1. What happens by default
Four steps follow automatically, and no party does anything wrong. The result follows from the arrangement.
Every tenderer reads the same design and makes their own division. Every tenderer calculates quantities according to their own division. Every tenderer decides for themselves what belongs in which line. And the client receives three tenders whose lines do not correspond to one another.
The result is useless for comparison, and that is structural rather than anyone's carelessness. There is no one to blame here.
2. Four consequences for the client
They follow one from another, and the second is the most expensive. It concerns a hidden omission.
| Consequence | Content |
|---|---|
| Comparison reduces to the total | there is nothing else comparable |
| Missing work is not visible | a missing line does not show |
| Variations are priced without a base document | by negotiation |
| Omitting parts is not possible | the price of the parts is not known |
The second is also the hardest to detect: the lowest tender may be the lowest precisely because something is missing, and that emerges during construction as additional work. Missing work surfaces during construction.
3. Two consequences for the tenderer
They are less discussed but real, and they explain the price level. Their effect runs through the whole market.
A tenderer does not know whether a competitor is pricing the same content, and covers that uncertainty with a risk allowance. A tenderer who honestly allows for everything loses to one who allowed for less, which is a bad selection for the market.
In professional terms this means that the absence of a structure penalises thoroughness. The risk allowance meanwhile does not disappear: it sits inside the price the client pays, without anyone seeing it separately.
4. Where the cost actually arises
Three places, all of them invisible, and the third is the most tangible for a client. It concerns the price of variations.
| Where | Who pays |
|---|---|
| Each tenderer's quantity take-off time | spread into the prices |
| The risk allowance in the tenders | the client, unknowingly |
| Additional works during construction | the client, without competition |
The third is rarely connected with the absence of the original document. Additional work arising from a missing line is not the contractor's fault: it is a defect in the tender documents.
5. Why the situation persists
Three reasons, all of them understandable, and the third is a classic coordination problem. The market does not solve it by itself.
Preparing a structure is work that someone has to pay for. The client does not know it can be required, as covered by the article on the client's role. And without a requirement, no individual party has a motive to do it.
The situation is worse for everyone, yet no single party can resolve it alone. The one party that can is the one that commissions the work, because it sets the conditions of the procurement.
6. When it becomes most expensive
Three situations, and the first is particularly relevant in Estonia. It concerns reconstruction.
Reconstruction, where the boundaries of the works are unclear in any case. Comparing several tenderers, where comparison is the only point of the procurement. And a long construction period, where variations are certain to arise.
The volume of reconstruction is growing, and it is there that a structured schedule makes the greatest difference, since without one no one knows exactly what is inside the price. Quantities are least clear in that work.
Summary and four practical rules
Where no structure is prescribed, several different structures appear, and the client receives tenders whose lines do not correspond, without anyone having done anything wrong. Of the four consequences, the most expensive is that missing work is not visible, so the lowest tender may be lowest precisely because of an omission. A tenderer covers the uncertainty with a risk allowance, so the absence of a structure penalises the thorough tenderer, and the allowance sits inside the price the client pays.
Four rules: do not assume comparable tenders will arrive by themselves. Bear in mind that the absence of a structure penalises the thorough tenderer. Connect later additional works with defects in the original document rather than with the contractor's conduct. Require a structure especially in reconstruction, where the difference is greatest.
This article offers professional orientation as at the date of verification. It replaces neither a quotation nor the assessment of a competent specialist.