procurement guide - bills of quantities

basis:


Often referred to as “traditional Bills of Quantities”

A lump sum tender price based upon the priced Bills of Quantities is normally tendered in competition by a pre-selected list of between three and six contractors.

Selection of a contractor is made on the basis of the tenderer pricing measured Bills of Quantities, prepared to 'Standard Rules of Measurement', for example:

  • NRM2 (New Rules of Measurement Volume 2 - Procurement)
  • SMM7
  • ARM – Agreed Rules of Measurement (in the Republic of Ireland)
  • POMI – Principles of Measurement International

Bills of Quantities include definitive measurements of the major elements of the building.

Where design is not complete, ‘provisional’ and/or ‘approximate’ quantities can be included.

Additionally Provisional Sum allowances for undefined and defined works can also be included, together with provisional sum allowances for works to be carried out by ‘named’ specialist sub-contractors; which, if required, can be tendered separately – although this is relatively uncommon today and it is more likely that such work will be part of the main contractor’s tender by means of selection from list of ‘preferred sub-contractors’, to then be employed as ‘Domestic sub-contractors’.

This method of procurement is the oldest construction procurement methodology still used in the UK.

It not now as popular as it was in the first 85 years of the 20th century, but is still often preferred by Public clients.

advantages:


  • Gives excellent comparison of tender bids because all tenders are based on the same measured information.
  • Creates a low risk tendering environment allowing tenderers to give their most competitive price because the risk for the contractor is well understood and defined.
  • This is a procurement process which is widely understood.
  • Gives a good basis for measurement and valuation of variations and for the calculation of interim valuations and the eventual final account.
  • Needs the design team to have prepared and developed the building design before the Bills of Quantity can be prepared and so through reduction of design risk often leads to a much greater level of programme certainty and thus the date for completion.
  • Can incorporate Design and Build and Performance Specified works if required

disadvantages:


  • For the level of cost certainty promised by this procurement methodology to be delivered, the design must have evolved before preparation of the Bills of Quantity is started.
  • Errors in the tender documents are normally required to be corrected at the client’s risk.
  • Pre-contract phase of procurement is lengthy compared to other procurement methods and so often leads to a later start on site.
  • Risk is generally dependent upon status of design at time of document preparation and can therefore mean that the Client can bear more risk if Design is not largely completed and therefore do not fully represent the final design/build solution.

suitability:


Appropriate for projects where time is available for design work to largely be completed so that detailed measurements can be made before the tenders are sought.

Bills of Quantity can be used on any size project but can be suitable for those which are extremely large and complex and where the design time required would mean a very long lead-in period.