Reading Three Builder Quotes That Are Not the Same Job

Four pages, nine pages, nineteen pages

The three of them are on the kitchen table. The cheapest is a single sheet with a total, a start date and a mobile number. The middle one runs to nine pages with a room-by-room breakdown and a line for skips. The dearest is nineteen pages, with a specification, a programme, a page of exclusions and a note that the party wall matter is not included. The low and the high are close to half apart, and the instinct at that point is that somebody is trying it on.

Almost always nobody is. Three estimators read the same drawings and made different private decisions about what those drawings actually required. One assumed the existing floor is sound and priced nothing for it. One allowed to lift and relay it. One excluded it in a sentence on page fourteen that you have not read yet. None of the three is wrong until you decide which of them you want — and until that decision is made and applied to all three, the totals are not comparable and the spread between them means nothing at all.

The industry has a name for the work that follows: levelling, or scope levelling, or bid tabulation depending on whose office you are standing in. It is clerical rather than adversarial and it takes an evening. It ends with one sheet on which the three prices sit against an identical list of work, every gap named and priced, every assumption written down as yours rather than somebody else's. Only after that does the cheapest quote being cheapest tell you anything. What follows is that evening, in the order the work actually goes.

Retype all three into one order before you compare any two

The frame you sort into matters far less than having one at all. CSI MasterFormat orders work by result — the trade section a specification is already written in — and CSI UniFormat orders it by element, so foundations, superstructure and exterior enclosure sit together the way a building does rather than the way a subcontract does. RICS New Rules of Measurement 2 is the British equivalent for detailed measured work, with NRM1 doing the elemental version for early cost planning. Pick whichever you can hold in your head. Three quotes each arranged by their own author's habits cannot be read line against line, and the first hour of the job is retyping them into a common order so that a missing line becomes a hole rather than a difference in style.

The second hour is writing down what the job is, in your own words, before you look at any price again. AACE International Recommended Practice 34R-05 calls this the basis of estimate: what is included, what has been assumed, what is excluded, what the whole thing depends on. On a commercial project it is a formal document reviewed under Recommended Practice 31R-03. On a kitchen it is one page. Its value is not thoroughness — it is ownership. Every later argument about whether something was in the price gets settled against a sheet that belongs to you, rather than against whichever of the three men speaks with the most confidence about what he meant.

1. Choose the sorting frame first and write its name at the top of the sheet, so that a line arriving next week has an obvious place to go.
2. Retype every quote's lines into that order, one column per firm, keeping the bidder's own wording rather than paraphrasing it into agreement.
3. Leave a blank cell wherever a firm has no line for something another firm priced. Those blanks are the entire exercise; do not fill them in with a guess.
4. Write your own scope page — inclusions, assumptions, exclusions — from the union of all three documents, then decide which side of each blank you want to be on.
5. Mark every line that is an allowance, a provisional sum or a day rate, because those totals behave differently from the rest and must not be compared as though they are fixed.
6. Only now add the columns up, and treat the three subtotals as the first real comparison you have made.

The exclusions page is the price list

Read the last page before the first. Any quote longer than a single sheet carries a list of what is not in it, and that list is where the three documents genuinely differ. The inclusions look similar because the drawings were the same. The exclusions are each firm's private judgement about what they refuse to be caught by, written after the estimator has had a bad experience with exactly that item.

What routinely lives there is predictable, and expensive in aggregate: making good and decoration to the rooms the work merely passes through; removal, containers and tipping charges for what comes out; scaffolding, propping and temporary protection; welfare and set-up on a house somebody is still living in; the structural engineer's calculations and fee; building control charges and per-visit inspections; a party wall award; a survey for lead, asbestos or silica exposure and whatever that survey then requires; and anything discovered once a floor is up. Every one of those is a real cost somebody pays. A quote excluding six of them and a quote excluding none are not two prices for one job, and subtracting one from the other produces a number that describes nothing.

Two words earn a highlighter. An allowance, or a provisional sum, means the figure in front of it is a placeholder that will be adjusted when the thing is actually chosen or measured. AIA Document A201 deals with allowances at Section 3.8, and the mechanism is worth understanding rather than merely spotting: the allowance covers the material delivered to site, while the labour to install it and the contractor's overhead and profit on that labour sit in the contract sum around it. British practice splits the same idea into prime cost sums, for work by a named specialist, and provisional sums under RICS New Rules of Measurement 2, where a defined sum is one the contractor has been given enough information to have allowed for in the programme and an undefined one is not.

The reason this matters to a comparison rather than to a budget is that allowances are never distributed evenly across three quotes. A firm carrying eight of them has priced less of your job than a firm carrying two, and its total is softer by exactly that much. Count them per quote, total what they cover, and express that total as a share of each price. That share is a far better measure of how firm a number is than the number itself, and it frequently reorders the three.

