The importance of data hygiene for Estimators

We’re all aware of how much data is floating around these days. It’s a term you won’t go more than a few days without hearing, and data hygiene is the way to keep it all in check. For builders, technical expertise, competitive pricing, and project experience are all crucial for business growth and winning new work. The integrity of your data, however, how you collect, maintain, and use it, is just as vital, especially in the tendering game.

Let’s take a look at why data hygiene is so important, especially if you find yourself in any form of estimation role.

What is data hygiene in construction estimating?

Data hygiene in construction estimating is the systematic process of ensuring clean, accurate, consistent, and usable information. This can apply to internal databases, cost libraries, project records and virtually any other business information.

Some examples of poor data hygiene include:

• Manual entry errors
• Inconsistent units of measure
• Duplicate entries
• Outdated supplier pricing

Important distinction: Data hygiene and “data quality are different things. Data hygiene is the process (ongoing cleaning and maintenance), whereas data quality is the outcome, whether or not your data is fit for purpose. Here’s an example:

You’re maintaining a cost database for steel supplies. Data hygiene means making sure that “Steel Grade 300” isn’t also recorded as “Grade 300 Steel.” This might seem trivial, but it can cause automated systems to fail. Small mistakes like this in a spreadsheet can turn into big problems as your record volume increases.

Why is poor data hygiene a problem?

Poor data hygiene can cost you a lot of money, especially when making estimations for tender bids. In construction, everything comes down to dollars and cents, and design and informational errors can account for around 6.85% of the contract value, with indirect costs adding another 7.36%. On a $1 million package, that’s around $140,000 lost.

If you win a tender with these issues present, poor data hygiene has caused you to lose most, if not all, of your profit. We also need to consider the adverse effects incorrect estimations can have on winning the bid. If poor data hygiene causes your pricing to be off, you may lose potential work due to a high price that you shouldn’t have even presented.

Margin erosion can appear with something as simple as an estimator using an outdated template with incorrect units of measure. One incorrectly entered material quantity in a spreadsheet is an error that might not be found until after construction begins. If you’ve signed a fixed-price contract, you’ll have to absorb the cost. 

Why outdated or inaccurate data is a big problem

Material price volatility is a big challenge for estimators, and stale data increases the risk of underquoting a job. In 2024, for example, concrete prices rose by 6.57%. Just imagine if estimators were pricing with 2023 data? Working with numbers that are even 3-6% below the current market rates can turn a profitable job into a big loss. 

If you are just getting into tendering, you may be compelled to bid on everything available. In the Australian market, there’s an average of 12 to 15 subcontractor bids per project (it can get as high as 20:1). Therefore, bidding on everything in hopes that something sticks can lessen the quality of your bids and damage your reputation.

Clean historical data provides a big benefit here as it allows you to identify the projects with the highest probability of profit. Your reputation is a valuable asset, and contractor insolvency is a major risk for builders these days. Good data leads to accurate tenders, which signal professional competence and ultimately help your business to grow.

Can automation improve the quality of my data?

Yes, implementing automated systems to lessen the amount of manual tasks in the estimation process is a great way to improve your data. This will also save you time, letting you focus more on strategic analysis and risk assessment.

Here are some use cases for automation in data estimation that can be of value:

• Replace manual data cells with pull-down menus and templates to eliminate typos and inconsistent supplier names
• Integrate with live databases like Cordell or Rawlinsons to ensure prices are current
• Use centralised cloud storage to avoid obsolete plans and drawings
• Use dedicated estimating software as opposed to Excel sheets

What are some tips for cleaning my data?

Always conduct regular reviews on your current data to ensure completeness, accuracy, and consistency. Past that, here are four quick tips to practice good data hygiene:

1. Establish some clear rules for data entry that specify naming conventions for files and standardised tagging for photos and logs.
2. Wherever possible, eliminate manual text entry
3. Assign different data categories to different SMEs and always have someone on hand to double-check things
4. Use mobile field tools to capture time logs

Are there legal ramifications for bad data?

Yes, good data hygiene is a legal requirement under section 18 of Australian Consumer Law. Misleading or deceptive behaviour in trade, such as a bid based on faulty data, for example, leaves you liable for damages.

Security of Payment legislation across Australia requires you to prove the value of work performed through accurate site diaries, variation documentation, and compliance tracking. The Australian Taxation Office is another consideration, as they have data-matching tools that assess Business Activity Statements and GST expense claims. Bad data can trigger audits and penalties, which are headaches you’ll likely want to avoid.

Making sure you have data you can rely on

The Australian construction industry is embracing technological innovations like digital engineering and AI, which means the data you provide needs to be compatible with modern asset management systems, and above all, reliable.

A clean and accurate database should be one of your top priorities. Your data is just as important as your physical materials, even more so if we consider profit margins, legal risks, and long-term growth. E1 (EstimateOne) exists to help you find tenders worth quoting while helping you understand your quoting performance and win rates. We give you the data that helps you win more work.