Estimations/Quotations

Quotations are costed by way of investing ample time and detail to provide a very accurate, clear, and almost perfect summary of the costs.

Quotations are costed by way of investing ample time and detail to provide a very accurate, clear, and almost perfect summary of the costs.

You have probably not seen many a quotation with a very accurate, clear, and almost perfect summary of the costs, in your life and the reason is because they are mostly provided for free! The benefits of an accurate (paid for) estimation, that changes into the final, detailed quotation for your project, firstly takes time, a lot of time! To give you an idea, we’ve worked for a solid 8-hour day and one full week on some larger quotations in the past, so it a lot of work. When it is done by a QS or Estimator, the benefits it holds is of such importance, that I can’t emphasise it enough to clients!!! Therefore, this article will be an invaluable read, though long, to help clients see the importance of a comprehensive quotation, before kicking off their project and it should shed much needed light on the subject! Know this, it will pay you back in hard cash, and I am not talking cents, if you respect this step!

(A side note: QS/Estimators can belong to the QS Institute, like we do, that provides them with a support system, sharing legislation and ongoing changes, they can apply in their client’s projects, including a portfolio of usable documents, tools and other benefits that influences the clients project positively and helps the contractor to act professionally and render a top service. Very much the same as belonging to the MB Association or Site Safe, they just all offer different benefits for the different needs. We are in a very beneficial position where we are qualified builders, project managers and estimators, which you
don’t always find in one company/person, topping it off with a world of experience, in fact 50 years combined)!

While discussing the negatives around a simple, free (watered-down) quotation, mostly just being a thumb-suck, based on some experience and some outdated material prices and a few minutes spent, calculating or head-counting some labour prices, most contractors arrive at their price to charge and pray it will suffice. Its only Estimators or QS’s that will truly know if it suffices. It’s as shocking, as it’s scary, to know how this is done and to make it worse, everyone accepts it as the standard of quoting!
IT IS NOT!!! It is risky, it’s a very bad platform to kick-off a new project on and it presents in no-way, even a semi-good pricing structure! This causes last minute decision making, for instance, such as running across the road to purchase materials close-by, because the contractor is now out of time or rhythm with other work on the project! You will never have an accurate outcome of costs during a project! Only in the end, you will know the actual cost when adding it all up. Not even a fixed price contract will suffice, if costing isn’t done accurately from the start and as said, that can be done by using actual material
costs and presenting the detail! It probably will derail your project, as one issue leads to the next and could even put you legally at risk, guaranteeing missed deadlines, and although your contractor may hold a good pose, your project will probably be upside down most of the time and that WILL influence quality of the works in the end. Should you be so lucky, that the contractor can keep the ball in the air during the project, the negatives can only reflect in the build, later-on. You may argue it’s not your problem during the build and you may not see this in the everyday doings, but it is happening under your nose, while you calmly think it’s all under control and accepting it as the standard way to build, which it is not! It does all sound like a summary of full blown, over-reaction from my end, but believe me, that is probably how 90% contractors work on an ongoing basis, sadly due to a lack of time to quote or a lack of knowledge how to quote “better!”

After understanding that paying for a good quotation, checking, and discussing the details thereof and allowing the needed time to plan the project, before physically starting, is important, I can also mention that other factors is just as important for a great outcome, but still, they will mainly be determined by the quotation and add on documents offered. That badly presented quotation influences all factors of a project, not only timewise, but on all levels, even your own personal time and stress levels is compromised, never-mind the extra costs! “Bad” quotations also lead to “bad” planning and a “bad” end-product! The “bad” may not show during the project as much, or even directly after, but it will come in time and your paper guarantee may not save the situation and even if it does, the client is usually at the worst end of it, so making sure it goes well from the start is of utmost importance, then the rest of the build should too!

