How to review a contractor's quotation before you sign

Once you sign a quotation, you accept its scope, price and terms, and anything it leaves out comes back to you as an extra. Spend an hour on these checks before you sign, or ask a quantity surveyor to do them for you.

Check the scope against your drawings

Lay the quote next to your drawings and specification and tick off each part of the work. Look for items the contractor has left out or described in vague terms, such as "electrical work as required" or "plumbing complete". A vague description makes it hard to hold the contractor to a standard and easy for them to claim extras later.

Test the quantities and rates

If the quote shows quantities, check the main ones: floor and wall areas, roof area, lengths of walling, and the number of doors and windows. A mistake in a quantity carries through to the price. Compare the rates with the other quotes and with recent work you know of. A rate far below the rest can mean the contractor misread the work, and that contractor may look for ways to recover the money once on site.

Read the allowances

Provisional sums and prime cost sums cover work or items nobody has designed or chosen yet, such as tiles, sanitaryware or kitchen fittings. Check that each allowance matches the standard you want. A low allowance makes the quote look cheaper, and you pay the difference when you make your selection. Check the markup the contractor adds to these sums as well.

Read the exclusions

The exclusions tell you what you will pay for outside the quote. Look for items such as:

• Municipal plan fees and connection costs
• Rubble removal and site clearance
• Excavation in rock or hard material
• Electrical certificates of compliance
• Engineer inspections and professional fees
• Painting, landscaping and boundary walls

Ask the contractor to price each exclusion you need, so you can compare quotes on the same scope.

Check the terms

• Deposit. Keep the deposit in line with the materials the contractor must order, and link later payments to work completed.
• Payments. Agree how the contractor will claim and how you will check the work before you pay. On larger projects, a QS valuation of work done protects you.
• Retention. Agree a portion held back from each payment until the end of the defects period, so the contractor has a reason to return and fix defects.
• Programme. Ask for start and completion dates and a programme you can track.
• Variations. Agree in writing how you will instruct and price changes before work on them starts.
• VAT. Confirm whether the price includes VAT and whether the contractor is VAT registered.
• Contract. For anything beyond a small job, sign a recognised building contract, such as a JBCC agreement, with the quote and drawings attached.

Check the contractor

For a new home, the builder must register with the NHBRC and enrol the home before construction starts. Public bodies appoint contractors by CIDB grading, so check the grading if your project needs one. Ask for references from recent clients and visit a finished job if you can. Confirm that the contractor carries the insurance your project needs, such as contract works and public liability cover, and ask for the policy schedule.

Compare like for like

Quotes from different contractors cover different scopes, allowances and exclusions. Before you compare totals, adjust each quote to the same scope: add the cost of exclusions, correct low allowances and price missing items. The lowest adjusted total can belong to a different contractor from the lowest headline price.

Write down every question the review raises and send the list to the contractor. Ask for written answers, and attach them to the contract you sign.

Quantum reviews contractor quotations for homeowners, businesses, body corporates and developers. We return a written list of scope gaps, rate checks and questions to put to the contractor before you sign.