Specification, Quantity & Costing of Buildings Unit 3

BILL OF QUANTITIES

Bill of Quantities (BOQ):

This is a complete list of all items of work involved in connection with the estimate for a project with
the description, quantity and unit of rate against each item of work. These are filled up in a tabular form
similar to the abstract form but the rate and amount columns remain blank. The bill of quantities when
multiplied by the corresponding rates of items and summed up, gives the estimated cost of the project.
Such a BOQ is provided in a tender form for item-rate tenders. Contractors put up their own
competitive rates and calculate the totals to offer their estimated amount to complete the whole work.

Sl. Description of Unit of

Quantity Rate Amount
No. item Rate

The nomenclature of the item provides concise description of the nature of the work, name of the
materials and their quantities, preparation of materials, workmanship, period of curing, consideration of
lead and lift, scaffolding, shuttering, dewatering, operations including all transport, tools and plants
required for the work etc. The rate of each item depends upon its nomenclature.

BOQ helps in;

1. Knowing comparative costs of different items of work
2. Knowing the various items of work to be carried out for a particular project
3. It forms the part of a tender document basis which percentage tenders are called

List of items in a BOQ for an R.C framed building includes the following. Generally, the items are
arranged according to the progress of construction activity.
1. Earthwork
2. Brickwork or RCC in foundation and plinth
3. Damp-proof course
4. Brickwork in Superstructure
5. RCC work in superstructure including centering and steel reinforcement
6. Woodwork for door, windows and ventilators
7. Structural steel work
8. Steel grill work
9. Paving and floor finish
10. Plastering, terracing and water-proofing
11. Whitewashing and colour-washing

Contract and Its Types:

A contract is an agreement which can be enforced by law (Indian Contract Act 1872). The contract
invariably follows a proposal from one party and its acceptance by the other. In the absence of any of
the above elements of a contract, it becomes void i.e. without a legal effect.
With connection to Public Works Department, a contract means a written undertaking for execution of
works or supply of materials or for the performance of any service which is duly accepted and
registered by the competent authority on behalf of the Union or State Government.

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Following categories of contracts are generally registered in relation to PWD works.
1. Building and Roads
2. Sanitary Installations and Water Supply
3. Electrical and Air-conditioning
4. Furniture

Types of Contract:
1. Item Rate or Unit Price Contract – In this type, the contractor quotes rates for individual items of
work. The approximate quantities of all possible items of construction are worked out and put up in
tender form. It also includes full nomenclature of items and their units. Against each item, the contractor
fills up his rates and works out the final total amount for the work.
The rate per unit of the contractor includes materials, labour, overhead charges and profit. This form of
contract is very useful when the quality of work is to be ensured.

2. Lump Sum Contract – In this type, the contractor is required to quote a fixed sum for execution of
the complete work as per plans and specifications within the specified time. This contract will be useful
when it is possible to work out the exact quantities of the items to be executed and also when the
number of items is limited e.g. a small room for watchman, a septic tank etc. Miscellaneous items which
cannot be carried out using other form of contracts are given on lump-sum basis e.g. ornamental door,
demolishing a structure, ornamental grillwork etc.

3. Cost-Plus or Percentage Rate Contract – In percentage rate contract, the schedule of items, their
quantities, units and item rates are all fixed. The contractor agrees to complete the work at par with the
fixed rates. The contractor is paid a certain fee for his profit along with the actual cost of work. This
method is adopted when the labour and material rates are fluctuating. Various methods used to fix the
fee are:
a. Cost-Plus A Fixed Percentage – A certain fixed percentage of the total amount spent by the owner
is given to the contractor as his fee (usually 10% to 15%) along with the actual cost of the work.
b. Cost-Plus A Fixed Sum – The owner pays a fixed amount to the contractor over and above the
actual cost of work.
c. Cost-Plus A Variable Percentage – The contractor is paid the actual cost of work and a variable
percentage of the actual cost of work as his fee. The contractor’s percentage increases with the decrease
in the actual cost of work and it decreases with the increase in the actual cost of work. Thus, the
contractor gets more amount, if he brings down the actual cost lower than the estimated cost.
d. Cost-Plus A Fixed Sum and Bonus – This is adopted where the work is to be completed
immediately. A target date is fixed for the completion of the work and if the contractor is able to
manage early completion of work, he is paid a certain amount per day of early completion in addition to
his fixed sum. Also, penalty for each day is paid by the contractor for late completion.

