Sep 05

The Use of Bills of Quantities in Tender Pricing and Purchasing Materials

The Use of Bills of Quantities in Tender Pricing and Purchasing Materials

Detailed Bills of Quantities have enough detail for complete pricing

A BOQ (Bills of Quantities) is a contract document prepared for tendering, project cost control and budgeting, but have you ever wondered why a BOQ is so lengthy, detailed and intimidating? If you curtail the lengthy item descriptions to short titles and strip out the clauses, preambles to trades and specifications, you will be left with a simple takeoff list, but a measuring list is not useful to a contractor who is bidding for a construction tender.

Takeoff Lists should not be used for quoting or as bid documents because they don’t have sufficient information for pricing an item. At least, when you give out a takeoff list, you should also attach some specification details that are referenced in your item list. When you are pricing an item, you need a full description of the size, properties, product code, method of fixing, construction technology and material specification. Otherwise, items which lack specification detail should be treated as provisional. This provides flexibility and room for the contractor to insert a price obtained from past projects or to select an item price from a preferred supplier. However, when too many items in a Bill of Quantities are provisional, the BOQ sum will deviate from the projected value by a high margin, which will result in numerous claims and variation orders during the post-contract period.

In order to avoid an unreasonable number of change orders and claims, the consulting Quantity Surveyor must use detailed Bills of Quantities, not a takeoff list. Takeoff lists are not recommended. They are not recommended, even for material purchasing unless the client has a preferred supplier and contractor they have worked with in the past.

So whenever you see a BOQ with over 100 pages, do not be intimidated. The clauses, preambles and specifications along with item descriptions are there to guide the contractor in pricing and building up rates. The rates should reflect what is contained in the item description and specifications. Without detail, it’s not possible to build an accurate rate. You may overprice or under-price the item, and such a scenario will put your building firm in financial trouble. A lot of construction projects are abandoned due to cashflow problems when the contractor is not making profit in the contracted job.

Takeoff List – has little or no detail for complete pricing.