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This post was last edited by Hasty Passer on 2018-12-24 at 13:46. Summary of Q&A regarding bill of quantities pricing and common quotation handling. What is a bill of quantities? The bill of quantities is a detailed list showing the names and corresponding quantities of the constituent items, measure items, and other items of the proposed construction project. A complete bill of quantities consists of the following sections: Cover ； Instructions for Filling out the Form ； General Instructions ； Itemized bill of quantities for sub-projects ； List of measure items ； List of other projects ； List of sporadic work projects. If there are materials supplied by Party A, a list of such materials and their price list must also be provided. For details, see the appendices of the \"Code for Quantitative Pricing of Construction Projects\". 2. How is the project code set? The project code is represented by twelve Arabic numerals. Digits 1 to 9 form a unified code: digits 1 and 2 are the appendix sequence numbers, digits 3 and 4 are the professional project sequence numbers, digits 5 and 6 are the sub-project sequence numbers, digits 7, 8, and 9 are the sequence numbers for the names of individual project items, while digits 10 to 12 are the sequence numbers for the names of items in the list. The first nine must be selected strictly in accordance with the pricing specifications of the bill of quantities, while the last three are arranged in order by the bill of quantities preparer based on the circumstances. 3. What is the comprehensive unit price? The comprehensive unit price represents the labor costs, material costs, machinery usage fees, management fees, and profit required to complete one unit of measurement specified in the bill of quantities, taking into account risk factors. The process of calculating the comprehensive unit price generally involves examining the descriptive details in the bill of quantities. Based on the bidder’s own corporate pricing standards (or, if such standards are not available, using the consumption quotas issued by the local cost management authorities), corresponding pricing items are determined for each item listed in the bill of quantities – there may be one or multiple such items. The volume of work is then calculated, and using the corporate pricing standards, an estimate is made that includes labor costs, material costs, machinery usage costs, administrative expenses, and profits (including factors related to risk). From this, the comprehensive unit price is determined. 4. What are measure items? Measure items refer to non-physical project elements related to technology, daily life, safety, etc., that arise before and during the construction of a project in order to complete its construction. For this section of the bid, entries can be added or removed according to the specific circumstances of the enterprise; the bid will not be rejected merely because the number of measures listed has been increased or decreased during the evaluation process. 5. What is a reserve fund? The reserve fund is an amount set aside by the tenderer for possible changes in the volume of work. This fee shall be included in the employer’s costs listed under other items; bidders cannot change the amount of this fee when submitting their quotes, otherwise it will be considered a rejected bid. 6. What is the general contracting service fee? The general contracting service fee refers to the expenses required to coordinate and facilitate the contract awardee’s subcontracting of works and procurement of materials. This does not include the work that the bidder will subcontract on their own after winning the bid. If, after winning the bid, the bidder agrees to subcontract certain tasks on its own, the costs associated with such cooperation shall be borne by the bidder itself. 7. What is the cost for miscellaneous minor works? The fee for miscellaneous work items covers the costs required to carry out the miscellaneous tasks specified by the tenderer, for which the volume of work is estimated preliminarily. This portion of the cost is generally included in the bidder’s costs under other item lists. 8. What is the consumption quota? The standard consumption quota is established by the construction administration department, based on a reasonable construction plan and under normal working conditions, as the average social consumption of labor, materials, and machine hours required to produce one unit of qualified product. Due to the implementation of fixed-amount pricing in our country for many years, with these rates being issued uniformly by the cost management department, all regions have relatively well-developed standards for material consumption. Due to the vast size of our country, the classification and content of the consumption quota sub-items vary greatly from region to region, so careful analysis is required when making a choice. Construction companies can develop their own corporate standards based on the local consumption quotas. 9. What are enterprise quotas? Enterprise quotas are the amounts of labor, materials, and machine hours required, established by construction companies based on their own construction techniques and management capabilities, as well as relevant data on project costs, for use within those companies. At present, due to the implementation of fixed-amount pricing in our country for many years, with these fixed amounts being issued uniformly by the cost management department, most enterprises do not have their own internal fixed-amount standards. In the absence of enterprise-specific quotas, cocoa producers may refer to the consumption quotas issued by local cost management authorities to modify or substitute these for their own enterprise quotas; such enterprise quotas can then be further refined during the actual process of bill of quantities-based bidding. The parts in bold are excerpted from the \"Specifications for Quantity Surveying and Pricing in Construction Projects\" – Questions and Answers on Quantity Surveying Pricing (2). 1. What contents should be included in the general description of the quantity list? What issues should be noted? The general description in the bill of quantities should include the following: 1) Project overview: construction scale, project characteristics, planned duration, actual conditions at the construction site, transportation conditions, natural and geographical conditions, environmental protection requirements, etc. 2) Scope of project bidding and subcontracting. 3) Basis for preparing the bill of quantities. 4) Special requirements regarding project quality, materials, construction, etc. 5) The name, specifications, model, quantity, etc. of the materials to be purchased by the tenderer itself. 