21 Dec 2014: Moved from wiki.
What are Bills of Quantities?
- A Bill of Quantities is a list of quantified items of work or services required for the completion of construction works with the quantities of the work or services stated in appropriate units of measurement and with materials, workmanship, quality and standard required for the work or services fully described.
- "Bills of Quantities" are usually given in plural since usually there are more than one bill in a set of Bills of Quantities and more than one item in a Bill of Quantities.
- Bills of Quantities are usually prepared by Quantity Surveyors, a member of the Consultant teams to the Developers of construction projects.
Functions of Bills of Quantities
- The primary function of Bills of Quantities is for inclusion in Tender Documents issued to Tenderers for pricing such that all tenders are priced based on the same set of items and quantities and the returned priced Bills of Quantities will be useful for tender analysis.
- The secondary functions, not necessarily less important functions, of Bills of Quantities are:
- The rates in the priced Bills of Quantities, when accepted, will become the contract rates for the purposes of pricing payments, variations and valuations.
- The priced Bills of Quantities can be used for valuing work in progress.
- The priced Bills of Quantities can be analysed to produce cost analysis of the building or construction.
- 较准确的投标 – 编标者在编清单过程与建筑师及工程师保持密切的沟通，编出的工程量清单会比较由承包方自己编的更有代表性
- 较少的合同后争议 – 编得好的工程量清单可减少项目涵盖范图不清楚所带来的争议及减少索赔
- 较易计算减帐 – 在计算工程变更的减帐时，可以查阅原来的计算来扣减，而不必再计
Types of Bills of Quantities
- Based on the nature of the quantities, Bills of Quantities can either be:
- Firm Bills of Quantities; or
- Provisional Bills of Quantities (sometimes called Approximate Bills of Quantities).
- For Firm Bills of Quantities, all quantities are meant to have been accurately measured based on the Tender Drawings and Specification and therefore do not require remeasurement in the settlement of the Final Accounts. If it is found after contract award that the quantities are wrong, the Contract Sum will be adjusted for the rectification of the errors. The risks of the errors in the Bills of Quantities therefore rest with the Employer.
- For Provisional Bills of Quantities, all quantities are meant to have been approximately measured from the Tender Drawings and Specification or estimated based on predictions. The quantities will require remeasurement in the settlement of the Final Accounts. Any errors or imprecision in estimating the quantities or describing the work will be rectified once and for all in the Remeasurement Bills. However, if the final as constructed items and quantities differ from the original provisional items and quantities substantially, the Contractor may argue for an adjustment of the unit rates. If the total value of the Remeasurement Bills vary substantially from the value of the original Provisional Bills of Quantities, the Client may also query.
Contractors’ Bills of Quantities / Schedule of Quantities and Rates
- If Bills of Quantities are not provided to Tenderers for tendering, the Tenderers will be required to measure their own quantities and submit their own itemized quantities and rates build-up or breakdown of the tender sums. To distinguish such kind of build-up or breakdown from Bills of Quantities provided to Tenderers, they are called "Schedule of Quantities and Rates" or simply "Schedule of Rates".
- The quantities of Schedule of Quantities and Rates do not form part of the Contract. This means that any errors or omissions or excess in the quantities or items in the Schedule of Quantities and Rates will be regarded as the risks of the Tenderers and the Contract Sum will not be rectified for the errors.
- In theory, the quantities of a defined scope of works should be the same. However, the format, classification, sequence, items and descriptions of Schedules of Quantities and Rates prepared by different Tenderers will be different. This would make tender analysis and comparison very difficult and less precise.
- Each Tenderer would have to spend money and resources to prepare the Schedule of Quantities and Rates. However, only one out of several Tenderers will be successful in obtaining the contract for each tendering, and there is no guarantee that the value of work secured will be equally spread amongst Tenderers. Tenderers would have to make short-cuts or approximations when preparing the Schedule of Quantities and Rates in order to reduce the cost of tendering.
- With the common practice of awarding the contract to the lowest Tenderer, it is sometimes said that the lowest Tenderer is the lowest because he has made serious errors by under-measurement or under-pricing.
- Contractors who have under-priced will be more likely to explore avenues for claims in order to recover the loss. This would make post contract management difficult.
- Since the quantities in the Schedule of Quantities and Rates do not form part of the Contract, for each variation, the quantities of work omitted should be measured rather than relying upon the quantities stated in the Schedule of Quantities of Rates. For example, if the Schedule of Quantities and Rates included a separate item for 100 m2 of false ceilings in the lift lobbies and there is a variation requiring omission of all false ceilings in the lift lobbies, the quantity to be omitted cannot simply be 100 m2 but shall be accurately measured which may turn out to be more or less.
