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Tender Pricing Documents Explained
What are Tender Pricing Documents?
You may recall that at the end of my last article I referred to ‘Tender Pricing Documents’. The types of documents available, and the level of detail they include are broadly categorised as;
- Unquantified Schedules of Work
- Quantified Schedules of Work
- Unquantified Bill of Quantities
- Quantified Bill of Quantities
- Tender Stage Cost Plan.
The aim of this article is to explain in simple terms what each of these is in order to make it a little easier for you to decide which option best fits your project. Before I go on, if you are dealing with a Design & Build (D&B) Contract you will be referring to the Contract Sum Analysis.
Schedules of Work
Schedules of Work are, as the name would suggest, lists of the work entailed in a project. Typically they are used for small building projects or alterations work and enable the contractor to price the work.
The schedules provide high-level data and more in-depth information about the quality of items should be obtained from the specifications document issued alongside the schedule and drawings. In some projects, they will be produced in addition to a Bill of Quantities (BQ) but in many cases, they will be used in place of a BQ.
To give an example of the difference between unquantified and quantified schedules, unquantified schedules refer broadly to each item without detailing the exact number. I.e. a line in the schedule might detail the installation of internal doors without detailing how many doors are required. By contrast, quantified schedules of work would provide the number of doors, but the specification with regards to fire rating, materials, size, or location would need to be taken from the accompanying drawings and specification documents.
Schedules of work are designed to assist the contractor in preparing their estimate. Whilst it is down to the contractor to ensure they have sufficient information to accurately estimate the costs, it is equally important to ensure that the schedules provide sufficient quality information to avoid claims from the contractor at a later date.
Bills of Quantities (BQ’s)
BQs are a more comprehensive document and, in turn, offer greater cost certainty for all parties. Whilst a client may choose to obtain a BQ and then share an unpriced version with the tendering contractors, it is more common for a contractor to obtain their own.
Prepared by a professional cost consultant, BQs require completed drawings and detailed specifications in order to be compiled. The project is broken down into defined elements; preliminaries, substructure, super-structure and so on in accordance with recognised, industry standards. BQs are required to comply with New Rules of Measurement 2 (NRM2). However, as estimators and contractors still prefer the Standard Methods of Measurement 7 (SMM7), the industry adopts the use of both NRM2 and SMM7.
The term ‘unquantified’ BQ may sound counter-intuitive, and to a lay-person might be a tricky concept to grasp. In some respects, they could be compared to unquantified schedules of work. For example, there may be a line in the bill requiring the removal of a specified item from a specified location, whilst not actually providing the measurement of the item – thereby rendering it an unquantified item.
Quantified BQs provide the greatest cost certainty for a construction project. This highly detailed document takes account of every item and activity involved in delivering a completed project and sets a cost against it line by line. Where assumptions are made, these will be set out making them easy to identify and monitor.
With projects broken down into distinct work packages, the procurement of subcontractors is made easier as is the pre, and post-contract cost monitoring and the assessment and handling of variations.
Tender Stage Cost Plan
The Tender Stage Cost Plan is the cost plan in place at the point in which tenders are invited and can be issued at various times in the project as demonstrated by the RIBA Plan of Works. If the tender process starts early in the design process, then clearly there will be changes along the way.
The more comprehensive and developed the cost plan is at the point it is issued, the greater the cost certainty for both client and contractor, that the project can be delivered within the budget parameters.
The aim of the Tender Pricing Document is to achieve comparable end-to-end costs for the project from tendering contractors in order to award the contract to the bidder able to demonstrate the greatest value for money.
Note though, that value for money does not necessarily mean the cheapest bid wins – and nor should it.
With properly completed tender submissions, it will become apparent which bidder is the best equipped to deliver their element of the project and also how pricing compares across the returns. If a contractor has misinterpreted aspects of the design, it will usually become apparent during tendering, thus affording the client the opportunity to clarify these areas.
Our cost managers are extremely experienced in helping you navigate the complexities of the tendering process.
To discuss which approach would best suit your project, or if you are in need of a BQ, contact the office on 023 8040 5073 to arrange your free consultation.