A price built three or four months ago is already carrying rates that may have moved. Material costs shift, labour rates change and supplier quotes expire. Submit that price unchanged and you are pricing against numbers that no longer reflect what the job will cost to build.
Most builders know this. The problem is not knowing it, it is having a habit that makes it happen. So here is a plain answer to when to review a construction estimate, and what to look at when you do.
Rates go stale faster than people think
An estimate is a snapshot. The quantities in it stay true as long as the drawings do, but the rates start ageing the day you type them in. A supplier quote usually carries a validity period. A subcontractor who priced a package in spring may not hold that figure through to autumn, especially if their own order book has filled up in the meantime.
Labour moves too. If a trade is busy in your area, day rates rise, and a gang you priced at one rate may not be available at that rate when the job actually starts. The dangerous part is that none of this shows on the page. A total built on old rates looks exactly the same as one built on current ones. You only find out which it was when the orders go out.
When to review a construction estimate: the trigger points
A price should get checked again at a handful of clear points, not left alone from the day it was written.
- Before submission. Obvious, but on a tight deadline it is the step that gets squeezed. Check the quantities against the latest drawing issue and the rates against the latest quotes.
- When drawings change. Any new revision means the quantities may have moved. Compare the revision against the set you priced and update the affected items, not just the ones you notice.
- When a tender is extended or delayed. If the client pushes the return date or sits on the decision, the rates underneath your price are getting older by the week.
- Before you commit to a subcontract package. Compare the firm quote against the allowance you carried. The difference is either margin gained or margin lost, and you want to know which before you sign.
- At intervals on long jobs. On a job that runs for many months, a regular check of cost to complete against the original price stops surprises piling up for the final account.
What happens when nobody checks
A stale price causes the same problems every time. Margin gets eaten by costs that moved after the price was fixed. Clients lose confidence when a figure keeps changing after the event instead of being managed through the job. Disputes over what was or was not included get harder to settle the longer a price has gone unchecked, because the person who built it has moved on to other work and the reasons have gone with them.
Take a hypothetical. You price a refurbishment in January, the client comes back in May ready to sign, and you send the January price with a new date on it. In the meantime the M&E subcontractor's quote has lapsed and their new figure is higher. You have two choices: absorb it, or go back to a client who thought the price was agreed. Neither is a good conversation.
A ten minute check in May would have caught it. You could have re-confirmed the quote, adjusted the price, and gone back to the client with a revised figure and a clear reason before anything was signed. Clients take a revised price far better before they commit than a claim for more money after.
A price that gets looked at again holds up. One that does not, does not. The check costs an afternoon; skipping it can cost the job's margin.
What to look at during a review
A review does not mean rebuilding the estimate. It means checking the parts most likely to have moved.
- Quote validity. List every supplier and subcontractor quote with its date and validity. Anything expired or close to it gets re-confirmed.
- Drawing references. Confirm the estimate was priced off the current revision of every drawing, not just the general arrangements.
- Allowances and provisional sums. Check whether any can now be replaced with a firm price.
- Preliminaries against programme. If the start date or duration has moved, time-related costs have moved too.
- Exclusions and assumptions. Make sure they still match the scope as it now stands.
If you want a second view on this, stop treating the first estimate as the last word goes through the same thinking from the client's side.
Keep a record of every change
Treat a check on rates and quantities as a normal part of running a job, not an extra step. Keep a note of what changed and why, with the date. That record is what gives a client a straight answer when they question a figure, instead of a guess. It is the same principle behind keeping proper records through every stage of a job: the cost side should be as traceable as the programme.
This is also where a properly structured estimate earns its keep. If every line traces back to a measured quantity and a named rate, updating it is quick. If the price is a handful of lump sums, every review becomes a rebuild, and rebuilds are what get skipped. A sample estimate shows the kind of layout that makes a review take an afternoon rather than a week.
A rule of thumb
If a price is older than its oldest quote, or older than the current drawing revision, it needs reviewing before anyone relies on it. That single test answers when to review a construction estimate on most jobs, and it takes a minute to apply.