Read the bill against the rest of the tender
A BOQ is not a stand-alone price list. The sample preamble in the World Bank's standard Request for Bids for Works says the bill is read with the instructions to bidders, conditions of contract, specifications and drawings; that its quantities are estimates giving a common basis for bidding; and that payment is for the quantities actually carried out and measured, at your rates. In a remeasured contract, a wrong rate costs you on every unit measured.
Before you price a single line, establish three things:
- What each item includes. The method of measurement named in the tender defines what an item covers, such as whether formwork, reinforcement, dewatering or disposal are measured separately or included in the rate. For UK building work it is often RICS's NRM 2; civil and donor-funded bills name their own standard in the preamble.
- What the rates must cover. The World Bank sample preamble says that, unless the contract provides otherwise, rates include plant, labour, supervision, materials, erection, maintenance, insurance, profit, taxes and duties, together with the general risks, liabilities and obligations of the contract.
- What the employer has fixed. Provisional sums, provisional quantities, dayworks and any contingency line are set by the employer, and the rules for each are in the preamble and the bid data sheet.
Raise a clarification early for any item you cannot price from its description: the World Bank document only commits the employer to answer requests received at least 14 days before the bid deadline. Price from the latest bill, because addenda can change quantities, items and units.
Build each unit rate from its resources
A unit rate is the cost of one unit of an item (one cubic metre, one tonne, one linear metre) built up from the resources that unit consumes. Work from an output: how much a gang or a machine actually produces in an hour on this site, with this access and this method. Then divide each resource's hourly cost by that output.
- Labour: gang cost per hour ÷ gang output per hour. Use all-in hourly costs: wages plus allowances, statutory on-costs, and accommodation and travel where the site needs them.
- Plant: ownership or hire cost plus operating cost (fuel, operator, maintenance) per hour ÷ output per hour. Include the standing time your method forces on the machine.
- Materials: the supplier's price per unit of the item, plus an allowance for waste, breakage and over-ordering. Note whether the price includes tax and duty.
- Transport: freight to site where the supplier's price is ex-works or ex-port. On a remote site this can rival the cost of the material itself.
- Subcontract: the subcontractor's quoted rate, adjusted for the attendance you provide and anything their quote excludes.
Write the output assumption next to every rate (for example, an excavator and three tippers at 45 m³ an hour on an 8 km round haul), so a later change of quantity or method can be re-priced without guessing what the old rate assumed.
Worked example: a concrete rate (illustrative)
The item: 120 m³ of grade C25 concrete in culvert base slabs, measured per cubic metre, with formwork and reinforcement measured separately. The gang is a foreman and six labourers with a mixer and a poker vibrator, placing 6 m³ an hour. All figures are illustrative, in a notional currency.
| Resource | Quantity per m³ | Unit cost | Cost per m³ |
|---|---|---|---|
| Cement | 0.35 t | 600.00 | 210.00 |
| Sand | 0.45 m³ | 90.00 | 40.50 |
| Coarse aggregate | 0.85 m³ | 110.00 | 93.50 |
| Water and admixture | allowance | 5.00 | |
| Waste at 5% of the materials above (349.00) | 17.45 | ||
| Freight of cement to site | 0.35 t | 150.00 | 52.50 |
| Labour: foreman and six labourers at 6 m³/h | 0.1667 gang-hours | 85.00 | 14.17 |
| Plant: mixer and vibrator at 6 m³/h | 0.1667 hours | 45.00 | 7.50 |
| Net cost | 440.62 | ||
| Overheads, risk and profit at a 15% markup | 66.09 | ||
| Tender rate | 506.71 |
What the figures say
The line amount is 120 × 506.71 = 60,805.20. The 15% added on top of cost is a markup; as a share of the tender rate it is a margin of 66.09 ÷ 506.71 = 13.0%.
Preliminaries and general items
Preliminaries are the costs of running the job rather than of building a measured item: mobilisation and demobilisation, site establishment and camp, supervision and site management, temporary works and services, insurances, bonds, testing, facilities for the engineer where the contract requires them, and security. The World Bank's sample bill opens with Bill No. 1, General Items, for costs common to all parts of the works.
