel, and more than hot air. We can all use the work, especially with residential looking grim for at least another year. I just got back from 2 weeks on Oahu, where Hawaii’s voters were excited to have a Local headed for Pennsylvania Avenue. Prior to that trip I was back in Nebraska,and the week before down in Orange County. I am looking forward to the Holidays, and a bit of a breather.

Sage Timberline released its new Vista-compliant version 9.5. More changes were made to Accounting than Estimating, which is both the good news and the bad. The primary changes in Accounting include a more robust Security Administration, and to default data file locations. Sage Timberline insiders tell me that changes in subsequent releases will be more frequent this year, but will NOT require data file upgrades- which sounds to me like a win-win scenario. Most of our Sage Timberline accounting clientele don’t upgrade until after year-end anyway. For early adopters of version 9.5, the primary reward to Operations is the introduction of Daily Field Reports to Project Management- a very welcome addition. I will include a link to the  version 9.5 Release Notes on the Support Page of CassellConsulting.com

Please note the change of my email address- I finally got our domain email out of Spam Purgatory. I can be once again be reached at barry@cassellconsulting.com.

The jobs in progress are going well:

At Beachside Roofing Hawaii we designed a brand new set of cost codes, assigned to all the items in the Timberline Estimating database. The new estimating database and cost codes are fully tested and operational, and interfacing correctly into Beachside’s Master Builder Accounting system. It’s our first Master Builder project, and the Sage Timberline Estimating-to-Sage Master Builder Accounting procedure works smoothly. We finished two days of training at the end of more than a week of database development. We have two dozen assemblies for single-ply flat roofing systems, tile and shingle steep slope roofs, as well as fluid-applied waterproofing, in place and tested. Both the new cost codes and the entire estimating database are indexed to the new 2004 MasterFormat system. I also built an Estimating Model, to combine the multiple systems on a project into a single, easy to follow Takeoff Sequence. I’m anticipating doing more with Timberline Estimating Models in the coming year. Scott’s goal was to be up and running by year-end, and we’re already starting to produce estimates in Timberline, almost 2 months ahead of schedule. Next initiative is Buyout Purchasing implementation. We’re starting that in early December, along with building more assemblies, project by project.

We did two days of training at Seedorff Masonry’s Omaha office. Day One was mostly focused on basics, with 6 estimators relatively new to Timberline. But the excellent skill level of these “beginners” had us well into intermediate and advanced Timberline Estimating training topics by 10am! Day Two was Advanced Timberline Estimating “Tips & Tricks” session attended by 16 estimators, many of whom have used the system for over 10 years. Among our topics, we worked with WBS codes, Layouts, using Eos Explorer Extended, and spreading markups and project general requirements back into the bid items in an estimate. In class we devised a slight variation on my tried and true Adjust Column techniques, which I’ll write up and post to the Support section of the webiste, and include a link here as well.

GE Johnson’s project in Colorado is closed out. Concrete Assembly replacement Phases I, II, & III all complete. Thanks to Doug Finely for excellent communication of project goals, and Bob Baker for strong IT backbone to make it possible. We still haven’t met personally, did all the work on a virtual computer (that doesn’t really exist), yet the project is complete. Welcome to the 21st Century - I love my job! We finished 3 days of training in Orange County for PBC Companies, commercial concrete and masonry contractors. There’s more to do, but after the training, I think Jose and Mark will be able to finish and get the databases merged, and new cost codes we designed, up and running on their own.

We’ve got some new initiatives in the planning stages for the New Year. Here in Southwest Washington, I’m working with Golden & Co. CPA’s and Market Accelerators, to offer a series of M.O.B. (Markeing-Operations-Back Office) seminars for local contractors. Our plan is to sponsor lunch meetings starting in January. Call or email John Caughell, Michael Thompson, or myself for more details. We’re offering our specialized Project Management / Scheduling training, SureTrak for Contractors in Honolulu next month. We’ve been offering training to government contractors for over ten years. We’ve noticed that the government specs for Network Analysis Schedules have become far more stringent, putting contractors at a disadvantage, if they’re not trained specifically to meet the high standards of the construction contract. (Read you won’t get paid unless your schedule is updated and linked correctly to the Schedule of Values, and activities Resource and Cost-Loaded. period.)

