1. Start with scope, not price
Before pricing any line item, identify what the tender documents actually require. The BOQ description may be brief, while drawings, specifications, schedules and general requirements contain the details that change the cost.
For each system, clarify supply responsibility, installation responsibility, testing, commissioning, accessories, supports, consumables, builders work, temporary works and interfaces with other trades.
- List every document used for pricing and its revision.
- Record exclusions and unclear requirements instead of silently assuming them.
- Separate Mechanical and Electrical scopes so items are not mixed between disciplines.
- Flag alternates, provisional sums and client-supplied materials early.
2. Quantities need a basis
A BOQ quantity can be accepted, checked or remeasured depending on the contract and tender instructions. Whatever the approach, the estimator needs to know the quantity basis because the commercial risk is different.
When drawings and BOQ quantities disagree, do not quietly overwrite one with the other. Record the difference and decide whether it needs an RFI, a tender qualification or a separate internal risk allowance.
3. Build the unit rate in layers
A transparent unit rate normally separates material, labour, equipment or tools, wastage and other direct costs before adding project or company-level factors. The exact structure varies by contractor, but the logic should remain reviewable.
Supplier quotations should not automatically become the final unit rate. Check validity, currency, VAT treatment, delivery terms, included accessories, warranty, quantities, brand compliance and whether the quoted item matches the technical requirement.
| Layer | Typical questions |
|---|---|
| Material | Correct brand/specification? Accessories included? Wastage considered? |
| Labour | Installation productivity realistic for the project conditions? |
| Equipment / tools | Lifting, testing, access or specialist tools required? |
| Indirects | Which costs belong at item, system, project or company level? |
| Risk | What uncertainty is real, measurable and not already covered elsewhere? |
4. Do not mix overhead, contingency and profit
Overhead, contingency and profit solve different commercial problems. Overhead recovers indirect business or project costs. Contingency addresses identified uncertainty. Profit is the intended return after costs. Combining them into one unexplained percentage makes review difficult and increases the chance of double counting.
Use a consistent company method and document whether percentages are applied to direct cost, total cost or selling price. A percentage with no defined base is not auditable.
5. Finish with a review, not a formula
Before issue, review major cost drivers by system, supplier dependency, imported content, long-lead equipment, abnormal labour assumptions and exclusions. Compare the estimate with historical benchmarks where those benchmarks are genuinely comparable.
The final check should answer two questions: can another estimator understand how the price was built, and can the team explain what would change the price if the scope changes? If the answer is no, the estimate is not yet ready.