In brief
- Price every tender line as quantity times rate, then set contingency from listed risks rather than a round figure.
- Run the priced breakdown through the construction budget analyzer to catch arithmetic slips, duplicate lines and lump-sum drift before submission.
- Run the project facts through the construction risk analyzer to see which risks need a price, a clause or a programme change.
Contents
A tender price is only as good as its build-up: measured quantities, honest rates, a contingency tied to named risks and a cash flow the contractor can fund. This covers the pricing order, what the construction budget analyzer construction budget analyzer checks in a finished breakdown, and what the construction risk analyzer construction risk analyzer flags in the project facts. By the end a reader can assemble, test and submit a priced tender with the weak lines marked before the client sees them.
What order do you price a tender in?
Start from the documents, not the total. A price built from the bottom up survives questioning line by line, and each of these steps produces something the next one needs.
- Read the tender documents and list what is excluded or provisional, then read the contract conditions for what the price must carry and check what the contract allows on payment and adjustment.
- Prepare the bill of quantities What is a BOQ (bill of quantities)? or take off quantities from the drawings, grouping items the way the tender asks.
- Write down the method and programme, including imported items, site access and the skilled roles the team will fill locally. The risk analyzer uses these inputs.
- Build a rate for each line: material and waste, labour by output, plant, transport and wastage, then overheads and margin.
- Add contingency and any provisional sums, then test the whole breakdown before submission rather than after.
A rate card that separates material from labour lets a reviewer see which line moved when a supplier quotes differently. Keep quantities and rates visible on every line so the arithmetic can be checked.
How do you build each rate?
A rate is the cost of one unit of work, assembled from its parts. The tool never supplies rates: the budget analyzer applies no benchmark and never says a rate or a total is high or low, so rates come from the reader's own supplier quotes, labour records and plant costs, and the arithmetic is what gets tested.
| Part of the rate | What it covers | Where the figure comes from |
|---|---|---|
| Material | Net quantity plus waste | Written supplier quotes |
| Labour | Hours at crew output | Site records or agreed output |
| Plant | Owned or hired time | Hire terms or ownership records |
| Transport | Delivery to the site | Written haulage quotes |
| Overheads and margin | Office, supervision, profit | Company policy |
Build one line, then test it: quantity multiplied by rate must equal the amount. The budget analyzer flags any line where the two differ by more than 1%, so a slip in a large measured item shows up before the client finds it. Lists of items marked imported, or lines that name a material, are grouped by the analyzer and flagged when they reach half or more of the total, because a rise in material or freight prices then moves the whole budget. Keep that share in view when deciding how much to buy early.
How much contingency should the price carry?
Contingency is a costed allowance for risks that are known but not yet priced, not a round percentage added at the end. The risk analyzer treats a contingency below 5% of the contract value as a high-level finding and a contingency from 5% to under 10% as a medium-level one, and the budget analyzer flags a missing contingency line or one under 5% of the total. Both thresholds are the tools' rules of thumb, not standards.
List the risks the project actually carries, from the site investigation, the programme, the supply chain and the contract, estimate the likely cost of each, and let the sum set the allowance. Then write down who may draw on it and for what. On the example the risk analyzer works through, a building priced with a contingency of 3% comes back with 10 findings, 4 of them high, and the thin contingency is one of the four: the tool's wording is that the contingency is thin for construction.
Which project facts change the price?
The risk analyzer applies fixed rules to what the reader enters: project type, procurement method, site access, contract value, contingency, duration, imported materials and their lead time, suppliers, distance to the supply town or port, skilled roles filled locally, and which documents are in place. It uses no outside data about places, prices or firms.
