The strange history of the takeoff and estimating software marketplace

The following information, created May, 2020 by Vertigraph, Inc., addresses takeoff and estimating software supplied to general building contractors that prepare lump sum and negotiated bids; and sub-contractors in original CSI construction divisions 3 through 10. Site excavation, mechanical and electrical sub-contractors have unique takeoff and estimating needs and this paper does not address those trades.

Knowing the basic definitions of takeoff and estimating is important. Takeoff is the process where individual items required for a construction project are measured from drawings and then calculations are applied to these measurements to arrive at the desired quantities such as cubic yards of concrete, number of ceramic tiles, pounds or rebar, man-hours of labor, tons of asphalt, etc. Estimating, on the other hand, is applying costs to these quantities. In summary, takeoff is about measuring and calculating quantities; estimating is applying prices to these quantities.

Before drawing files, measurements for takeoffs were performed from paper blueprints. In the past, contractors distributed expensive, bulky blueprints to its various subcontractors for bidding. Instead of using a scale, contractors would automate the measuring from these paper blueprints by using a large digitizer tablet. The paper plans would be plopped onto the digitizer tablet and inexact measurements would be calculated by clicking on the paper drawings using the digitizer’s pointing device. The digitizer would generate x,y coordinates and the software would then calculate the areas and lengths from these coordinates based on the defined scale.

The GTCO company (aka GTCO/CalComp) was the dominant digitizer manufacturer. GTCO, and all other digitizer manufacturers, only supplied the digitizer hardware; software developers bundled these digitizers with their unique takeoff and estimating software that used the digitizer. Since automating the takeoff process required an expensive digitizer tablet costing well over $2,500, the total cost of takeoff and estimating solutions generally exceeded $5,000.

Historically, digitizer tablet takeoff was also combined with database driven estimating software. As a result, the software was known as “takeoff and estimating software”. In the past, everybody in the industry supplied not just takeoff, but also estimating software. All of the estimating software marketed to contractors were high level assembly, database driven programs that were bundled with the digitizer tablet. A database program is significantly different than a spreadsheet program such as Excel. For a discussion of the differences between database applications and spreadsheet software, please click here.

Estimating software was costly to license, learn, setup and manage. The vast majority of the customers purchasing takeoff and estimating software were not able to implement the estimating portion of the software due to the complexity to learn and implement the costing database. Most companies did not have the time, people, knowledge, or resources to make use of the cost items and complicated assemblies. Many found their existing spreadsheets were superior to the database estimating software being offered.

Most purchasers of takeoff and estimating software did enjoy the benefits of the digitizer tablet however. Instead of scaling complicated areas, the digitizer tablet and software would obtain the measurements from the drawings in a fraction of the time. The returns were significant if the contractor performed a lot of takeoffs. The entire industry was selling the same make and model of GTCO digitizer and the takeoff portion of the software was very similar to each other for most trades (i.e. the digitizer software measured areas, lengths and counted items). As a result, there was little difference in the software solutions being offered. In general, the digitizer tablet was used for takeoff and the database portion of the software for estimating was rarely employed by the users.

Twenty years ago, the leading companies supplying takeoff and estimating software to GCs and most sub-contractors were Timberline, Mc2, Vertigraph, Estimating Institute (aka Quest, Maxwell), WinEst and many others that are no longer in business. Much of the software was not sold directly by the software developer but through authorized resellers spread around the country. These resellers were paid commissions that were usually 35% or more of the software price. The use of resellers to sell takeoff and estimating software resulted in substantially higher prices in comparison with those companies that sold direct to the customer.

Most contractors automating the estimating process at this time moved from a paper spreadsheet system to an electronic spreadsheet, initially Lotus and then later MS Excel. Once the contractor developed a Lotus or Excel template for takeoff and estimating it was difficult to change to a new process of managing thousands of cost items and assemblies stored in a database.

Due the to lack of acceptance of database estimating and the challenges in selling these complicated solutions, certain companies began releasing takeoff solutions that were not tied to a database type estimating program. Vertigraph, with its BidPoint solution uniquely tied the takeoff directly to a cell in Microsoft Excel and this product changed the entire industry. With BidPoint, contractors could now measure directly in Excel, which was, and continues to be, the most popular takeoff and estimating program.

