UNDERGROUND UTILITY: HDD VS OPEN CUT
Directional drilling sells feet-per-day through a bore path priced on soils, depth, and diameter; open cut sells trench-lay-backfill production. Different machines, risks (frac-outs and cross-bores vs shoring and dewatering), and cost curves. The mass/fine grading lesson travels here.
This page covers one problem. The full picture for this trade, including the other places margin leaks, is on the underground utility operating system page.
WHERE THE MONEY GOES.
Covered in full in the quick answer above. The sourced numbers and what controls it are below.
THE NUMBER TO MEASURE IT AGAINST.
Underground Utility contractors run about 3% net profit at $1M to $5M, rising to roughly 6% at $5M to $10M. The CFOS target at $1M to $5M is 10%, set at 10 percent after taxes or 3.5 points better than your trade's industry average at your revenue, whichever is higher. A problem like this one lives in the distance between those two figures rather than in a loss on any single job.
Gross margin over the same bands runs 18% to 20%, against a CFOS target of 24%.
THE SYSTEM THAT FIXES THIS.
Cost codes built against the estimate, so a job can be read while it is open.
FREQUENTLY ASKED.