| Input entered | Level the analyzer gives | What it means for the price |
|---|---|---|
| Contingency below 5% of contract value | High | Rebuild the contingency from a risk list |
| No price adjustment clause, at least 30% imported, 12 months or more | High | Price the clause or buy imported materials early |
| Imported materials with a lead time of half the planned duration or more | High | Add storage, early order or an alternative |
| Building, road, water or port project without a soil or site investigation | High | Price the investigation or an allowance for ground risk |
| Track only or no road access | High | Price access works and transport separately |
| More than 200 km from the main supply town or port | Medium | Price transport, consolidate loads, hold buffer stock |
| Under 50% of skilled roles filled locally | Medium | Price recruitment, training or imported labour |
| No signed contract with written conditions | High | Settle the terms before pricing further |
| No bill of quantities | Medium | Prepare one before the total can be tested |
| Permits or plan approvals not in hand | Medium | Price the time they may take |
| One supplier or none for the main materials | Medium | Qualify a second supplier or hold stock |
The tool takes one lead time to stand for all imported materials and counts a month as 52/12 weeks. Its mitigations are the pricing actions: set contingency from the project's known risks and agree who may draw on it; agree a price adjustment clause with a published index or buy the main imported materials early and store them; list long-lead items, order them at contract award and plan independent work first; price transport separately and keep buffer stock; plan the access route before mobilising and include access works in the price; qualify a second supplier for each main material.
Does the cash flow fit the programme?
A tender can be priced correctly and still fail if the money leaves the account before it arrives. When each line carries a month, the budget analyzer builds the cash flow and flags a month that carries over 40% of the total. That month is where the contractor's working capital is tested.
Run the check in order:
- Put a month on every line, from the programme rather than from habit.
- Compare each month's total and find any month over 40% of the total.
- Ask what must be bought, paid for or held in that month, including imported items ordered early.
- Move work, split deliveries or agree staged payment terms within what the contract allows.
- Repeat the check after any change to the programme or the procurement.
The analyzer also flags when one line is over a quarter of the total, which points to the same problem from the other side: a single item that dominates the price dominates the risk. Most of the total in lump sums is flagged as well, because a lump sum hides the quantities a reviewer would otherwise check.
What does the finished breakdown get checked for?
Before a priced breakdown goes to a client, a funder or a tender board, it gets read once for arithmetic and once for structure. The budget analyzer checks quantity times rate against the amount and flags a difference over 1%; the same item on two lines; a zero or negative line; one line over a quarter of the total; most of the total in lump sums; a missing contingency line or one under 5% of the total; material-price exposure at half or more of the total; and, when each line has a month, a month carrying over 40% of the total.
Work through the findings in that order, correct the breakdown and run it again. Neither tool knows current prices, the place, the market or the firms involved; the risk analyzer never rates a contractor; and neither is engineering, legal or financial advice. A quantity surveyor should review any budget a reader relies on, and the priced breakdown still needs the engineer's or the specification's confirmation on technical limits before submission.
What to do next
Open the construction budget analyzer construction budget analyzer with the priced breakdown: every line's description, unit, quantity, rate, amount and month, plus lump sums marked as such. Run the project facts through the construction risk analyzer construction risk analyzer first if the contingency, imported materials or documents are still open. Bring both sets of findings and the contract's payment terms to the review.
Frequently asked questions
What is the first thing to check in a priced tender?
Check that every line is quantity times rate equals amount. The construction budget analyzer flags any line where the two differ by more than 1%. Fixing arithmetic before submission is faster than answering a client's query after it.
How large should the contingency be?
Set it from a list of the project's known risks and their likely cost, not from habit. The risk analyzer treats a contingency below 5% of the contract value as a high-level finding and one from 5% to under 10% as a medium-level finding. Those are the tool's rules of thumb, so confirm the figure against the project's own risk list.
Why does a high share of imported materials matter?
When lines marked imported, or lines that name a material, reach half or more of the total, a rise in material or freight prices moves the whole budget, and the budget analyzer flags that. The risk analyzer adds that imported materials with a lead time of half the planned duration or more are a high-level finding, so order long-lead items at contract award and plan independent work first.
What happens when one month carries most of the cost?
The budget analyzer flags a month that carries over 40% of the total. That month is where working capital is tested, so check what must be bought or held in it, then move work, split deliveries or agree staged payment terms within what the contract allows.
Do the tools set prices or say a rate is too high?
No. The budget analyzer applies no benchmark and never says a rate or a total is high or low, and the risk analyzer never rates a contractor. Both use only what the reader enters, so rates come from written supplier quotes, labour records and plant costs, and a quantity surveyor should review the result.
What must be in place before pricing goes further?
The risk analyzer gives a high-level finding to a project with no signed contract with written conditions, no approved drawings, no quality and testing plan, or no soil or site investigation. Settle those items or price the risk they carry, and check what the contract allows on payment and adjustment.