Estimating in Building

Construction
Chapter 7 Labor

Engr. Imran Mehmood
Email: [email protected]
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Semester IV - 2010 Civil UG


What is Labor Hour
One worker working for one hour

Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Labor Productivity
Productivity rate = Labor hours / Quantity
Based on historical data
For average or standard conditions
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Labor Productivity
Example
It took 170 labor hours to complete
10,000 sf of slab.
Productivity rate = 170/10,000 = 0.017
labor hour per sf

Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Labor Productivity
Example 7-1
Type of work 8 x8 x 16 Concrete
Masonry Units
Quantity = 1,700 sf
Labor hours = 170
Productivity rate = 170/1,700 = 0.10
labor hour per sf

Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Labor Hours
Labor hours = Quantity takeoff
x Productivity rate
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Labor Hours
Adjusted labor hour = Labor hours
x Productivity factor
Productivity factor:
> 1 for below average conditions
1 for average
< 1 for above average conditions

Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Labor Hours
Productivity factor:
When the conditions slow the progress of
work, a productivity factor greater than one is
used, thus increasing the number of labor
hours to complete a unit of work

A productivity factor of greater than one is
used when conditions are worse than average,
and a productivity factor of less than one is
used when conditions are better than average.


Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Factors Affecting Productivity
Availability of trained craft persons
Climatic conditions
Too hot or cold
Rain or snow
Wind

Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Factors Affecting Productivity
Working conditions
Limited working space
Limited storage
Waiting for materials deliveries
Restricted movement around the site

Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Factors Affecting Productivity
Other Consideration
Breaks: bathroom, coffee, water
Clean-up time
Availability of equipment
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Example 7-2 Labor hours
Type of work = 8x8x16 Concrete masonry units
Quantity of work = 1,000 sf
Productivity rate = 0.1 labor hours per sf
Productivity factor = 1.1
Crew (5 persons) = 3 masons and 2 helpers
60% labor hours will be performed by masons and 40% by their
helpers
Labor hours = 1,000 sf x 0.1 labor hours per sf = 100 labor
hours
Adjusted labor hours = 100x1.1 = 110 labor hours
Masons labor hours (3/5) = 0.60x110 = 66 labor hours
Mason helper labor hours (2/5) = 0.40x110 labor hours = 44
labor hours
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Cycle Time Analysis
Used for repetitive cycles
Excavation estimating
Hauling from pit to job site

Productivity rate =
Average cycle time Productivity factor Crew size

System Efficiency Quantity per cycle
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Example 7-3 Productivity rate using cycle time
Type of work Hauling materials from the borrow pit
Average cycle time = 35 minutes
Truck capacity = 17 tons
Crew = One driver
Productivity factor = 0.95
System efficiency = 45 minutes per hour

Productivity rate = (35 x 0.95 x1) / (45x17)
= 0.0435 labor hour per ton


Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Productivity Rate using Rate of Progress
for Linear Tasks
Used for linear tasks
Paving or striping a road




Productivity rate =
Quantity
+ Travel time Crew size
Rate of progress

System efficiency Quantity
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Example 7-4 Productivity Rate Using Rate of
Progress for Linear Task
Type of work = Placing concrete curb
Quantity = 2,200
Rate of progress = 3 per minute
Crew = One operator and two helpers
Productivity factor = 0.95
System efficiency = 45 minutes per hour
Travel time = 115 minutes

Productivity rate = {(2,200/3 + 115) x 3} / (45 x 2,200)
= 0.0257 labor hours per foot
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Unions
Set wage rules
Prevailing hourly wages
Holidays

How is the union to work with?
Prefer to talk or strike
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Open Shop
Employees of the open shop contractor or subcontractor
are having greater flexibility with multiple skills.
Advantage
Less restrictive than unions
Disadvantage
No apprentice program for training

The union carpenter has gone through a structured
apprentice program to become a union carpenter
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Labor Burden
Wages paid are known as the bare hourly wage
rate / bare wage rate
Contractor incurs additional costs which are
known as labor burden. Examples are:
Cash equivalents and allowances: paid for
the employee own tools or for the use of his
personal vehicle
Treated as wages
Different from reimbursements
Based on actual costs
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Labor Burden
Payroll taxes: Both the employer and the
employee are required to pay 6.2% social
security tax. Both have to pay 1.45% Medicare
tax.
Payroll taxes
6.2% on first $106,800 of wages (2010)
Medicare
1.45% of all wages

Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Labor Burden
Unemployment insurance: The Federal
Unemployment Tax Act (FUTA) and State
Unemployment Tax Act (SUTA) at the rate of
6.2% on the first $7,000 of each employees
wage.

Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Labor Burden
Workers compensation insurance: It is compulsory
insurance for all employees. Medical insurance, lost wages
due to injury on the job, occupational illness, killed on the
job
It is paid entirely by the employer and is labor burden.
Varies by:
Worker class (high risk task such as roofing, low risk task such as
office work)
Companys accident history
Compensation rates are based on actual losses, the
companies must take measures to improve safety and
reduce the cost of accidents.
On average, workers compensation insurance = $7.25 per
$100 of wages



Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Labor Burden
General Liability Insurance: Provides the
company with protection from lawsuits arising
from negligence of company employees
Bodily injury, property damage or loss

Insurance benefits: Companies often provide
employees with health, dental, life or disability
insurance
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Labor Burden
Retirement Contributions: Employer
contributes money to the employees retirement
program. An employer may contribute $0.5 for
every $1.0 the employee contributes on 6% of
an employees wages.

Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Labor Burden
Union payments: When employees belong to a
union, the employer is responsible for making
payment to the union according to the union
contract. Provide for retirement and insurance
and apprentice program.
Benefits for union employees
Training programs

Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Vacation, Holiday, Sick Leave
Accounted for by excluding these hour
from billable hours
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Burdened Hourly Wage Rate
Burdened wage rate = Wages + Benefits
Billable hours
Billable hours exclude:
Vacation
Holidays
Sick leave
Other unbillable time
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Example 7-5 Burdened hourly wage rate
Craft = Mason
Wage rate = $29 per hour
Hours worked = 50 hours per week for 20 weeks and 40
hours per week for 29 weeks
Paid vacation, holidays, and sick leave = 3 weeks at 40
hours per week
Overtime= Time-and-a-half for any hours over 40 per
week
Gas allowance = $100 per month
Annual bonus = 500
Social security = 6.2% on the first $106,800 of wage
Medicare = 1.45% of all wage
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Example 7-5 Burdened hourly wage rate
Federal Unemployment Tax Act = 0.8% on the first
$7,000 of wage
State Unemployment Tax Act = 4.5% on the first $18,000
of wages
Workers compensation insurance = $7.25 per $100 of
wages
General liability insurance = 0.75% of wages
Health insurance (companys portion) = $300 per month
per employee
Retirement = 0.75 per $1 contributed by the employee on
6% of the employees wages.
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Example 7-5 Burdened hourly wage rate
Wages = (40 hours per week x 52 weeks x $29 per hour)
+ (10 hour per week x 20 weeks x $29 per hour x 1.5)
+ 100 per month x 12 months +500
Wages = $70,720
Social security = o.062 x 70720 = $4384.64
Medicare = 0.0145 x 70720 = $1025
FUTA = 0.008 x 7000 = $56
SUTA = 0.045 x 18000 = $810
Worker compensation insurance = 7.25/100 x 70720
= $5127
General liability insurance = 0.0075 x 70720 = $530
Health insurance = $300/month x 12 = $3600
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Example 7-5 Burdened hourly wage rate
Assume that employee take full retirement benefits
Retirement = 0.06 x 70720 x 0.75 = 3182

Benefits = 4385+1025+56+810+5127+530+3600+3182
= $ 18,715
Billable hours = 50 hours per week x 20 weeks + 40
hours per week x 29 weeks = 2160 hour
Burdened hourly wage rate = (70,720 + 18,715)/2160
= $41.41 per hour
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Pricing Labor
Labor cost = Adjusted labor hours
x Weighted average burdened wage rate
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt
Example 7-6 Determining labor cost
From example 7-2
There were 110 labor hours
From Figure 7-2
Weighted average burdened wage rate = 35.58

Labor cost = 110 x 35.58
= $3913.8
Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt


Department of Civil Engineering
Swedish College of Engineering & Technology, Wah Cantt