So you want to build your project for less money, risk, stress, hassle and time? Well, there’s a simple way to do everyone a favour, says Peter Kilby
I have almost 40 years of experience in the construction business, and I have seen trends in contracts and procurement come and go. One of the trends that concerns me the most is the steady decline in use of the bill of quantity (BoQ). I believe that the current lack of enthusiasm for BoQs has moved us all away from what was, and could continue to be, a major benefit to the industry.
All too frequently, clients are reluctant to instruct their QS to produce BoQs because they think the costs exceed the benefits. QSs also struggle to find people with the experience and motivation to undertake the time-intensive task of drawing them up. They tend to issue the design drawings and specifications and leave the contractors to work out how to quantify their tenders. The net result is that anything up to half a dozen contractors may each draw up their own bill, each incurring the substantial additional cost involved. The perception that money can be saved through not using BoQs is false. Clients ultimately end up paying more when reimbursing contractors’ for their overheads. A much leaner and more intelligent approach would be for the PQS to produce one BoQ for all to work from.
If you do have a BoQ there are multiple benefits for all concerned. Design teams are forced to address the all too prevalent lack of details in tender drawings. And when the tendering main contractor issues its subcontractors with BoQs to price, it is much more likely to receive accurate quotations, and can therefore produce a more concise and commercially priced tender for the client. The contractor’s supply chain partners will give priority to quotations with a BoQ because it makes it is easier, quicker and cheaper to complete a bid. It also means contractors can check their supply chain quotes for subtle manual alteration of text, descriptions or quantities. Once checked, only compliant bids will be used.
Main contractors can use standard rates if they have BoQs, making pricing easier and quicker. The use of standard rates relative to industry standard descriptions significantly reduces the time and cost of tender production, especially in conjunction with bespoke estimating packages into which BoQs can be imported.
When tenders are returned, BoQs enable the PQSs to analyse them more easily and fairly. Coupled with the use of spreadsheets, bids can be analysed to the highest elemental detail. This is hugely important when assessing if contractors have priced everything and have therefore produced a compliant bid. Gaps in pricing are easily spotted, as are errors. Inconsistencies between bids result in appropriate interrogation.
At Cornhill we have recently undertaken risk assessments for estimating errors.
Design teams are forced to address the lack of details in tender drawings And main contractors are much more likely to receive accurate quotations from suppliers
The bespoke software used in systems such as Conquest and Causeway substantially cuts down arithmetic errors and can also mitigate the risk of not applying the correct rate. Clients have a more accurate contract sum in terms of additions or omissions and a pro-rata rate can be easily worked out.
Often design development or wholesale changes can occur after the production of tender documents. It is easy to adjust BoQs to allow the incorporation of change. We are increasingly requested to assist client teams to value-engineer projects and the use of a BoQ helps us do that more easily.
With the growth in fast-track construction programmes, the use of BoQs is even more important as they can often help teams to work cohesively to tight deadlines.
With so many advantages and few disadvantages it would make sense to see the BoQ re-instated in full. Now, more than ever, we need to be more competitive. Surely training staff to produce a BoQ the old fashioned way makes a lot of sense.
Peter Kilby is the chief executive of Cornhill Construction