Why “We’ll Just Ask a Contractor” Is Usually a Mistake

One of the most common objections architects hear when recommending a cost plan is:

“Why would I spend £1,000 or £2,000 on a Quantity Surveyor when a contractor can tell me what the project will cost for free?”

At first glance, this sounds perfectly reasonable. Contractors build houses every day, employ trades, buy materials and prepare quotations for a living. Surely they are better placed than anyone else to tell a client what a project is likely to cost.

The problem is that this line of thinking is based on a misunderstanding of what a contractor’s early estimate actually is, what it is trying to achieve and, perhaps most importantly, what it is not.

I have lost count of how many times I have seen a project begin with a contractor suggesting a budget of £300,000, only for the same project to reach tender stage six months later and attract prices of £500,000 or more. The client is shocked, the architect is embarrassed, everyone starts looking for someone to blame, and yet, from my perspective, the outcome was entirely predictable from the outset.

This is not because contractors do not understand construction. Quite the opposite. It is because an early contractor estimate is often being used for a purpose it was never designed to fulfil.

A Contractor’s Estimate Is Not A Budget

The first thing worth understanding is that a contractor’s estimate and a professional cost plan are not trying to answer the same question.

When a client asks a contractor for an early indication of cost, the contractor is generally trying to provide a broad assessment based on the information currently available. At the early design stages, that information is usually incomplete. Structural design may be in its infancy, building services may not yet exist, drainage strategies may be unresolved, planning conditions may still be unknown and many of the details that ultimately drive cost simply have not been designed.

The contractor therefore has little choice but to make assumptions.

The Quantity Surveyor also makes assumptions, but the objective is different. We are not trying to estimate what the current drawings might cost if built exactly as they appear today. We are trying to establish what the completed project is likely to cost, after the design has evolved, the risks have been identified, and the inevitable unknowns have started to reveal themselves.

This distinction may appear subtle, but it is fundamental.

The purpose of cost planning is not to predict the cheapest plausible outcome. It is not even to predict the tender return. The purpose of cost planning is to establish the likely final cost of the project so that informed decisions can be made while there is still time to influence the design.

The Commercial Reality Nobody Talks About

At this point, somebody will inevitably point out that contractors build projects every day and therefore should know what they cost. That is true, at least to a point, but it misses a rather important aspect of the discussion.

Contractors are not being asked to perform an academic exercise. They are not sitting in a room trying to determine the most likely final cost of the project with complete objectivity and no commercial interest in the outcome. They are businesses competing for work and, whilst most are perfectly honest people, they operate within a commercial environment that inevitably influences how early budgets are formed.

Let’s imagine two contractors are approached by a client with a set of early-stage drawings. One looks at the scheme and concludes that, based on his experience, the project is likely to end up costing £500,000. The other believes that if a number of optimistic assumptions are made, the same project could perhaps be delivered for £350,000.

Which one do you think is more likely to receive the next phone call?

This is not because clients are foolish. It is entirely natural. Most people have never built a house before, have limited construction knowledge and are understandably drawn towards the answer they would prefer to hear. Equally, many contractors have learned through experience that presenting a fully risk-adjusted budget at an early stage is often an excellent way of ensuring somebody else gets the opportunity to tender the project.

What often happens therefore is not outright dishonesty but something much more subtle and, in many ways, more dangerous. Risks are assumed away, optimistic assumptions are made and unknowns are treated as though they will somehow resolve themselves. The estimate starts to represent the best-case scenario rather than the most likely outcome.

The client then becomes anchored to a number that was never particularly robust in the first place and, once that anchor has been set, every subsequent discussion becomes more difficult. Architects find themselves trying to explain why costs are increasing, consultants are accused of being overly pessimistic and tender returns are criticised for being unrealistic, when in reality the original budget simply never reflected the likely cost of delivering the project.

The Problem With Limited Information

In my experience, this is where the biggest misunderstanding tends to occur.

When clients receive an early estimate from a contractor, they often assume that the contractor has somehow looked at the project and determined what it is going to cost. In reality, what the contractor has usually done is assess the information currently available and applied a price to it.

The problem, of course, is that at Stage 2 or Stage 3 a large proportion of the eventual project has not yet been designed.

A contractor can only price what they can see. They cannot properly price structural solutions that have not yet been developed, drainage strategies that have not yet been agreed, Building Regulations requirements that have not yet been identified or specifications that have not yet been selected. They can make assumptions, and they inevitably do, but assumptions are not the same thing as certainty.

