Bills of Quantities comprise a list of items of work
which are briefly described. The Bills also provide a measure of the extent
of work and this allows the work to be priced. The work included in the item
is defined in detail by the rules in the Method of Measurement. The item
descriptions are therefore a shorthand to allow the relevant rules of the
Method to be identified. The measure may be a single item or number,
dimension (linear metre, square metre, cubic metre), time (hrs, weeks) or
The Bills of Quantities may serve a number of functions
A breakdown of the tendered price, with no contractual
status, but providing information for the selection from tenderers;
An estimate measure of the work for the tendered price,
to be used to arrive at a revised contract price once the actual
quantities of work carried out are measured. This is the remeasure form of
A schedule of rates as the contract basis for valuing
variations in the work.
A basis for measure of the value of work completed for
Many contracts are let using Bills of Quantities,
although this does not necessarily mean that the works are to be valued by
re-measurement. The Bills of Quantities are required to be prepared using
rules in a specified Method of Measurement. Many Standard Methods of
Measurement are now in common use.
The Method of Measurement will specify the division of
work into categories. In the building industry the division is usually on
the basis of different trades, and are generally very detailed. In the
engineering industry the division is usually less complex and composite
items are used describing the completed construction operation. There is
normally a division for preliminary items such as mobilisation, site set up
and insurances. In contrast to the remainder of the Methods, preliminary
items require large lump sums, in some cases time-related, but with little
detail to allow the build-up to the item to be ascertained.
Standard Methods of Measurement have become increasingly
more complicated. They give rise to claims for additional payment based on
interpretation of the Method. The tendency has been for the Methods to
provide detailed sub-division of work and therefore scope for claims based
on ambiguities of interpretation, failure to measure the tendered Bills in
accordance with the Method and the application of exceptions to measure.
The item description simply identifies the extent of work
priced, but the detailed requirements are to be found in the Specification
and Drawings. In JCT Forms the specification of the works is included in the
Bills of Quantities in the form of lengthy preambles.
The practice in the Building industry is to set out in
the Bills of Quantities particulars required by the Conditions of Contract,
with detailed specification for the work. Determining the precedence of such
documents in interpreting the contract may create difficulties, since the
Bills of Quantities will be a specially written or "one-off"
document in contrast to the printed standard conditions. The normal rule (in
absence of express terms) is that specially prepared documents will take
precedence over standard printed conditions J Evans & Sons
(Portsmouth) Ltd -v- Andrea Merzano Ltd (1976).
Mistakes in the bill descriptions or quantities are
unlikely to be remedied as a legal rectification of the terms of the
contract to reflect the true intention of the parties. It is more likely
than not, that the common intention will be that the tendered price should
prevail, rather than a price revised to account of the error. Most standard
forms of contract which adopt Bills of Quantities make provision to deal
with errors in bill descriptions and quantities, distinct from the effect of
The use of a Bill of Quantities in a re-measurement
contract requires the responsibility for the consequence of the following
risks to be defined, independently of the effect of variations to the
The preparation of the Bills of Quantities may be
incorrect, with items omitted which should have been included in the
tendered Bill for the original work described in Drawings and
The Bills of Quantities may not have been prepared in
accordance with the Standard Method of Measurement for the original work
described in the Drawings and Specifications;
The final quantities of work for an item may be
different to the estimate in the tendered documents.
The change in the final quantities of work for an item
may so upset the balance of resources and plant and material and/or the
method of working, to make the unit price for the item inaccurate.
The actual quantity of work for an item may differ from
the estimate at tender for a number of reasons. In the case of excavation
for instance the removal of unsuitable material or the extent of rock or the
extent of tunnelling in particular classifications of ground, may only be
estimated from ground investigation information and not known until work is
carried out. Similarly the length of piles driven to a specified set may not
be known precisely at each pile location.
As a matter of business efficacy, a term will be implied
(in the absence of express terms) that the cost of the work for a Bill item
which has not been priced by the contractor is included in the prices
entered elsewhere in the Bill.
In a measurement contract it is necessary to ascertain
how the parties intended to price the differences between as-built
quantities from those estimated at tender, independently of the effect of
variations. The following item valuations are possibilities:
Apply the contract rates unaltered to the changed
quantities for the item of work;
Adjust the contract rates for the item of work, if the
difference in quantities makes the balance of the rate inaccurate, leaving
all other items including preliminaries unaltered. If this is the
intention contractors will need to have included in the price for
quantities - related site overheads in the prices for work items and not
in the Preliminary Item rates;
Adjust the rates for other items of work, when planned
execution is no longer valid due to the difference in quantity for the
item of work.
