Tender analysis: how to compare priced BOQs like for like
The lowest total is where tender analysis starts, not where it ends. A priced bill shows how each tenderer has understood the job, where they have taken a risk and where they may have made a mistake. Reading it properly protects the client and the contractor alike.
By the Caprix AI team · · 8 min read
Key takeaways
- Check the arithmetic first. Errors in extensions and totals are common and change the ranking.
- Compare section by section and rate by rate, not only total against total.
- A rate far from the others is a question to ask, not a conclusion to draw.
- Front loading and unbalanced rates move money without changing the total, and they shift risk to the employer.
- To benchmark against past projects, adjust for time, location and scope first.
Step 1: check that the tenders are complete and comparable
- Compliance. Is the tender on the documents as issued, with every addendum acknowledged?
- Qualifications. Has the tenderer excluded anything, or attached conditions that change the offer? Price them or have them withdrawn.
- Unpriced items. A blank is not a zero. Establish whether the cost is included elsewhere.
- Alterations. Has anyone changed a quantity or a description in the bill?
Until tenders are on the same basis, their totals cannot be ranked.
Step 2: check the arithmetic
Recalculate every extension (quantity multiplied by rate), every page total, every collection and the summary. Compare the checked total with the figure on the form of tender.
What happens when they differ depends on the tender conditions, which usually say whether the rates or the total govern and how an error is to be dealt with. Follow those rules exactly and apply them to every tenderer in the same way.
Step 3: compare by section, then by rate
Set the tenders side by side with your own pre-tender estimate. Work from the top down.
| Level | What to look for |
|---|---|
| Summary | The spread between tenders. A tight group suggests a well understood job. One far below the rest needs explaining. |
| Preliminaries | Large differences often reflect different assumptions about programme, plant or site set-up. |
| Each bill or trade | Sections where one tenderer is well above or below the others. |
| Major items | The items that make up most of the value. A small number of them usually explains most of the gap. |
| Sums | Prime cost and provisional sums should be identical across tenders. Check that they are. |
For the major items, compare each rate with the average or median of the tenders and with your estimate. Flag the outliers. A rate that is half the others may be an error, a different reading of the description, a keen subcontract quotation, or a deliberate choice. Only the tenderer can say which, so ask.
Step 4: look for unbalanced pricing
Front loading
High rates on work done early, such as preliminaries, excavation and substructure, and low rates on later work. The total is unchanged, but the contractor is paid ahead of the value of the work, and the employer is exposed if the contractor fails.
Rates loaded where quantities may grow
A high rate on an item the tenderer expects to increase, and a low rate on one expected to reduce. If the quantities are remeasured or varied, the final account rises.
Abnormally low rates
A rate that cannot cover the cost of the work. It may win the tender and then become a source of claims, poor quality or default.
Loaded dayworks and percentages
Small numbers at tender that apply to large sums later. Check them against the likely volume of use.
None of these is necessarily improper. The task is to identify them, understand the reason and tell the client what the risk is.
Step 5: benchmark against the market
The tenders tell you how the bidders compare with each other. They do not tell you whether all of them are high. For that you need a reference outside the tender: your estimate, current market rates for the main items, and the cost of similar completed projects.
Past projects have to be made comparable before they are any use:
- Time. Bring each project to the tender date using a tender price index.
- Location. Adjust for the state the project was built in.
- Size and scope. Compare on cost per m² of gross floor area, element by element, and note what each project included.
- Specification. A difference in quality is a reason for a gap, not an error in it.
A gap that survives all four adjustments is real. One that disappears was only geography and timing.
Step 6: write the report
- The tenders received, and any that were late or non-compliant.
- The arithmetic checks and how errors were dealt with under the tender conditions.
- A comparison of the tenders with each other and with the estimate, by section.
- The significant rates queried and the tenderers' answers.
- Qualifications, and their effect on price and risk.
- A clear recommendation, with its reasons and any conditions.
The recommendation is the surveyor's professional opinion. The lowest compliant tender is often the right answer, but the report should show that it was examined and not merely selected.
Doing the comparison in Caprix AI
In the BOQ Builder, Review checks a bill for missing units, duplicated descriptions, unit mismatches and suspicious quantities or rates. Compare takes two to five saved projects, puts them on a common footing by adjusting in time with the tender price index and across states with the regional cost index, tells you which adjustments it applied, and explains the differences line by line. It starts at 10 credits for two projects. The judgement on what the differences mean, and the recommendation, remain yours.