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Put a base date and a validity period on every quotation

Two lines on your quotation stop your old price being accepted months later, when you can no longer buy at it. The base date gives any adjustment a starting point, and the validity period sets when the offer ends.

Updated: . By Jack Butler-Kettle, Construction Claims Consultant.

Why it matters

Every adjustment for a rise is measured from a starting point, and the base date is that point. Without one, your main contractor can say the rise was already in your price. The validity period does a different job: it sets how long your main contractor has to accept before the offer lapses. A quotation with neither can be picked up 6 months later at the old price. You then have to win an argument about whether it was still open before you can even talk about the rise.

How to do it

  1. Write the base date on the front of every quotation: the date your supplier prices were fixed.
  2. State a validity period that matches your suppliers' own, which for volatile materials is often 30 days or less.
  3. Say what happens after it: an order placed later is repriced, or the named materials are adjusted from the base date.
  4. Keep the supplier quotes the price was built on, dated, in the quotation file.

Example

Illustrative example. The scenario and figures are invented.

The facts

A groundworks subcontractor quotes £410,000 for a drainage and external works package. The quotation states a base date and a 30-day validity. It also says concrete and pipe will be adjusted from the base date by named published indices if the order comes later.

What happens

  1. The order arrives 4 months later, and it accepts the quotation's terms.
  2. Concrete and pipe make up £280,000 of the package, and their indices have risen 7.5% since the base date.
  3. The adjustment is added to the subcontract sum before any work starts.

The outcome

£21,000 is added to the package without argument, because the quotation said what would happen and the main contractor accepted it.

To have this set up for you, see our Price Rise Loss Prevention service.