Many developers struggled in this marketplace and few were making much money supplying takeoff and estimating software except for GTCO, the digitizer manufacturer. As a result, most of the original takeoff and estimating companies have ceased operations or have been liquidated or absorbed by various investment groups. As Vertigraph’s software for Excel gained market share, On-Center software put the nail in the coffin for digitizer tablet takeoff software. On-Center’s On-Screen Takeoff product was the first to provided quantity measuring from drawing files rather than from paper blueprints. This changed the entire industry. Since a digitizer tablet was no longer required, the cost of plan distribution and takeoff software dropped substantially and digitizer tablet takeoff became obsolete.

Today, most takeoffs are now performed on-screen from drawing files using on-screen measuring software from a collection of vendors including Vertigraph. Additionally, very view companies provide takeoff AND estimating software today. Instead most builders license takeoff software separately from the estimating software. Contractors shopping today will need to decide which takeoff tool to use and which software is best for their estimating. Today, the leading takeoff products are BidScreen XL by Vertigraph, On-Screen Takeoff, PlanSwift, Bluebeam and many others. Estimating software marketed to the industry continues to be database programs that usually do not have a takeoff component. Excel, by far, remains the number one program for estimating however. Timberline, B2W, HCSS, InEight, ViewPoint, ProEst and others continue to market database driven estimating programs.

Vertigraph was founded in 1991 and has seen the changes in the takeoff and estimating marketplace over the years. Just about every major supplier to the industry has been sold, some have changed hands multiple times. We suspect most companies were not very successful in this marketplace or some of the principals found it too difficult to compete and sought an exit from the market.

Often when a company changes hands, its original DNA is lost. The company, through its shareholders, often changes its focus from a dedicated and committed supplier of takeoff and estimating software where expertise was created over many years to a company that is seeking to maximize the returns of the purchasing shareholders that are often not engaged in the construction industry. We have found many times that the acquiring shareholders are not truly committed to the takeoff or estimating marketplace. They often want to increase efficiencies, increase prices, reduce competition and increase returns to the owners. They often try to milk the existing product line at the customer’s expense and have little interest in investing and advancing the product line. The amount of innovation decreases as a result. Today, the takeoff and estimating software is a mature market. The software is sticky, where customers stick around, at any cost, and have no interest in changing once they become proficient in the brand of software they are using. Two of the larger takeoff software suppliers, On-Center and PlanSwift are now owned by the same company, ConstructConnect a subsidiary of Roper Technologies, Inc. Is Roper Technologies truly dedicated to takeoff and estimating software and to investing and improving both of these brands that compete with each other? I suspect they are mostly concerned about maximizing Roper’s profits and reducing competition. It appears that the ConstructConnect operations are not material to Roper since ConstructConnect is one of over 400 non-construction related subsidiaries owned by Roper. It will be interesting to see how this marketplace, consolidation and solutions will evolve in the years ahead.

On a final note, where does Building Information Modeling (BIM) stand in terms of eliminating the contractor’s need to perform a takeoff and estimate? Ideally, when using BIM, (Revit from AutoDesk is one example of a BIM application), the quantity takeoff should be automatically created by the designer. When the quantities are defined at the design stage and are included in the BIM model, the contractor should not have to start over and perform a quantity takeoff. Why is the contractor responsible for measuring and calculating quantities when this information should be easily available in BIM? If you designed it with BIM, you should know what quantities are needed.

In theory, BIM should automatically provide the contractor with accurate quantities. The problem is how infrastructure assets are being supplied. Currently, on most projects, an architect, which is a separate legal entity, designs the project and different parties (i.e. the GC and subcontractors) are responsible for the takeoff, estimate and building the project. Since there are many different entities involved in the delivery of the project, assigning responsibilities to these entities is often difficult. The designer has never provided quantities or costs to the contractors; why start now? Will the designer receive compensation for this activity and accept the increased liability? There are many legal and responsibility issues between the owner, designer and contractor when BIM and multiple parties are involved.

We believe that the organizational structure of the industry must change significantly before quantities are automatically provided to the contractor through BIM. If, and when, the industry changes where the designer and the contractor become one entity, known as a Design Builder or Master Builder, will quantities from the BIM model be made available. This one entity must be solely responsible to the owner for delivery of the infrastructure asset and the designer will be the same company, having the same legal responsibility, as the builder. Until this change in organizational structure occurs, where the same entity designs and builds the project, we fear that the responsibility and burden for quantity takeoff will continue to fall unfortunately on the contractor. Stay tuned to these exciting BIM developments.

If anybody has any interest in discussing takeoff and estimating software please contact us at any of the following addresses:
Vertigraph, Inc.
Takeoff and Estimating Software since 1991
12959 Jupiter Road, Ste 252
Dallas, TX 75238

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