6) Amount and quantity of reserve funds and materials purchased independently. 7) Other issues that need to be explained. 1) When writing the general description, pay attention to describing the scope of the project clearly. Many people who prepare lists do not pay attention to the descriptions of the project scale and characteristics in the general instructions. Since the list of measure items stipulates in the specifications that many costs are calculated on a \"item\" basis, if no specific details are provided in the general instructions, how can bidders accurately calculate such costs and submit quotes? It should be noted here that the implementation of the “Code for Pricing of Bill of Quantities in Construction Projects” is aimed at aligning with the international construction bidding market. Therefore, in the near future, construction drawings will no longer be provided to bidders along with the tender documents. So, just imagine: without accurate descriptions and in the absence of construction drawings, how can bidders determine the construction plan and subsequently calculate the costs associated with various measures, such as scaffolding erection and vertical transportation equipment? Therefore, the technical parameters such as the structural type, floor area, total length, total width, total height, number of floors, and the height of each floor should be specified in the section on construction scale within the general description, rather than being covered simply by stating that the floor area is XXX square meters. 2) In project tenders, if there are elements such as direct subcontracting by the client, these should be specified so that bidders can estimate the general contracting service fee. 3) If special materials or construction techniques are required in the engineering design, these should also be clearly described so that bidders can calculate the comprehensive unit price for the relevant line items. 4) If the tenderer intends to provide certain materials itself, a schedule should be attached detailing the types, specifications, brands, and prices of such materials, so that bidders can calculate the comprehensive unit price for the relevant line items. 5) If there are any modifications to the design drawings or deviations from the standard procedures in the preparation of the schedule, these should also be specified, so that bidders can calculate the comprehensive unit price for the relevant schedule items. 2. What issues should be considered when preparing a bill of quantities? During the preparation of the bill of quantities, the following points should be noted: 1) The list items must be classified strictly in accordance with the relevant appendices in the “Code for Pricing of Bill of Quantities in Construction Projects”, and the list codes must be standardized. 2) When components of the same type have an impact on the comprehensive unit price or related cost measures due to different characteristics, separate line items should be created, with each characteristic described individually, and they should be distinguished by the last three digits of the item code. If, in a certain floor of a building, there are concrete columns of 400*400 and 500*500 sizes, separate line items need to be listed so that bidders can calculate the formwork costs for each type of column. Similarly, in a certain building, for concrete columns with a 400*400 cross-section, the designed concrete strength grades at different locations are C25 and C30 respectively. Separate list items must be created for these; this allows bidders to submit separate quotes for columns with different concrete strength grades. 3) The characteristic descriptions for each list item should be as detailed as possible to enable bidders to accurately calculate the comprehensive unit price. 4) The terms used for describing features should be standardized. The measurement of the work volume should also be as accurate as possible. 5) For some items in the list, the \"Code for Quantity Calculation and Pricing of Construction Projects\" provides several alternative units; when preparing the list, one of these should be selected instead of listing them all. In the bathroom project list prepared by a certain unit for Yangzhou Vocational College of Industry, this situation occurred several times; no specific unit was selected in each case, and all the units specified in the standards were listed. Such an approach can, first, prevent bidders from determining the appropriate measurement units for the quantities specified in the list, thereby preventing them from submitting quotes; second, it can lead to claim disputes during the project execution phase due to differences in understanding of these measurement units. Therefore, I made corrections during the bid evaluation. In short, a good bill of quantities allows the bidding party, once it has obtained the drawings, to accurately calculate the costs associated with the work without needing to refer to the drawings, and to prepare a construction organization plan as well. Q&A on Bill of Quantities Pricing (3) 3. How should bidders calculate the comprehensive unit price? Bidders shall submit their quotes based on the bill of quantities provided by the tenderer. When calculating the comprehensive unit price, it is necessary to refer to the characteristics specified in the bill of quantities, and in accordance with the company’s own enterprise norms (or local norms), define pricing sub-items corresponding to each item in the bill of quantities. The actual quantities of work must then be calculated. Subsequently, the applicable norms are applied, along with the unit prices for labor, materials, and machinery, to determine the overhead costs, profit, and risk premiums considered in the company’s bid. This process ultimately yields the comprehensive unit price and the overall bid price. The common methods for calculating the comprehensive unit price are the direct method and the reverse method. The so-called direct calculation method involves using one of the units of measurement listed in a bill of quantities as a basis; after calculating the quantifiable volume of work, the comprehensive unit price for that item in the bill of quantities is determined as described above. The regional content quotas in the bill of quantities compiled by many regions are based on this method. The so-called reverse calculation method involves using the details and characteristics of each item in the bill of quantities to determine the total volume of work covered by that bill. Then, the enterprise’s quota (or local quota) is applied to calculate the comprehensive price for that item; this value is subsequently divided by the