1. Four levels of detail
Each level has its use, and the fourth is what the company prepares for itself in any case. It is never shown to the client.
| Level | Content | What it makes possible |
|---|---|---|
| 1 | A single sum | quick, but incomparable and useless for variations |
| 2 | A sum by stage | gives a division, but not the content |
| 3 | A sum by type of work with quantities | allows the content to be checked |
| 4 | Unit prices and quantities separately | allows variations to be priced without fresh negotiation |
The fourth level is what a construction company prepares for itself, as covered by the article on the two documents. The difference is therefore not the amount of work but what is shared.
2. What each level makes possible
Three tasks require different levels, and the second is the most expensive when the detail is missing. It concerns the pricing of variations.
Comparing tenders requires at least the third level, since otherwise there is no knowing whether the content is the same. Pricing variations during construction requires the fourth, since otherwise every variation has to be negotiated separately. Omitting parts when the budget is tight requires the third or the fourth.
The second is the one clients do not think to ask for in advance, and the consequence is a lasting one: a variation whose price is agreed during construction is not in competition. The basis has to be created before the works.
3. Why the level is a choice
Three reasons, all of them understandable, and the first is not worth disputing. It concerns business secrecy.
A detailed tender shows the cost structure, which is the company's competitive advantage. In the wording of professional sources, showing costs to the client line by line is often the hardest point for a company. And a detailed tender takes longer to draw up, even though the calculation has already been made.
The solution is not to require disclosure of the cost structure but to require unit prices, which are selling prices rather than costs: a unit price already contains the margin and therefore reveals none of it. A unit price is a selling price, not a cost.
4. What to ask for without asking too much
Three requirements are acceptable to a tenderer, and they give the client everything it needs. None of them touches the company's costs.
| What to ask for | From whom |
|---|---|
| A common structure of works | prescribed by the client or the designer |
| Quantities for each line | completed by the tenderer or provided by the client |
| A unit price for each line | the tenderer, and it is a selling price |
These three reveal neither the company's costs nor its margin, yet they give comparability and the ability to manage variations, as covered in more detail by the article on three things to ask for. That is exactly why they are accepted.
5. What not to ask for
Two requirements create resistance without benefit. Showing costs and margin separately, which is the company's internal affair, and disclosure of subcontractors' prices, which is the company's purchase price. Both may lead the best tenderer not to take part at all.
The boundary is clear and worth remembering: a selling price is negotiable, a purchase price is not. The distinction is worth following in procurement.
Summary and four practical rules
There are four levels of detail in a tender, from a single sum to unit prices and quantities presented separately, and the fourth is what the company prepares for itself in any case. Comparison requires at least the third level and pricing variations the fourth, so that without unit prices every variation is negotiated without competition. The level of detail is a choice, and the solution is not to require the cost structure but unit prices, which already contain the margin.
Four rules: ask for unit prices, not costs. Prescribe the level of detail rather than hoping it will arrive by itself. Agree unit prices before the contract, since pricing variations requires them. Do not ask for the cost structure, which creates resistance without benefiting the client.
This article offers professional orientation as at the date of verification. It replaces neither a quotation nor the assessment of a competent specialist.