Blog

Why two quotations are not comparable

📐 Article5 min read

What you will learn Three conditions for comparability, why the lowest price is not always the cheapest, what a low price can mean, what to do when quotations are not comparable, and what comparability does not guarantee.

Two quotations for the same house can differ by tens of percent. Before explaining that difference, check whether it is measurable at all.

1. Three conditions for comparability

These are cumulative: all three must hold at once. If one is missing, the comparison means nothing.

Condition What it means
Same completion level the quotations take the work equally far
Same area definition where prices are given per square metre
Same cost scope both include, or both exclude, preparation, connections and external works

If one condition is missing, the comparison no longer measures price but a difference in content. This is the commonest error among private clients, and it costs more than the price difference they thought they had found.

2. Why the lowest price is not always the cheapest

Three mechanisms restore the real price later. Excluded works, which must be ordered separately afterwards.

A lower level of finish, which does not show in the summary of a quotation. It appears only in the detailed description.

Expensive pricing of unforeseen works, where the quotation was made at a thin margin. The saving is recovered later through variations.

The third mechanism is the least visible, because it only emerges during construction, when the contractor is already on site and competition has ended. At that moment the price of additional work is no longer a market price but a bilateral agreement.

3. What a low price can mean

Four possibilities with very different consequences. They range from a clarification to abandoning the comparison.

Possibility Consequence for the client
Less content, the quotation does not cover the same work additional work or dispute
An error in the calculation, emerging during construction additional work or dispute
A deliberately thin margin, on commercial grounds partly good
More efficient organisation, for instance factory produced solutions good

Only the fourth, and partly the third, is good news for the client. The first two bring additional work or a dispute.

One question separates them: not why it is cheap, but what is included. Asking for a justification of the price produces an explanation; asking for a list of content produces an answer.

4. What to do when quotations are not comparable

Four steps, in order of usefulness. Ask everyone for the same completion level, described rather than named.

Have the missing works priced separately, to restore a common scope. Only then are the totals comparable.

Compare total cost, not price per square metre.

Abandon the comparison and ask again on a common basis, where the differences are too large. That costs less than a wrong decision.

The fourth step looks expensive in time, but it is often cheaper than correcting a wrong choice during construction. A week of re-tendering is cheaper than a month of negotiating variations.

5. What comparability does not guarantee

Two limits are worth knowing. It does not guarantee the quality of execution, which depends on factors other than price.

It does not guarantee the reliability of the firm, which is assessed separately. Reliability is checked in registers and references.

Comparing comparable prices is a necessary, not a sufficient condition for a good choice. Two comparable quotations say which is cheaper; they do not say which will be delivered.

In summary, and four practical rules

Two quotations are comparable only where completion level, area definition and cost scope are the same in all three. The lowest price is not always the cheapest, because excluded works, a lower level of finish and expensive pricing of variations restore the difference later. Of the four possible reasons for a low price, only one is clearly good for the client.

Four rules: check the three conditions before explaining a price difference. Ask what is included, not why the price is low, when a quotation is unexpectedly cheap. Restore a common scope before deciding. Prefer total cost to price per square metre.

This article serves professional orientation at the date of checking. It is not a quotation.

Frequently asked questions

When the scope, the completion level and the area definition are the same. These conditions are cumulative.

For one of four possible reasons with very different consequences. Three of them concern scope.

Have the missing works priced separately, or ask again on a common basis. A fresh comparison costs less than a wrong decision.

No, reliability is assessed separately. It is checked in registers and references.

Construction costs in Estonia