Why the Cheapest Tender Costs the Most

The first thing everyone looks at when starting a building project is the figure. The lowest tender looks like the safest choice. More often than not, though, the cheapest tender is not a price but a deferred debt.

What is cheap is not the tender but what it leaves out

A tender is made of two things: what is written down and what is not. Low figures usually come from missing items — details left vague, lower-grade materials, work nobody counted. Everything that does not appear in the contract comes back on site as a “variation”.

In construction, everything you do not pay for now you pay for later, and usually twice over.

The difference is hidden in the estimate

The difference between two tenders usually lies not in the workmanship but in the estimating. A properly prepared tender sees the groundworks, the insulation, the services and the finishes from the outset, and prices them. A tender put together in a hurry leaves them to “we will look at that later”. Every item looked at later is a place where the budget leaves your control.

The right question is not “which is cheapest?”

The question to ask when you are assessing a tender is not “which is the lowest?” but “exactly what does this figure include?”. Two people can do the same job for very different prices; what matters is which job has been described. What you compare should be the scope, not the price.

Cheapness is not a saving, it is a risk

Saving money is not choosing the lowest figure. Saving money is taking the right decision at the start and not pulling work down to build it again. The real cost is not the first figure you pay but the total you have paid by the end.

The cheapest tender usually produces the most expensive house.