Split them into fixed costs, incurred once (such as mobilisation), and time-related costs, incurred every week the site is open (such as supervision, camp running and standing plant). Price the time-related items from your programme rather than as a percentage, because an extension of time is argued over exactly these figures.
Where the bill has an item for a cost, price it there. Where it has none, the World Bank sample preamble deems the cost distributed among the rates for the related items, so carry it into those measured rates and note it in your build-up.
Provisional sums, prime-cost sums and dayworks
A provisional sum is the employer's figure for work or a supply that cannot be fully defined at tender, spent only at the engineer's direction. Enter it exactly as printed: it is not yours to change, and it is not where your profit comes from. In the World Bank document it is spent at the engineer's direction under Sub-Clauses 13.4 and 13.5 of the general conditions, and the contract data states the percentage rate for overhead charges and profit applied to it.
Under RICS's NRM 2, a provisional sum is defined or undefined. For a defined one, the bill describes the nature and extent of the work, and you are assumed to have allowed for it in your programming, planning and preliminaries; for an undefined one, you are not. Either way it excludes overheads and profit, and the bill provides for you to add your own percentage on the work done under it.
A prime-cost (PC) sum or price is a supply-only allowance for a material whose exact type is not yet chosen, such as tiles at a stated price per square metre delivered to site. It sits inside your unit rate: you price the fixing, waste and ancillary materials around it, and under NRM 2 your overheads and profit on it are dealt with separately.
Where work under a provisional sum will go to a nominated subcontractor, the World Bank guidance follows the sum with an item inviting the main bidder to quote a percentage on the actual expenditure, for the attendance and facilities it provides. That percentage is the only competitive part of the sum, so price it properly.
Dayworks are rates for labour, materials and plant used on work the engineer orders on a daywork basis. In the World Bank document, bidders enter basic rates against nominal quantities, plus a percentage on each daywork subtotal for profit, overheads and supervision, and the total goes to the summary as a provisional sum. Daywork priced competitively this way counts in the evaluated bid price, while other provisional sums and the contingency do not, so do not load daywork rates on the assumption that nobody compares them.
Overheads, risk and profit: markup versus margin
Once you have the net cost, three amounts remain: head-office overheads (the share of your fixed business costs this contract has to carry), risk (an allowance for the risks the contract leaves with you that no individual rate has priced) and profit. Add them as a markup on cost, then check the result as a margin on price, because the two percentages are not the same.
- Markup = (price − cost) ÷ cost, so price = cost × (1 + markup).
- Margin = (price − cost) ÷ price, so price = cost ÷ (1 − margin).
- Converting: margin = markup ÷ (1 + markup), and markup = margin ÷ (1 − margin).
Why the difference matters
In the worked example, a 15% markup gives a 13.0% margin. Going the other way, a target margin of 10% needs a markup of 0.10 ÷ 0.90 = 11.1%, not 10%. A firm that confuses the two prices every job below what it intends, by about one percentage point at a 10% target and two points at 15%. On a job priced for a 10% margin, that is close to a tenth of the profit you planned.
Spread overheads and profit evenly across the measured rates unless you have a stated reason not to. Pricing early items high to improve cash flow is front-loading, and the employer can act on it (see the checks below).
Supplier quotes, currency and imported materials
For material and subcontract prices, send the same package to several suppliers and compare the quotes line by line, not by total, checking each one's validity, delivery terms, exclusions and currency. Price any item a supplier left out from another quote or your own build-up.
Imported plant, fuel and materials put currency risk into your rates, so read how the tender handles currency. Under one option in the World Bank document, rates are quoted entirely in local currency, and a bidder that needs foreign currency for inputs from outside the employer's country states the percentage of the bid price (excluding provisional sums) it needs, in no more than three foreign currencies, with the exchange rates it used; those rates apply to all payments, so it bears no exchange risk on those portions. Unless the bid data sheet and conditions say otherwise, that document's rates are subject to price adjustment by formula; where the price is fixed, escalation is yours to price.
Checks before you submit
Run these checks on the final bill, after the last addendum and the last change to your margin:
- 1No blank rates. Under the World Bank rules, an item with no rate or price is deemed covered by your other rates and is not paid for separately. An item left out of the bill altogether is treated as not included and, if the bid is still substantially responsive, the average price other responsive bidders quoted for it is added to your price for comparison. Enter a rate on every line.