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October is starting off at a near frenetic pace. This week we’re finishing up a nearly year-long Timberline Estimating database project for GE Johnson General Contractors, of Colorado Springs, Colorado. The job included a complete rebuild of GEJ’s 40+ Timberline concrete estimating assemblies, (the bread and butter of most self-performing GC’s). GEJ broke the job down into three phases, foundation, horizontal, & vertical components. Today’s technology tools allow efficiency and flexibility unheard of just a few years ago. Case in point- I’ve never met Doug or Bob, with whom I’ve been working for the past year, and the job is nearly done! We log on GEJ’s remote server, and do all the work online. The project team reviews the work, and updates the project log with notes, suggestions, and questions, keeping communication timely. The phases were planned and executed in the sequence laid out at the beginning of the project, and we’re down to a finishing up the final tuneup of our last four assemblies. We tackled the full gamut of commercial concrete work, starting with caissons and pile caps, and finishing with structural cast-in-place stairs and topping slabs. Most of the assemblies existed in a prior version within GEJ’s database. We enhanced formwork methodology, streamlined the variables, and brought consistent workflow across all the assemblies, while incorporating GEJ’s innovative wbs usage. End result- accurate takeoff, faster, with greater consistency.

I’ll be down in Orange County the second week of October, working with PBC Companies, in Brea, California. We’ve got an ambitious goal to go live with a brand new estimating system by the first of 2009. Two of PBC’s senior estimators are working on building out two separate databases for their concrete and masonry work. We’ll be working to synchronize the database components, and merge the two into a single master database before the end of the year. The upcoming training session will focus on efficient database management, using database editor for faster database manipulation, and setting up and assigning crews and wbs codes. Full integration to Sage Timberline accounting’s cost codes is scheduled for December.

We have training planned the third week of October in the Midwest, with Seedorff Masonry, the region’s premier masonry contractor. Our 2-day training in Omaha is split into a fundamentals session targeted to its new estimators, and an advanced-intermediate session for seasoned staffers. Our long-term goals include a brand new estimating database, with all new assemblies and cost codes. SMI is one of three companies utilizing our SAP plan, which enables steady monthly progress toward our goals.

The last week of the month I’ll be on Oahu working on another interesting Sage Timberline Estimating database build, with Beachside Roofing Hawaii. Scott got my attention with his simply stated goal. “We just want to build the best roofing estimating system in the world.” (No pressure) We’re in month 2, still gathering data from the manufacturers, building prototype assemblies, and working on a new ground-up cost-coding system using the new MasterFormat 2004 coding scheme. I’ll be over in Honolulu the last week of October to start putting it all together with the goal of going live in December. We’ve already got the pilot database linked to Beachside’s Sage Master Builder accounting system. We’re coordinating the links to Master Builder with Kathy Gotzenberg of Construction Business Services, Kauai.

At the beginning of November, I plan to hop over to Kauai on another project in progress, with Unlimited Construction. Todd built the database from scratch following our training in 2006. As he’s been out managing the Botanical Gardens and Kauai Judiciary projects, current focus is on training the balance of UCSI’s estimating staff on Timberline Estimating. All successful Timberline estimates flow directly into the budget, for accurate tracking in Timberline Accounting. We’re planning to continue our training as well as assembly development in Division 3. Pat Ledgerwood of Ledgerwood Associates Hawaii & I have worked together since 1988. Pat has been the Sage Timberline Business Partner for over 20 years in Hawaii, and his name has become synonymous with Timberline in Hawaii.

Our Primavera SureTrak training is picking up in the Islands as well, with classes in December offered at Honolulu Community College, (listed under “Sizzling Seminars”, and “Project Management”). Class dates are December 4th and 5th. In addition, we’ve been working with M&M Tanks and Electricians Hawaii, providing customized onsite training for each company’s unique requirements. We’re working with both companies teaching Project Group scheduling in SureTrak. EHI is primarily interested in meeting the US Navy’s strict shceduling specification, while M&M is focused on balancing its company’s resources across all its jobs for the coming months. SureTrak does a great job of both.

Uncategorized, construction industry construction industry update, estimating consulting, Timberline estimating