Pricing self-performed work: the same build-up every time, beside the trade quotes
The estimator has two trade quotes for site concrete and a verbal assurance that the company's crew can do it cheaper. The internal figure includes labour and material only. Neither the equipment nor the foreman's time appears beside it.
Build the internal option from the same scope, quantities and conditions you are asking subcontractors to price. Show labour, equipment, materials, supervision and relevant job allowances, then apply your company's stated pricing basis. Compare the completed internal price with quotes normalized for their exclusions and timing. You do not know a subcontractor's margin from its total, so matching an assumed trade markup is not a reliable comparison method.
Make the internal option a priced offer
- Write the common scope. Identify work boundaries, preparation, temporary needs, checks, cleanup and exclusions using the project requirements. Compare delivery dates and access assumptions as well as quantities. A lower total for a smaller obligation does not answer the same decision.
- Use relevant crew history. Estimate hours from comparable completed work, with the quantity unit and included tasks stated. Explain adjustments for this job's conditions. Confirm the proposed people are available instead of treating a past production rate as a current crew commitment.
- Apply a documented labour cost. Use the accepted hours basis and current employer-cost build-up. Separate supervision that is not included in the production hours, and check that nonproductive time has not been allowed twice.
- Add the other resources. Price equipment bookings, transport, materials, consumables and expected waste from current information. State which small-tool and site-support items are carried elsewhere. Mark an outstanding quote as an assumption with an owner and confirmation date.
- Show pricing additions explicitly. Apply the company's overhead and margin policy on a stated cost basis. Label the result as an internal price or cost comparison, whichever the decision requires. Use the same comparison basis for the trade options without guessing their private cost structure.
- Level and present the options. Add or clarify exclusions and align schedule assumptions before comparing totals. Keep crew capacity, supervision demands and uncertainty beside the figures. The build-up supplies evidence for the self-perform decision; it does not replace that wider decision.
Common mistakes
- Comparing internal wages with a subcontractor's complete selling price.
- Assuming owned equipment has no allocation or opportunity cost to review.
- Choosing the lower figure before checking exclusions and available people.
Action list
Complete the internal column
- Common scope and conditions.
- Quantity and hours basis.
- Current labour-cost build-up.
- Equipment, materials and supervision.
- Support and pricing additions identified.
- Trade exclusions and timing normalized.
Check your understanding
The internal option is lower until foreman and equipment costs are included. Should those costs be left out because the resources are already yours?
