The BOQ and pricing your bid
How the Bill of Quantities is built from the Schedule of Rates, the difference between item-rate and percentage-rate tenders, how to estimate your own cost, what the winning discount in your district tells you, and the arithmetic of quoting below the estimate.
In this module
You get one sealed number, and it is compared with everyone else's. This chapter is about arriving at that number from your costs rather than from your nerves.
Where the estimate comes from
The department's engineer measures the work (so many cubic metres of excavation, so many tonnes of bitumen, so many square metres of plaster), looks up each item in the Schedule of RatesSchedule of Rates (SR)The department's published rate book for every item of work, revised each year. Estimates are built from it, so it is also the benchmark your quote is measured against.Read in the glossary → (the SR, revised yearly for each PWD zone), multiplies, and adds the standard allowances. The result is the Bill of QuantitiesBOQ (Bill of Quantities)The itemised list of everything the work needs, with quantities and units. You price it line by line (item rate) or quote one percentage over the whole thing (percentage rate).Read in the glossary →, and its total is the estimateEstimate (amount put to tender)The department's own costing of the work, prepared from the schedule of rates. Your bid is quoted against it, the EMD is calculated on it, and your class of registration is checked against it.Read in the glossary →. The SR rates include the contractor's profit and overheads, typically around 10 to 15%. That matters: the estimate is not the cost; it is the cost plus a normal margin.
Two ways a tender asks for your price
| Percentage-rate tender | Item-rate tender | |
|---|---|---|
| What you quote | One number: % above, below, or at par with the estimate | A rate for every BOQ item; the total is the sum |
| Where it is used | Many PWD, PRED and ULB works under a few crore | The K/W standard documents are item-rate; larger works, KRDCL, nigams, and where quantities are uncertain |
| Effort to prepare | Low: one decision | High: every line is a decision |
| Flexibility | None: every item moves together | You can price items you expect to grow higher, and items likely to be dropped lower (front-loading has rules; see below) |
| Payment | Measured quantities at SR rates, plus or minus your % | Measured quantities at your rates |
Cost it yourself
Before looking at what others quote, price the BOQ from your own numbers: material at your supplier's delivered price, labour at the rates you actually pay, machinery hire or ownership cost per day, the site engineer's salary for the period, transport, and a line for the money you will have tied up between bills (Module 6). Add the deductions the department will make from every bill: 1% cessLabour welfare cess (BOCW cess)1% of the construction cost, deducted from every bill and paid to the Building and Other Construction Workers Welfare Board.Read in the glossary →, 2% income tax TDS, royalty if you cannot show receipts, and the security depositSecurity deposit (SD)Money held by the department for the whole contract as a guarantee of performance, commonly 5% of the contract value in Karnataka works. Part is paid at agreement, the rest deducted from bills.Read in the glossary → retained until completion. What is left is your margin at par. Now you know what a 10% discount does to you.
Read the market
For the last ten awards from this division in this size band: what was the winning percentage, how many bidders were there, how far apart were L1 and L2? BiddingView shows this on every tender page and in the analytics by department and district. Three patterns are common:
- Crowded and deep (15 bidders, L1 at 20% below): the SR is generous for that item mix and established contractors have cheap material. A newcomer at 8% below will not win and should not try.
- Thin and near par (2 to 4 bidders, L1 at 1 to 5% below): the work is unattractive to the big names, remote, or small. A well-costed bid at your real margin can win.
- Above estimate (L1 at a premium): the SR has fallen behind material prices, often for bitumen or steel. The department will negotiate with L1; quote what the work costs and be ready to hold it.
The arithmetic of a discount
A 10% discount on a ₹1 crore estimate is not ₹10 lakh off your profit; it is ₹10 lakh off a total that includes the built-in margin. If the SR margin is 12%, a 10% discount leaves 2% before deductions, which is a loss after the money cost. Percentages compound in the wrong direction quickly. Work in rupees, not percentages, and stop at the number where the road pays for itself and for your time.
Price adjustment on long works
On K/W-4 works with a completion period over 12 months the contract price is adjusted for changes in the cost of labour, materials, fuel and lubricants by the formula in the document. Below that, and on every K/W-1 to K/W-3 work, your rates are fixed for the duration: a bitumen price rise in month five is yours to carry. Price the fixed-rate works with that in mind.
Practise before you pay
The Arena on this site lets you seal a guess at the winning bid on live tenders, free, and scores you against the real L1 when the award comes. Ten tenders in your district and your sense of the market stops being a guess.
Key takeaways
- The estimate is the SR cost plus a built-in margin of roughly 10 to 15%. It is not your cost.
- Percentage-rate: one number. Item-rate: every line, with rules against unbalanced pricing and additional security when a bid is far below the estimate.
- Cost the BOQ from your own prices first, then read the winning discounts in that division and size band.
- Work in rupees. Rates are fixed on works under a year; only long K/W-4 works get price adjustment.
Check yourself
0 / 3- 1.In a percentage-rate tender, what do you quote?
- 2.The SR includes a 12% margin. You quote 10% below. Before deductions, what margin is left?
- 3.On which works does the contract price adjust for material price changes?
Frequently asked
What is the difference between item rate and percentage rate tenders?
What discount usually wins PWD tenders in Karnataka?
What happens if my bid is far below the estimate?
Every live Karnataka tender, with the history the portal never shows.
Who won the last ones like it, at what discount, and the documents it asks for. Browse without an account; sign up when you want alerts.
Written from the KTPP Act and Rules, the Karnataka Public Works Departmental Code 2014, KPWD bidding documents and office checklists, and checked against awarded tenders on this site. Figures change; the tender document and the registering office are the final word. Spotted an error? Tell us.