On large, complicated projects, it can be difficult for project owners to compare proposals from contractors: They have to verify that the contractors are bidding the same scope of work before comparing prices. In construction, a bill of quantities allows owners to control the bidding process because the work and quantities are clearly stated for contractors to price before the project is sent to bid. It takes the guesswork out of bidding and analyzing bids.
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What is a bill of quantities?
A bill of quantities (BOQ or BQ) is usually used on larger construction projects and consists of a list of materials and services required to perform a project. The list includes materials, labor, and quantities of each, and is often prepared by the engineer or architect after project design is complete.
Once prepared, the BOQ is given to contractors to provide pricing for the project. Because the materials and quantities are already given, this allows them to focus on pricing instead of doing takeoffs. After its complete, the pricing is returned to the owner for review and contractor selection.
After a contractor has been selected, the bill of quantities can be used when invoicing the project. The same form is often used, and progress is easy to calculate based on the amount of material on the job site and the work completed.
If the project design is not totally complete, or it’s not clear what exact quantities are needed, teams can use what’s called an approximate or notional bill of quantities. In this case, the pricing is estimated based on approximate quantities, and can be revised once the amounts are quantified.
What is the purpose of a bill of quantities?
Bills of quantities in construction allow for quick and easy comparison of contractor proposals. Since everyone is quoting the same amount of work, differences in pricing are easy to spot. This gives the owner confidence that the proposal includes all the work shown on the documents and that they are getting the best price.
The bill of quantities is also used to clearly define the scope of work on a project. Since quantities and amounts are provided, there’s no room for misinterpretation and less chance of mathematical errors. This helps ensure that contractor pricing is accurate.
It also helps project owners with cost controls and cost predictions. Based on the project schedule and the breakdown provided on the BOQ, the owner can anticipate the amount of work that will be completed in each billing cycle. This enables them to prepare for their cash flow needs as the project progresses.
How to prepare a bill of quantities
Start preparing a bill of quantities by breaking the work down into items that can be quantified or measured. This breakdown is often based on standard work breakdown structures, like CSI codes. The breakdown works best when it’s organized by subcontractor packages, which makes it easier for general contractors to bid the work.
The list of work items includes a short description, the quantity, and the unit of measure. From there, the contractor prices the work listed on the bill of quantities, based on the drawings and specifications they have been provided. If an item is shown on the drawings and is missing from the bill of quantities, the contractor should bring this to the owner’s attention. A revised bill of quantities may need to be sent out.
Pricing is sent back to the owner by the general contractor for review, where their proposal is compared to other bidders.
Once a contract is signed, the bill of quantities can be used to create payment applications as the work progresses. The contractor notes the quantities completed each month on the form and multiplies it by the price for each item to get the invoice amount.
Although architects and engineers usually create the bill of quantities for a project, more companies are using BIM software to prepare their list of quantities. The software easily creates the list, and it can revise it quickly if the model is updated.
The bill of quantities helps create an even playing field
Using a bill of quantities in construction to estimate a project improves the accuracy of the proposals and ensures that all contractors are bidding the same work. This makes it easier for project owners to select a contractor because they don’t have to worry about comparing the scope of work.
The form can also be used as a progress payment application, making it easy for the owner to see progress on the project and anticipate their future cash flow needs.