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Glossary · Bid management

BOQ vs schedule of rates vs lump sum

A lump sum is one price for a defined scope. A bill of quantities lists measured items and quantities to be priced line by line. A schedule of rates sets prices for defined units, with the total commonly determined from the quantities performed. The contract determines whether quantities are binding, remeasured or indicative and who carries the associated risk.

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What is each structure?

A lump sum contract fixes one price for the whole defined scope. You price the drawings and specification as a package, and if the work takes more material than you allowed, the difference is yours unless a variation or another clause moves it.

A bill of quantities is a measured list: each item, its unit and its quantity, against which you enter a rate. A schedule of rates gives the items and units but leaves the quantities open, which suits work whose extent is genuinely unknown when the contract is signed.

contractor carries the quantity risk principal carries the quantity risk Lump sum one price, defined scope you measured it, you own it Bill of quantities client measures, you rate position depends on remeasurement Schedule of rates rates fixed, quantities open paid for what is done
The same work can be tendered any of these three ways. What changes is who pays when the quantity turns out to be different from the one in the document.

Who carries the risk in each?

Under a lump sum, the contractor carries both the quantity and the rate. This is why a lump sum tender with thin drawings is dangerous: you are guaranteeing a price for work whose extent you had to infer.

Under a schedule of rates, the contractor guarantees the rate only, and the client pays for the quantity that occurs. A bill of quantities depends on the contract: where quantities are remeasured, the risk sits closer to the client; where the bill is stated to be indicative and the lump sum governs, it sits with you despite the line by line appearance.

What changes in how you price?

Under a lump sum you price the scope and carry your own measurement, so the quantity survey is your risk and worth doing properly. Under a bill you price rates against someone else's measurement, which makes checking a sample of quantities against the drawings a cheap and high value exercise.

Under a schedule of rates the rate has to stand up across a range of quantities you cannot predict, so a rate that only works at volume is a trap: state the assumption, or price for the low volume case.

The three structures compared

The three structures compared
StructureWhat you priceQuantity riskSuits
Lump sumOne fixed amount for the defined scopeContractorWell defined scope, mature drawings
Bill of quantitiesA rate against each measured itemShared; depends on whether quantities are remeasuredDefined scope where the client wants comparable, itemised pricing
Schedule of ratesRates only, quantities left openPrincipalWork of genuinely uncertain extent, term or maintenance contracts

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FAQ

Common questions

What is the difference between a bill of quantities and a schedule of rates?

A bill of quantities states both the items and the measured quantities, so the tendered total follows from your rates applied to those quantities. A schedule of rates states the items and units but leaves quantities open, and payment follows the quantity actually carried out.

Is a bill of quantities a lump sum?

It depends on the contract. Some contracts use the bill to arrive at a lump sum that then governs, with the quantities treated as indicative; others remeasure against the bill as the work proceeds. Read the pricing clause rather than assuming from the format of the document.

Should you check the client's quantities?

Sample them against the drawings, always, and check the units in particular. Where the quantities are indicative and a lump sum governs, an error is yours to carry, which makes a few hours of checking the cheapest risk reduction available in the whole bid.

Can Elora Grid check a bill against the drawings?

Upload the bill, schedules and relevant drawing revisions together. AI can help identify differences in stated quantities, units and equipment requirements, and organise them for review. It is not a guarantee of a complete measured take-off: confirm measurements, rates and commercial treatment with your estimator.

Put it into practice

From tender files to levelled bids.

Compare quantities, units, scope and supplier prices before choosing a commercial position.

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