How to compare MEP quotations — lining up three prices so the difference means something

You have three quotations for the MEP package. They are 20 percent apart. The instinct is to award the lowest and negotiate the middle one down. The better instinct is to ask whether the three are pricing the same thing — because on most projects they are not, and the spread is mostly scope, not margin.

This is the method our own estimating team uses when it is asked to review competing bids on a client's behalf. It is unglamorous and it works.

Step one — put the scopes side by side before the prices

Build a matrix: rows for every element of the work, columns for each bidder, cells marked included, excluded or silent. The rows that matter most are the ones bidders routinely handle differently:

• Design — full design, design-and-build, or installation to someone else's drawings
• Statutory approvals — who files Fire NOC, CEIG, DISCOM and pollution-board applications, and who pays the fees
• Owner-supplied items — DG set, transformer, lifts, BMS, sanitary ware, light fittings
• Testing, adjusting and balancing, and integrated commissioning
• As-built drawings and the O&M dossier
• Civil interfaces — plant-room builder's work, cable trenches, foundations, core cutting, fire-stopping
• Defect liability — duration, and whether it covers labour only or parts as well

"Silent" is the important state. A quotation that does not mention approvals has not included them; the bidder will say so after award, when it costs the most.

Step two — compare the makes, item by item

A chiller is not a chiller. An unnamed "reputed make" on one quote and a named tier-1 manufacturer on another can be the whole price difference on that line. For the major plant — chillers, transformers, switchgear, DG sets, fire pumps, inverters, modules — require the make and model to be stated, and compare them. Where a bidder has offered a lower-tier make, ask them to price the specified one as an alternative so the comparison is on the same basis. Our service pages list the approved makes we specify for each system, which is the level of specificity to demand.

Step three — check the quantities behind the rates

Two bidders can quote the same rate per metre of cable and differ by a third on the cable line, because one measured the routes from the drawings and one took a metres-per-square-foot guess. On an item-rate contract the quantity is the client's risk; on a lump sum it is the contractor's — but a lump sum built on a guessed quantity becomes a claim. Ask each bidder for the quantity basis on the five or six biggest lines: cable, pipe, duct, sprinkler heads, light fittings, panels. Who pays when the site says 1,470 metres depends on what was written here.

Step four — read the exclusions and assumptions sheet

Every quotation should carry one; every bidder should be required to. The lines to look for: statutory fees excluded; "site power and water by client"; "scaffolding by others"; rates valid for a stated period with escalation thereafter — copper and steel clauses deserve their own reading; "quantities subject to final measurement"; and the assumption about working hours and shutdown access on a live site. Each exclusion is a cost that will arrive from somewhere.

Step five — normalise, then compare

Add to each quotation the cost of what it excluded and the others included, at the rate the others quoted for it. Now the totals are comparable. On most projects the spread shrinks sharply at this point — and occasionally the order reverses. Only now is a price difference a difference in margin, efficiency or design approach, which is a conversation worth having with the bidder.

Step six — ask the low bidder to explain the number

A low price with a clear basis is a good price. Ask the bidder to walk through it against the BOQ. Answers that hold up: a leaner but adequate design, a different make that meets the specification, a genuinely lower overhead, an existing team nearby. Answers that do not: silence on the lines where they are cheapest, or a promise that "it will be sorted on site". The L1 award that backfires is the one where nobody asked.

The shortcut: make the bidders do the normalising

All of the above is far easier if the tender goes out with one BOQ — quantities measured, makes named, scope matrix attached, exclusions sheet mandatory — so that every bidder prices the same document. A BOQ that cannot be gamed describes how to write one, and why per-square-foot MEP costs vary explains what a sensible band looks like before the quotes arrive. If you would like a bid reviewed, or a budget to test them against, a BOQ review is one of the things you can ask us for.