How to Assess Building Contractor Quotations
You have invited three contractors to price your project and received three very different figures. The temptation is to pick the lowest. But a quotation is not just a price. It is a description of what the contractor intends to build, how and on what terms. Comparing quotations properly is one of the most valuable things an owner can do before signing.
1. Make sure everyone priced the same thing
Quotations can only be compared if they are based on the same information. Give every contractor the same drawings, specification and, ideally, the same bill of quantities prepared by a quantity surveyor. If contractors priced from different assumptions, your comparison is meaningless.
2. Look for itemisation
A single total on a letterhead tells you almost nothing. A professional quotation breaks the work into elements, for example:
- Preliminaries (site setup, supervision, insurance, temporary works)
- Substructure (excavation, foundations, ground slab)
- Frame and upper floors
- Walls and blockwork
- Roof
- Windows and doors
- Finishes
- Services installations
- External works
Itemisation lets you see where prices differ and ask why.
3. Check the specification behind the price
Large differences in price often come from different specifications: concrete mix, reinforcement sizes, block types and thicknesses, roofing material, and the grade of finishes. Ask each contractor to confirm the key specifications they have allowed for. A lower price built on lower specifications is not a saving; it is a different building.
4. Read the exclusions carefully
Exclusions are where costs hide. Common exclusions include approvals and professional fees, soil investigation, external works, electrical and plumbing fixtures, water and power for construction, and security. An item excluded from one quotation and included in another must be priced back in before you compare.
5. Understand provisional sums
Provisional sums are allowances for work that cannot be fully defined yet, such as hidden repairs in a renovation or fittings not yet selected. They are legitimate, but they are estimates. Check that provisional sums are realistic and consistent across quotations. Unusually small allowances can make a quotation look cheaper than it really is.
6. Check payment terms and validity
- Payment schedule: are payments tied to completed, inspected stages?
- Advance payment: how much is requested before work starts, and what is it for?
- Validity: how long is the price fixed, and how will material price changes be handled?
- Variations: how will changes be priced and approved?
7. Compare programme and resources
A credible quotation is accompanied by a realistic programme. An unusually short programme may mean the contractor has underestimated the work, or plans to cut corners. Ask how the programme accounts for the rainy season and material lead times.
8. Normalise, then compare
Create a simple comparison table with each element in rows and each contractor in columns. Add back exclusions, adjust provisional sums to a common basis, and note specification differences. Only then compare totals, alongside the contractor's evidence of experience, supervision approach and communication.
9. Ask questions
Where prices differ significantly, ask the contractor to explain. Good contractors can justify every line. If a contractor cannot explain their own price, consider what that means for how they will manage your project.
This article provides general guidance only. Regulations, procedures and prices change; confirm current requirements with the relevant authorities and qualified professionals before acting.
