How to Price a Bill of Quantities (BOQ): A Step-by-Step Guide for South African Contractors

Pricing a Bill of Quantities is where tenders are won or lost. Price too high and a competitor takes the job; price too low and you win work that bleeds money. This guide walks through exactly how to build up accurate rates for a South African construction tender — line by line — and shows you where estimators lose the most time and money.

1. What a Bill of Quantities actually is

A Bill of Quantities (BOQ) is a document, usually prepared by the client's quantity surveyor, that lists every item of work and material required to complete a project. For each item it gives a description, a unit of measurement (m², m³, kg, number, sum) and a measured quantity. What it does not give you is the price — that's your job as the tendering contractor.

Your task is to insert a rate against every line. Multiply rate × quantity and you get the amount for that line. Add every amount together, add your Preliminaries and General items, add markup and VAT, and you have your tender sum. Get the rates right and you have a competitive, profitable bid. Get them wrong and you've either priced yourself out or committed to a loss.

2. The anatomy of a priced rate

Every unit rate you enter is really four costs bundled together. Understanding these four components is the single most important skill in estimating:

A built-up rate adds material + labour + plant to get your net cost, and markup is applied afterwards (see step 5). Skipping the labour and plant build-up — just guessing a rate "per square metre" — is the number-one cause of underpriced tenders.

3. The 7 steps to pricing a BOQ

Step 1 — Read the documents before you price anything

Before touching a single rate, read the scope, drawings, specifications and conditions of contract. Note the site location (it changes material delivery and labour rates), the programme, retention terms, penalties and any special requirements. Many losses come from pricing the BOQ correctly but missing a condition buried in the specification.

Step 2 — Categorise every line item

Group the BOQ into work sections — earthworks, concrete, brickwork, roofing, electrical, plumbing, finishes. This lets you price similar items together and spot which trades you'll subcontract. It also makes it far easier to check your rates against each other for consistency.

Step 3 — Build up material costs (with waste)

Get current supplier prices for your region — cement, steel, brick, aggregate, pipes. Prices in Gauteng are not the same as in the Eastern Cape, and they move month to month. Always add a waste factor: cut-offs, breakages and over-ordering are real. A common range is 5% for bulk materials and up to 10% for items with lots of cutting.

Step 4 — Build up labour and plant

This is where experience shows. You need realistic output rates: how many square metres of plaster a plasterer lays per day, how many cubic metres an excavator moves per hour. Divide the quantity by the output rate to get the hours, multiply by the crew's daily/hourly cost. Add plant hire priced against the same output.

Step 5 — Apply overheads and profit (markup)

Your net cost doesn't keep the lights on. Add a markup for company overheads (office, insurance, admin, vehicles) and profit. See the markup section below for typical ranges.

Step 6 — Price the Preliminaries & General (P&Gs)

These are the project-wide costs that don't belong to any single line item — site establishment, supervision, temporary services, security, insurance and the like. Covered in detail in section 4.

Step 7 — Review, sanity-check and finalise

Before submitting, sanity-check your rates against each other and against past jobs. Does the total feel right for a project this size? Are any rates suspiciously low (a sign of a missed cost) or high (a sign you'll lose)? This final review is what separates a winning bid from a lucky one.

4. Preliminaries & General (P&Gs)

P&Gs are the costs of running the whole site, not building any one element. On a South African tender they typically include:

• Site establishment — offices, stores, fencing, ablutions, connections
• Management and supervision — site agent, foreman, safety officer
• Temporary services — water, power, telecommunications on site
• Plant not tied to a rate — cranes, general small plant
• Insurances, guarantees and bonds — CAR insurance, performance guarantee
• Health & safety — compliance, PPE, inductions

P&Gs are often 8–15% of a project's value, but on small or short-duration jobs they can be much higher as a percentage. Under-pricing P&Gs is a classic way to win a job and then lose money on it.

5. Markup, margin and VAT

Once you have your net cost (material + labour + plant + P&Gs), you add markup for overheads and profit, then VAT. There's no single correct number — it depends on your cost base, the competition and how badly you want the job — but as a starting point many SA contractors work with:

Remember that markup on a competitive public tender is usually tighter than on private work. If your win rate is very high, your margin may be too low; if you never win, it may be too high or your base costs are uncompetitive. Track it over time. For more on choosing the right number, see our guide on tender pricing mistakes.

6. Five mistakes that lose tenders

1. Guessing rates instead of building them up. A rate that isn't built from material + labour + plant is a gamble.
2. Using stale material prices. Steel and cement move constantly; a three-month-old price can wipe out your margin.
3. Under-pricing labour. Optimistic output rates are the fastest route to a loss-making job.
4. Forgetting P&Gs or pricing them into rates inconsistently.
5. Submitting late. The most accurate price in the world is worthless after the closing time. Speed is a competitive weapon.

7. How to price a BOQ in minutes, not days

Everything above is correct — and it's also why a medium BOQ takes an experienced estimator two to three days by hand. That time cost is the real constraint on small and medium contractors: you can only bid on a fraction of the work you could win.

This is exactly the problem TenderGenie was built to solve. You upload the BOQ in any format — PDF, Excel, Word, CSV, even a photo of a printed bill. The AI extracts every line item, classifies it by trade, and builds up material, labour and plant from live regional supplier data. It calculates P&Gs, applies your markup, flags risky items, and produces a complete, submission-ready tender package. You review and submit — usually in under an hour instead of three days.

Frequently asked questions