Tenders rarely go wrong on the big items. Nobody forgets the roof. Jobs turn into losses on five costs that are hard to see on a drawing: preliminaries priced as a percentage, time-related costs when the programme slips, waste taken off the drawing rather than off site, temporary works nobody drew, and labour time that is paid for but not productive.
All five share a property that makes them dangerous. Each one looks small on its own, and each one scales with something other than the quantity of work.
1. Preliminaries priced as a percentage
Preliminaries cover everything that is not a physical piece of work: site management, welfare, insurances, scaffolding, temporary services, plant, security. Ask what they should come to and the usual answer is a percentage of contract value.
That answer is the problem. Published ranges vary from around 5% to 15% and higher on constrained sites, and BCIS sets out why the spread is so wide. The reason is simple: preliminaries do not scale with contract value. They scale with time.
Two jobs of identical value, one running 20 weeks and one running 32, do not carry the same preliminaries. The percentage that was right on the last job is right on this one only by coincidence. Build them up from the programme instead, week by week, and the number stops being a guess.
2. Time-related costs when the programme slips
This is the same mistake with the consequences attached, and it is the one that turns thin jobs into losses.
Take a typical weekly cost for a modest residential job. Round figures — use your own:
- Site manager, allocated: £1,100
- Scaffold hire: £450
- Welfare unit, temporary power and water: £280
- Skips and waste removal: £320
- Small plant hire: £250
- Insurances and site overheads: £400
- Total per week: £2,800
Price an 8-week programme and you carry £22,400. Run 12 weeks and it is £33,600. The overrun costs £11,200, and not one penny of it bought any extra work.
Now set that against the job. On an £85,000 contract at 12% net margin, you were expecting £10,200. A four-week overrun costs £11,200. The margin is gone and you are £1,000 down, on a job where every trade hit its measured quantity exactly.
Scaffold is the one people notice, because the hire invoice keeps arriving. It was £450 of the £2,800. The other £2,350 a week is the part that does not send a reminder.
3. Waste taken off the drawing rather than off site
Bills of quantities measure work net as fixed in place. The quantity is the finished item, so waste, offcuts and over-dig are never in it. They belong in your rate, and the allowance most contractors carry is the one they have always carried rather than one they have checked.
The gap between a 5% allowance and a real 10% is invisible per unit and substantial per job. On 400 m² of brickwork at roughly 60 bricks per m², that is 24,000 bricks net. At 5% you order 25,200. At an actual 10% you need 26,400. The 1,200-brick difference is not a disaster on its own, but the same error is running through the blockwork, the timber, the plasterboard, the tiling and the screed at the same time.
Cut lengths are where it concentrates. A material with a fixed module wasted on a job with awkward dimensions does not waste at the average rate, it wastes at whatever the geometry dictates. That is worth checking against your own site records rather than a figure copied from a rate book. It is the single most useful piece of data a builder already owns and almost never analyses. We have written more on how to read a bill of quantities and what the measure deliberately leaves out.
4. Temporary works nobody drew
Temporary works are the structures that exist only so the permanent ones can be built: propping, needling, formwork, edge protection, sheet piling, trench support, temporary roofs, crash decks, haul routes.
They get missed because they are not on the architect's drawings and often not on the engineer's either. Nothing in the bill prompts you, so the allowance depends on whether the person pricing has built that particular detail before.
The reliable check is to read the construction sequence rather than the drawings. Anywhere the permanent structure cannot support itself yet, something temporary is holding it up, and that something has a cost, a design and sometimes an engineer's sign-off. Removal costs money too, and gets left out even more often than installation.
A rear extension with a steel beam replacing a load-bearing wall is the everyday version. The beam is on the drawing and gets priced. The Acrow props, the needles through the wall above, the temporary bearing they sit on, the hire period while the padstones cure, and the making good afterwards usually are not. None of it is expensive individually. Together it is a fortnight of hire and a day or two of labour that nobody allowed for, on a job where the margin was already thin.
5. Labour time that is paid for but not productive
An eight-hour day is not eight hours of output, and everyone knows it, but the rates people use often quietly assume otherwise.
Paid but non-productive time covers travel between sites, setting up and clearing down, moving materials, waiting for a delivery that did not arrive at eight, inductions, toolbox talks, weather, and the drop in output on a congested site with four trades in the same room. None of it appears in a measured quantity. All of it is on your payroll.
If your labour rate is built from an hourly wage without an allowance for this, it is understated before you add a single on-cost. The others belong there too: employer's national insurance or superannuation, pension, holiday pay, sick cover, supervision, training, tools and site transport. A labour rate is a build-up, not a wage.
The size of the gap surprises people the first time they work it out. Take a nominal 40-hour week. Strip out an hour a day of setting up, clearing down and moving materials, and you are at 35. Take off the mornings lost waiting on a delivery, the induction on a new site, and a wet afternoon, and a realistic productive figure is lower again. If you divide a weekly wage by 40 to get your rate, every one of those hours is being given away free, on every job, all year.
What to check before you submit
- Are preliminaries built up week by week from the programme, or applied as a percentage?
- What is your genuine all-in weekly site cost, and how many weeks are you carrying?
- What happens to the margin if the programme runs four weeks long?
- Are waste allowances taken from your own outturn records or from habit?
- Has anyone walked the construction sequence looking for temporary works?
- Does your labour rate include on-costs and non-productive time, or just the wage?
- Are provisional sums excluded from your margin?
The programme question is the one worth doing first. It takes ten minutes and it tells you how much slippage the job can absorb before you are working for nothing. On the example above the answer was three and a half weeks, which is not much.
Who this applies to
- Main contractors
- Subcontractors
- Builders
- Specialist trades
FAQ
What are preliminaries in construction? Everything needed to run a site that is not a physical piece of measured work: site management, welfare, insurances, scaffolding, temporary power and water, plant and security. Most of it is time-related, which is why it should be built up from the programme rather than taken as a percentage.
What percentage should preliminaries be? Published figures range from roughly 5% to 15% of contract value and go higher on constrained sites, which tells you the percentage is not a reliable method. A 20-week and a 32-week job of the same value carry very different preliminaries. Build them from the programme.
How much waste should I allow? It depends on the material, the module and how awkward the geometry is, so a single figure across a job will be wrong in both directions. The most reliable source is your own delivery and outturn records rather than a published table.
What counts as temporary works? Anything built only so the permanent works can be constructed: propping, formwork, trench support, edge protection, crash decks, temporary roofs and haul routes. They rarely appear on drawings, so they are found by walking the construction sequence rather than by reading the bill.
Why did a job lose money when every quantity was right? Usually time. Measured quantities can be exactly correct while the programme runs long, and time-related costs keep accruing regardless of how much work is being done. That is the most common way a technically accurate tender turns into a loss.
Where to start
If you want the preliminaries on your next tender built up from the programme rather than estimated as a percentage, send the drawings and the programme over. We prepare estimates and cost plans with preliminaries measured and priced as line items, and construction programmes where the time-related costs need pinning down before you commit to a price.