Quantity Surveying: Profession, Scope and Cost Terminology

Introduction and context

Construction projects transform financial resources, land, materials, labour, technology and professional knowledge into physical assets. Because these resources are limited, the project must be planned and controlled not only technically but also economically. Quantity surveying is the professional discipline concerned with the measurement, valuation, procurement and cost management of construction work throughout its life cycle.

A quantity surveyor (QS) is not merely a person who measures quantities from drawings. The modern QS interprets design information, advises on cost and value, supports procurement decisions, manages commercial risk, administers contractual payment processes and helps the client obtain the best practicable balance between cost, time, quality, risk, sustainability and performance.

The discipline has developed from traditional measurement and bill preparation into a broader construction-management and commercial-advisory profession. Its work may cover buildings, civil engineering, infrastructure, industrial facilities, maintenance, refurbishment, facilities management and dispute resolution.

Learning objectives

After studying this chapter, a student should be able to:

1. Explain the purpose and evolution of quantity surveying.
2. Describe the quantity surveyor’s responsibilities at each major project stage.
3. Distinguish cost, price, value, budget, estimate, tender and final account.
4. Identify the principal stakeholders and typical QS deliverables.
5. Explain the competencies and professional behaviours required of a graduate quantity surveyor.
6. Apply basic cost terminology to a construction case.
7. Discuss ethical, technological and contemporary issues affecting the profession.

1. The nature and purpose of quantity surveying

Quantity surveying is the systematic management of construction resources and commercial information. Its central purpose is to assist informed decisions about what is to be built, how it will be procured, how much it is likely to cost, how payments and changes will be valued, and whether the completed project has achieved the client’s objectives.

The discipline combines several forms of knowledge:

• Construction technology: understanding materials, methods, sequencing and buildability.
• Measurement: quantifying work in consistent units from drawings, models and specifications.
• Economics: understanding scarcity, inflation, markets, productivity and opportunity cost.
• Contract practice: interpreting obligations, risks, payment rules, variations and claims.
• Cost management: forecasting, benchmarking, monitoring and controlling expenditure.
• Communication: presenting complex commercial information clearly to technical and non-technical stakeholders.
• Professional judgement: making defensible recommendations when information is incomplete or uncertain.

A QS may work for a client, consultant, contractor, subcontractor, developer, government agency, specialist supplier, bank, insurer, arbitrator or law firm. The exact title varies by country and employer. Related titles include cost consultant, construction cost manager, commercial manager, contracts manager, estimator and claims consultant. Although these roles overlap, their responsibilities depend on the organisation and stage of the project.

Traditional and contemporary roles

Traditionally, the QS prepared bills of quantities, obtained tenders, advised on the lowest suitable tender and valued work during construction. Contemporary practice retains these functions but adds early cost planning, whole-life costing, risk analysis, value management, digital measurement, carbon assessment and strategic procurement advice.

The modern professional therefore asks questions such as:

• Is the proposed facility affordable, not merely technically feasible?
• Which design option provides the required performance at the lowest whole-life cost?
• Are project risks allocated to the party best able to manage them?
• Does the procurement route support the client’s priorities?
• Are current costs supported by reliable market evidence?
• How will design changes affect cost, programme, carbon and operational performance?

2. The project life cycle and the QS role

Project stages vary between organisations and standard forms of appointment, but a useful sequence is: strategic definition, feasibility, concept and design development, procurement, construction, completion and operation. The QS contributes throughout this sequence.

2.1 Strategic definition and feasibility

At the earliest stage, the client may have only a business need, a site and a broad description of the intended facility. The QS helps convert that need into a financially informed project strategy.

Typical activities include:

• preparing an initial order-of-cost estimate;
• benchmarking against comparable projects;
• identifying project cost categories and exclusions;
• advising on affordability and funding limits;
• considering land, statutory, professional, finance and contingency costs;
• identifying major commercial risks;
• testing alternative sizes, standards and construction systems;
• advising on procurement routes and likely market capacity; and
• supporting feasibility, option appraisal and business-case preparation.

Early estimates should be expressed with an appropriate accuracy range. A figure based on a sketch design must not be presented as if it were a tender price. The QS should state assumptions, inclusions, exclusions, data sources, price level and uncertainty.

