How to require a structured tender

Each depends on the previous one, and the fifth makes the requirement acceptable to the tenderer. The order is part of the method.

#	Step
1	Decide who prepares the structure (the preparer)
2	Draw up a schedule of works that follows a common classification and whose names are not changed
3	Calculate the quantity for each line
4	Give the schedule and the quantities to every tenderer as a completable form
5	Require a unit price and a line total, not a breakdown of costs

The fifth is covered by the article on the level of detail: a unit price is a selling price and reveals no margin. The boundary is set out there.

Six points, all of them short, and the fourth is the one most often missing. It concerns whether the quantities bind.

Which classification is used and that its names may not be changed. That prices are to be submitted on the prescribed form. That a unit price and a total are given for each line. That the quantities are provided by the client and are not to be changed, or conversely that the tenderer checks them itself. How work not included in the schedule is treated. And whether a line left blank counts as included in the price or renders the tender non-compliant.

Where it is not stated whether the quantities are binding, the tenderer does not know whether they are answerable for their accuracy, and that affects the price. The risk then stays open.

Both are legitimate, but they must not be confused. The difference has to be stated in the procurement.

Option	Who is responsible	Effect on price
The client provides the quantities and is answerable for them	the client; where a quantity is wrong the sum is adjusted	lower prices, the tenderer carries no quantity risk
The client provides the quantities for information	the tenderer checks them and is answerable	a firmer final sum, but the tenderer adds a risk allowance

The choice depends on which risk is more acceptable to the client, and it has to be made deliberately. Leaving it open gives the worst outcome: the tenderer adds an allowance and argues about it later anyway.

Three requirements create resistance without benefit. Showing costs and margin separately. Disclosure of subcontractors' prices. And employees' pay data, except where the law requires it in a particular procedure.

All three concern the company's internal economy, which is not the thing the client is buying. A client buys a result and is entitled to know what is inside the price. It has no need to know how much the tenderer earns.

Three arguments work with a tenderer, and the third is the strongest with a long-term partner. It concerns avoiding disputes.

A common form means everyone is pricing the same content, which protects the thorough tenderer too. Providing quantities saves the tenderer time, which is the most expensive part of preparing a tender. And a structured tender reduces the likelihood of later disputes, which is in the contractor's interest as well.

A dispute over the content of a contract is a cost to both parties, and a structured base document reduces its likelihood. The cost falls on both sides.

The requirement consists of five steps ending in asking for a unit price and a line total, and of six points that fit on one page of the tender documents. Responsibility for the quantities has two legitimate options: the client's responsibility gives lower prices, the tenderer's a firmer final sum with a risk allowance, and leaving it open gives the worst outcome. There is no point requiring costs and margin to be shown separately, or subcontractors' prices, since those are the company's internal economy.

Four rules: decide responsibility for the quantities before inviting tenders. Give the schedule as a completable form, not as a description. State how work missing from the schedule is treated. Justify the requirement by the tenderer's benefit rather than by a need to check.