4. Labour Contract – The contractors put up their rates for the labour required per unit execution of
each item and the materials are supplied by the owner. The rates include the use of contractor’s plant or
equipments, supervision, profit etc.
The owner must make sure the necessary materials are brought on time and the contractor has to arrange
for a proper rate of progress of the work. Superior quality of work can be achieved as materials of better
quality will be ensured by the owner. The wastage of materials must be checked by the owner as the
contractor is paid only for the labour.

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5. Material Supply Contract – In this form, the contractors have to offer their rates for supply of the
required quantity of materials inclusive of local taxes, carriage and delivery charges to the specified
stores within the fixed time. All materials received should be examined and counted or measured when
delivered.

6. Turn-key or Package Deal Contract – The owner of construction project at times desires to deal
with only one party for all services in connection with the work. Offers are invited from specialised
contractors for all planning, design, plans, specifications and construction services under one contract
on competitive basis. Ex. Sewage treatment plants, important bridges etc.

7. Demolition Contract – In this, the owner invites tenders for the demolition of an existing structure
so that the land on which the structure is standing can be developed. As such, there is no construction
activity and the successful tenderer has to take away all the materials of the old building and to hand
over the site in the form of an open plot of land. The contractor in turn pays a specified amount to the
owner. The contract is given to the contractor quoting highest amount. The following points should be
noted,
a. The owner should take the entire amount from the contractor before handing over the building
b. The contract must clearly state that the contractor is responsible for making necessary arrangements
for cutting off existing services of water supply, electricity and drainage.
c. The contractor should be asked to take out insurance policies for labourers, third party risks etc and to
keep the owner free from all such claims.

Tender:
A tender is an offer in writing for executing certain specified work or supplying specified materials
subject to certain terms and conditions like rates, time limit etc. Depending upon the type of contract,
the tender can be lump-sum tender, item-rate tender, cost-plus tender etc. The tenders may be invited
either by private owners or by public notice.
The tender may either be open tender or selective tender. The open tender is given to all reputed
contractors and thus, the tenders for the project are received on competitive basis. In case of selective
tender, the architect after consultation with the client invites a limited number of contractors for filling
up the tender of the project.

Tender Documents:
The Notice Inviting Tenders (N.I.T) is a very important document on which tenders and subsequent
agreements with the contractors are based. All the tender notices should be in the standard form of
department.

The contents of a tender notice include the following.

1. Name of the authorities inviting tender
2. Particulars of contractors eligible to submit tenders
3. Name of work and its location
4. Estimated cost of work
5. Cost of complete set of tender form
6. Time of completion
7. Earnest money deposit and security deposit
8. Last date of sale of tender paper
9. Last date, time limit and place of receipt of sealed tenders
10. Date, time and place of opening of tenders
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11. Accepting authority
12. Validity of tender

Specimen Copy of N.I.T

Earnest money deposit – Earnest money is an assurance on the part of the contractor to confirm his
intentions to take up the work for execution as per terms and conditions in the tender. This amount is to
be accompanied with the tender form and is usually 1% to 2% of the total estimated cost of the work.
The amount is kept with the owner till the contract is allotted to some contractor.
Security deposit – It is the amount of money which shall be deposited by the contractor whose tender
has been accepted, in order to render himself liable to the owner to pay compensation if the work is not
carried out according to the specifications, conditions and time limit. Security deposit is usually 2.5% to
10% of the total estimated cost of the project. The contractor is to deposit the money before starting the
work. The security deposit is returned to the contractor upon successful completion of the work.

