My quote was accepted six months after I priced it
We priced the package in the winter, heard nothing, and now an order has arrived at our old price with our materials much dearer.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
What's happening?
Your quotation is an offer. If it stated a validity period, it lapsed when that period ended. A later order is then a new offer from your main contractor, and you are free to answer it. If it stated no period, it stays open for a reasonable time. Whether 6 months was reasonable is an argument you do not want at the final account.
Most subcontractors in this position start work and argue about the price later. Starting work usually means you have accepted the order's price and terms by your conduct. From then on, the rise sits with you.
The solution
Reset the price before the first operative goes to site. Check what your quotation said about its base date and validity. Get today's prices from your suppliers. Then answer the order in writing with the repriced sum, or with the old price, a stated base date and the volatile materials on an adjustment basis.
We check your quotation, the order and what has happened since. We reprice the package item by item against your tender, so the rise since your base date is a figure with evidence behind it. Price Rise Loss Prevention then puts a base date and a validity period on every quotation you send.
To have this done for you, see our Price Rise Claim service.
Example
Illustrative example. The scenario and figures are invented.
The facts
A roofing subcontractor quotes £188,000 on 3 February, with no validity period and no base date. The main contractor's order arrives on 5 August at the same price. By then slate and lead have risen by about 14%.
What happens
- With no validity period, the quotation may or may not still have been open in August. The subcontractor does not rely on it having lapsed.
- The package is repriced from current supplier quotes at £203,500, with the supplier increase notices for slate and lead attached.
- Before anyone goes to site, the subcontractor replies that the quotation was priced on February prices and offers the repriced sum.
- The main contractor, needing the roof started, agrees £198,000 with a base date stated in the order.
The package in figures
| Position | Amount |
|---|---|
| Quotation of 3 February | £188,000 |
| Repriced for August | £203,500 |
| Agreed before work started | £198,000 |
The outcome
£10,000 of the rise is recovered before a slate is fixed, and every quotation since carries a 30-day validity and a base date.