Adjust the prices for preliminary items, which are
affected by the difference in quantities. This will create difficulties
unless the preliminary item is clearly time-related and the effect can be
assessed on a time basis or if there is a build-up of the preliminary item
The Standard Forms of contract normally used for civil
engineering adopt the bills of quantities for re-measurement. In the
building industry the price is usually a lump sum, and the bills are
intended to be simply a guide to allow the price to be determined. However
matters are not so simple, and provisions for the adjustment if there are
errors in the bills makes the standard JCT with quantities form effectively
re-measure. All forms use the rates and prices in the bills as a schedule of
rates for valuation of variations.
Of the three FIDIC Forms, only FIDIC Red Book refers
to a Bill of Quantities, although even then this is not the only method
envisaged for establishing interim payments due. The FIDIC Red Book has
moved away from the over-dependance on Bill of Quantities of other standard
forms, and allows the Contractors build-up of his tendered price to be in
the form of an appropriate Schedule, but still requires a method of
measurement to be stated, and still allows additional payment for
differences in quantities which are not minimal. The Bill of Quantities
where used, is the basis for valuation of variations.
Clause 22.214.171.124 of the Red Book defines the Contract in
terms of documents which include the "Schedules". Clause 126.96.36.199
defines Schedules to mean those documents which are entitled
"schedules" and completed by the Contractor and submitted with the
Letter of Tender and states that it may include the Bill of Quantities.
Clause 188.8.131.52 defines Bill of Quantities to be the documents so named (if
any) which are comprised in the Schedules. The FIDIC Red Book does not
therefore require a Bill of Quantities for pricing but allows instead a
schedule of rates and/or prices.
Clause 1.5 provides that the documents forming the
Contract are to be taken as mutually explanatory of one another. For the
purposes of interpretation the priority of documents is given, in which the
Schedules have the lowest priority. Clause 14.1 further defines the status
of the Bill of Quantities in defining the work. Clause 14.1 (c) provides
that any quantities which may be set out in the Bill of Quantities are
estimated quantities and are not to be taken as the actual and correct
quantities of the Works which the Contractor is required to execute.
The Method of Measurement is dealt within Clause 12.2(b)
which provides that except as otherwise stated in the Contract and
notwithstanding local practice, the method of measurement shall be in
accordance with the Bill of Quantities or other applicable Schedules. It is
necessary therefore for the Bill of Quantities (if any) to state, usually in
the Preamble to the Bill, the method applicable.
Clause 12.3 deals with the effect of differences between
the quantities in the original tendered Bill and the as-built quantities.
The modern trend is to avoid claims for items which have little consequences
and this is reflected in Clause 12.3(a) which requires four criteria to be
satisfied if a new rate is to apply to an item of work:
the measured quantity of the item differs by more than
the change in quantity multiplied by the original rate
exceeds 0.01% of the Accepted Contract Amount, and
The change in quantity directly changes the Cost per
unit quantity of the item by more than 1%, and
the item is not specified in the Contract as a
"fixed rate item".
The new rate is then derived in the same way as new rates
Clause 14.1(a) requires the Contractor to submit to the
Engineer, within 28 days after the Commencement Date, a proposed breakdown
of each lump sum price in the Schedules. The Engineer can take this into
account when preparing Payment Certificates, but is not bound by it. This is
a useful provision since the Schedules (including the Bill of Quantities)
are used as a Schedule of Rates for rating variations. The provision is
particularly useful in relation to Preliminary Items.
Clause 14.4 anticipates that Interim Payments may not be
on the basis of measurement of the Works. If the Contract includes a
schedule of payments specifying the installments, then payments are made
against the schedule adjusted for progress. Otherwise the Contractors
Statement under Clause 14.3(a) is simply stated as the estimated contract
value of the Works executed. There is no reference to the Bill of Quantities
but Clause 12.1 requires the work to be measured and valued for payment and
12.2 requires the method of measurement to be in accordance with the Bill of
The FIDIC Red Book does not provide a mechanism for
dealing with errors in measurement of the Works, omitting items which were
required to be included by the Method of Measurement. However it appears to
follow from the requirements of Clause 12.1 and 12.2 that omitted
descriptions will need to be included in the final measure and appropriate
Clause 8.4(a) provides that the Contractor may be
entitled to an extension of the Time for Completion for substantial change
in the quantity of an item of work included in the Contract.
