Using pre-tender estimates

Pre tender estimates should be reported in a similar way to cost reports. The executive summary and introduction should state what is included within this particular pre-tender estimate and what the allocated budget is.

The budget should be reconciled with the extent of works covered by the pre-tender estimate. This may include transferring money in and/or out of the budget total. The budget starting point should be the cost plan. The pre-tender estimate should be reconciled against the budget highlighting unagreed areas of scope growth, client change and market movement. If the pre-tender estimate is over budget then it is worth identifying potential value engineering elements (time permitting).

When reporting on the costs particularly with respect to the overall building costs that the costs are related to the building area. When reporting against floor areas it is necessary to define under which code of measurement the areas have been measured (see RICS property measurement (professional statement, 2015) and International Property Measurement Standard (IPMS) for Office Buildings).

Areas of work which are covered by allowances should be identified indicating the extent of work that needs to be detailed.

The summary should include comments on the financial risks associated with the design information, for example, whether the design is complete, extent of provisional sums, unnecessary complexity and specification level. The information used in producing the pre-tender estimate should be scheduled with the revision numbers of each of the drawings and documents shown.

It is important that sufficient time is allowed within the project programme to carry out the pre-tender estimate and deal with any potential outcomes.

Preparation of a pre-tender check list

There are a number of fundamental things that need to be established before starting a pre-tender estimate.

You will need:

• a bill of quantities or pricing document. If this is not available you will need to quantify the extent of works to allow pricing of the scheme;
• a clear scope of what elements of work will be covered (a bill of quantities or pricing document should define the extent of work involved);
• a full set of drawings and specification that covers the extent of works. These should be completed drawings and specification documents without ambiguity;
• a principle location for the project, for example, city, country;
• a site location. Is the site in a built up area or greenfield area? This will also indicate restrictions such as building at the end of a one way street, adjacent busy road or next to a river.;
  
• the work face location. Establishing the logistics associated with carrying out the actual work. For example, if the works take place on the eighth floor;
• site investigations and photographs of the existing site. The report on the existing site particularly geotechnical reports will help to determine the extent of temporary measures required to carry out the works in the ground (dewatering and propping). For refurbishment of existing buildings, the internal structural investigations will highlight what temporary and permanent structures are required to facilitate the proposed scheme (strengthening works and repairs);
• a programme or schedule for the works. If there is a shortened programme then this will dictate how the work is carried out and whether special measures need to be employed;
• to know about any other restrictions placed on the works such as phasing, occupied portions of the site, limited working hours. These restrictions would need to be factored in to the pre-tender estimate either as line items or as enhancement to the measured work rates;
• to know about any previous contractor advice/methodologies which could be used to help define the proposed approach to carrying out the works; and
  
• available relevant cost data.