On the positive side, I would love for you to read and understand all the good of knowing your contractor has spent a good amount of time in financially planning for your project, costing it, (hence planning out all materials to be used and stock checks, etc.) and have set time frames based on the aforementioned. It’s the only way he can guarantee that an actual fixed pricing contract can stand its ground! Yes, there is loopholes in any contract, so in my opinion all that a fixed pricing contract is, is a document the contractor sees as something he needs to try and work a bit more carefully within not to blow the budget and when he does, he might just state that it was out of his control, especially where it comes to a residential contract. Yes, you can argue that it’s fixed and not pay based on the fixed agreement, but that will put you at risk as the contractor will in 90% cases decide to start working in cheaper ways, just walk away, go bankrupt in more serious situations or if you lucky and which happens mostly I must say, just put your project last in the queue, as the contractor now needs to make profit elsewhere, to complete your project (and that is, if the contractor is decent and willing to lose the profit, but some just aren’t, so don’t expect this outcome! It is also possible that he will merely find a way to bill you at the other end
of the contract. With a “good” quotation however, this is not possible, as the finest detail and pricing is shared within it, thus avoiding the problem from even ever arising and avoiding legal issues and misunderstandings because details is missing/unclear!

A practical point to make would be, as you are in the same way paying for your Drawings, your Council Approval, and even paying for your Mortgage Broker’s Service, if there is one thing you’d rather want to pay for, is the time spent on a more advanced, detailed provision of a very accurate price, ensuring that what you are informed the physical project will cost, is what it will actually cost you. It could mean a saving of thousands and even tens-of-thousands, in some projects!

For interest’s sake, an accurate quotation also involves the knowledge that comes with studying and understanding each component of labour, material, and other related expenses to calculate the cost of a project to its finest detail. Most builders can’t do this, they are practical, problem solvers mostly and as said, it takes time, lots of it and won’t happen for most after a long day on site! It also requires many years of experience and an intelligent, non-tired brain to break it all down into spreadsheets of detailed information, entered in a pricing system, build up over years, and needing constant updating, with well
set formulas and rules applied to it. The few years of study behind you and the in-depth knowledge of what you are doing (from the study knowledge) and experience from various types of projects, that could include residential, commercial or even government projects, (that is also structured in many different types of contract types) , is what you all need, to offer the best to your client and in that sense, we are the full package. It’s also very much a legal field and knowing how to navigate in its rules taking all aspects into consideration of a build, most legal issues can be avoided by providing accurate costing,
hence it’s importance!!!

It’s mind blowing when someone working in the industry for two decades, tells you they have never seen some costs broken up to such a degree and did not know that certain expenses even existed, because that’s when you realise it’s a specialised field with many rules, systems, structures and more and it asks for an in-depth study of everything you do! The big question therefore is, who would do/consider all this in a project and not get paid for it? (Yes, there are ways to make up for the time spent hiding it in the project’s works, as most constructors do, but that also comes with a price-tag for the client, as such a thumb-suck could see the actual cost to be added-on, doubling, even tripling the calculated cost). Isn’t it then just fairer to charge for the actual costing done, so the client can see the quotation time spent, the heart of wanting to be honest in the quotation and the cost of the components and the tasks it involved to arrive to this accurate costing, that would include requesting material quotes for each individual item, etc., mostly for us from different suppliers, so we can get the client the best price in the end! I could easily
arrive at obtaining 60 other quotations, if I need only to purchase 20 items for a project, which isn’t much for a $100 000 project for instance. Can you see the work in this? With an accurate quotation all the correct materials are sourced beforehand, as they need to be priced to the cent, this means your contractor will make sure there is sufficient stock, and that pricing is secured by way of arrangement or deposit on the items. Many other questions are asked while sourcing, that is very beneficial to the project, to exclude future issues and leaves maximum time to sort any problems or arrange alternatives where needed, if something then does go wrong. This in turn also saves immense time on the actual build itself and things just move forward so much faster and smoother. It will otherwise, always keep you on budget and in control of matters too, because an accurate quotation with costed details, will give you the needed foot to stand on, not only legally, but to understand and enquire things when you need or want too from the basis of the details provided within the quotation, hence you will not to be left in the dark. It is honestly a risky business to rely on a free quotation, as you will pay for it in many ways, perhaps only later-on and is no way to protect yourself or the final-outcome.

Author:

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Angie

Angie has been in construction for 25 years, with a 5-year break where she worked as a Property Manager, gaining valuable insight into property maintenance. She excels as the Office Manager for Retro Construction and currently serves as their Project Coordinator and Office Manager. Her highest qualification is in the legal field, in which she worked for the first 7 years of her career. Since schooldays, being in a technical school, she knew her forte would be construction. She also has 4 years of business qualifications to support her role.

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