A post-tender estimate is the link between tender reporting and cost reporting. It is prepared after all construction tenders have been received and evaluated it is incorporated into the tender report and becomes the first cost report.
It is a pre-contract activity and, as such, it is more flexible in its approach. It does relate back to a milestone document (i.e. the tender return) but it is not limited to the works carried out under the contract.
As it is an estimate, it relates to the project and will cater for aspects of works that do not form part of the contract, for example, utility connections, professional fees and advanced enabling works.
When undertaking a post-tender estimate it is important to consider the form of contract that will be reflected in the tender return. Much of this comes down to risk allocation, refer to NEC3 contract types as scheduled below.
The ECC comes in six options which are:
|Priced contract with activity schedule
|Priced contract with bills of quantities
|Target contract with activity schedule
|Cost reimbursement with pain-gain mechanism
|Target contract with bills of quantities
|Cost re-imbursement contract
The tender will have included risk allocation as required by the contract. The post-tender estimate needs to consider what aspects of the project remain as client risk. Where risk is shared or wholly owned by the client then these should form part of the Quantitative Risk Assessment (QRA) which goes to inform the risk provision the client needs to maintain for the project.