How to Compare Office Renovation Quotes
You have asked several contractors to quote on your office renovation and the proposals have started arriving. One contractor is considerably cheaper than the others. Another has included much more detail. A third has allowed for items that do not appear anywhere in the other quotations. So, which quote should you choose?
Comparing office renovation quotes is rarely as simple as looking at the total price at the bottom of each proposal. Two contractors may appear to be quoting for the same project while actually allowing for very different scopes of work. Before appointing a contractor, you need to establish whether the quotations are genuinely comparable.
Start With the Scope, Not the Price
The first thing to compare is what each contractor has actually included. A quote of R400,000 is not necessarily cheaper than a quote of R450,000 if the lower quotation excludes R100,000 worth of work that will need to be added later. Go through each quotation line by line and identify what has been allowed for.
Depending on the project, this could include:
- demolition and removal of existing installations;
- drywall partitioning;
- ceilings;
- flooring;
- painting;
- electrical work;
- lighting;
- data cabling;
- plumbing;
- air-conditioning alterations;
- fire services;
- access control;
- kitchen installations;
- built-in joinery;
- office furniture;
- signage and branding;
- professional fees;
- project management;
- waste removal and final cleaning.
For larger projects, it can be useful to create a simple spreadsheet showing each contractor alongside the major elements of the project. This quickly highlights where one contractor has included something another has left out.
Check the Exclusions Carefully
The exclusions section can be just as important as the price. Some quotations provide a long list of exclusions. Others simply state that anything not specifically mentioned is excluded.
Pay particular attention to items such as:
- landlord approvals;
- building plan submissions;
- professional drawings;
- electrical compliance certificates;
- fire compliance;
- mechanical and air-conditioning work;
- data and IT infrastructure;
- furniture;
- after-hours work;
- building access fees;
- parking for contractors;
- rubble removal;
- temporary protection;
- reinstatement work.
An excluded item is not necessarily a problem. The important thing is that you know about it before appointing the contractor. If one contractor has included electrical work and another has excluded it, their bottom-line prices cannot be compared directly.
Compare Like With Like
Ideally, every contractor should quote against the same brief. This is one of the most important parts of obtaining useful office renovation quotations. If Contractor A has been told to install new vinyl flooring throughout the office while Contractor B thinks the existing flooring will remain, the resulting quotations tell you very little about which contractor offers better value. Before comparing prices, check that all contractors have worked from the same:
- floor plan;
- project description;
- room requirements;
- finish specifications;
- furniture requirements;
- electrical requirements;
- programme;
- site information.
If your original brief was fairly informal, you may need to go back to the contractors and clarify certain items before making your final comparison.
Look at Quantities and Specifications
A quotation may say:
New carpet – R65,000
Another might say:
Supply and install 420 m² commercial carpet tiles – R78,000
The second quote gives you considerably more information. Where possible, look for quantities, product specifications and clearly defined allowances. You want to understand what you are buying. This becomes particularly important when comparing items such as flooring, lighting, sanitaryware, kitchen finishes, joinery and office furniture, where there can be substantial differences between specifications. A cheaper quote based on a lower specification is not necessarily better value.
Understand Provisional Sums and Allowances
Not every cost can always be fixed at quotation stage. A contractor may therefore include a provisional sum or allowance for an item that has not yet been fully specified.
For example:
Kitchen joinery allowance – R60,000
This means R60,000 has been included in the price, but the final amount may change once the kitchen has been designed and specified. Look carefully at provisional amounts because a quotation containing numerous low allowances can appear cheaper initially and then increase substantially as selections are finalised. Ask what each allowance covers and whether the contractor believes it is realistic for the standard you require.
Compare the Project Programme
Price matters, but so does time. If you need to occupy your new office by a particular date, a contractor offering the lowest price but requiring 14 weeks may not work for your business if another contractor can complete the project in eight.
Ask each contractor to confirm:
- when they can start;
- expected construction period;
- any long-lead items;
- when final selections are required;
- proposed completion date;
- whether work will take place during normal working hours or after hours.
This is particularly important if the renovation is taking place in an occupied office.