- Descriptions in the Schedule of Quantities and Rates are generally simplified or imprecise or incomplete. This will create difficulties in interpreting what are actually covered by and allowed for by an item, and will lead to argument when such items are used for pricing of additions or omissions.
- Taking aside the commercial consideration of minimizing the costs, the principle and technique described in this Knowledge Base for the production of Bills of Quantities should also be applicable to the production of Schedule of Quantities and Rates.
Advantages of Bills of Quantities
- Having discussed the characteristics of Schedule of Quantities and Rates, it is apparent that the advantages of providing Bills of Quantities to Tenderers for pricing are:
- Comparison of tenders on common basis - Tenders are priced on a common basis. Analysis and comparison of tenders would be on the rates and prices only.
- Saving Tenderers’ costs of tendering - Tenderers would not need to spend money and resources to measure the Bills of Quantities.
- More accurate tenders - The quality of Bills of Quantities produced by Quantity Surveyors having dialogue with the Architects and Engineers over a longer period of time should be better than the Schedule of Quantities and Rates produced by Tenderers within shorter period of time with less budget.
- Easier to calculate omissions - For omission of quantities due to variations in the post contract stage, instead of remeasuring the quantities to be omitted, the original measurements can be referred to for the quantities to be omitted.
- Less post contract problems - Well prepared Bills of Quantities will reduce the uncertainty as to the coverage of items and reduce claims.
Difficulties for Bills of Quantities
- Production of good Bills of Quantities do require substantial number of man-hours which span over a significant period of time. This means fees and time on programme.
- Some Developers because of tight development budgets or small development size would not want to spend money in producing Bills of Quantities.
- Some Developers would not want to spend an extra few weeks on programme to produce Bills of Quantities.
- Some Developers may go to the extreme to say that the quality of Bills of Quantities produced by the Quantity Surveyors is no better than the Schedule of Quantities and Rates produced by Tenderers.
- Without the need to produce Bills of Quantities, the Quantity Surveyors’ fees will be reduced, it is therefore of paramount importance that Quantity Surveyors should take the best measures and make the best effort to produce quality Bills of Quantities within the shortest possible time.
- It should also be borne in mind that without Bills of Quantities, the time required to deal with tender analysis and post contract management will be increased.
Verification of Bills of Quantities
- Because of the fear that the Bills of Quantities measured by the Quantity Surveyors are not accurate enough that there will be post contract claim for increase in the Contract Sum for rectification of errors of omissions, there is a tendency that some major Developers require the Tenderers to verify the accuracy of the Bills of Quantities during the tendering period. Tenderers are required to correct the errors and submit Tender Sums inclusive of rectification of errors. The risks of the errors in the Bills of Quantities are therefore transferred to the Contractors.
- Such practice indicates a mistrust of Quantity Surveyors and defeats the original ideas of saving Tenderers’ costs of tendering.
- Some Developers argue that, without discrediting Quantity Surveyors, they would rather play safe. They would rather let the Tenderers price high to cover the errors than to let the errors coming up unexpectedly during the post contract thus upsetting the budget plan.
- In reality, the tendering period would not be sufficient for the Tenderers to carry out thorough detailed check of the Bills of Quantities. They can only carry out bulk-checking. Competitive market pressure of tendering will deter Tenderers from allowing buffers for errors.
- Some Tender Documents will declare that the Bills of Quantities after verification will be deemed to be the Contractor’s Bills of Quantities or Schedule of Quantities and Rates and that the quantities do not form part of the Contract. The Tender Drawings and Specification become the sole basis of the Contract with the Bills of Quantities excluded. A benefit of Bills of Quantities whereby inadequacy in Tender Drawings and Specification can be made up by properly described or measured items in the Bills of Quantities will be lost since the correct measurement is not evidenced from the Tender Drawings and Specification.
- The adoption of the practice to require the Tenderers to verify the Bills of Quantities therefore should not be encouraged. A better alternative is to require the successful Contractor to verify the Bills of Quantities within a defined period after award of the Contract. This would save the Tenderers’ costs of tendering and risks of uncertainty, yet give the Clients earlier warning of errors.
- Quantity Surveyors should produce Bills of Quantities as accurate as possible for the benefit of every party involved in the project.
- However, it should be cautioned that "accuracy" does not mean measuring quantities in unduly fine and tedious details without regard to the time required and the significance of the costs of the items involved. Accuracy must be judged against the costs of the items involved. Priority and emphasis should be given to cost significant items.