2.2 Concept and developed design

As the design becomes more defined, the QS develops a cost plan. A cost plan distributes the approved cost target among building elements or work packages. It enables the design team to see the financial consequences of its decisions.

Typical activities include:

• measuring approximate quantities or areas;
• pricing elemental or functional components;
• comparing design options;
• updating inflation and location adjustments;
• reviewing design changes and their cost consequences;
• conducting value management or value engineering;
• identifying provisional sums and design development allowances; and
• reporting risks, assumptions and cost movements.

A useful cost plan is not simply a list of prices. It is a decision-making instrument. It should show the relationship between scope, quality, risk, time and cost.

2.3 Detailed design and pre-contract documentation

When the design is sufficiently developed, the QS prepares or coordinates measurement and pricing information for procurement. Deliverables may include:

• bills of quantities;
• schedules of works;
• pricing schedules;
• elemental cost plans;
• pre-tender estimates;
• cash-flow forecasts;
• tender instructions and commercial amendments;
• contract-risk schedules; and
• evaluation criteria and tender analysis models.

Measurement must be systematic. The QS identifies the work, selects an appropriate unit, determines the quantity and describes the item so that tenderers can price it consistently. Depending on the applicable standard method of measurement, work may be measured in cubic metres, square metres, metres, kilograms, tonnes, number, hours or a lump sum.

2.4 Procurement and tendering

During procurement, the QS supports the client in obtaining and evaluating offers. The work may involve preparing tender documents, answering commercial queries, issuing clarifications, organising pre-tender meetings and analysing submitted prices.

Tender analysis should consider more than the lowest total. Relevant considerations include:

• compliance with the documents;
• arithmetic accuracy;
• qualifications and exclusions;
• abnormal or unbalanced rates;
• programme and proposed resources;
• contractor experience and financial capacity;
• health, safety and environmental performance;
• risk allowances;
• proposed subcontracting arrangements; and
• whole-life or quality considerations where applicable.

A tender recommendation should distinguish facts from professional judgement. It should record the basis of comparison and explain any adjustment made to achieve a fair comparison.

2.5 Construction stage

During construction, the QS becomes a principal source of commercial information. Responsibilities may include:

• measuring work executed;
• valuing interim payment applications;
• assessing variations and instructions;
• maintaining the cost report;
• forecasting the final cost;
• reviewing claims for extensions of time or additional payment in collaboration with other professionals;
• monitoring provisional sums and prime-cost items;
• preparing cash-flow information;
• assessing subcontractor accounts; and
• advising on commercial risks and settlement strategies.

The QS must distinguish between work that has been completed, work that is properly stored or otherwise payable under the contract, and work that is merely proposed. Payment certification should follow the contract, supporting records and applicable law.

2.6 Completion, defects and final account

At completion, the QS helps close the commercial record. The final account establishes the agreed financial value of the work under the contract, including the original contract sum, authorised changes, measured quantity adjustments, claims, provisional sums, fluctuations where applicable, and agreed deductions.

The QS may also assist with:

• preparing the final measurement;
• agreeing outstanding variations;
• reconciling retention and other deductions;
• reviewing claims and contra-charges;
• preparing financial statements for the client; and
• recording lessons for future projects.

The final account is not automatically the same as the contractor’s last payment application. It is a negotiated or determined contractual valuation supported by evidence and the contract’s rules.

2.7 Operation, maintenance and asset management

Construction cost is only one part of an asset’s economic performance. During operation, the QS may contribute to life-cycle costing, planned maintenance, refurbishment, condition surveys, facilities management procurement and asset replacement strategies.

A whole-life perspective considers initial construction cost together with operation, maintenance, renewal, energy, disposal and other relevant costs over a defined analysis period. Comparisons must use consistent assumptions about service life, inflation, energy prices, discounting and performance; otherwise a life-cycle result can give a false impression of precision.

3. Stakeholders and professional relationships

Construction is a temporary multi-organisational activity. Stakeholders have different objectives, information and risk tolerances. Commercial advice is effective only when the QS understands these relationships.

Stakeholder conflict is not necessarily a sign of poor management. A client may seek cost certainty while a contractor seeks flexibility; a designer may seek a higher specification while the funder imposes a budget limit. The QS contributes by making consequences visible and ensuring that recommendations are based on defined criteria.