The ICE 7th Edition Measurement Version is a
measurement form in which the Bill of Quantities is a central document.
Clause 1(1)(e) defines the Contract in terms of documents
and this includes the Bill of Quantities. Clause 1(1)(h) defines Bill of
Quantities to be the priced and completed Bill of Quantities. Clause 5
provides that the several documents forming the Contract are to be taken as
mutually explanatory of one another. There is no order of priority stated
for the interpretation of the Contract, so that the Bill of Quantities has
the same status as drawings and specification. However, Clause 55(1)
provides that the quantities set out in the Bill of Quantities are the
estimated quantities of the work, but that they are not to be taken as the
actual and correct quantities of the Work to be carried out by the
Clause 55(2) deal with errors in description in or
omissions from the Bill of Quantities. These do not release the Contractor
from his obligations under the Contract. He is required to carry out the
whole of the Works according to the Drawings and Specifications. Any such
error or omission is corrected by the Engineer and the value of work
ascertained under Clause 52(2) or (3) in the same way as a variation. Errors
omissions or wrong estimates in the descriptions rates and prices inserted
by the Contractor are not rectified.
Clause 57 provides that the Bill of Quantities is deemed
to have been prepared and measurements made in accordance with the Standard
Method of Measurement referred to as "Civil Engineering Standard Method
of Measurement" (CESMM). This provision is subject to an important
proviso that general or detailed description or any other statement do not
clearly show the contrary.
Clause 56(1) deals with the value of work, which is
required to be ascertained by admeasurement, unless otherwise stated. Clause
56(2) deals with the situation where the actual quantities for an item
differ from the quantity in the Bill. If in the opinion of the Engineer such
difference of itself so warrants, then the Engineer determines the increase
or decrease of any rate tendered unreasonable or inapplicable in
Clause 51(4) provides that a written order from the
Engineer is not required for increase or decrease in the quantity of any
work, where it results from the quantities being different to those stated
in the Bill of Quantities and not from an order under Clause 51. It appears
then that such a change is a variation to the contract and required to be
priced as a variation under Clause 52. The relationship between Clauses
51(4) and 56(2) is not clear. Some guidance is given in a number of cases
see the article Payment
- Valuation of Variations, and a legal commentary on the decided cases
Henry Boot and Weldon
Clause 44(1)(b) provides that increased quantities under
Clause 51(4) is one of the events which may entitle the Contractor to an
extension of time.
Options B and D include a bill of quantities and is in
traditional form. Mistakes in the measure are corrected and are dealt with
as compensation events, and changes in quantities which are not minimal are
also compensation events.
The ECC 2nd Edition does not define the
Contract. The Contract Data Part Two which contains the contractors offer
defines bill of quantities as a document identified by the contractor, for
Options B and D. Clause 55.1 provides that information in the bill of
quantities is not Works Information or Site Information. Since the
definition of Works Information is that it specifies and describes the
Works, this provision effectively creates an order of precedence between the
Works Information and the bill of quantities in defining the Works. The bill
of quantities is intended to be solely a means of defining the price for the
Works. Clause 11.2(21) defines the Prices as the lump sums and the amounts
obtained by multiplying the rates by the quantities for the items in the
bill of quantities. Clause 11.2(25) of Option B defines the Price for Work
Done to Date based on the quantity or proportion of work carried out and the
rates and prices in the bill of quantities.
A standard method of measurement is not stated, but is
required to be specified in the Contract Data Part One together with any
departures. Any mistakes in the bill of quantities which are departures from
the method of measurement or are due to ambiguities or inconsistences are
corrected by the Project Manager, and each correction is a compensation
event under Clause 60.6.
The effect of differences between the total final
quantity of work done and the quantity for an item in the bill of quantities
at the Contract Date are dealt with in Clauses 60.4 and 60.5. Clause 60.4
provides that a difference is a compensation event if it causes the Actual
Cost per unit of quantity to change and if the change in the Total price of
final total quantity multiplied by the rate is more than 0.1% of the total
of the Prices at the Contract Date. If the difference delays Completion then
it is a compensation event under Clause 60.5.
Clause 63.9 allows the rates and lump sums in the bill of
quantities to be used as a basis for assessment of Actual Cost and resulting
Fee for the assessment of compensation events, but only if the Project
Manager and Contractor agree.
