How do I compare construction quotations fairly?

Send every contractor the same written scope, including a client-drafted exclusions list, and require pricing against it. Without a common scope, totals are not comparable because the quotations are usually for different amounts of work.

What should be in a contractor's quotation?

A written exclusions list, specification precision on named items, provisional sums with a stated basis, a programme with milestones and a named approvals allowance, payment terms tracking verifiable progress, a variation mechanism, warranty terms, and clarity on which scopes are self-performed.

Why is the cheapest quotation often the most expensive?

Because a low price usually reflects a smaller scope, an unseen assumption, a resourcing plan that will slip, or a strategy of winning low and recovering through variations. Once a contractor is mobilised, replacing them is costly, which is exactly why variation pricing is where projects lose money.

How to Read a Contractor's Quotation Properly

Three quotations arrive. One is noticeably cheaper. A client with no construction background compares the totals, notes that all three describe the same project, and selects the low number.

They have just made a decision on the least informative line in the document.

Quotations for the same building are rarely comparable, because they are rarely for the same scope. Here is what to check before any price comparison means anything.

1. The exclusions list

Start here, not at the total. What a contractor has excluded tells you more than what they have included. A cheaper quotation that excludes authority approvals, MEP modifications, waterproofing or making good is not cheaper — it is smaller. Any quotation without a written exclusions list should be returned for one.

2. Provisional sums and their basis

Provisional sums are legitimate for genuinely open decisions. They are also the standard mechanism for making a quotation look competitive. If a quotation carries a large provisional sum for sanitaryware, ask what specification level it assumes. A provisional sum with no stated basis is a placeholder that will be reconciled upward.

3. Specification precision

Compare how each quotation describes the same item. "Porcelain floor tile" against "Porcelain floor tile, 600×1200, rectified, R10, named manufacturer, supply and install including adhesive and grout to specification" are not two prices for the same thing. The vague one has room to move; the precise one does not.

4. What the programme actually says

A duration is not a programme. Look for named milestones, an explicit approvals allowance in weeks, lead times for long-lead items, and stated assumptions about site access and working hours. A contractor who has read the building's fit-out manual will show its constraints in the programme. One who has not will show a duration.

5. Payment terms against progress

Front-loaded payment schedules transfer risk to you. A schedule where a large proportion is due before meaningful work is complete leaves you exposed and removes your leverage on quality. Payments should track verifiable progress, with a retention held to practical completion and a portion beyond it.

6. The variation mechanism

As covered elsewhere on this site: whether a schedule of rates for common changes exists, agreed now, is more financially significant than the headline price. A quotation with pre-agreed variation rates is worth a premium over one without.

7. Warranties, and what they cover

Distinguish workmanship warranty from manufacturer product warranty. Ask the duration of each, what voids them, and who honours them. Also ask what the defects liability period is and what obligations sit inside it. A one-year defects period actively managed is worth more than a five-year warranty from a contractor with no process for honouring it.

8. Who is actually doing the work

Which scopes are self-performed and which are subcontracted? Neither answer is wrong, but a contractor subcontracting everything is a coordinator, and you should understand their coordination capability, their track record with those specific subcontractors, and how much of your money passes through as margin.

Why the cheapest quotation is often the most expensive

A price meaningfully below its peers usually reflects one of four things: a smaller scope (see exclusions), an assumption you have not seen, a resourcing plan that will slip, or a deliberate strategy of winning low and recovering through variations.

The fourth is the most damaging because it is invisible at signature and unavoidable afterwards. Once a contractor is mobilised on your property, changing them costs demobilisation, remobilisation, programme and a fresh learning curve. Both sides know this. It is the reason variation pricing is where projects lose money.

The single most useful thing to do

Send all three contractors the same written scope, including exclusions you have drafted yourself, and require the price against it. It takes an afternoon and it is the only way to make totals comparable.

If a contractor will not price against your scope and insists on their own, that is informative in itself.