Then there is the third category, which is neither excluded nor allowed for: the thing nobody mentions. Silence is not inclusion. If the drawing shows a new structural opening and none of the three quotes mentions a lintel, padstones or temporary propping, three estimators have made the same unspoken assumption and you still have to find out what it was before one of them starts.

One of these is a price and one of them is a forecast

Before the totals get compared at all, check that they are the same kind of number. A stipulated sum is a price, and the contractor carries the risk of the work costing more than they thought. Cost of the work plus a fee is a forecast, and you carry it. AIA publishes those as separate agreements for exactly that reason — A101 where the basis of payment is a stipulated sum, A102 for cost of the work plus a fee with a guaranteed maximum price, and A103 for the same arrangement without one — with A105 as the short form used at domestic and small-project scale. The number on an A103 is not a price at all; it is an expectation, and reading it against a stipulated sum as though the two were rival offers is the most expensive mistake available at this table.

The British and international forms make the same division differently, and the vocabulary is worth recognising on a covering letter. The NEC4 Engineering and Construction Contract puts it in the main options: Option A is a priced contract with an activity schedule, Option B a priced contract with a bill of quantities, Option C a target contract, and Option E cost reimbursable. The JCT Minor Works Building Contract is a lump sum arrangement sized for small works, and JCT's fluctuations provisions are where a firm price and a price that moves with cost are chosen between rather than assumed. Whatever the form, the name on the front tells you who holds the risk of the work costing more than anyone expected, which is at least as important as the figure on the back.

The domestic version of all this is less written down and no less real: one builder offers a fixed price, one offers a fixed price with a great many allowances inside it, and one offers a day rate against an estimate of days. Those three cannot be compared as totals under any circumstances. Convert them onto one basis first — take the day-rate quote's estimate of days at face value, compute the labour at the stated rate, add the material as quoted, and then write in the margin that this number, unlike the other two, has no ceiling on it and never had one.

The bidder behind the bid

Perhaps two of the three prices are actually deliverable. The document that exists for settling which is AIA Document A305, the Contractor's Qualification Statement: who the firm is, what it has completed, what it is currently committed to, and who its references and its bank are. Nobody sends one unasked on a kitchen, and nobody needs to — the questions off it get asked over the phone. Current work in hand is the most useful by a distance: a firm fully committed for four months that has quoted you a start date next week has made a promise about somebody else's job as well as yours, and one of the two is going to give.

Insurance is a document rather than an assurance, and the difference matters. In the US the certificate is an ACORD 25, Certificate of Liability Insurance, and the checks are that it names the right entity, is in date, and carries cover appropriate to the work — a certificate evidences a policy, it is not the policy, and it confers nothing by itself. In the UK the equivalents are the certificate required by the Employers' Liability (Compulsory Insurance) Act 1969 and a public liability schedule showing the limit. Where the work is notifiable there is a registration to check as well: electrical work under Part P of the Building Regulations in England and Wales is either self-certified through a competent person scheme or notified to building control, and which route a firm intends decides whether that fee is inside their price or waiting for you outside it.

What to do with the cheapest one

Go back to all three with the levelled sheet. Not to haggle — a re-price against a written scope is an ordinary professional request that any firm worth appointing has handled fifty times. Send each of them the same list, the same assumptions, the same exclusions, ask for the gaps to be priced, and then ask the question that earns the whole evening back: what do you think is missing from this list? That is where the estimator who has done twenty of these tells you what he saw in the loft and assumed you already knew about.

The second round usually collapses most of the spread, and what is left is worth judging rather than accepting. If the cheapest is still cheapest against identical scope, ask it to explain itself and listen for whether the explanation is about the work or about the price. A crew already working two doors down, a gap in the programme next month, an existing account with the supplier for the specified units, a genuine reading that the job is simpler than the other two assumed — these are real reasons for a lower number and they survive being asked about in detail. "We'll sort that out on site" is not a reason; it is a description of a conversation you will be having in week six from a weaker position than you occupy now.

A firm that will not re-price against a common scope has told you something useful early and cheaply. The exercise costs them an hour. A firm unwilling to spend an hour to win the work is not going to spend one to fix a problem inside it once the work is theirs.

One last piece of arithmetic before anybody is told they have the job. Take the gap between the price you are about to accept and the next one up, and ask what it would take to close it: one structural surprise, one extra week of labour, two variations of ordinary size. If the answer is any of those, the money has not been saved — it has been borrowed against an outcome nobody can currently see. That is not an argument for appointing the dearest quote, which is often just the most cautious reading of the same drawings. It is an argument for knowing, before you sign, which of these three you would rather be standing in a half-finished room arguing with.