Construction price list vs market price: why a general price list is not accurate for your project
A general construction price list is a handy tool: item, unit and price, all ready in advance. The question is what that price assumes, and what happens when your project does not meet those assumptions. In most private projects the real price is set somewhere else: in contractors' quotes for the same site, in the same season and under the same conditions.
What a construction price list assumes, and what it does not know about you
A published price list, however good, describes an average project. Its editors say so themselves. At the start of every chapter of a well-known commercial price list it says that the prices are subject to the methods of measurement (the rules for how each item is measured) of the General Specification for building works, Israel's inter-ministerial specification; that you add or deduct according to the region of the country and the scale of the work; and that the price is a trade contractor's price, without the main contractor's percentage. In other words, the price list itself asks the user to adjust it.
That adjustment is not only technical. The earthworks price in the same price list, for example, includes compacting the bottom of the excavation, moving suitable material for fill up to a certain distance within the site, and removing surplus to an approved disposal site up to a certain distance from the site, without tipping fees. If your plot is further from the disposal site, or has no room to store soil, you get a price that does not reflect your work.
The factors that move the price from one plot to another
- Distance from the concrete plant and quarries. Fresh concrete has a limited delivery time under the applicable standards, and a concrete truck stuck in traffic is a direct cost. A plot in the centre of a dense city and a plot on the edge of a town get different quotes for the same cubic metre.
- Access and logistics. A narrow street, no room to park a semi-trailer, the need for a long concrete pump or a crane, and the window of working hours the local authority allows. All of these appear in the contractor's quote and not in the price list.
- Local authority requirements. Working hours, municipal inspection, road-closure permits, building permit conditions. In some cities these are large items in the site set-up.
- Density and neighbours. Building on the boundary line next to an existing building calls for shoring, monitoring and sometimes manual work. The price list prices the excavation; it does not know who lives next door.
- Scale and repetition. In a well-known commercial price list the same excavation item has several prices by quantity, and the price for a small quantity is more than twice the price for a large one. In a real project the quantity of each item is known only after a proper quantity takeoff.
- Timing and market. The availability of subcontractors, the season, and the workload in the industry in those months. No price list is updated to the level of a specific site.
Construction price list vs contractors' quotes: an illustrative example
In this example there are two private houses with identical drawings, about 200 m² each. One stands on a wide corner plot in a new neighbourhood, the other on a narrow plot in an old town, next to an existing house and on a one-way street. By a general price list both houses get almost the same number. In contractors' quotes the gap in the structural frame and site set-up items may be considerable: shoring, manual labour, a pump, crane days and fees. The first number is useful for an initial budget; the second is the one that will be paid.
What a price list is good for. A published price list suits an early cost estimate, a reasonableness check of a quote, and a comparison between design alternatives. It is less suited as the basis for a contract in a private project, unless the parties agreed to it explicitly. A proper cost estimate, with stated assumptions, is described on the construction cost estimate page.
When a well-known price list is binding
In public projects, in framework contracts, and in contracts that set a price list with a discount percentage in advance, the price list is part of the contract. There the question is not whether the price is accurate, but whether the quantities and descriptions in the bill of quantities (BOQ) match the price list's items and its methods of measurement. Even then it is worth checking what each item includes, because a price-list item that includes removal up to a certain distance is not the same as an item worded differently in the project's BOQ.
How to get to a real market price
- A bill of quantities with clear descriptions. A bill of quantities that sets out what each item includes lets contractors price the work itself, not their assumptions about it.
- The same BOQ to several contractors. When everyone prices the same quantities and the same descriptions, the differences between the quotes reflect market price, not interpretation. More on the comparison itself on the quantity surveyors page.
- Separate site set-up and logistics items. Access, crane, pump, site security and removal, as visible items. That way you see what makes this particular site more expensive.
- A reasonableness check against a price list. Once the quotes are in, the price list helps you spot an item priced unusually low or high, and ask why.
At this stage, the work of a quantity surveyor for construction projects is to prepare the basis for the comparison and to flag where a price-list price may mislead.
What a professional quantity surveyor adds here
If you measure only what is marked on the drawing and attach a price-list price to every line, you get a number that looks precise. A quantity surveyor who comes from the field, an engineer or a registered building technician who worked on site, like Yaakov Avital, reads the drawings also as someone who will have to build from them, and asks what will happen on this site. For example: the external works drawing shows ordinary excavation, and the soil report shows a groundwater level close to the bottom of the excavation. Measuring by the drawing puts one excavation item into the bill at a price-list price. A professional check flags a question to the geotechnical consultant and the structural engineer about pumping, shoring and casting in wet conditions, and they decide. The result is a flag in the bill, not a guessed price. On soil, excavation, foundations and shoring, check against the project's soil report and with the geotechnical consultant and the structural engineer.
A price list does not replace a quantity takeoff: even the right price will not save a wrong quantity. A quantity surveyor who knows the area can comment on the prices too, but first makes sure the quantities are right.
Frequently asked questions
Can I build a budget from a construction price list?
As an initial estimate, yes, especially when you state which of the price list's assumptions hold for the project. The final budget should rest on contractors' quotes for the project's own BOQ.
Why do two contractors give different prices for the same item?
Usually because of different assumptions: the equipment they have, their distance from the site, their workload and the level of risk they price in. A clear BOQ narrows the gap that comes from interpretation and leaves the gap that comes from the market.
What is the difference between a price-list price and market price?
A price-list price is a published average for defined conditions. Market price is what contractors are willing to accept for this work, in this place and at this time. The gap between them changes from project to project.
What do I need to get quotes I can compare?
Drawings in one revision, a specification, and one BOQ sent to everyone. Preparing it is covered on the BOQ preparation page.
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.