From drawings to a priced tender, step by step

Decide whether the job is worth estimating before you spend two days on it. Estimating time is a cost, and a low win rate on the wrong jobs costs more than it earns.

• Log the tender: client / main contractor, project, closing date and time, submission method, tender validity required
• Contract form: NZS 3910:2023 head contract, SA-2017 subcontract, bespoke, or design & build
• Procurement type: construct only, design & build, ECI, negotiated, or schedule of rates
• Who else is bidding, and how many main contractors are you pricing to
• Fit check: size versus your capacity, location and travel, programme clash with current work
• Client check: payment history, retentions behaviour, relationship value
• Go / no-go decision recorded with a reason (this builds your win/loss data)

Tip: track your hit rate by client and job type. It shows which tenders are worth chasing.

Most pricing errors are scope errors, not arithmetic errors. Read the specification and drawings end to end first, then measure.

• Document register: every drawing number and revision, spec sections, schedules, addenda, tender clarifications
• Mechanical spec: equipment schedules, approved brands, "or equal" rules, duct construction standard, insulation spec, testing & commissioning section
• Architectural, structural and electrical drawings: ceiling heights, plant room access, roof access, penetrations, who supplies power to mechanical plant
• Fire drawings and spec: fire dampers, smoke control, fire mode interfaces (AS 1668.1)
• Ventilation basis: NZBC G4 and AS 1668.2 rates; energy basis: NZBC H1
• Seismic restraint requirements (NZS 4219) and who designs and certifies them
• Controls / BMS: points schedule, platform, open protocol (BACnet / Modbus), graphics, integration with other systems
• Contract conditions: retentions, liquidated damages, defects period, insurance, bonds, payment terms
• Mark up conflicts between drawings and spec as you go, they become RFIs or qualifications

Tip: the equipment schedule, the duct construction standard and the commissioning section of the spec drive most of the cost. Read those first.

Write down who does what at every interface. Gaps between trades are where contractors lose money.

• Fill the matrix for this project; every "?" is resolved, priced, or qualified
• Send RFIs early, with a closing date that leaves time to price the answer
• Track addenda and re-check takeoff against each revision

Measure everything from the drawings in a fixed order so nothing is missed. Mark each item on the PDF as you count it (Bluebeam, Groundplan, Cubit or similar), so a second person can check.

• Equipment counted against the schedule and against the plans (they often disagree)
• Ductwork measured by size and converted to m² and kg (see duct calculator)
• Pipework measured by size with fittings allowance
• Air terminals, dampers and accessories counted per floor
• Controls points counted and checked against the sequence of operation
• Takeoff marked up on the PDF so someone else can check it

Send enquiries out early, with a clear scope, the right drawings and a return date. Compare quotes on a like-for-like basis, not on the bottom line.

• Equipment quotes from at least two suppliers where the spec allows
• Subcontract scopes sent: sheet metal fabrication, insulation, electrical, controls / BMS, cranage, scaffold / EWP, balancing, passive fire
• Quote comparison sheet: what each one includes and excludes, lead times, validity, freight to site
• Normalise: add missing items to the cheaper quote before deciding it is cheaper
• Check lead times against the programme (VRF, AHUs and switchboards can be long)
• Note currency or price-rise clauses on imported equipment

Tip: read every supplier's exclusions line by line. Controllers, branch kits, freight and commissioning are the usual gaps (see the worked example).

Labour is where supplier and contractor pricing differ most. It is commonly cited as 40–60% of HVAC job cost, so errors here move the whole price.

1. Unit rates: hours per item (per fan, per FCU, per diffuser) or productivity per quantity (kg of duct per hour, metres of pipe per hour). Use the company's own historical rates first, published databases (SMACNA, MCAA) as a cross-check.
2. Base hours = quantity × unit hours.
3. Adjust for conditions: working height, access, occupied building, night or weekend work, congested ceilings, refurbishment, weather exposure on roofs.
4. Add non-productive time: travel to site, set-out, material handling, toolbox meetings, cleaning up.
5. Burdened rate: wage + ACC levies + KiwiSaver employer contribution + holiday pay and leave + vehicle and tools + allowances. Not just the hourly wage.
6. Crew check: total hours ÷ crew size ÷ hours per day = days on site. Does it fit the programme?

• Unit hours taken from company history where available
• Condition factors applied and written down (see labour calculator)
• Travel and accommodation priced for out-of-town sites
• Burdened rate confirmed with management, not guessed
• Crew size × duration checked against the main contractor's programme

Tip: where there is no history for a task, price it from first principles, list it as an assumption, and compare it with actual hours after the job.

The costs of running the job that are not tied to a single item. Often under-priced on small jobs.

• P&G priced as its own section, time-based where possible (weeks × weekly cost)
• Documentation and commissioning hours included, not assumed free
• Defects period and warranty obligations priced

List the risks, estimate a cost and likelihood for each, and price the expected value. Some risks are better excluded or qualified than priced.

• Risk register written for this tender
• Each risk is priced, excluded, or qualified, never ignored
• Site visit done or a qualification added for site conditions

• Markup vs margin: a 20% markup gives about 16.7% margin. To hit a target margin, price = cost ÷ (1 − margin). Use the converter.
• Overhead recovery: annual overhead ÷ expected annual turnover gives the percentage to recover on each job.
• Retentions: since 5 October 2023 retention money under commercial construction contracts is held on trust and must be kept in a separate account or covered by insurance or a bond. Still price the cashflow cost of money held back.
• Payment terms: payment claims and schedules under the Construction Contracts Act 2002. Long terms are a financing cost.
• Strategy: the margin can change by job (must-win, existing client, high risk, poor payer). Management decides, the estimator gives them the numbers.

• Overhead percentage confirmed with management
• Margin applied the right way (÷ (1 − m), not × (1 + m))
• Retention and payment terms reviewed and priced
• Final price reviewed by a second person (tender review meeting)

A fixed self-check routine. This is the answer to "how do you make sure your quotes are accurate?"

• Every drawing on the register was used, latest revision
• Every addendum and RFI answer is reflected
• Equipment count matches schedules and plans; model numbers and capacities match the spec
• Controls selection matches the sequence of operation, voltage and signal type (0–10 V, Modbus, BACnet)
• Units consistent (m vs mm, kW vs W, L/s vs m³/h)
• Benchmark: $/m² of floor area and $/kW cooling compared with similar past jobs
• Labour as a percentage of total is in the normal range for this job type
• Inclusions, exclusions and qualifications read once more against the spec
• Second-person check on anything over an agreed value

Tip: errors repeat. Add every mistake you find to this checklist so it gets checked on every future quote.

• Cover letter: price excl. GST, validity period, documents priced (drawing register and revisions)
• Inclusions: plain list by system
• Exclusions: everything in the scope matrix you are not doing
• Qualifications and assumptions: access, working hours, programme, lead times, design responsibility
• Alternatives and value engineering options, priced separately
• Schedule of rates for variations, if requested
• Programme / lead-time statement and key equipment brands offered
• Submitted on time through the correct channel; receipt confirmed

• Answer post-tender clarifications quickly and in writing
• Record win / loss and the winning price if you can find it
• If won: handover meeting to the project team with the estimate, assumptions and risk register
• After completion: compare estimated and actual hours and costs, update unit rates

Step 12 is what makes estimates more accurate over time.