Common Mistakes When Cost Estimating Plumbing Systems
A plumbing contractor’s profitability is most impacted by 3 factors:
- How much is charged for services
- The cost of materials used on a job
- Labor and overhead expenses
Many plumbers give serious consideration to their price-for-services structure and labor expenses. Some have taken steps to review their overhead costs to avoid lost profits. But when it comes to the cost of materials, many new construction plumbers haven’t updated their cost models in many years.
When a relatively expensive part with a specific cost per unit goes up in price, such as a water heater, lavatory or toilet, those costs can be translated into a pricing model with relative ease. Estimating pipe and fitting is more complex, given the quantities and variability of parts as well as pricing that can fluctuate over time and from one distributor to another. Unfortunately, a failure to account for this complexity when estimating these material costs can lead to significant financial losses.
While each plumber handles their estimating practices differently, there are a few common mistakes that can have a major impact on one’s bottom line.
Mistake #1: Inaccurate “Fittings Factor”
When estimating a job, no plumber wants to take the time to count the individual fittings that they’re going to use. In an attempt to estimate the cost of fittings, estimators frequently use a “fittings factor” applied to the total cost of the pipe. For example, if an estimator believes that a job will take $1000 in piping only, they will multiply that by 0.5 and estimate $1000 for pipe and $500 for fittings.
While there’s nothing inherently wrong with using this estimating practice, it can be a costly mistake to use the wrong factor for a given material.
In an analysis of FlowGuard Gold® Plumbing Systems pipe and fitting purchases from several plumbing contractors across the country, we’ve found that the cost of FlowGuard Gold fittings on a job account for approximately 25-35% of the cost of the pipe. However, in a plumbing system using PEX, using that same ratio would be a mistake because:
- Most PEX fittings require crimp or expansion rings that add cost.
- PEX fittings with rings cost between 3-5 times more per fitting than the comparable FlowGuard Gold fittings.
- PEX systems typically use about 30-40% fewer fittings than CPVC or copper systems.
When you consider these factors, the PEX fitting “fudge factor” would most likely fall in a range from 45-125% of pipe, depending on how many fittings can be eliminated and whether the fittings are closer to 3 times or 5 times what’s required for CPVC.
While the numbers will be slightly different for each company, the fittings factor for PEX systems will be roughly 2 to 4 times higher than the fittings factor for FlowGuard Gold CPVC.
Contractors using the same factor for both materials are either significantly underestimating the cost of their PEX systems, or dramatically over-estimating the cost of a FlowGuard Gold Plumbing System.
Mistake #2: Failure to Upsize Your PEX Piping
FlowGuard Gold Plumbing Systems are copper tube size SDR 11 and use full-flow fittings, which allow the system to be sized the same as a copper system. Beware: this is not the case for PEX plumbing systems.
To illustrate how various materials impact flow rates and pressure drops, we plugged FlowGuard Gold® CPVC piping and PEX piping of the same diameter into the Plastics Pipe Institute’s Plastic Pressure Pipe Design Calculator. Using this objective, third-party tool, we specified a flow rate of 4 gallons per minute at a temperature of 73° F. The results show that CTS SDR 11, like FlowGuard Gold Plumbing Systems, has 10% lower pressure loss than PEX at ½” diameters. With larger diameters, the benefit of CPVC gets even greater, reaching 23% for 2” pipe.
This issue is made worse when fittings are factored in. While CPVC uses socket-style fittings, PEX pipe fits around the outside of the fitting, reducing the internal diameter within the fitting. These PEX fittings result in 6 to 10 times more pressure loss than FlowGuard Gold fittings. Even when using fewer fittings, the pressure loss in a PEX system is significantly higher than a CPVC or copper system, meaning that PEX must be upsized to provide adequate pressure at fixture units.
When comparing the cost of a FlowGuard Gold CPVC system against a PEX system, it would be inaccurate to use the same pipe lengths at each diameter for both systems. To do so would result in either costing an undersized PEX system or an oversized CPVC system, skewing the results of your cost assessment.
Mistake #3: Overestimating Material Impacts on Labor
Labor practices have evolved significantly over the years. Today, many new construction plumbers are no longer being paid an hourly wage and instead are earning a flat rate per unit or fixture. For these contractors, the cost of labor is a non-factor when comparing materials with an eye on job profitability. It only comes into play if an installer can knockout more units in a given time due to the faster installation.
According to research conducted by Home Innovation Research Labs, formerly known as the NAHB Research Center, FlowGuard Gold CPVC and PEX plumbing systems have fairly comparable installation speeds. Depending on floorplan, system design and individual contractor, either material could win an installation race, but not by more than 30 to 45 minutes for a single-family house. For most plumbers, this just means an earlier quitting time, but not more units plumbed.
For those contractors who do pay their employees hourly, the differences between materials are negligible. However, for engineered buildings like hotels and multi-family buildings, using the manufacturer recommended hanger spacing can make a significant impact. Because FlowGuard Gold CPVC is more rigid than PEX, it can be supported less frequently in an engineered design. For diameters of 1” to 2”, that spacing can be 2 to 3 times farther apart, which reduces both material and labor costs associated with pipe supports.
Measuring the Total Impact
To illustrate the impact of these errors on a cost estimate, we did a material cost take-off comparison for a large hotel project using an actual estimating tool used by plumbers in the field. When we treated both materials equally, making all of the mistakes noted above, the PEX system appeared to cost $619 less than the CPVC system, a difference of less than 1%.
However, then we fixed the mistakes above by:
- Upsizing by one size 25% of the length at each diameter ≤1” in the PEX system
- Using the manufacturer recommended hanger spacing for both systems
- Using a 30% fittings factor for FlowGuard Gold CPVC
- Using a 63% fittings factor for PEX
The resulting analysis showed that the FlowGuard Gold CPVC system would cost $8600 less than the PEX system, a 9% cost savings. Not only did it shift the comparison in favor of CPVC, but it showed the original PEX estimate was actually $2300 lower than the actual costs.
Do the math. Correctly.
The more reliable the numbers you feed into your business equations, the more accurate your estimates. Far too many plumbers pay the price of making these common mistakes while estimating, potentially leaving thousands of dollars on the table without realizing it.
When based on reliable data, FlowGuard Gold Plumbing Systems consistently come out on top as the best value in performance, installation speed and total cost. Run your own numbers and you’ll see what we mean.
You can also watch our on-demand webinar that walks through the specific cost impacts for single family and multi-family contractors. And, if you’d like additional assistance in making the switch to FlowGuard Gold CPVC, please don’t hesitate to contact us.