NOTE-- We retired the BidMagic construction
estimating software program in 2001. It has been replaced by
Goldenseal construction
estimating software program.
We still include this BidMagic estimating software
program manual as a convenience for users of our older program. Many features are similar, in Goldenseal estimating.
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The BidMagic construction
estimation software program includes four separate
fudge factors. They can be used to adjust overall
project costs, or just the cost of labor,
materials or subcontractors.
How Fudge Factors
work
Each fudge factor is a percentage adjustment that will be applied across-the-board to
every item in every cost category.
EXAMPLE: If materials for the project originally cost $10,000,
a 5% material fudge factor will increase the cost by $500, while a -1% fudge factor will subtract
$100.
The labor fudge factor adjusts labor prices only, the material fudge factor adjusts materials
only, and the subcontractor fudge factor affects subcontractors only.
The Overall fudge factor adjusts
all prices, including soft costs. It is applied after the other fudge factors.
EXAMPLE: With a Labor
fudge factor of 5%, an Overall fudge factor of 10%, and the original cost of Painting Labor at $1000,
first the Labor fudge will be added ($50), then the Overall fudge factor
(10% of $1050, or
$105) will be added, for a final labor cost of $1155.
When to use Fudge Factors
Fudge factors allow you to make 'quick and dirty' adjustments
to prices, without changing individual unit prices. You can use the Fudge factors in many different
situations:
- Price Increases-- If material prices increase or decrease quickly and you don't
have time to adjust your unit prices, apply a Material fudge factor to get your existing
unit prices to agree with
the new conditions. EXAMPLE 1: If overall material prices have risen about 5% since the last
time you updated unit prices, then use a Material fudge factor of 5%. EXAMPLE 2: If lumber
prices have recently risen by 50% and lumber makes up about 20% of the material cost
on your jobs, then use a material fudge factor of about 10%.
- Adjusting for Local costs-- When calibrating BidMagic to match your
own local costs, use the fudge factors to 'tweak' the unit prices in BidMagic so they match your
own local costs (see pages 102-113).
- Unusual Projects-- Use fudge factors to adjust costs upward for outdoor
work in bad weather, for projects in remote or highly congested areas, for work on older buildings,
for very innovative or unusual construction,
or for small and/or peculiar jobs. You can also use a fudge factor to account for picky clients or other
situations where a 'gut feeling' tells you that you should raise or lower your prices.
- Multiple
Units-- When building more than one copy of an identical building or living unit, create an
estimate for just one unit, then enter 100 times the total number of units into the Overall
Fudge Factor (see page 353).
- Currency conversions-- BidMagic comes with prices based on American dollars.
To convert them quickly to other currencies, use an overall fudge factor equal to
the cost of one American dollar in the other currency.
EXAMPLE: If it currently costs $1.22 in Canadian dollars to purchase an American dollar,
use an overall fudge factor of 22%.
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