BILL OF QUANTITIES
- Quantity surveying emerged as a separate profession in Britain in the 19th century. It
is simply a task of measuring construction work required to implement the architects'
design for new or renovated buildings. The purpose of the work is to produce quantified
specifications of works known as Bills of Quantities.
- The objectives of the Bill of Quantities are: (1) to provide sufficient information on
the quantities of Works to be performed to enable bids to be prepared efficiently and
accurately; and when a contract has been entered into, (2) to provide a priced Bill of
Quantities for use in the periodic valuation of works executed.
- In order to attain these objectives, works are itemized in the Bill of Quantities in
sufficient detail to distinguish between the
different classes of works, or between works of the same nature carried out in different
locations or in other circumstances which may
give rise to different considerations of cost. Consistent with these requirements, the
layout and content of the Bill of Quantities are required to be
as simple and brief as possible.
- The large data bank of information contained in the Bill of Quantities can be used in
many ways to help the post-contract control of a project.
- Bill of Quantities form a part of the contract in many countries. The World Bank and
FIDIC documents also include Bill of Quantities.
- In order to produce the Bill of Quantities, a detailed quantity survey or materials
takeoff has to be completed. The services are provided by a professional Quantity Surveyor
- A Quantity Surveyor is usually hired by the owner at the inception of a project. The QS
makes cost feasibility studies, establishes construction budget, makes cost checks at all
stages of the design process, and prepares a final Bill of Quantities. This Bill of
Quantities is included in the bidding documents of the project. The bidders use this
information, along with the construction drawings and specifications, as the basis for
their pricing of the work.
- The QS advises the owner on contractual arrangements and compiles certificates of
interim and final payment to the contractor doing the work.
- Based on their detailed knowledge of construction costs, the Quantity Surveyors can
provide design cost planning service that allows customers to decide on their total
budget, even before any design work is commissioned. Without cost planning, designs may
result in bids that are too expensive.
AN OVERVIEW OF BILLS OF
- The Bills of Quantities are usually indicated by items of work, units of measurement,
quantities of work, rate for doing the work, and total value of the work. An example is
||Description of item
||Unit of measurement
||Quantity of work
||Rate in US $
||Total amount in US $
||Reinforced cement concrete work in grade beams (attaining compressive
strength of 3,000 psi in 28 days) with the leanest permissible mix, 2:3:6 with 3/4"
down graded crushed stone as coarse aggregate and coarse sand with an FM not less than 2.7
as fine aggregate.
- Usually the contractor goes through the Bills of Quantities and would quote her/his rate
as a percentage above or below the rates indicated.
- Even though the QS employed by the owner provides a detailed estimate for the project,
sometimes the rates and total amount to do the works may not be shown in the Bills of
Quantities. In that case, the bidder provides the rates of the items at which she/he is
capable to do the works.
- Pricing of different items of work are done on the basis of the cost of materials,
equipment, labor, and overheads and profit.
- Materials: The materials costs are calculated by examining the material quotations
received from suppliers, applying appropriate wastage factors, and delivery charges.
- Equipment: Cost of equipment is calculated usually as a percentage of the cost of
materials. Depending on whether the equipment is owned or rented, this percentage will
- Labor: The most difficult element to price is the labor cost. Most of the times, it is
not sufficient to rely on published standard rates. Allowances for absences due to
sickness, loss of time due to inclement weather, overtime, etc. are required to be built
in to arrive at a pragmatic all-inclusive labor rate. Rate of productivity is another
factor that plays an important role in fixing labor prices.
- Overheads and profit: Once the cost of materials, equipment, and labor has been added
up, a percentage for overhead and profit is added to the item rate. This percentage may
vary from project to project depending on how well the document has been prepared by the
QS and also on market conditions. It may range from 2.5 to over 25 percent.
- Once the pricing of all individual items for all trades is completed, the amounts are
carried to a summary page to indicate the total bid price.
PREPARATION OF SCHEDULE FROM BILL OF
- A schedule of works may be prepared from the Bill of Quantities.
- Assume the total amount of labor envisaged to complete a certain item of work is
$240,000. The Bill of Quantities indicate that labor cost (including the cost of all types
of labor) per hour for the work is $240. In that case the total time required to complete
the work will be 1,000 hours. If we allow 40 hours per week, then total duration of the
work would be 25 weeks.
POST-CONTRACT USE OF BILL
- The Bill of Quantities virtually works as a data bank for the successful contractor. The
breakdown of materials, equipment, and labor prices may be in some cases manipulated to
get the maximum percentage profit from any changes instructed by the client.
- Assume that $40 was the accepted labor rate and 10 percent was the accepted overhead and
profit rate for an item of work. The materials cost was accepted to be $60. The total item
rate (assuming that there was no equipment cost involved), therefore, was $110
($40+$60+$10) per unit. Now if a change in material specification is ordered by the
client, and if cost of newly specified material is $80, then the item rate would be $132
($40+$80+$12) per unit.
- For large quantities of work, the materials suppliers may be willing to give a discount
once the project has been awarded. Often a discount of even 2 percent on material prices
can make a significant difference to the profitability of a contract.
- Profit margin can also be increased by providing incentive to the labor forces. Rate of
an item is usually based on the theoretical productivity of the trade workers. Assume that
an increase of 10 per cent on labor rates increases the productivity of labor by 20
percent. If an item of work requires 1,000 hours to be completed under normal
circumstances (and as envisaged in the contract), then with this increased rate of wages,
the duration of the work could be reduced to about 835 hours. Assume that the original
labor cost was envisaged to be $240,000 @$240 per hour. With an increase of 10 per cent,
the new labor cost would be $264 per hour, but the total labor cost would be reduced to $
SOME OTHER ADVANTAGES OF
THE USE OF BILL OF QUANTITIES
- Save the cost and time of several contractors measuring the same design in order to
calculate their bids for competition.
- Provide a consistent basis for competitive bids so that the contractor who is the most
efficient and least expensive in providing the items of work is likely to be commissioned
for the job.
- Provide an open basis for the contract; the client provides an extensive and clear
statement of the work he/she requires and the contractor states the price at which he/she
is prepared to undertake the job.
- Provide a very strong basis for financial administration of the contract.