- 2Quantity × rate = amount, on every line. Where they disagree, the World Bank rule is that the unit rate prevails and the amount is corrected, unless the decimal point in the rate is obviously misplaced; subtotals prevail over a wrong total, and words over figures unless the words carry an arithmetic error. A bidder that does not accept the correction is rejected.
- 3Quantities and descriptions unchanged. Compare every item, unit and quantity with the issued bill and the latest addendum. Do not alter what the employer issued.
- 4Provisional sums and contingency exactly as printed, and carried to the summary the way the bill instructs.
- 5Balance. Look for rates far above or below your build-ups, and for early items priced high. If the bid evaluated as lowest in cost is seriously unbalanced or front-loaded, the World Bank document lets the employer ask for detailed price analyses, then accept the bid, raise the performance security to as much as 20% of the contract price at the bidder's expense, or reject it. An abnormally low bid is rejected if its price analyses do not show the bidder can perform for that price.
- 6One price everywhere. The bill total, the summary, the letter of bid and every form that quotes the price must show the same figure, in the currency the tender asks for.
Rules differ between employers and editions. As of October 2026 these points come from the World Bank's September 2025 standard document for works; confirm each one in your tender's instructions to bidders and bid data sheet. More on what gets bids thrown out: why tenders are rejected.
How Bidligence prices a BOQ
When a tender issues its bill as a spreadsheet that Bidligence can read, that bill becomes the price format: the employer's bills, items, units, quantities, numbering and provisional sums stay as issued, and only the rates are priced. When a tender issues no bill, Bidligence drafts one from the scope of works for your estimator to check. It does not measure quantities from drawings.
Each line Bidligence prices from first principles carries a build-up shaped like the worked example: labour, plant, materials, transport and subcontract components, each with a quantity per unit and a unit cost, plus the output assumption, a justification, the web pages it cites for its prices and a high, medium or low confidence grade. Your own won-contract rate comes first where that contract's scope covers the line, then a rate-library estimate that passes its confidence checks, with the build-up kept beside it as a check. Won-contract rates are never shared with other workspaces, and build-ups never appear in the client's workbook.
Provisional sums are priced at exactly the employer's figure, with no margin. Bidligence's profit margin setting is added on top of each net rate, so it works as a markup on cost: for a 10% margin on price, set it to about 11.1%. You can send parts of the bill to suppliers as a request-for-quote link that needs no account, compare their quotes line by line and apply the lowest per item, with your margin re-applied on top.
When the tender issued an .xlsx workbook, the export writes your rates into it, each amount a quantity × rate formula the employer can audit. Bidligence will not save a priced bill with lines it could not price, and the export stops if any line of the tender's bill has no matching rate on the bid. The Rate Review (basis of rates) workbook stays with your team, outside the submission ZIP. Bids can be priced in any of 100 currencies; see BOQ pricing software.
Questions
- What is a unit rate build-up?
- A breakdown of one unit of a BOQ item into the labour, plant, materials, transport and subcontract work it uses, each as a quantity per unit times a unit cost. Their sum is the net rate, before overheads, risk and profit are added.
- What is the difference between markup and margin?
- Markup is profit as a share of cost; margin is profit as a share of the selling price. A 15% markup is a 13.0% margin, and a 10% margin needs an 11.1% markup.
- Should I add profit to provisional sums?
- No. Enter provisional sums exactly as the employer states them. Overheads and profit on the work done under them are recovered separately: in the World Bank documents through a percentage stated in the contract data, and in NRM 2 bills through a separate item where you enter your own percentage.
- What happens if I leave a rate blank in the BOQ?
- Under the World Bank's standard documents, an item with no rate is deemed covered by your other rates and is not paid for separately, so you do that work for nothing. Check your own tender's instructions to bidders for its rule.
- Can Bidligence price our BOQ?
- Yes. Bidligence prices the tender's own bill, or drafts one from the scope when the tender issued none, building rates from their resources with cited sources and a confidence grade and using your own won-contract rates first where their scope covers the line. Your estimator can review and edit every rate before export.
Sources
Rules and portals change. Check the tender’s own documents and the official source before you rely on any of this.