Your Guide on How to Prepare Bill of Quantities in Construction
Creating a Bill of Quantities is a necessary component in the planning stage of a construction project, but knowing how to prepare one can be challenging.
Bill of quantities have standardized information even if they look slightly different.
This guide will go through the basic components of a Bill of Quantities and how to use it throughout the life of a construction project.
Table of Contents
- Flexbase: Streamlining AIA Billing and Construction Documents
- What Is the Purpose of a Bill of Quantities?
- How to Prepare Bill of Quantities in Construction: 6 Basic Steps
- When Are Bill of Quantities Prepared?
- Who Prepares a Bill of Quantities?
- Advantages of Using a Bill of Quantities
- Let Flexbase Relieve the Stress by Housing Your Construction Forms, Including a Bill of Quantities
Flexbase: Streamlining AIA Billing and Construction Documents
With Flexbase, you can:
- Automate paperwork such as AIA forms, lien waivers, insurance documents, and more.
- Send intelligent reminders and legal notices to your clients.
- Get paid faster and easily negotiate payment terms with your clients.
- Automatically submit paperwork mapping to your customer’s AP process.
- Integrate with construction ERP, project management software, and every accounting software.
- Borrow capital quickly by letting Flexbase use your payments data to give you the best rates from our lending partners.
With this level of data integration and organization, creating a Bill of Quantities has become even easier.
What Is the Purpose of a Bill of Quantities?
A Bill of Quantities (BoQ or BQ) is a document that lists the total materials required to complete a construction project that have been outlined in the tender documentation.
A BoQ allows you to compare several quotes in thorough detail before you hire a contractor. This also allows you to clearly define the scope of work in a project.
The quantities may be measured in:
Before a BoQ can be completed, the design must be complete, and specification has to be prepared. The BoQ is then given to tenderers so they can prepare a price for carrying out the work.
A Bill of Quantities is usually completed by a quality surveyor, a cost consultant, or a civil engineer whose expertise is estimating materials required for a project. Even if you don’t prepare the BoQ yourself, knowing what’s involved in preparing one will help you better prepare for tender negotiations.
How to Prepare Bill of Quantities in Construction: 6 Basic Steps
Step #1: Prepare a Spreadsheet
To begin, a spreadsheet can be prepared to collect the data you’ll need to create a Bill of Quantities.
Here are some categories that should be included as columns:
- Item numbers
- Unit measurement
- Unit price
- Total cost for the item
Be sure to label your item numbers consecutively, starting from 1. Restart the item numbers for each category or section of the build.
Something that is often found in a Bill of Quantities is a contingency sum. This refers to unforeseeable costs likely to be incurred during the contract.
There are two types of contingency sums:
- A contingency sum referring to a specific item - An example could be “additional alterations to services when installing said sink unit.”
- A contingency sum where money can be set aside for any item within the bill of quantities - An example of this can look very similar to the first: “additional work to be undertaken by the contractor at the request of the contract administrator.”
Step #2: Break Down the Work
First prepare a list of materials you’ll need to complete the project.
After looking at the architect’s plans, write a basic list of all the building materials and quantities of those materials needed.
Here’s a simple example.
If you’re building a house, some items you might include on your list of materials may be:
- Framing materials
- Flooring materials
- Lighting fixtures
- Bathroom and kitchen fixtures
Next, identify the unit of measurement for each of these materials. For example, if you have concrete on your list, your unit of measurement will be cubic meters (CUM).
Once you’ve got a list of materials, fill in the details on your spreadsheet.
For example, if you need concrete, you might list “RCC slab” for reinforced concrete slab next to item number one. In the unit of measurement, you will write “CUM” for cubic meters.
Since projects cannot always be economical and wasteless, you may want to add 15% to 20% to your material calculations to prepare for any waste during the project.
Why Is a Bill of Quantities Broken Down By Categories?
Different parts of your project are likely to be completed by different contractors or subcontractors. A Bill of Quantities is most useful to the contractor when they are separated into work sections that likely reflect subcontractor contracts.
