Your essential guide to producing a Bill of Quantities
A Bill of Quantities (BoQ / BQ) is a document prepared to allow the quantification and costing of construction works and may be prepared during several stages on a project for all of the works or a sample of the works.
Typically, BoQs are prepared at the outset of a construction project and generally prepared by the Employer’s QS. BoQs are prepared and issued out as part of the tender documentation and provide a solid pricing document inclusive of all specification references and supplier contract details provided by the design team for which the Contractor can assemble and build up the pricing submission.
It’s important to provide a document prepared in accordance with a defined standard and widely recognised methodology. This reduces the risk of any ambiguity omissions or misunderstandings and can assist in the avoidance of disputes. It also ensures all competitive tenders are pricing on the same basis.
Disputes can occur when there is a discrepancy between the priced BoQ and the tender documents. Where an item is shown on the documents but missing from the BoQ, this will generally be treated as a change, provided that the contract is with quantities. A without quants drawings and specification contract won’t give precedence to the BoQ in the event of any discrepancy and a BoQ may not even be produced for this contract.
The table below shows how a BoQ should be set out in accordance with SMM7 and NRM2. Note that SMM7 was replaced by NRM2 on 1st July 2013 and therefore NRM2 is the current industry standard. Previously SMM7 had adopted a common arrangement of works schedules in line with that used by the National Building Specification (NBS). However, the NRM prepares BoQ by working through group elements that are each further divided into sub elements. The group elements of NRM2 are more aligned to the BCIS elemental breakdown, thus allowing easier reconciliation with the clients’ elemental budget cost plan.
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Below is a typical example of how a brickwork BoQ may look like for a traditionally built masonry cavity wall. This type of BoQ may be issued with a Design and Build or without quants (drawings and specification) contract accompanying the Employer’s Requirements or the Drawings and Specifications. A BoQ issued under a Standard Building Contract with Quantities is likely to have all the relevant NBS details to each item noted and referred to within the BoQ.
The below Is a typical example of what a painting and decorating BoQ may look like. Typically painting is split into £/m2 and £/m rates. A £/m2 rate would be applicable to surfaces in excess of 300mm in girth, whereas a £/m would be used for items such as window reveals, door frames etc.
BoQs may not be created when contracting without Quants or under Design and Build. With these forms of contract, BoQs are discretionary but still advisable in some form or another. When Contracts place responsibility to submit a price or tender based on drawings and specification then there’s no contractual need for a BoQ. This is because the contract doesn’t recognise the basis of the priced offer to be the drawings and specification and not priced BoQ. In most cases a drawings and specification contract may still utilise a BoQ for provided and priced document, but this document for valuation purposes within the contract’s monthly payment cycles.
BoQs may also not be created for complex works that are specialist in nature. This is because this type of work may not lend itself to a standardised method of measurement and may be subject to a quote and acceptance principle. Likewise, smaller works may not be subject to a BoQ preparation as works of little comparable value will more than likely be priced on a labour plant and materials basis or dayworks as the work involved isn’t of the required scale to attribute a competitive rates towards it.
Does a BoQ need to be created in line with NRM2?
A BoQ need not be created in line with the stringent requirements of SMM7 or NRM2. A BoQ may not even be created on a project for any number of reasons. The Employer may wish to go out to tender based on a schedule of activities pricing document, whereby the works items are quantified holistically and lump sum corresponding rates are applied to the descriptions.
If a BoQ is not created or any form of pricing document not issued within the contract, and the contract sum is simply a lump sum for the works, then it would be the responsibility of the Employer’s consultants to value the progress of the works fair and reasonably against the contract sum. In reality, very few contracts would ever be awarded with no pricing information other than the contract sum as this would make analysing any tenders very difficult. It would also present a risk of initial valuations being loaded up with monies and the QS or Contract Administrator having to make an assessment with little back up to work from, other than perhaps and initial cost plan.
No BoQ would also present challenges when valuing changes as there would be no contract rates, so a fair and reasonable assessment based on similar works would be required. Where the PQS has an assessment of similar works from another contract, these rates may not be representative of the rates the main contractor is engaging the supply chain on, leaving both parties susceptible to risk of over or under payment. It is in both the Contractor’s and the Employer’s best interest to have some form of BoQ or pricing document prepared for the contract.
Design and Build Contracts
Under Design and Build Contracts, a main contractor would be responsible for carrying out detailed design. In some cases this might be during the process of the works and as the design is not complete prior to entering a contract, the production of a BoQ would be difficult, especially from the clients side of the table.
Under Design and Build, a tendering Contractor may appoint a BoQ preparation company and liaise with them to put together a BoQ based on the information provided at tender. This will largely follow NRM2 but where specification or design is missing, the tendering Contractor will need to plug items or make due allowance. Under a Design and Build Contract the BoQ has no bearing within the contract, unless the BoQ is included as the Contract Sum Analysis or appended within the Contract. Any errors contained herein are at the risk of the contractor.
Standard Building Contracts
Under the Standard and Intermediate Build Contracts with Quantities, the Employer will provide as part of the tender process a Bill of Quantities for pricing purposes. This should be measured in accordance with the New Rules of Measurement 2. As the Employer has provided this, any omission or discrepancy with regards to the drawings or specification will be at the Employer’s Risk. As BoQ’s can run into hundreds of pages of detail, these can also be condensed down into a priced activity schedule that will equate to the contract sum and be used for valuation purposes.
Conversely, with the Standard and Intermediate Build Contracts without Quantities, a BoQ is not produced by the Employer as a contract document. This is not to say that a BoQ isn’t produced, it just isn’t the basis for tendering. The Standard Building Contractor without Quantities is drawings and specification lump sum contract. The pricing document only needs to exist as a method to assist drawdown for applications. Any errors or items missing from it will be deemed included within the works so long as they are either noted on the contract drawings or within the contract specification.
How does it work with Subcontractors?
A Main Contractor may appoint a subcontract package based on a BoQ. The Main Contractor may be under contract on a drawings and specification basis. If this is the case and the main and subcontracts were not back to back, any gaps in the BoQ that were covered by the drawings and specification would be at the risk of the Main Contractor. This is because the Sub Contractor would have priced the works based on the BoQ prepared by the Main Contractor and not the Drawings and Specification.
Final Takeaway thoughts…
To conclude a BoQ document should always be prepared by the clients QS as a minimum, and where a schedule of works or Contract Sum Analysis is provided, it is advisable for the Contractor to prepare their own BoQ to ensure all works are covered off.
Regardless of whether a Contract is awarded on the basis of drawings and specification, design and build or a contract with quantities, Contracts should always contain contract rates. This provides a basis to value any likely changes and also assist with valuing the works moving forward.
Careful consideration should also be given to the risk allocation of with or without quantities contracts. If the contract is with quantities, the BoQ as prepared by the Employer takes precedence over the drawings and specification. Any missing items from the BoQ are dealt with as a change and therefore a client risk. Conversely, where the contract is drawings and specification and there are items missing from the pricing document, as long as these items are covered within the drawings and specification, these would be deemed to be included within the contract lump sum and therefore are at the risk of the Contractor.
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