To determine the final pricing of your pay items on the job, you can use one of the following two options in Auto Price > Balanced Bid:
Hit Target Total
Use Item Unit Price
These Balanced Bid options are a simple way to have the Estimate automatically balance the bid, spreading your cost, overhead, and profit proportionately across your pay items. This can be a great starting point for finalizing your bid, with the understanding that, once balanced, you can still make your own adjustments to pay items manually.
You access the Balanced Bid options from the Actions menu of the Pay Item & Proposal Register.
Pricing Options - Prior to using the Auto Price feature, pricing options should be considered. These can be configured as a default for all jobs from Library > Job Properties, or for an individual job in its own Job Properties.
See Library Job Properties Pricing for more information.
Rounding Precision - The Rounding Precision option is an important factor to consider when using Auto Price to balance your bid, as it can influence how pricing is or is not spread to a pay item based on what decimal the item’s unit price is rounded to.
In the Pay Item & Proposal Register, you can define the rounding precision at the pay item level using the Rounding Precision column. For more information, see Rounding Precision.
The Hit Target Total option is the same as the Use Item Unit Price option, though it goes the extra step and tries to spread the variance (if there is any) back over your pay items.
In most cases, selecting Balance Bid > Hit Target Total results in all the rounding variance being spread over your pay items successfully. The following use cases explore situations where some variance might remain.
When adjusting the pricing of pay items to absorb rounding variance, even minor adjustments to the unit price can result in a large change to the pay item’s total price if it has a large pay quantity. For example, cutting $.01 from a lump sum pay item has very little effect when compared to a pay item with a pay quantity of 50,000.
| Pay Item | Pay Quantity | Unit of Measure | Unit Price Adjustment Amount | Total Price Adjustment Amount | Rounding Precision |
|---|---|---|---|---|---|
| Mobilization | 1 | Lump Sum | $0.01 | $0.01 | 2 |
| Excavation | 50,000 | Cubic Yards | $0.01 | $500.00 | 2 |
Depending on the amount of variance that needs to be spread and the pay quantities of your unlocked pay items, Estimate might not be able to spread all your remaining variance.
For example, if your remaining rounding variance is $200.00 and Estimate only has high quantity pay items to spread to like the Excavation pay item in the above example, it would not be able to adjust the pay item by only $200.00.
When balancing the bid, the higher the rounding precision of your pay items, the less variance there will be, and the more likely Estimate will be able to spread the variance back over your pay items.
For example, a bid that has a rounding precision of 2 (two to the right of the decimal or to the penny) for all the pay items in the bid will typically have no remaining variance when using Balance Bid > Hit Target Total, because any rounding variance from the initial balancing can be absorbed by making minor adjustments to the pay items’ unit prices.
If the bid includes a pay item that has a lower rounding precision, that pay item might not be able to absorb variance because of the rounding precision assigned to it.
In the below example, the pay item’s rounding precision is set to -2 (two to the left of the decimal or to a hundred. If the Estimate needs to add $49 to this pay item to balance the bid, it will not be able to since its precision is set to round back down to $18,500.
If your bid has a low number of pay items to spread variance to, either due to a low number of deliverables, or to a small number of unlocked pay items, this leaves less opportunity for Estimate to spread the remaining variance successfully.
The option Balanced Bid > Use Item Unit Price can best be thought of as use the item’s balanced unit price for balancing the bid. When this option is selected, the following takes place:
All assigned costs are distributed to pay items based on the cost items assigned to them.
All unassigned costs are distributed to pay items proportionally according to the weight of the pay items’ assigned costs and the level selected for distributing unassigned costs on the Job Properties > Pricing tab (Individual Categories, Top level Categories, or Total Cost/Billing amount).
Markup is applied to pay items according to the markup options selected on the Job Properties > Pricing tab.
See Balanced Price Options in Library Job Properties Pricing for more information.
After balancing, when you select a pay item, on the Item Recap section you can see the Unit Price (current) now matches the Unit Price (balanced), indicating the pay item is using the balanced unit price.
As Estimate calculates the balanced unit price for each pay item, it follows the rounding precision defined for each pay item. As it rounds pricing up or down based on this precision, a variance from the Target Price might occur. You can see this variance on the Proposal Recap section, with an indication of whether you need to cut or add money to reach the Target price.
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