volume of work specified in the bill, thereby determining the unit price. This method is quite common in practical applications. The pricing items corresponding to this list are: 1) Excavation of foundation trenches (with the price including labor, materials, machinery, overheads, and profit set at 20 yuan per cubic meter), 2) Transportation of soil within the site (with the price including labor, materials, machinery, overheads, and profit set at 10 yuan per cubic meter). It can also be seen from the diagram that for each cubic meter of work under this list item, the length of the actual foundation trench is 1 meter; whereas for this list item in particular, the length of the foundation trench is 100 meters. Using the standard calculation method, the volume for each of the two pricing sub-items corresponding to one cubic meter of the listed work amount to: 1 * (1 + 0.6 for the working surface) * 1 = 1.6 cubic meters. For the foundation digging associated with each cubic meter of work listed in the schedule, the cost is 1.6*20=32 yuan; the cost for transporting soil within the site is 1.6*10=16 yuan. Thus, the comprehensive unit price for this item is 32+16=48 yuan per cubic meter. Using reverse calculation, the volume of work for both pricing sub-items related to this item is 100*(1+0.6) * 1 = 160 cubic meters, assuming that formwork is required for the base layer. For the foundation digging work specified in this item of the list, the cost is 160*20=3200 yuan; the cost for transporting the soil within the site is 160*10=1600 yuan. Thus, the total cost for this item is 3200+1600=4800 yuan. The unit price for this item is therefore 4800/100=48 yuan. 4. How should bidders summarize their quoted prices? After all bidders have calculated the comprehensive unit prices and overall quotes for the entire bill of quantities, the figures should be summarized by unit project, individual project, and overall project. If a project consists of two building units, namely Building 1 and Building 2, each building unit is further divided into two specialties: civil engineering and installation. Then, the civil works and installation for each building should be treated as separate unit projects, with their costs aggregated accordingly. Each building is summarized as a separate project, and then these are combined to determine the total project cost. When compiling the summary table for individual construction projects, be sure not to change the rates for fees and taxes; otherwise, the submission will be rejected! 5. Can bidders modify the quantities listed in the bill of quantities? What should be done if the quantity for certain items in the bill of quantities is 0? Bidders cannot change the quantities listed in the bill of quantities; otherwise, their bids will be rejected. When reviewing the quantities according to the drawings and finding errors in certain quantities listed in the bill of quantities, clarification should be requested from the tenderer, and action should be taken only after such clarification is obtained. Unbalanced bidding can also be used. Even when the quantity of work is zero, the unit price should still be filled in. Because for list items with a workload of zero like this, no matter what unit price you enter, it won’t affect the overall total cost, since the workload is already zero. However, to prevent issues arising from changes during construction related to these items with zero workload, I suggest setting the unit price for such items at a relatively high level. This way, in the event that work related to these items needs to be carried out due to some change, the price listed for them in your schedule can be utilized accordingly Don’t miss such a great opportunity. If, during construction, the quantity of work for an item on this list changes due to some modifications, and the unit price cannot be determined, it will be too late to regret it at that point. Q&A on Bill of Quantities Pricing (4) 6. Why are there different comprehensive unit prices for the same bill of quantities item? For the same list item, with identical feature descriptions and quantities, different bidders may use different construction methods, which can result in varying priced quantities and pricing sub-items ； Different bidders offer different prices for purchasing construction materials, and companies also have varying levels of material consumption ； Different bidders require different management fees ； Different bidders have varying expectations regarding the profit margin on the project. These are different, and they all result in different bidders submitting varying quotes for the same list item. As in the example above, if formwork is not used for the cushion layer, the volume of work required for digging the foundation trench and transporting soil becomes 100*(1.4*0.9+1*0.1) = 136 cubic meters, which is quite different from the result obtained under the construction plan that requires formwork for the cushion layer. 7. Two rooms that are being renovated on the same floor, using the same construction methods and with similar descriptions, but having different item codes – can the quotes for these two items be different? According to the \"Code for Valuation of Construction Projects based on Bill of Quantities\", it can be completely different. You can report it however you like, as long as it’s not too absurd. Because in different rooms, the construction methods that may need to be used can be the same, yet the level of difficulty determined by the overall decoration effect can vary greatly. 8. When submitting bids through a list bidding system, if the bidder reduces fees such as management fees significantly in order to win the bid, can they charge fees according to the rates specified in the construction company’s fee structure at the time of settlement? No. In bidding based on a bill of quantities, if there is an existing entry in the bill for the change in quantity, the comprehensive unit price from the original bid shall be applied. For items with similar entries in the list, the comprehensive unit price of the similar entries shall be referred to; for newly added list items, the pricing shall be agreed upon by the owner and the contractor. Generally, pricing is determined by referring to the local consumption quotas, in accordance with the terms specified in the contractor’s original quotation. Except as stipulated in the contract regarding adjustment methods (such as when changes in the volume of work exceed a certain threshold, the comprehensive unit price is adjusted according to a specific coefficient), Q&A on list-based pricing (5): 9. In list-based pricing, how should materials provided by the employer be handled? How to get a price reduction at settlement?