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How to Calculate Bill of Quantities (BOQ) for getting the total amount required for Materials

The Bill of Quantities (BOQ) is the detailed list of the building construction project, which enables the contractor to gain an idea about how much of each building material, including bricks, wood, cement and others, is required to complete the building project. The BOQ has been put together by a construction professional called a quantity surveyor. The BOQ has been mostly used for the big building construction projects.

BOQ provides the accurate materials, qualities of items, and labour that are required for the completion of the building project. The BOQ includes the detailed project information, detailed project item descriptions, unit of measurement, material quantities, unit costs, and total item costs of the building construction project.

Importance of BOQ for billing

Standaring the tendering process of the building project

BOQ helps to standardise the tendering process, which allows the contractors to prepare more precise cost estimates for the building project.

Helps to provide cost control and projections

A detailed schedule and breakdown of the building construction project has been provided by the BOQ, which offers the building owners visibility into the cash flow required over various cycles of the project.

Building a foundation for contracts

The bill of quantities has acted as the foundation for the final contract between the project contractor and the clients.

Facilitating tender analysis

BOQ also helps to facilitate the tender analysis of the building project, which helps to ensure that the project contractor will submit complete and compliant bids and meet the budgetary goals of the building project.

Maintaining transparency and reducing errors

BOQ helps to specify the project materials and labourers, thus creating transparency, scope and pricing. Thus, BOQ helps to reduce the errors and misunderstandings of the building construction project. Thus, BOQ helps to ensure that all parties of that specific building project have a clear understanding of the requirements of that project.

Importance of accurate estimating of the quantity and costing of the building project

• The accurate estimation of the building project is essential to achieving the success of any building construction project. Both project contractors and owners has relies on the cost estimates for the building project from preconstruction to completion.
• The initial understanding of the project’s cost helps to determine whether the project is feasible within the allotted budget. After getting the preliminary estimate of the building project, design or scope modifications may also be required to alter the project costs.
• The building project contractors also depend upon the accurate project estimates to prepare bids that are competitive and profitable.
• Overestimating the project costs can lead the contractor to submit a bid that’s too high to be selected. As a result, the estimation of the construction project should be accurate in order to strike a balance between the budget of the owner and the profit of the project contractor.

Process of estimating the quantity and costing of the building project

The accurate estimation of the quantity and costing of the building construction project has been done in several steps, which are:

Reviewing the bid package

At first, both general and speciality contractors should review the documents of the building project. In this context, the contractor should refer only to the document that is relevant to the project work being performed on the project.

Conducting a site visit

Before submitting a bid, a project site visit should be done. This site visit process helps the project estimators to understand the conditions of the project site and influences the costs of the overall building project.

Performing material takeoff

In the next step, the contractor should perform a material takeoff by reviewing the construction documents and also be involved in counting every item of the project that is required for that project.

Solicit pricing from vendors and suppliers

To get pricing information for the building project, a definite list of materials and project equipment should be required from vendors and suppliers.

Evaluating labour requirements

The project estimators also have to determine the labour requirements for the building project. The project estimators must ensure that the loader labour rates for wage should be calculated. In this context, the loader rate should include wages, taxes, retirement contributions, union dues and sick or vacation leaves.

Determining insurance and bonding costs

The insurance and bonding help to mitigate the risks for both project owners and contractors. So, the insurance and bonding costs should also be included in the project cost.

Calculating overhead and indirect costs

The project estimators also have to consider the indirect field costs and overhead costs that have been associated with the construction project. The indirect costs of the project should include permits, site cleaning, sfiwtare, equipment costs, professional services and temporary offices, whereas the overhead costs should include the taxes, insurance, utilities, rent for office space, administrative salaries, depreciation and software subscriptions.

Accounts for profit

After all the costs of the project have been calculated for the building construction project, the project estimator should adjust the total account for both profit margin and contingency. The profit margin has been determined by considering the growth goals and market conditions.