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Time limit – The tender form should contain the period in which the work is to be completed. It should
specify the period in calendar days or months and the period is counted from the day of the receipt of
notice to start the work from the owner.
Tender validity period – The validity period of the tender after its opening should be mentioned.
Depending upon the magnitude of work, the tender validity period may be 30 days to 150 days after the
date of its opening. The following time limits between date of call for tenders and the date of opening of
the tenders are followed by CPWD.
10 days in the case of works costing up to Rs.1 Lakh
2 weeks in the case of works costing from Rs.1 Lakh up to 10 Lakhs
3 weeks in the case of works costing more than Rs.10 Lakhs

The other documents formulated while inviting tender for civil works are:
a. The Notice Inviting Tenders (N.I.T)
b. Tender form with standard conditions of contract
c. Schedule of quantities of works to be done and materials, tools and plants to be supplied
d. Special terms and conditions
e. Complete specification of the work to be executed
f. One set of approved drawings

Administrative Approval and Technical Sanction:

The department looking after the construction works of the Government is known as Public Works
Department. A proposal is sent to the PWD by any other department for its requirement. The PWD
studies the proposal and if it is found sound, a report along with the preliminary estimate, is sent to the
concerned authority for its approval. This approval is known as administrative approval and it indicates
the formal acceptance of the proposal by the concerned department. An approximate estimate and
preliminary plans are necessary to be submitted to the administration.
After this approval is obtained, the PWD prepares a detailed estimate, drawings and design and the
sanction of the authority is obtained. Such sanction is known as technical sanction and should be taken
before inviting the tenders for the work. Technical sanctions ensure that the proposals are structurally
sound and the estimate is accurately calculated based on adequate data.

Measurement Book (M.B):

In order to record the measurements of the works done, a measurement book is maintained. This is a
very important document in case of works of a public body and hence, the measurement book (Form
No.23) should be maintained carefully. It is the basis of all account of quantities for work done for
which payment is made to the contractor. It is also produced as evidence in a Court of Law, when
required.
The entries in M.B are made in a chronological order, no blank page being left or torn out. It is the usual
practice to put a diagonal red ink line across a page of the measurement book, when the bill relating to
the items mentioned on that page, is prepared. The following information is given in the beginning of
each set of measurements.
i. Full name of the work vi. Budget head
ii. Name of the contractor vii. Estimated amount
iii. Situation of the work viii. Tender amount
iv. Sanction No. of the estimate ix. Date of start
v. Sanction No. of the tender x. Time limit

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Measurements for works done shall be taken just after completion of the work. It should not be
confused with measurement required during preparation of a bill. All the entries in the M.B shall be
such that others can understand and check the measurements in absence of the person who entered the
measurements.

Sl. Details of actual measurements Contents or

Particulars
No. No. L B H or D Area

Form No. 23 – Measurement Book

Running Account Bill (R.A. Bill):

Bill is a detailed account of claim for works done or supplies made indicating quantities, rates and
amount due. The bill after payment becomes a voucher and is kept on record as a legal proof of
payment.
All the entries in the measurement book are scrutinized before the bills are prepared. The abstract of the
bill is prepared by checking the description of work, quantity of work and calculations of quantities, and
then the payment is made.
Payment made for works at convenient intervals to the contractor subject to final settlement of the
account is termed as running account or intermediate payment or interim bill.
The payment for finished works is usually made in the following stages:
a. 1st R.A Bill is prepared after completion of brickwork up to roof level including fitting doors and
window frames.
b. 2st R.A Bill is prepared after completion of R.C roof, fitting window gratings, doors and window
shutters, inside plastering and flooring.
c. 3rd and final bill is prepared after completion of rest of the work.

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Specimen Copy of R.A Bill

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Specimen Copy of Cash Abstract of R.A Bill

Valuation:
Valuation is the art of assessing the present fair value of a property at a stated time. It is based on certain
facts and only after a judicious processing of such facts, the fair price of the property is suggested. Rises
and falls of the fair price can occur in a very short span of time.