The effect of construction on your staff and operations needs to form part of the decision.
Check Whether VAT Is Included
This sounds basic, but it can create a significant apparent price difference.
Make sure you know whether each quotation is:
Including VAT
or
Excluding VAT
Also check whether professional fees, delivery charges and other associated costs are included in the stated total. Always compare quotations on the same basis.
Look at Payment Terms
Two contractors quoting the same total project value may have very different payment requirements. One may request a substantial deposit before starting, while another may structure payments around progress milestones.
Understand:
- deposit required;
- progress payment structure;
- payment dates;
- retention, if applicable;
- final payment requirements;
- how variations will be invoiced.
You should understand both the total cost and the cash-flow implications of the project.
Ask How Variations Will Be Handled
Changes happen during renovation projects. You may change a finish, add another meeting room, increase the number of electrical points or discover something behind an existing wall that could not reasonably have been identified beforehand.
Ask each contractor how variations are dealt with. Ideally, additional work should be priced and approved before it is undertaken wherever practical. This gives you better control over the final project cost and reduces disputes later.
Don’t Automatically Choose the Cheapest Quote
The cheapest quotation may ultimately be the right choice. But it should be selected because you have established that it offers the right combination of scope, price, programme and contractor capability, not simply because it has the lowest total. A large difference between quotations is worth investigating.
Ask why.
Perhaps one contractor has:
- misunderstood the scope;
- excluded certain work;
- specified different materials;
- allowed a shorter construction period;
- included professional services;
- included more contingency;
- priced the project differently because of their current workload.
Sometimes the explanation is perfectly reasonable. The purpose of comparing several quotations is to identify those differences before you sign a contract.
Assess the Contractor as Well as the Quote
A quotation is only one part of your decision. You also need confidence that the contractor can deliver the project.
Consider:
- experience with commercial office renovations;
- examples of completed projects;
- references;
- experience working in occupied commercial buildings;
- communication during the quoting process;
- ability to meet your programme;
- understanding of landlord and building requirements;
- insurance and compliance requirements;
- warranties and defects procedures.
If a contractor struggles to communicate clearly while trying to win the work, consider what communication might be like once the project has started.
Ask Questions Before You Appoint
Do not be afraid to go back to contractors and ask for clarification.
Useful questions include:
- Is this your complete price for the scope provided?
- What have you excluded?
- Which items are provisional?
- Are there any costs you expect could change?
- Does your price include VAT?
- How long will the project take?
- When could you start?
- Who will manage the project on site?
- How will variations be approved and charged?
- What warranties apply to the work?
A professional contractor should be comfortable explaining how their quotation has been put together.
Why Three Quotes Can Be More Useful Than One
One quotation gives you a price. Several independent quotations give you context. They allow you to compare how different contractors interpret the same project, identify potential omissions and get a better understanding of the likely market cost. The purpose is not necessarily to drive contractors toward the lowest possible price. It is to give you enough information to make an informed decision.
If three quotations are relatively close and contain similar scopes, you have useful confirmation of the likely project cost. If the quotations are dramatically different, that tells you something needs further investigation before you appoint anyone.
What Should You Do if the Quotes Are Completely Different?
Do not immediately discard the highest or accept the lowest. First establish why they differ.
Create a simple comparison of:
- Scope
- Specifications
- Exclusions
- Provisional amounts
- Programme
- Payment terms
- Total price
You will often find that the apparent price difference becomes much smaller once missing items and different specifications are taken into account. Where necessary, ask contractors to revise their quotations against a clarified scope. That gives you a much stronger basis for making a decision. Need some advice on finding offices, find out more…
Get Independent Office Renovation Quotes
If you are about to renovate an office and have not yet approached contractors, Cape Interiors can simplify the quotation process. We connect Cape Town businesses with vetted commercial interior contractors and coordinate up to three independent quotations for your project. Each contractor prepares their own proposal and pricing. You can then compare the scope, cost and programme before deciding whether you want to appoint anyone.
There is no obligation to proceed.
Planning an office renovation? View our Office Renovation service and request up to three independent quotes.