The JCT 1998 Form Private with Quantities is the
traditional route in the Building Industry to construction with a Bills of
Quantities. The form provides a number of different pricing mechanisms,
including Activity Schedule, the use of Approximate Quantities, the use of
Provisional Sums and Contractors Statements.
The second recital to the Articles of Agreement, states
that the Contractor has supplied the Employer with a fully priced copy of
the Bills of Quantities, and that document is referred to as the Contract
Bills. The third recital states that the Contract Bills have been signed by
or on behalf of the parties.
Clause 1.3 defines the Contract Documents to comprise the
Contract Bills, the Contract Drawings, the Articles of Agreement, the
Conditions and the Appendix. There is no reference to a Specification.
Clauses 8.1.1 provide that all materials and goods shall be of the kinds and
standards described in the Contract Bills, and workmanship also is to be the
standard described in the Contract Bills.
Clause 13.1.2 anticipates that obligations or
restrictions in respect to access to the site or use of any specific part of
the site, limitations of working space, limitations of working hours and the
execution or completion of the work in any specific order, are to be stated
in the Contract Bills. Any change is a variation.
Clause 2.2.1 provides that nothing contained in the
Contract Bills shall override or modify the application or interpretation of
that which is contained in the Articles of Agreement, the Conditions or the
Appendix. This will be strictly applied. In English Industrial Estates
Corporation v George Wimpey & Co Ltd (1972) CA 7BLR126 the form of
contract was the JCT 1963 Form in which Clause 12(1) was in similar terms to
Clause 2.2.1JCT 1998. English Industries wished to rely on two special
provisions in the bills of quantities in interpreting the contract. On
settled principles the printed conditions would have taken second place to
the special insertion in the bills. It was held that Clause 12 requires the
court to either disregard or even reverse the ordinary and sensible rules of
construction. It was held that the bills should be taken into account in
construing the contract, or at least in order to follow what was going on,
but if any conditions were inconsistent with the bills, the bills would be
rejected. That was not found to be the situation in this case, the various
provisions could be reconciled. In Moody v Ellis (1983)CA 26BLR45 the
form of contract was also JCT 1963 and Clause 12(1) again in issue. It was
held that Clause 12(1) did not prevent the provisions in the Bill of
Quantities from being incorporated into the building contract. Since in this
case there was no question of a particular provision overriding, modifying
or affecting the conditions, there was no reason why it should not take
effect in the normal way.
The use of a bill of quantities does not mean that the
works are subject to re-measure. The JCT Form with Quantities is a lump sum
contract with special remedies relating to the preparation of the Contract
Bills and the quantities therein. Clause 184.108.40.206 provides that subject to
Clause 2.2.1, the Contract Bills are to have been prepared in accordance
with the Standard Method of Measurement of Building Works 7th
Edition, unless otherwise specifically stated in the Contract Bills. Clause
220.127.116.11 deals with departures, errors and omissions in the Contract Bills,
which are required to be corrected and treated as if they were a Variation
required by an instruction of the Architect under Clause 13.2. The
departures and errors falling under Clause 18.104.22.168 are:
departure from the method of preparation referred to in
error in description of an item;
error in quantity of an item;
omission of an item;
error in or omission of information in an item which is
the subject of a provisional sum for defined work.
Clause 14.2 provides that subject to clause 22.214.171.124 any
error whether of arithmetic or not in the computation of the Contract Sum
shall be deemed to have been accepted by the parties.
Clause 13.1.1 defines Variation to include alterations or
modifications in the quantity of the Works. Clause 126.96.36.199 provides that
variations are to be valued under Alternative A which requires a Price
Statement or, if not implemented or not accepted, Alternative B which adopts
valuation rules based on the rates and prices set out in the Contract Bills.
Clause 14.1 provides that the quality and quantity of the
work included in the Contract Sum is deemed to be that which is set out in
the Contract Bills.
Clause 2.3 requires the Architect to issue instructions
for any discrepancy or divergence between specified documents including the
Contract Drawings and the Contract Bills. Under Clause 188.8.131.52 such
instruction is a Relevant Event which may entitle the Contractor to an
extension of time. Under Clause 26.2.3 any such discrepancy or divergence is
a matter which may entitle the Contractor to claim loss and expense.
