Definition

A pricing document is a formal schedule used to invite and compare contractor tenders or record agreed contract values. The most common forms are bills of quantities (BoQ), schedules of rates, and activity schedules, each suited to different procurement routes. The RICS New Rules of Measurement (NRM) provide the standard methodology for preparing BoQs and cost plans.

Why this matters for Communication and Negotiation

  • A pricing document is a communication as much as a technical document: it must convey scope clearly enough that all tenderers price the same thing and the client can make an informed procurement decision.
  • At Level 2, assessors expect you to describe the format and content of a real pricing document, explain your choices, and confirm it achieved its purpose.
  • A poorly structured document leads to ambiguous tenders, post-contract disputes and cost overruns; Rule 3 (Service) requires the document to be fit for purpose.

Key principles

Choose the right document type for the project

A bill of quantities measures every element in detail for like-for-like tender comparison; it suits larger projects with well-advanced design. A schedule of rates prices unit rates with quantities measured post-contract, suitable where full scope cannot be determined at tender. An activity schedule links payment to completion of defined activities and is common in NEC contracts. The choice signals to tenderers how risk and scope are allocated.

Measure accurately and consistently

Derive the quantity take-off from current design information, measured in accordance with the relevant rules (NRM2 for building works, CESMM4 for civil engineering). Reference each measurement to the drawing or specification from which it was taken. Describe work items clearly enough that a contractor with no prior knowledge can price them without assumptions about the specification.

Present the document accessibly

Structure the document logically, with a clear table of contents, consistent headings and unambiguous descriptions. Group related items together and provide a summary page for quick section-by-section comparison. Explain the basis of any provisional or PC sums clearly. A difficult-to-navigate document generates queries during the tender period and imprecise tenders at close.

Review, check and issue with a clear tender process

Check the document with a second surveyor before issue. The tender package must include the contract conditions and a clear programme for return, evaluation and appointment. Allow a reasonable tender period (typically four to six weeks for a medium-sized project). Circulate all clarifications in writing to every tenderer to maintain fairness.

Relevant RICS guidance and legislation

  • RICS New Rules of Measurement (NRM2) — the standard methodology for preparing bills of quantities for building works; candidates must be able to apply the measurement rules and describe how they used them.
  • RICS Rules of Conduct (effective 2 February 2022) — Rule 3 (Service) requires the pricing document to be fit for purpose; Rule 1 (Honesty and Integrity) requires that the document is accurate and not misleading.
  • Public Contracts Regulations 2015 — where the project is publicly funded and exceeds the relevant threshold, the tender process must comply with procurement legislation, including equal treatment and transparency obligations.

Ethics and Rules of Conduct angle

Rule 1 (Honesty and Integrity) requires that pricing documents accurately represent the scope of work; inflating quantities or omitting items to suppress the apparent tender price breaches this rule. Where provisional sums or contingencies are included, their basis must be disclosed clearly to the client. Rule 3 (Service) requires the document to function as a genuine cost-management tool, not a procurement formality.

APC-style Q&As

Q (Level 1)What is a bill of quantities and what is it used for?

A bill of quantities itemises and measures every element of the building works in accordance with a standard method of measurement, providing tenderers with a common basis for pricing. It enables like-for-like tender comparison, forms the basis of the contract sum, and is used for valuing interim payments and variations during construction.

Q (Level 1)What is NRM2 and why is it relevant to producing a bill of quantities?

NRM2 is the RICS New Rules of Measurement for detailed measurement of building works. It defines how each element should be itemised and measured in a bill of quantities. Using NRM2 ensures consistency across different projects, enabling fair tender comparison and reducing the risk of dispute about what is included in each price.

Q (Level 2)Describe a pricing document you prepared on a real project. What format did you choose and why?

(example) On a 50-unit residential development I prepared a full bill of quantities measured in accordance with NRM2. I chose a BoQ because the design was sufficiently advanced at tender stage to allow detailed measurement, and the client wanted like-for-like tender comparison across five shortlisted contractors. The BoQ was structured by work section (preliminaries, substructure, superstructure, internal finishes, external works and services) with a summary page at the front. I included a schedule of daywork rates and a list of PC sums for specialist subcontract packages. The format enabled the client to award to the lowest compliant tenderer with confidence that all tenders were priced on the same basis.

Q (Level 2)Why is it important to circulate tender clarifications to all tenderers in writing?

All tenderers must receive the same information for a fair, like-for-like comparison. If one tenderer receives a clarification that others do not, the comparison is distorted. On publicly funded projects, unequal treatment may breach the Public Contracts Regulations 2015. On private projects, a disadvantaged tenderer may challenge the process or withdraw, damaging the procurement programme.

Q (Level 3)A client asks you to suppress the contingency from the tender documents so that the overall cost figure looks lower for board approval. How do you respond?

This request cannot be complied with. Rule 1 (Honesty and Integrity) requires pricing documents to represent the cost of the works accurately, including risk allowances. A contingency is a necessary element of any realistic cost plan; omitting it presents the board with a knowingly understated figure and may lead to a contract the client cannot fund to completion. I would offer instead to present the contingency separately as a risk allowance, with a clear explanation of its basis, so the board can decide on an informed basis whether to include or reduce it. I would document my advice and the client's decision in writing.