You’ll increase your organization by splitting up your list of materials into sections that reflect different categories of work.
For example, you can break down the work into categories such as HVAC installations and fire protection systems.
Some materials may fall under more than one category. If you have both framing and flooring as categories, they both may need to use the same nails. Divide the overall number of nails you estimate needing for each section. You might want to allot 60% to framing and 40% to flooring, or whatever best suits your project.
Each section will have an itemized list and a subtotal. A subcontractor will be able to look at the total of that category and be able to quickly understand what their costs will be for the project.
Step #3: Estimate Labor
Here you will determine the number of man-hours it will take to finish each section of the project. The unit of measurement used will be man-hours.
This should be a conservative estimate.
People vary in how fast they work. A quantity surveyor can often estimate this based on their own experience with similar projects. But you can also talk to contractors to get an idea of how many man-hours it would take to finish each part.
Step #4: Make an Initial Cost Estimate
Now you can make an initial cost estimate.
To find local coverage prices for materials and labor in your area, you can:
- Check the local hardware stores to find prices.
- Speak with contractors in the area who work on similar projects to determine local labor costs.
Be sure to print off a separate copy of the Bill of Quantities for your initial cost estimate. This information is not usually included in the official BoQ. However, you can use it to compare bids from other contractors.
Step #5: Draft a Schedule
Using the labor cost estimates, you can determine how long it will take to complete the project. A best practice is to keep this schedule loose to account for things that could cause delays such as weather.
By adding in a buffer, you’re allowing yourself the flexibility you need to be able to complete the project on time.
Step #6: Continue Using the Bill of Quantities Throughout the Project
A BoQ can be used to create payment applications as the work continues. The contractor can keep track of the quantities used each month on the form, then multiply it by the price for each item to get the invoice amount.
This also makes it easy for the owner to see progress on the project and prepare for future cash flow needs.
When Are Bill of Quantities Prepared?
BoQs are prepared during the tendering process before the owner accepts a bid from a contractor. This is an important step in construction projects that allows you to compare different offers under equal terms.
Who Prepares a Bill of Quantities?
Bills of Quantity are often prepared by the cost consultant or quality surveyor. This role is often taken on by the engineering firm in charge of the design. Larger companies with their own engineering staff often create their own Bills of Quantity.
This allows the scope and quantity of work to be determined by a neutral party. This also means building contractors compete under equal conditions.
Advantages of Using a Bill of Quantities
Here are 9 major advantages of BoQs:
- It gives you the details of the work. The bidder is given a solid idea about the scope of the work required.
- It offers an opportunity to evaluate and compare each contractor on the basis of each item. This way, you get the best deal.
- A BoQ helps you to detect problems before the work starts. You can start searching for possible solutions as early as possible.
- It offers you the chance to better plan the project. The planning is the most important step that the BoQ can help with. In a BoQ, quantities are listed which allow you to arrange resources and set the duration of the project.
- A BoQ allows you advance time to find quality suppliers. Because you know the quantity, you have plenty of time to identify the suppliers and enter into negotiations. This will ultimately save you money on the overall project cost.
- A BoQ removes the guesswork. It provides exact information that can be crucial in planning out the lifecycle of the project.
- It is an efficient tool in project management. It can allow you to arrange materials within the proper time frame in order to complete the work on time.
- It can help reduce construction costs. You can be more efficient with your time and your materials with detailed planning upfront.
- A BoQ offers transparency. Every item of work and their quantity with the appropriate rate is listed. This greatly lessens the chances of corrupt practices.
Let Flexbase Relieve the Stress by Housing Your Construction Forms, Including a Bill of Quantities
FlexBase auto-generates contracts and forms and houses them all in one, easy-to-access place for record-keeping.
Flexbase can help organize your documentation and quickly create forms that take valuable time to complete individually.
Schedule a demo today and find out how we can ease your cash flow and give you valuable time back.