In estimating, the question often arises, who is to profit by an estimator's or contractor's skill in design, economy of management, or closeness in buying. That is, suppose by rearranging fixtures an estimator saw where he could save $500 on an operation; should he figure on the work as planned and pocket the difference between the cost as originally laid out and as rearranged, or should he estimate on the lower cost of the work and give to the owner the benefit of the saving?

There is no doubt but that if an estimator knew positively that he alone possessed sufficient skill to lay out the work so economically he would be perfectly justified in reaping the reward of merit and add to the profit account of his ledger the money saved by economical design. But right there is where the stumbling block lies. No man is so clever but others will be found who can show equal results, and the estimator who figures that he alone can lay out work economically will learn to his sorrow that other minds are equally bright and many of the choice contracts he hoped to carry off will go to rival shops. The only safe way is for an estimator to assume that his competitors are more clever than he is, and that in order to bid lower than the others he must find the very lowest cost he can satisfactorily do the work for; then, knowing the profit he is willing to do the work for, add it, and be satisfied whether he wins or loses. If he wins the profit is his. If he loses it is with the knowledge that he could not have taken off another dollar, so he has nothing to regret.

An estimator must not assume, however, that because he could not do the work cheaper the competitor who took it at a lower figure will lose money. Perhaps his skill in design is greater than yours, or he has some other method of procedure which enables him to do the work at a lower price. It is a good plan for an estimator when he has lost a contract for being too high, after he has figured his lowest, to inspect the work of his competitor from time to time as the installation progresses, to see if he can discover either in design, workmanship or materials wherein the difference lies between his cost for a certain piece of work and his competitor's.

The percentage of profit to add to an estimate will depend greatly upon the character of the work. If the work is hazardous, where there is danger of losing considerable if everything does not go right, with but little chance for profit even under the most favorable circumstances, a percentage of from 50 to 60 per cent. would be considered a fair profit. For example, suppose a house sewer and water pipe were to be extended from the old work just inside a cellar wall to the sewer and water pipes in the street; that the soil to be excavated through was treacherous, likely to cave or give other trouble, and the street was a busy thoroughfare where accidents might happen due to having the street open. In such a case, if the cost of doing the work were $200, a profit of 50 per cent. or even 60 per cent. would not be excessive.

In ordinary work within buildings, however, no such percentage would secure the contract. Ordinarily, on all work in small cities, and on small installations in large cities, the allowance is from 15 to 20 per cent., while on large work in large cities, the allowance is from 8 to 10 per cent., according to the nature of the operation. For instance, in an operation where most of the cost is for fixtures and very little for labor, as is the case when the fixtures are well bunched together, an allowance of 8 per cent. might be all that an estimator could allow with a chance of winning. Take, for instance, a toilet-room, or a couple of toilet rooms, at an institution where eighty fixtures, each averaging $35, are to be installed and where three workmen in thirty days can install the material. In such a case the cost of labor, which is the uncertain element in a plumbing estimate, bears but a slight proportion to the entire cost, and the signing of such a contract is almost like selling the goods on delivery. That being true, and there being no delay for the money, the contractor could better afford to do the work for a profit of 8 per cent. than he could other classes of work where the cost of labor is the chief item for a profit of 10 per cent. It may be well to remark, however, that 8 per cent. is too low an allowance to make only in exceptional cases where the circumstances warrant. Ordinarily from 15 to 20 per cent. in small cities and 8 to 10 per cent. in large cities are the profits estimated on, in addition to the operating costs, contingencies and other items which might swell the actual cost to the plumber. It might be added that 8, or even 10, per cent. is a very small profit to allow in a business as uncertain as the plumbing business. Unfortunately, however, in the larger cities that is the profit actually estimated on, and to allow a greater percentage would mean the loss of the contract.