Ingeniero Civil

Practical information for designers

Economy in Steel
By Charles J. Carter, P.E., S.E., Thomas M. Murray, P.E., Ph.D., and William A. Thornton, P.E., Ph.D.

The Economy Equation

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he famous bank robber Willie Sutton was once asked a simple question: why do you rob banks, Willie? His simple response: “because that’s where the money is.” Sarcastic? Maybe, but his answer showed why he wasso successful. The simple question in your mind right now is probably “what does Willie Sutton have to do with steel economy?” Well, like he said, if you want to save money in steel construction, go where the money is! When a steel fabricator prepares a cost estimate for a typical project, the following steps are common: • • Perform a detailed material and labor takeoff. Weigh and price allmaterials, including waste materials, for which payment is based upon weight, such as structural shapes, plates and bolting products. Add the cost of supplemental materials for which payment is not based upon weight, such as welding and painting products. Add the cost of fabrication labor required for each operation, including overhead and profit. Add the cost of all outside services required, such aspre-fabrication materials preparation, galvanizing, shipping and erection. Add the cost of shop drawings. Add the cost of buyout items, such as steel deck and steel joists. Evaluate the risk and need for contingency and add the appropriate amount. Factor in schedule requirements and add the appropriate amount.

Figure 1. Material, shop labor, erection labor and other costs; 1983 through 1998.and incorporated into the work. It also includes the waste materials, such as short lengths of beams (called “drops”) that result when beams are cut to the specified length. The typical material cost has dropped in recent years from 40 percent of the total cost in 1983 to 26 percent in 1998 (see figure 1). This represents a 35 percent decline in material cost over the last 15 years. Fabricationlabor costs: This category includes the fabrication labor required to prepare and assemble the shop assemblies of structural shapes, plates, bolts, welds and other materials and products for shipment and subsequent erection in the field. It also includes the labor associated with shop painting. The total fabrication labor cost is simply the cost of the shop time required to prepare and assemble thesecomponents, including overhead and profit. The typical fabrication labor cost has increased slightly in recent years from 30 percent of the total cost in 1983 to 33 percent in 1998 (figure 1). This represents a 10 percent increase in fabrication labor costs over the last 15 years. Erection labor costs: This category includes the erection labor required to unload, lift, place and connect thecomponents of the structural steel frame. The total erection labor cost is simply the cost of the field time required to assemble the structure, including overhead and profit. The typical erection labor cost has increased in recent years from 19 percent of the total cost in 1983 to 27 percent in 1998 (figure 1). This represents a 42 percent increase in erection labor costs over the last 15 years. Othercosts: This catch-all category includes all cost items not specifically included in the three foregoing categories, including outside services other than erection, shop drawings and the additional costs associated with risk, the need for contingency, and the schedule requirements of the project. The typical cost in this category has increased slightly in recent years from 11 percent of the totalcost in 1983 to 13 percent in 1998 (figure 1). This represents an 18 percent increase in other costs over the last 15 years.

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All of the components of the total cost identified in the foregoing estimating process can be classified into one of four categories: Material costs: This category includes the structural shapes, plates, steel joists, steel deck, bolting products,...