Construction procurement: why data and quantities set the price
Construction procurement is where a contractor's prices become real: quotations from suppliers and subcontractors, purchase orders, invoices and measured quantities. An estimate or a budget built without procurement data prices by an average, not by the price this particular contractor actually pays. That is why procurement, accounting and the bill of quantities need to speak the same language: the same items, the same units and the same quantities.
Construction procurement: where the real prices come from
What drives pricing is data: price lists and catalogues of large suppliers, of concrete plants, of plasterboard and waterproofing manufacturers and of the other material suppliers. These prices change by region, by the size of the contractor and by the material, and they are updated all the time. The procurement department of a large contractor receives quotations, orders materials based on previous orders and invoices, and gets price updates in every period. The people who do this work hard, and what they know about prices is an asset of the company.
A small contractor's prices say little about a large contractor's prices, and the other way round. Every contractor has its own suppliers, its own volumes and its own prices. A generic price, for example gypsum plaster three centimetres thick on walls and ceilings multiplied by a standard rate, gives a standard result, and that is exactly what it means: an approximation, not the price of a particular contractor. On the difference between a price list and what is paid in the market, see construction price list vs market price.
Procurement and accounting: two systems and a lot of typing
At a large contractor, procurement and accounting usually run on different systems. Invoices arrive from suppliers who use one system, the contractor uses another, and there is no interface between them. The result is that invoices are still typed in by hand, and procurement sits under piles of paperwork. This is the big gap in construction procurement today: the data exists, but it is not connected.
The first pain to solve is scanning the invoices and connecting the systems. Only once the data is in one place, and linked to the items of the bill of quantities, can it be compared with the next projects and used for pricing. An invoice that is not linked to an item is a number in the accounts, not pricing data. On the bill of quantities as the shared basis, see bill of quantities.
There is no bill of quantities at the push of a button
It is tempting to think that a Revit model produces a bill of quantities with one click. In practice it is work: improving the model, reading the specifications and matching every element to an item. Not all buildings are built the same way, and not all walls get exactly the same material. So the process can be semi-automatic: the computer counts and measures, and a person checks that every quantity belongs to the right item according to the specification. On this approach, see model quantity takeoff.
The same principle applies to breaking an item down into resources: how much material goes into each wall type, how much labour and how much equipment. It depends on the project, the contractor and the specification, not on one generic table. On that breakdown, see construction resources.
A price without procurement data is an average. It is fine for a first estimate, but it does not replace the quotations, invoices and quantities of the contractor who actually builds.
Lump-sum finishes, quantities in procurement and cost control
For finishes, large contractors often work on a lump sum: a price per flat agreed with the subcontractor, without going into every square metre. The people who do look at exact quantities are procurement, which has to order materials, and budget control, which has to know whether the project stays within its budget. For them an inaccurate quantity means surplus orders, shortages on site or an overrun found too late. On finishes quantities, see finishes quantity takeoff.
An estimate is a macro picture: roughly what the project should cost. A large body of procurement data, linked to items and quantities, is what makes it possible to sharpen it over time. On tracking orders and invoices against the budget, see construction cost control.
What a quantity surveyor gives procurement
Construction procurement needs quantities by item, in the same units and with the same descriptions that suppliers and subcontractors price. A uniform bill of quantities makes it possible to ask for quotations on the same work and to compare item against item, as explained in negotiating with contractors. The same quantities are later used for orders and for checking payment applications.
A quantity surveyor may be an engineer or a registered building technician, like Yaakov Avital. In my work I measure the quantities the way a contractor would, and pricing and estimates are an extra service: verbal feedback on prices together with you, with no commitment. When you ask for a number, I do not commit to it; I write down what is needed to make it precise: quotations, procurement data and quantities. More on the page of a quantity surveyor in Israel.
Frequently asked questions
Why don't a small contractor's prices fit a large contractor?
Because every contractor has its own suppliers, purchasing volumes and terms. What a small contractor pays says little about what a contractor building hundreds of flats a year will pay, and the other way round.
Can a bill of quantities be produced automatically from Revit?
Not at the push of a button. The model gives quantities of elements, but it has to be improved, the specification has to be read and every quantity has to be assigned to an item. It can be semi-automatic, with a person checking.
Who checks finishes quantities when the contractor works on a lump sum?
Procurement and budget control. The subcontractor gets a price per flat, but the materials are ordered by quantity, and the budget is checked against those quantities.
What do invoices have to do with the estimate?
Invoices linked to items are the prices the contractor actually paid. When there are many of them, the next estimate can be built from them instead of guessing by an average.
Have a project? Tell me briefly what the project is and what already exists. When the project is a good fit, I usually reply with focused questions and a written quote.
Contact me for a quote* Created with AI for marketing, for illustration only. Not reviewed by Yaakov Avital and not professional advice. Every project must be checked on its own by a professional quantity surveyor and an engineer.