Procurement & Tendering

A bill of quantities (BoQ) is a document listing the measured quantities of each item of work, such as cubic metres of concrete, so every tenderer prices the same quantities. In Australia a quantity surveyor prepares it, and it is more common in civil and government work than in private building.

A commitment in construction cost management is a cost the project has contractually agreed to pay, such as a subcontract, purchase order or hire agreement, whether or not the work has been done or invoiced yet. Tracking commitments against budget shows how much of each cost code is already locked in.

Design and construct (D&C) is a delivery method where one contractor is responsible for both designing and building the project under a single contract with the principal. The principal provides a brief or concept design, and the contractor develops the design, engages the consultants and carries the design risk.

An expression of interest (EOI) is a short, non-binding response showing that a company wants to be considered for an opportunity. In construction, an EOI is usually the first stage of a tender: builders or subcontractors submit capability, experience and capacity so the client can shortlist who receives the full request for tender.

A letter of intent (LOI) is a letter from a client to its preferred tenderer stating that it intends to award the contract, often authorising limited work to start before the formal contract is signed. Depending on its wording, an LOI can be non-binding or can create a binding interim contract.

A lump sum contract is a construction contract where the contractor agrees to complete a defined scope of work for a single fixed price. The price only changes through mechanisms the contract allows, such as variations, provisional sum adjustments or latent conditions, so the contractor carries the risk of its own costs.

Preliminaries are the costs of running and supporting a construction site that are not part of any single trade, such as site supervision, site sheds, cranes, scaffolding, temporary services, insurances and fencing. In Australia they are priced as a separate section of the tender, often split into fixed and time-related costs.

Prequalification is the process of checking a contractor's or subcontractor's capability, financial capacity, safety and quality systems, licences and insurances before inviting them to tender. In Australia, head contractors prequalify subcontractors for their approved lists, and governments run prequalification schemes for public construction work.

An RFQ (request for quotation) is a request sent to suppliers or subcontractors asking for a price for a clearly defined scope of work or materials. In Australian construction, RFQs are used for smaller or simpler packages where price is the main deciding factor and a full tender process is not justified.

An RFT (request for tender) is a formal invitation for contractors or subcontractors to submit a priced, conforming offer to carry out defined construction work. It includes the drawings, specifications, scope of works, contract conditions and tender rules, and tenders are evaluated on price and non-price criteria.

A scope of works is the document that defines exactly what work a contractor or subcontractor must carry out, including inclusions, exclusions, standards, interfaces and deliverables. In Australian construction it forms part of the tender and contract documents and sets the baseline for pricing and for assessing variations.

Value engineering is a structured review of a design to achieve the required function at lower cost, or better value for the same cost, without reducing quality, safety or performance. In Australian construction it usually happens during design or tendering, when contractors propose alternative materials, systems or methods.