What to bid.
WHAT TO ESTABLISH BEFORE PRICING
The full scope, including what is implied but not stated The contract conditions affecting cost The payment terms The duration
WHY IMPLIED SCOPE
Requirements not explicitly listed but necessary to deliver are your cost.
WHAT TO COST
Direct costs: materials, labour, equipment, transport
Site and mobilisation costs Supervision and management Insurance and securities Compliance and reporting Financing cost of delayed payment Overheads Contingency Margin
WHY FINANCING COST
Money committed for months before payment has a real cost, and it is routinely omitted.
WHAT TO CALCULATE
The cash requirement over the contract, and its cost.
WHAT PERFORMANCE SECURITY COSTS
Fees, and capital tied up.
WHAT TO ESTABLISH
What securities are required and what they cost.
WHAT TO INCLUDE FOR RISK
Contingency proportionate to the uncertainty.
WHAT TO ASSESS
Where the risk actually sits: price variation, quantity variation, delay, conditions.
WHAT TO AVOID
Bidding low to win Omitting costs to appear competitive Assuming variations will recover the shortfall
WHY THAT LAST POINT
Variations require instruction and they are resisted.
WHAT TO ESTABLISH
That the price is viable at the scope as stated.
WHAT TO CHECK
Arithmetic, thoroughly.
WHY
Arithmetic errors in bids are common, and they are binding or disqualifying.
WHAT TO ESTABLISH
Who checks the pricing independently.
WHAT TO RECORD
The basis of every rate.
WHY
It is needed for variations, claims and future bids.
