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How Industrial Scaffolding is Billed and How to Control Scaffolding Costs

When it comes to scaffolding at large industrial facilities, there are many ways costs can creep into your budget. Whether the scaffolding is on a project basis (ie turnarounds or capital projects) or part of your day-to-day maintenance activities, it helps to be informed and know what tools are available to help manage those costs.

Scaffolding for Projects & Turnarounds

With capital projects, the scaffolding services are often bid out out on a project-by-project basis. During this phase, the scaffolding contractors usually mock-up the scaffold in a 3D modeling tool and will know every piece required in advance of the job. This process takes time, but results in an accurate representation of how the scaffolding will be built, leading to a more accurate price quote.

For plant turnarounds, there are often multiple large capital projects mixed with smaller planned and unplanned jobs. It is not uncommon to have multiple scaffolding companies providing service in the same general area for the turnaround.

Due to the operational and logistical complexities of turnarounds, it may be beneficial to bid out the scaffolding for a turnaround holistically, and award the contract for all capital projects and day-to-day turnaround activities to a single source. Some of the benefits obtained by this approach are:

  • Reduced cost by using shared resources for equipment, materials, and crew
  • Reduced risk by having fewer individual work groups to manage
  • Improved communication by having all scaffolding activities reporting up through the same organizational structure and being “on the same team”
  • Less finger-pointing. Unfortunately, competing groups in this industry don’t always play well together!

In addition to single-source bidding, planned jobs and turnarounds offer a few other potential advantages for cost savings. Because these jobs are planned far in advance, it’s possible to work with the scaffolding contractor and identify cost-saving areas together.

Stilt is well suited to help with many of the issues that pop up in a turnaround environment. With Stilt you can:

Scaffolding for Maintenance Activities

Every plant has ongoing maintenance activities that require access, whether it be with scaffolding, high-reaches, or other access systems. The larger the plant, the bigger the need for scaffolding crews to be on-site every day. Some larger facilities might even have upwards of 50 scaffold builders on-site every day for day-to-day requests to erect, inspect, modify, and dismantle scaffolding throughout the plant. These requests can be as simple as installing a hand-barricade to block off an open hole, or as complex as a large overhanging scaffolding to replace a long section of leaking pipe.

Usually, these maintenance scaffolding contracts are bid out and are awarded as multi-year contracts. In some scenarios, other services are performed by the same company, in addition to scaffolding. The companies that provide these other services might be termed multi-craft or soft-craft services providers. Some of the common crafts provided alongside scaffolding are:

  • Insulation & Fireproofing
  • Sandblasting
  • Painting & Coatings
  • Lead & Asbestos Abatement

The benefits of using a multi-craft services provider are similar to the benefits listed above for selecting a sole-source provider for turnaround work — you can achieve operational efficiency by sharing resources and reduce risk by simplifying management structures.

When selecting a scaffolding or multi-craft services provider for day-to-day maintenance activities, there are 2 common billing types – Project-Based and Time & Material (T&M)

Project-Based Billing

With project-based billing, every single job goes through a quote and approval process. This adds to the administrative burden, but ensures that each job’s costs are understood and approved before the work is started. While this might be best from a contractor controls perspective, it does involve additional administrative effort and time, which may impact the rates and costs. Time spent from additional field walkthroughs, back-and-forth communication, billing/invoicing work, and record-keeping are all hidden costs that must be added to the provided rates for the work the be profitable. For scaffolding, the quote cost often includes the cost to erect & dismantle the scaffold, plus the rental fee, which might have a default time period for all initial requests. If a scaffold needs to stay up longer than the default period or if a modification needs to be made, additional funding is needed for that particular scaffold. This can lead to billing confusion which may even result in double or triple billing for the same scaffold.

With Stilt, you can easily keep track of each specific scaffold, along with all costs associated with the installation, rental, modification, and dismantle. Because the job details are stored on a centralized cloud-based digital platform, many jobs can be quoted and approved without additional unnecessary walkthroughs. Geo-locations and photos reduce the confusion associated with quoting and billing, while custom fields allow you to correlate scaffold records with other projects and systems.

When one of our utility plant customers began using Stilt, they found over $70k in savings in the first year alone from the improved organization and record-keeping that Stilt was able to provide. Before Stilt, scaffolds were kept track of using an Excel spreadsheet provided by the scaffolding company. Even though the scaffolds in the field have a tag, there were often still many scenarios where a tag did not match up with a record in the Excel spreadsheet. This led to billing confusion and the facility suspected that some scaffolds were being invoiced (and paid!) multiple times. With Stilt, there was no more confusion. All records were tracked in a single place, with photos, geo-locations, event trails, and more. The first-year direct savings to the maintenance budget was over $70k, not even including the time saved by admin personnel.

T&M Billing

With T&M billing, the contractor and facility agree to fixed hourly rates for different types of workers (scaffold-builder, forklift operator, sandblaster, etc). In the bid process, the facility often knows how many people of each type of skill is required to satisfy the day-to-day maintenance needs of the plant, and the bid process involves a race to the bottom for whoever can provide the lowest hourly rate. This has many obvious risks and selecting a contractor based off lowest-hourly-rate alone could end up costing more in the long run! In addition to the hourly rates for the workers, there may be scaffold rental fees. Often in T&M contracts, there is a provided time-period included with each scaffold. Once that time period has been exceeded, the facility might have to pay additional extended rental fees based on the leg-feet and days-standing. These fees can be tens of thousands of dollars per month if not managed properly!

When Stilt is implemented at a facility that uses T&M billing, the facility can see efficiency gains, leading to more work output from the same sized crew. In some scenarios, this leads to the facility being able to get the same amount of work done with less people, saving money on the overall T&M cost.

Stilt’s innovative scheduling and geo-tracking allows crews to be efficient with how they erect and dismantle scaffolding, spending less time driving around the plant and more time working.

In addition to properly managing multiple industrial crafts, whatever your billing method is, Stilt can help keep track of costs. Facilities who have implemented Stilt to keep track of their scaffolding & multi-craft services have reported savings of 10-20% of their typical annual contract.

Get in touch with us today to discuss your scaffolding process and learn how Stilt can save you money.

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