Tendering, Quotes & Estimates

An explanation on: how to produce a brief, the tendering process, and the difference between a quotation and an estimate

Producing a Brief


For the architect the initial requirements will include a general outline of work and a vision of the completed work. Once you’ve selected your design company work with them to produce a brief including work specifications and services you want them to undertake.

If you’re not using a designer make a detailed list of the requirements for the contractor to price and entitle it ‘Detailed Brief’ so as not to confuse it with design specifications. Include as much detail on the design and the standards you expect. To ensure contractors are not planning to use inferior materials and methods clarify what they are proposing for construction, e.g. specifics on windows, doors, walls, floor. It pays to visualise the final look of the build and include every part in the brief before discussing it with the contractor. Make sure you specify the quality and look of the designs and materials. If you don’t the contractor will have to make the decision for you and it may not be to your liking or budget.

 

Facilities & Services


Make sure the contractor(s) are advised of any the following facilities and services before they start pricing:

  • Water supply – where is the access and are there any restrictions?
  • Electricity – the units used during the project is usually charged to the contractor. Metre readings will need to be taken before work starts and once the work is completed.
  • Lighting – in order for completed work to be inspected adequate lighting will be required
  • Storage – where there will be an adequate place on site for storage of equipment and materials
  • Facilities - e.g. the toilet, is one available or will it need to be hired?
  • Telephone – whether or not a phone will be available for the contractor to use

 

Tendering

 
In the tendering process the contractor is only required to quote for the work stated in the scope of works including preliminaries (see facilities and services). Inform the contractor that no costs will be accepted for the preparation of the tender. They will be required to include a period of validity to the tender, i.e. a date when the tender expires.

The following should be included in the tender documents:

  • Cover letter
  • Design drawings and specifications
  • Preliminaries
  • Other relevant information
  • Contractual terms
  • Pricing
  • Health & Safety
  • Contract (if applicable)


Let the contractor know that they can ask questions if any information is not clear or fully understood. Ensure you receive a programme of works from those providing the response, you will get an understanding of the timescales proposed for each stage of work.

Ensure they provide a request for acceptance if there is a proposal to use alternative materials than what is stated in the specifications.

Make sure the contractor provides a breakdown of price for the stages of work. It will enable you to: analyse each of the responses, identify items of work which exceed your budget, identify any ambiguity in your specifications, and will assist with the staged payment calculations.

 

Quotation vs Estimate

 

A quotation is a fixed sum of money for an agreed amount of work based on the specifications and drawings or the design brief provided by the client. An estimate is an approximate or expected cost for materials and labour but may not reflect the final cost once the work is completed.

It is important that the specifications and drawings provided to the builder or contractor for quoting are clear and comprehensive. If they aren’t the contractor may deter from quoting and opt for an estimate or possibly a high quote instead. If the quotes you are receiving are far greater than your budget it may pay to use the services of a professional quantity surveyor to advise on the price you should be paying as well as overseeing the payments and contract terms. If the quotation is accepted it then forms a contract.

For a fixed quotation contractors may factor a contingency into their calculations to account for risk if the work is more complicated than expected, e.g. a contractor may provide a cost for groundworks based on a worst case scenario as the extent of the work may be difficult to ascertain fully. It may be more beneficial to accept an estimate in this situation.

 

VAT

 

Most quotations will include VAT unless the firm or contractor is not required to (i.e. their annual turnover is less than £70,000). VAT rules can change so it is advisable to contact Revenue & Customs to find out if the VAT you are charged can be reclaimed. You will find that the build is zero rated and the fittings and appliances are charged at the standard VAT rate.

Contact Details:
Her Majesty’s Revenue & Customs (HMRC)
Web: www.hmrc.gov.uk
Ph. 0121 697 4000

 

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