Can I withdraw my quote if prices rise before it is accepted?
Usually yes, as long as it has not been accepted: a quotation is an offer, and you can withdraw an offer before acceptance.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
The answer
Your withdrawal has to reach the main contractor before its acceptance does, so send it in writing and keep proof of when it arrived. A validity period does not usually oblige you to keep the quotation open that long. The exception is where something more than the quotation binds you, such as a separate agreement or tender rules you signed up to. Once the period ends, the quotation lapses on its own, and a later order is not an acceptance of it. A quotation with no validity period stays open for a reasonable time, which is exactly the uncertainty a stated period avoids. Once an order has been accepted, or you have started work under it, the price is the one you agreed. So act before then. Rather than withdrawing outright, it is usually better to reissue the quotation with a new base date and the volatile materials on an adjustment basis.
Example
Illustrative example. The scenario and figures are invented.
The facts
A drylining subcontractor quotes £265,000 on 12 March, open for 30 days. The main contractor's order arrives on 2 October at the same price. By then board and metal stud have risen 17% and labour rates 6%.
What happens
- The quotation lapsed on 11 April. The order is therefore a new offer from the main contractor, which the subcontractor is free to answer.
- The package is repriced from current supplier quotes, item by item, at £291,000.
- Before any operative goes to site, the subcontractor offers two options. One is £291,000 fixed. The other is £265,000 with a base date of 1 October, and board and stud adjusted by a published index.
- The main contractor takes a fixed price and the two meet at £284,000, with the base date stated in the order.
The package in figures
| Position | Amount |
|---|---|
| Quotation of 12 March | £265,000 |
| Repriced for October | £291,000 |
| Agreed before work started | £284,000 |
The outcome
The package is agreed at £284,000 before work starts. Had the gang started on the October order, the £265,000 price would very likely have stood.
To have a base date and a validity period put on every quotation you send, see our Price Rise Loss Prevention service.