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Pre-tender estimate and tender sum distinguished

📐 Article8 min read

What you will learn What the stage introduced in 2018 achieves and why it was introduced, how the two stages differ in purpose, basis and timing, why no estimated costs may remain within the tender sum, and what that means for structuring by procurement package.

Cost planning under DIN 276Stages of cost determination › Pre-tender estimate and tender sum

These two stages are confused more often than any others, for an understandable reason: up to the 2008 edition only one of them existed. Today's Kostenvoranschlag corresponds in substance to the former Kostenanschlag, and today's Kostenanschlag is something different from its namesake of that time.

Anyone drawing on an older source therefore works not only with a missing stage but with shifted terminology. The two errors compound one another.

What changed in 2018

The reissue introduced the Kostenvoranschlag as a stage in its own right. It corresponds to the former Kostenanschlag but now precedes it. Its purpose was extended in the process: it no longer serves merely as a basis for deciding on the planning of construction and preparing procurement, but for deciding on procurement and construction themselves.

The Kostenanschlag consequently moved later and was narrowed to determining costs on the basis of procurement and construction. Notably, earlier editions of the standard placed it under cost control, which was technically inaccurate: it is a cost determination, not a control activity.

The two stages compared

Kostenvoranschlag Kostenanschlag
Purpose deciding on procurement and construction determining costs arising from procurement and construction
Basis construction preparation, priced bills of quantities tenders, orders, costs already incurred
Timing work phase 6 work phase 7
Depth of treatment third level, additionally by procurement package by the packages set in the pre-tender estimate
Repeatability once or in several steps several times during the project
Estimated costs permitted no longer permitted

The last row is the most important substantive distinction. It concerns the treatment of variations.

Nothing may remain estimated in the tender sum

The standard defines the Kostenanschlag as a compilation of tenders, orders and costs already incurred. It follows directly that it may contain no estimated cost components.

This is a serious requirement in practice, because at the time of first preparation few projects have every trade under contract. The usual response is to prepare the tender sum several times during the project and update it with each further award.

While individual trades remain unawarded, the item concerned is to be flagged as not yet awarded rather than filled with an estimate that visually completes the compilation. Such a mixture of tendered prices and estimates looks more accurate than it is, and it prevents any sound statement about how much of the budget is actually committed.

A workable presentation carries three columns per procurement package: the sum under contract, the unawarded portion at the allowance from the pre-tender estimate, and the total. What part of the result rests on contracts and what part still on forecast then remains visible throughout.

Structuring by procurement package

From the pre-tender estimate onwards the leading ordering changes. Up to the cost calculation, structuring by cost group and therefore by building element governs. The pre-tender estimate additionally orders costs by procurement package, and the tender sum follows that ordering.

The change is substantively unavoidable, because what is procured is what a contractor executes, not what a building element is. But it creates a problem for cost control: comparison against the cost calculation is possible only where a reconciliation between the two orderings is carried alongside.

Setting the procurement packages in the pre-tender estimate is therefore a decision with consequences far beyond procurement. It determines the structure in which the project is carried through to the final cost statement. That variant is covered in the article on trade-oriented cost structure.

The pre-tender estimate is not a basic service

The HOAI in its 2021 version does not recognise the Kostenvoranschlag as such. For work phase 6 it provides for preparing priced bills of quantities.

The two overlap considerably in substance, since a priced bill of quantities is the data basis from which a pre-tender estimate is formed. They are not identical: the bill is a procurement document, the pre-tender estimate a cost determination by cost group and procurement package.

Anyone owing a pre-tender estimate within the meaning of the standard should agree it contractually. The boundary between basic and additional services is covered in the separate article.

Why the stage was introduced

The gap the Kostenvoranschlag closes is the one between design and procurement. Between the cost calculation in work phase 3 and the arrival of the first tenders lie detailed design and the preparation of procurement, that is the period in which most detailed decisions are taken.

Without a determination in that period, a cost deviation only becomes visible when tenders come in, at a point when redesign is expensive. This is precisely why the pre-tender estimate may be prepared repeatedly and in several steps, unlike the four single-instance stages.

For cost management this is the most effective point in the whole process: late enough for quantities and qualities to be reliably known, early enough for intervention to remain possible. How cost control and cost management interact is covered in the branch on cost control and cost management.

Variations within the running tender sum

Because the tender sum is prepared several times, it is the stage at which variations become visible. How they are handled determines whether the later final cost statement can be analysed.

Rather than absorbing variations into the original item, carrying them separately and flagging them by cause is worth doing. Only then does the origin of a deviation remain traceable, and only then can an increase be evidenced later.

Cause Attribution
Change of scope at the client's request project decision, not a forecasting failure
Quantity change against the tender documents establish whether measurement or execution caused it
Unforeseen circumstances typical in existing buildings, points to depth of survey
Price adjustment clauses market movement during construction

This flagging costs little as work proceeds and can barely be reconstructed afterwards. It is the precondition for the analysis of the final cost statement being able to distinguish project events from the quality of the determination, as described in the article on the final cost statement.

Treating both stages as one. Carrying only a tender sum loses the determination before procurement, and with it the last point for effective intervention.

Building estimates into the tender sum. The compilation looks complete but is not, and the share of budget actually committed remains unknown.

Setting procurement packages without a reconciliation. Comparison against the cost calculation becomes impossible, and determining chargeable costs is made harder.

Not incorporating variations as they arise. The tender sum is to be prepared several times. Left unrevised after the first round of awards, a gap without any sound cost statement opens up until the final cost statement.

The commonest errors

Treating the two stages as one. Carrying only a tender sum loses the determination made before procurement, and with it the last point at which management is still effective.

Building estimated figures into the tender sum. The schedule looks complete but is not, and the share of budget actually committed stays unknown.

Fixing the procurement packages without a reconciliation. Comparison against the cost calculation then becomes impossible, and determining chargeable costs becomes harder.

Not working variations in as they arise. The tender sum must be prepared repeatedly. Where it is not updated after the first round of procurement, a gap without any reliable cost statement opens up until the final cost statement.

This article reflects the position at the date of checking and serves professional orientation. It does not constitute legal advice and does not replace assessment of the individual case.

Frequently asked questions

The basis and the timing: the preliminary one precedes procurement, the tender-based one rests on bids. The article contrasts the two.

The stages were sharpened and their names adjusted. Older sources still use the earlier system.

Nothing material, because every procurement package is priced. Any remaining gaps must be shown.

No, it must be agreed separately. The article explains the consequence for the fee.

Cost planning under DIN 276: cost groups and cost determination