This is one of the reasons why I often struggle when somebody tells me that a contractor has looked at a set of planning drawings and “priced the job”. What exactly have they priced? The information shown on those drawings perhaps, but certainly not all of the decisions, constraints and design development that will follow over the next six to twelve months.

Anyone who has been involved in residential construction for any length of time knows how these projects evolve. The structural engineer may introduce significant steelwork that nobody anticipated at planning stage. Ground conditions may require additional foundations. Building Control may impose requirements that affect both design and cost. The glazing package may turn out to be considerably more expensive than originally assumed. Clients who initially thought they were happy with standard finishes often decide otherwise once they start making selections.

None of these things are unusual. In fact, they are so common that they should almost be expected.

This is where the role of a Quantity Surveyor differs fundamentally from that of a contractor providing an early estimate. We are not simply trying to price what exists today. We are trying to understand what is likely to exist by the time the project reaches site and, ultimately, what it is likely to cost by the time it is completed.

That means considering risks, identifying areas where information is incomplete and making reasonable allowances based on experience from similar projects. Not because we know exactly what will happen, but because after reviewing enough projects you begin to recognise recurring patterns and recurring problems.

The irony is that these allowances are often the very reason a cost plan appears more expensive than a contractor’s estimate. However, when those same risks materialise six months later, as they frequently do, the budget suddenly starts moving towards the figure that looked overly cautious in the first place.

Why Quantity Surveyors Often Produce Higher Figures

At this point, some readers may reasonably ask why they should place more weight on a Quantity Surveyor’s assessment than on the opinion of a contractor who is actually building similar projects.

It is a fair question. The answer is neither that Quantity Surveyors possess some special ability to predict the future, nor that contractors do not understand construction. In fact, some of the best cost advice I have received over the years has come directly from experienced contractors. The difference is in the breadth of information available to each party.

A contractor may complete a handful of comparable projects each year and, naturally, their understanding of costs is heavily influenced by those projects. There is nothing wrong with that, but it does create a relatively narrow field of view. A Quantity Surveyor, on the other hand, is typically exposed to a much larger pool of information. We review projects from different architects, contractors, procurement routes, locations, and market sectors. We see schemes that are well managed and schemes that go badly wrong. We see projects that stay within budget and projects that exceed it dramatically.

More importantly, we do not stop looking once the tender has been returned, this is perhaps one of the biggest differences and one that is often overlooked. When people discuss project costs, they frequently focus on the tender figure as though that somehow represents the finish line. In reality, it is often little more than the starting point. What interests me far more than the tender return is what happens afterwards.

• Did the project stay within budget?

• Did the provisional sums prove realistic?

• Were significant variations instructed during construction?

• Did the design continue to evolve after the contract was signed?

• Were important elements of the scope missing from the tender package?

• How close was the final account to the original budget?

These are the questions that ultimately determine whether a budget was realistic, yet they are rarely discussed when comparing contractor estimates against professional cost plans. Over the years I have seen plenty of projects secure what appeared to be very competitive tender returns, only for the final cost to increase substantially during construction. Sometimes this was due to genuine design development, sometimes because risks had not been properly understood and sometimes because important elements of the scope had never been adequately defined in the first place. The reason is often less important than the outcome.

The client still ends up spending significantly more money than anticipated.

The Cost Of Trying To Save Money

The irony in all of this is that most clients are simply trying to save money. They avoid spending £1,000 or £2,000 on professional cost planning because they can obtain a contractor’s opinion for free. Yet those same clients are often willing to commit tens of thousands of pounds to a project based on assumptions that have never been properly tested.

When the project eventually exceeds budget, the consequences are rarely limited to cost alone. Designs need to be revisited, planning permissions may require amendment, relationships become strained and clients are forced into difficult compromises that could have been avoided had the budget been established realistically from the outset. 

This is why I become frustrated when I hear people dismiss cost planning as an unnecessary expense. The purpose of a cost plan is not to tell clients what they want to hear. In many cases it does precisely the opposite. It highlights uncomfortable realities, challenges assumptions and forces difficult conversations early.

That is exactly why it is valuable.

A realistic budget established at the beginning of a project gives architects the opportunity to design intelligently, gives clients the opportunity to make informed decisions and dramatically reduces the likelihood of unpleasant surprises later.

So before deciding to save a small amount on professional cost advice, it is worth asking a simple question.

If your project is likely to cost £300,000, £500,000 or perhaps considerably more, is it really sensible to risk a major budget shortfall in order to save £1,000 or £2,000 at the point when good information is likely to have the greatest impact?

In my experience, that is one of the most expensive false economies in residential construction.