What is a Comparison Statement?
It is a statement used to compare the quotations submitted by different subcontractors or suppliers.
What is compared?
- The prices of different items in the BOQ
- Payment terms
- Delivery conditions
- Any other conditions put forth by them
Points to be considered while preparing a CS
- Read each and every line of the quotation carefully. We tend to focus so much on the price that we tend to ignore other things mentioned which may be equally important.
- Make sure everyone has considered the similar scope of works. Other wise it will result in a huge variation in the prices and we may not be getting what we want at the lowest quoted price. For e.g. in Supply of RMC, one supplier may have considered Green Concrete while other may have considered normal concrete. As my Project Manager says,
“Always compare apple to apple!”
- Read the payment terms carefully. An offer may be the lowest, but they may require an Advance of 50% which may not be feasible to you. Or they may not agree to give a Performance Bond.
- Check their quotations for any arithmetical errors and correct the same in your statement after getting a revised correct quotation from them.
- Check if they have missed to quote on any BOQ item. Ask them to submit a rate for that item. Or for the sake of comparison, assume lowest value quoted by others for that particular item.
- Check the inclusions and exclusions mentioned in the quotation and mention them in the statement. For e.g. one Painting Subcontractor will mention that Scaffolding works is excluded from his scope of works while another will mention that it is included. As a result, we are not comparing Apple to Apple! In this case make some provisions for scaffolding work where it is not included.
- Check whether the BOQ is front loaded or back loaded. Front loaded means they have priced higher for those items which are to be executed in the beginning and lower for those at the end. This way they can claim most of the amount in the beginning. Back loaded is the opposite of it. Both of them are not ethical as it favours one party more than other. Try to negotiate and balance out the rates.
- Check for other items such as Delivery Time, Warranty and Free Maintenance, on site requirements, etc.
- Mention all the rates quoted after each stage of negotiation in separate columns so as to give the decision maker an idea of the number of negotiations done with each party.
Points to be considered while making a recommendation
- Check the past history of the party with your company. If it is a known party then they are aware of all your company’s processes. If it is a new party then they may take time to adjust to your company’s working culture.
- Check the capacity of the party to complete the work. Check whether they have adequate manpower and machinery to execute the work.
- Check the origin of the material i.e. factory where the product is manufactured. If it is near to the project location, it can lead saving in time during transport. For e.g. an RMC supplier having a batching plant close to the project site can deliver RMC immediately upon request to the site.
- You may want to recommend the party who quoted the lowest. But keep in mind that this is not just a comparison of the prices but of other things as well. Take into considerations all the things mentioned above and make your final decision based on what is best suited for your project.
Sample format of CS