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Complete detail about Bill of quantity and its relevance

The Bill of quantities, also known as BoQ or BQ, refers to a type of document utilized in the tendering within the construction or supplies industries. It describes and categorizes the cost and number of materials, parts, and manpower. Along with this, it may include the terms and conditions of a project as well as all the work associated with it. The bill of quantities is addressed to tenderers that use it as a basis to calculate the cost of executing the construction work. This document makes it possible for contractors to prepare bids based on the same quantities. Thus, it creates a fair and precise tendering process for all participants.

The quantities described in the bill are measured in length, area, volume, weight, time or number. Preparation of the bill implies the completion of both design and specifications attributed to it.

A contractor, guided by the bill’s list of items, offers its price for each item. Thus, the priced bill of quantities forms a tender offer. Since each offer is based on the same items and quantities, a client is able to compare the total cost and prices for each item individually with proposals from other contractors. Information obtained in the course of such an assessment may assist in tender negotiations.

Bill of quantities can be of two types- the Elemental bill of quantities and the Trade bill.

Preparing Bills of Quantities

Quantity surveyors and building estimators are responsible for the bill of quantities preparation.

Bills of quantities can be compiled both elementary or in work packages using the “taking off” method. It implies the identification of items of the construction work that are possible to be measured and assessed.

Contractors can benefit from bills of quantities when they consist of work sections that, in turn, may be used for distribution of sub-contract packages. This approach allows a contractor to receive prices from sub-contractors and form an accurate and fair price.

The bill of quantities should provide a list of work according to the project but should not specify these items as it may result in confusion between the data contained in a bill of quantities and specifications.

If there is a discrepancy between the bill of quantities and other tender documents, disputes may arise. Inaccuracies can be the result of arithmetic errors or non-inclusion of elements in the bill while they are present in drawings and specifications.

As a rule, the clients are responsible for their own mistakes or omissions, which can be identified as relevant events (or compensation events), if they may result in claims for the extension of time, as well as losses and expenses. At the same time, if during the tender process the contractor notices an ambiguity or error, the rule of good taste is to inform the client of this, even if otherwise may be a commercial advantage for them.

Today, there are software packages to help with the preparation of bills of quantities. Additionally, the building information modeling systems can be utilised to create bills of quantities based on the information already contained in the model.

Contingency sum for BOQ:

Contingency sum refers to an item that a bill of quantities includes. This term is used to describe additional unforeseen costs of items or services that may occur during the execution of work according to the project.

Contingency sum can be divided into two types. The first one describes a specific item that may become a subject to adjustments or when it requires additional services that are not accurately described in the bill of quantities (however, some work concerning this item should be envisaged). An example of this type of contingency sum may be ‘additional alterations to services associated with the installation of kitchen appliances’. This type of contingency sum is normally estimated by the client’s project quantity surveyor.

The second type of the contingency sum implies additional money that can be attributed to any item included in a bill of quantity. An example to illustrate this type is: ‘additional work to be executed by the contractor when the contract administrator requires so’. Normally, the contractor’s quantity surveyor or commercial manager approximates this type of contingency sum.

There may be also additional requirements associated with a project that are reflected in a Bill of materials (BOM). This bill (also referred as product structure or associated list) describes a list of raw materials, sub-components, parts, and assemblies, as well as their quantities, required to produce a specific product.

 

Benefits of the Bill of quantities:

Bill of quantities allows clients to accurately estimate all the costs and expenses attributed to a specific constriction project. If there is no information regarding some item, the bill may use data taken from special schedules or known rates. Bill of quantities covers all aspects of a project, including construction work, materials, and any services provided by the contractor.

A well-designed and accurate bill of quantities makes the project procurement process much simpler and transparent, as well as eliminates the element of guesswork. Even before the construction starts, the bill can help introduce changes to the project if any items appear to be prohibitively expensive. Additionally, the bill clarifies the number of materials that can be purchased before the work begins.

Bill of quantities provides a clear and detailed description of work according to the project, as well as a reliable base for budget management and accurate expenditure reporting. This document makes it possible to prepare cash flow projections and provisions a basis for the variations assessment, interim payments, and final invoices.

Bill of quantities is also beneficial for tenderers in terms of creating a low-risk and low-price bidding environment. Such conditions encourage contractors to more actively submit tender offers.