How to Prepare a Construction Quotation
A solid construction quotation defines the scope, prices it from a BOQ with markup and VAT applied, and states clear payment terms and validity — leaving no room for later disputes about what was included.
The six steps to a professional quotation
- Define the scope of work. State exactly what is and is not included. Vague scope is the single biggest source of later disputes and unpaid variations.
- Price it from a BOQ. Build or price a Bill of Quantities for the scope — quantity × unit rate per line — to get an accurate direct cost, not a round-number guess.
- Add overhead and contingency. Roll a share of company overhead and a contingency buffer into the cost base before pricing, so the number reflects true project cost.
- Apply your markup. Add your markup percentage on top of total cost to set the selling price — see our Markup Calculator to convert cost to price precisely.
- Add VAT and other taxes. Apply VAT per local regulations, shown separately from the pre-tax price so the client can see both figures clearly.
- State payment terms and validity. Specify advance payment, milestone payments, retention percentage, and how long the quoted price remains valid before materials or labor costs may change it.
BOQ direct cost: $360,000. + 12% overhead ($43,200) + 6% contingency ($21,600) = total cost $424,800. + 20% markup ($84,960) = pre-tax price $509,760. + 15% VAT ($76,464) = final quotation total $586,224.
Frequently asked questions
What is the difference between a quotation and an invoice?
A quotation is a pre-project price offer the client can accept or negotiate. An invoice is a request for payment for work already delivered, issued during or after the project.
Should the BOQ be attached to the quotation?
Yes, or at least a summary of major line items. Attaching the priced BOQ shows the client exactly how the total was built, reduces back-and-forth negotiation, and protects you if scope later changes.
How long should a quotation stay valid?
Most contractors use 30 days for smaller jobs and shorter windows (7–14 days) when material prices are volatile. Stating this clearly protects your margin if costs rise before the client accepts.
Price it with our tools
Related guides
Generate a priced quotation straight from your BOQ.
Metrak builds your quotation from a priced BOQ automatically, with markup and VAT applied consistently — ready to export as a client-facing PDF.