What percentage does the electrical installation represent in today's world

[cdcengineer]

When I was finished my degree over 20 years ago we had a course in electrical construction estimating and at the time, the rule of thumb for commercial projects or mixed use residential / commercial projects was that electrical (Division 16 / 26) represented ~ 10% of the cost of construction. In review of some available data I now see electrical as low as 4.4% of total construction costs for residential projects. And a recent resort resi with limited commercial that we are involved with had the electrical install estimate come in at ~ 7.5%.

Whatever happened to 10%, and what do others here see in their regions.

Thanks for the input.

 

[mgookin]

When I was finished my degree over 20 years ago we had a course in electrical construction estimating and at the time, the rule of thumb for commercial projects or mixed use residential / commercial projects was that electrical (Division 16 / 26) represented ~ 10% of the cost of construction. In review of some available data I now see electrical as low as 4.4% of total construction costs for residential projects. And a recent resort resi with limited commercial that we are involved with had the electrical install estimate come in at ~ 7.5%.

Whatever happened to 10%, and what do others here see in their regions.

Thanks for the input.

What are you using for your cost estimates and are you following up after the fact to see if that's where some of it is?

 

[petersonra]

the place I used to work for used 10% for the value of the controls part of projects.

it was based on historical data that showed it was generally somewhat less than that, so was a convenient number to use where a guess at the project cost was appropriate as opposed to spending the money to figure out what it would really cost.

 

[cdcengineer]

Mgookin - the 4.4% for resi was taken from gov't data. The 7.5% was actual estimate from a contractor on a recent project.

Thanks for the responses.

 

[junkhound]

Own house was almost right on the 10%.

Of course, all spec grade, all 12 AWG or larger, much conduit vs. plain NM. I would expect the bare minimum for a development house sith cheap backstab outlets, etc would be 1/2 that, which is near the 4+% mentioned.

 

[Jraef]

It's because people want gold plated houses now, with special windows, special doors, special doorknobs, special sinks and faucets, stainless appliances, carpet made from wool taken from Himalayan sheep sheared at night by Tibetan monks using only a pocket knife while the sheep are being massaged and sung to, etc. etc. etc. But they don't want to spend more for the electrical system, they think it's just a bare necessity.

 

[James L]

I tried some freelance estimating about seven or eight years ago, and the owner of that company told me the same 10% would apply. I was estimating commercial and residential, and everything was priced by the opening.

There are a few of those bids which I distinctly remember:

A local bar/grille, the owner and I figured separately from each other, for sake of comparison. He used estimating software, I used pen and paper. He came up with $131k, I came up with $128k. We did not get the job. It was awarded to a guy with price of $65k. We both scratched our heads on that. I don't know what the total job valuation was.

A parks & rec building, with 2 miles of duct bank to connect communications to other buildings, bid was $479k, total job valuation was $5.1m, our GC had the winning bid until something went awry with his bond money. That was just under 10%

Residential retirement 4-plex community, we took over from another electrical contractor, using his numbers which were already in place (approx $5500/unit). Boss was losing approximately $1,500 per unit. Units were approx. $275k each. So the bare cost to my boss was about 2.5% of the total job valuation. 4.5% would have been comfortable enough there, but would have been double what was bid by the other electrical contractor. We bailed after 8 units.

I think a lot has to do with the fact there are so many guys working for themselves who are willing to work for nothing but wages, then they bring their two sons and a nephew, pay them $12 per hour, and don't make any extra.

 

[petersonra]

I think a lot has to do with the fact there are so many guys working for themselves who are willing to work for nothing but wages, then they bring their two sons and a nephew, pay them $12 per hour, and don't make any extra.

I think it has to do at least in part with the idea that there is so much money involved in a big project that "I have to make money". It never works that way, and often the bigger the project the less the margins because there is much tighter scrutiny just due to the amount of money involved.

 

[mgookin]

I think a lot of it has to do with what kind of EC the customer needs.

Do you need all licensed journeymen? Does the job require specialty equipment & instruments? Do you need to run the job quicker or at night to mitigate down time? All of this has considerably higher overhead than the "One man - One van" EC.