Methods of Valuation (For lands with buildings):

The different methods used in valuation are as follows.

a. Rental Method of Valuation – In this method, the net rental income is calculated after deducting all
outgoings from the gross rent. Then valuation of a property is worked out by multiplying the net rental
income by the year’s purchase. The year’s purchase is calculated by adopting the current bank interest.
Following particulars must be considered during valuation by this method.
i. Shape of the land and whether its freehold or leasehold
ii. Future life of the building
iii. Gross rent
iv. Capital repairs if required
v. Value of land from records

b. Land and Building Method or Valuation Based on Contractor’s Method – In this method, the
highest and best value of open land is worked out and it is then added to the depreciated cost of the
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structure. For finding out the depreciated cost of the building, the probable cost of building with
prevailing rates of materials are worked out and then, according to the age, type of construction,
condition of building etc. suitable depreciation is allowed.

c. Direct Comparison Method of Valuation – This is the most simplest and direct method of valuation
as it is based on comparing the property to be valued with similar properties sold in the recent past.
Suitable adjustments are to be made for differences, if any, between the property to be valued and the
property to be sold.

d. Profit Based Valuation – This method is similar to rental method of valuation. In certain type of
property, the capitalised value primarily depends on the profits resulting from the volume of trade or
business eg. hotels, cinema houses etc. An estimate is made of the gross profit and from this, the
working expenses of the business are deducted to obtain the value of the property.

e. Development Method of Valuation – In this method, the probable increase in the net income from
the property, if certain additions, alterations or modifications are carried out, is worked out. The cost of
such additions is estimated and the difference between the increased capital value and estimated cost of
additions gives the potential value of the property.

Why and how to build flexibility, resilience and redundancy in BOQ?

The functions of BOQ can be divided into 3 phases:
i. At pre contract stage, the functions are as follows:
a. Tendering document b. Project costing c. Cost planning d. Fairest Competition of tenders e. Consultant
Fee calculation f. Identifying suppliers and negotiating deals

ii. At all the time, the functions are as follows:

a. BOQ can be a database for new projects b. Cost information c. The BOQ can be used for quotations
d. BOQ can be useful for asset management e. Transparency (no corrupt practices)

iii. At post contract stage, the functions are as follows:

a. Valuing progress payment b. Valuing variations c. Ordering materials d. Quality analysis e. Planning
and progressing site programme f. BOQ as source of Final account g. Cost control

A few common mistakes can be made in the bill of quantities. These include:
i. Inaccurate measurement of quantities
ii. The inclusion of irrelevant preliminary items (using preliminary items from a previous project which,
although it may be similar, contains differences in scope)
iii. Insufficient information about the work given in the descriptions
iv. Discrepancies between the BOQ and the drawings or specifications (perhaps due to out-of-date or
inaccurate information being used)
v. Omissions or double-counting of items (this can be due to more than one quantity surveyor working on
the same bill)
vi. Omission of temporary works items

There can also be errors made in the pricing, such as:

i. Incorrect understanding of the method of work
ii. Past performance used to assume future productivity
iii. Inexperience of the estimator
iv. Ignoring the relationship between items of work

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v. Changes that are made late in the process
vi. Inaccurate assumptions regarding items in the BOQ
vii. Arithmetic errors
viii. Differences in currencies not considered

By avoiding the above stated faults, the BOQ can be made more efficient. Also,
1. Specifications should not be rigid. They should be dynamic in nature and made adaptable to new
inventions, new ideas and to new practices in construction.
2. The field applications of specifications must be observed and if necessary they can be changed,
expanded, modified or strengthened for future works.
3. Specifying the use of commercial sizes and patterns of the material.
4. The storage and maintenance of materials and tools must be added.
5. Clauses related to fencing and watching arrangements, site clearance, temporary works, testing of
materials, sanitary arrangements etc. must be suitably added.

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