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Pricing & commercial

Why the lowest quote is not always the lowest cost.

The cheapest initial quote often becomes the most expensive project. Omissions, variations, quality compromises, and delay costs can turn a £155,000 starting price into a £192,000 final account — higher than the middle quote that was properly priced from the start.

Authored by Alexandr Vreme & Maksym Vasylkov
Published July 2026 — Next review July 2027

Omissions

The most common way a low quote achieves its number is by omitting scope items. Items such as decoration, external works, drainage connections, design fees, or preliminaries may be excluded from the price. Once the contract is awarded, these omissions become variations — charged at the contractor’s rates, which are often higher than if they had been included in the original tender. The client pays more overall while losing the leverage of competitive pricing on those items.

Aggressive variation pricing

A contractor who wins a job on a low price needs to recover margin somewhere. Variations are the primary mechanism. Daywork rates may be high, preliminaries may be applied to every variation, and scope changes are priced at levels that compensate for the thin original margin. The result is a final account that far exceeds the original tender, while the contractor who priced the job properly from the outset has fewer variations and more predictable costs.

Quality and supervision

Low-price bids often cut corners on material quality, supervision, and management time. Cheaper materials may not meet the specified performance standard, leading to early-life failures. Fewer site visits by the project manager reduce oversight, increasing the risk of defects. The cost of rectification typically falls on the client, erasing the initial saving.

Delays from under-priced preliminaries

If the price does not include adequate provision for supervision, site management, and programme coordination, delays are likely. A project that runs over schedule incurs extended hire costs, professional fees, and in some cases liquidated damages. The cheapest quote may produce the longest programme.

Miniature example

A client receives three quotes for a house refurbishment: lowest £155,000, middle £178,000, highest £201,000. The client chooses the lowest. At final account, the £155,000 quote has grown to £192,000 through 17 variations and a 6-week programme delay. The middle-quote contractor, whose £178,000 price included a comprehensive scope and adequate preliminaries, completed the project with just 3 variations and a final account of £186,000. The “cheap” option cost £6,000 more and took 6 weeks longer.

Questions to ask

• What is the total likely final cost, not just the starting price?
• Is the contractor trading unsustainably — pricing below cost to win work?
• What items are omitted from the lowest quote that are included in the others?
• What is the contractor’s track record on final accounts versus initial quotes?