If a quantity for work is identified in the Contract
Bills as an approximate quantity, then all that work is valued as if it was
a variation under 184.108.40.206. If the approximate quantity is not a reasonably
accurate forecast of the quantity of work required, then this is a Relevant
Event under Clause 220.127.116.11 which may entitle the Contractor to an
extension of time, and is also a matter under Clause 26.2.8 which may
entitle the Contractor to claim loss and expense.
Clause 30.2 deals with ascertainment of amounts due in
Interim Certificates, which is the total value of the work properly executed
by the Contractor. Although not stated expressly, the Contract Bills are the
appropriate means to value the works.
The CECA Blue Form is either a lump sum or a measure
and value form, to be decided by the Main Contractor when inviting bids by
selection in the Third Schedule. If Bill of Quantities are used, then these
are identified in the Second Schedule, usually by extracts from the Bill of
Quantities from the Main Contract, but without prices.
The Sub-Contract Works is defined by reference to the
documents specified in the Second Schedule, and the Price by means of the
sum specified in the Third Schedule, Clauses 1(1)(c) and (e) respectively.
Clause 9(1) provides for the valuation of variations
which are to be ascertained by reference to the rates and prices (if any)
specified in the Sub Contract. Any measurement of a variation made under the
Main Contract is to constitute the measurement under the Sub Contract,
Clause 9(3). Other than this statement, no method of measurement is
Clause 9(4) provides that save where the contrary is
expressly stated in the bill of quantities, no quantity stated is to be
taken to define or limit the extent of any work to be done. However any
difference between the quantity billed and the actual quantity executed is
to be ascertained by measurement, and valued under Clause 9 as if it were an
authorised variation and paid under the Sub-Contract.
Clause 6(2)(a) provides that the Subcontractor may be
entitled to extensions of time for any ordered variations. This therefore
would not appear to include increased quantities. If however the increased
quantities entitle the Main Contractor to extension of time under Clause
51(4) of the ICE Form, then under Clause 6(2)(a) the Subcontractor may be
entitled to extension of time.
Clause 15 deals with payments and Clause 15(3) provides
that the value of work is to be determined in accordance with the rates and
prices specified in the Sub Contract.
Articles 1.2 provides that the Sub Contractor shall carry
out and complete the Sub Contract Works shown in the Sub Contract Documents
and subject to the Sub Contract Documents. Clause 1.3 of the Conditions
defines the Sub Contract Documents as Sub-Contract DOM/1 and the Numbered
Documents. The Numbered Documents are referred to in the First Recital of
the Articles and are required to be listed in the Appendix Part 2.
The Sub Contract is a re-measure and value, if Article
2.2 has been selected and completed, as opposed to Article 2.1. In that case
Clause 15.2 applies and price of the Sub Contract Works is subject to
complete re-measurement. Clause 17.1 also applies and requires measurement
of the work to be valued in accordance with the rules in Clause 17.3 which
use the bill rates and prices as the basis for valuation.
Whether or not Sub Contract is measure and value, if the
Sub Contract includes a bill of quantities in the Numbered Documents then
Clause 18.1.1 provides that unless otherwise specifically stated they are to
have been prepared in accordance with the Standard Method of Measurement of
Building Works, 7th Edition. Clause 18.1.2 provides that any
departure from the method of preparation or any error in description or in
quantity or omission of items, then such departure or error or omission
shall be corrected and treated as if it were a variation required by a
direction of the Contractor.
Clause 16.2 provides that where the Sub Contract
Documents include schedules of rates or prices for measured works, then they
are to be used in the valuation of variations under Clause 16.3. Clause
18.104.22.168 provides that where bills of quantities are a Sub Contract
Document, measurement is to be in accordance with the same principles as
those governing the preparation of the bills as referred to in Clause 18.
Clause 16.4.1 provides that where bills of quantities are
included the Numbered Documents, if the quantity for work for which an
Approximate Quantity is included in the bills is more or less than in the
bills, and this substantially changes the conditions under which any other
part of the Sub Contract Works are executed, then that affected part is to
be treated as if it was subject to a direction from the Contractor requiring
a variation and valued in accordance with Clause 16.3.
If the quantity of an Approximate Quantity in the bills
of quantities is not a reasonably accurate forecast of the quantity of work
required then it is a Relevant Event under Clause 11.10.14 which may entitle
the Sub Contractor to payment of direct loss and/or expense. A discrepancy
between the Contract Drawings and/or the Contract Bills and/or Numbered
Documents is also a Relevant Matter.
Clause 21.8 provides for the Ascertained Final Sub
Contract Sum to include the amount of valuation under Clause 17 were Clause