Escalation factors are a form of specialized markup that can be entered at the bid item or sub-item level. These factors are specific to different cost types, and include Material factor, Labor factor, Equipment factor, Subcontractor factor, Outside Trucking factor, Joint Venture factor, and Other factor.
Why Use Escalation Factors?
Escalation factors are primarily used on jobs where a certain level of inflation can be predicted. In the example below, the sub-item level of the overall 12” Water Main bid item is displayed. It is nearing the end of the year, and with our current level of progress we know that we will not finish by year’s end. We also know that labor rates will increase next year by 10%, therefore we can add 10% escalation to the Labor factor for the sub-items that we know contain labor information.
Escalation factors must be entered individually for each item. They can be assigned at either the bid item level or at the sub item level. Once you have assigned an escalation factor to an item, its new cost will be reflected in the cost summary panel at the bottom of the Bid Items window.
If you assign an escalation factor at the sub item level, the costs will be displayed in both the sub item and bid item panels. If you assign an escalation factor at the bid item level, the new costs will appear only in the bid item panel.
Note: This does not change the actual price of the items in the detail view. Reports that operate based on detail costs may not match what is displayed in the Summary sheet for this reason.
Setting up Escalation Factors
Open the Bid Items window from the toolbar.
Inside the Bid Items window, select a bid item to apply the escalation factor to. You can also drill in further and apply escalation factors at the sub-item level using the same method illustrated below.
Highlight the selected bid item, then select the Actions from the menu bar.
In the dropdown menu, select Item Escalation Factors.
In the Item Escalation Factors window, select which cost type that will have escalation applied to it. You can also select multiple cost types at once. In the example, we will be raising Labor by 10%. Select OK.
The escalation factor has now been applied, illustrated by the green arrow next to all related sub-items with labor items, visible from the sub-item view.
Conclusion
Getting started with SharpeSoft is a breeze. Whether you are looking to create a new job or add one, SharpeSoft has got your back. We have the tools and expertise necessary to help you make it happen without breaking a sweat.
You can continue on to other helpful Fast Trax articles found in the Blog section. To learn more about this particular subject, consult your system Help manual, or just give us a call and we’ll be glad to walk you through it.
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