Bill of quantities

A quantity surveyor measures the design drawings and breaks the work into items, grouped by trade or element. Each item has a description, unit and quantity. Tenderers enter a rate against each item, and the extended rates add up to the tender price.

Because everyone prices the same quantities, tenders are easy to compare and the rates can later be used to value variations. Measurement normally follows an agreed method so descriptions and units are consistent, in Australia commonly the Australian Standard Method of Measurement of Building Works published by the Australian Institute of Quantity Surveyors (AIQS).

A BoQ is usually organised in sections: preliminaries, then trades or elements such as earthworks, concrete, masonry, structural steel and finishes, then provisional sums and prime cost items. Some bills also include a schedule of rates for work that may or may not be required, such as rock excavation.

Australian practice differs from the UK, where full bills were long the norm on building projects. Here, private building work is mostly let as lump sum or design and construct, and full BoQs are less common.

• Lump sum contracts. If a BoQ is provided, it is often stated to be for information only. The contractor prices the drawings and specification and carries the risk of quantity errors.

• Schedule of rates or remeasure contracts. Common in civil, roads and government work. The BoQ quantities are estimates, the work is remeasured, and the contractor is paid the tendered rates for actual quantities. AS 4000-1997 and AS 2124-1992 both allow for a schedule of rates basis.

• Design and construct (D&C). The design is not complete at tender, so the principal cannot issue a meaningful BoQ. The contractor produces its own quantities and estimate.

Even without a formal BoQ, builders take off quantities for their own estimates, and many subcontract packages include a schedule of quantities or rates.

Under a BoQ approach, the client usually carries the risk that quantities are wrong, because payment follows actual measured work. Under a lump sum, the contractor carries that risk, and the price covers the work shown however much it turns out to be.

Check which way your contract works. A BoQ attached to a lump sum contract does not automatically make quantities a client risk.

The rates in a BoQ still matter on lump sum work. Many contracts use them, or a separate schedule of rates, to value variations, so rates that look harmless at tender can become expensive or uneconomic once changes start.

• Assuming the quantities are guaranteed. On a lump sum job, check the quantities yourself.

• Pricing items without reading the descriptions. The description defines what the rate covers, including labour, plant and waste.

• Loading rates unevenly. Front loading or loading items you expect to grow can be spotted in evaluation and challenged.

• Ignoring the preliminaries section. Site overheads priced in the wrong place distort variation valuations later.