4. Core cost terminology

Cost terminology is often used loosely in ordinary conversation. In professional practice, distinctions matter because each term describes a different point of view, decision stage or contractual status.

Cost

Cost is the amount of resources consumed or payable to produce, acquire, operate or dispose of something. In construction, cost may include labour, materials, plant, subcontract work, preliminaries, overheads, finance, professional fees, taxes and other defined components. Its meaning must be qualified: construction cost, project cost, capital cost and whole-life cost are not interchangeable.

From a contractor’s perspective, direct cost may include labour, materials and plant directly attributable to an item. Indirect cost may include site management, temporary facilities, insurance and head-office overheads. Classification depends on the purpose of the analysis.

Price

Price is the amount quoted, charged or paid in an exchange. A tender price is the contractor’s offer for the defined scope under stated conditions. Price can differ from cost because it includes profit, risk allowances, market conditions, strategic considerations and sometimes financing or tax effects.

Value

Value is the worth or usefulness attributed to an outcome by a particular stakeholder under defined circumstances. Value is not necessarily equal to the lowest price. A higher-priced option may provide greater durability, flexibility, safety, revenue or reduced operating cost.

Value management is a structured process for achieving required functions at the best overall relationship between performance and resource use. It must not be confused with indiscriminate cost cutting. Removing a required function can reduce value even if it reduces initial cost.

Budget

A budget is an approved financial limit or allocation for a defined scope and period. It is a control target, not necessarily a prediction of the final outturn cost. A budget may include allowances for risk, design development, inflation or contingency, depending on the client’s rules.

A budget should state its base date, currency, tax treatment, scope, exclusions and approval status. A change in scope should not be concealed by silently changing the budget.

Estimate

An estimate is a forecast of probable cost based on information available at a particular time. Estimates may be preliminary, elemental, detailed, resource-based or risk-adjusted. They are uncertain because design, quantities, prices, productivity and market conditions may change.

The reliability of an estimate depends on scope definition, measurement quality, price data, assumptions and estimator competence. Greater detail does not automatically make an estimate more accurate; false precision is a major reporting risk.

Tender

A tender is a formal offer submitted in response to procurement documents. It may contain a total price, rates, programme, qualifications, method statements and other commitments. The tender becomes contractually significant when accepted in accordance with the procurement process and applicable contract rules.

Tender price, estimate and budget may differ. The budget is the client’s approved financial framework; the estimate is the QS’s forecast; the tender is a bidder’s offer under specified conditions.

Contract sum and final account

The contract sum is the amount stated or determined under the construction contract at award or at a defined contractual point. It may be fixed, remeasurable, target-based, cost-reimbursable or subject to adjustment.

The final account is the final agreed or determined valuation of the contractor’s entitlement after incorporating the contract’s measurement rules, variations, claims, provisional items, fluctuations and deductions. It represents the financial closure of the contract, not simply the original tender total.

Contingency, allowance and provisional sum

A contingency is an allowance for identified or unidentified uncertainty, depending on the organisation’s terminology. It should not be used as an unexplained reserve to hide omissions.

An allowance is a stated provision for an item whose amount or definition is not yet fully known. A provisional sum is a contract allowance for work or services that cannot be fully described or quantified at tender stage; its treatment is governed by the contract. These terms must be used consistently because they affect cost control and contractual entitlement.

Direct, indirect, overhead and profit

Direct costs can be traced to a work item or activity. Indirect costs support the project but cannot be economically assigned to one item alone. Overhead is the cost of running the organisation or project infrastructure. Profit is the return sought by the contractor after recovering relevant costs and risks.

A simplified pricing relationship, used only when the categories are clearly defined, is:

The equation is an additive cost model, not a universal contractual formula. Each term must be measured on the same price basis and must not overlap. Taxes, escalation and finance costs are included only if the stated pricing basis requires them.

Prime cost, preliminaries and escalation

A prime cost item commonly represents the supply cost of a specified component for which the final selection or price is not known. The contract determines whether installation, wastage, attendance, overhead and profit are added separately.

Preliminaries are project-specific costs of managing and supporting construction, such as site establishment, supervision, temporary services, security and insurance. They may be priced as lump sums, time-related amounts or a combination.

Escalation is an increase in prices over time. It may arise from general inflation, labour shortages, commodity prices, exchange rates or supply-chain disruption. An estimate should identify whether its rates are at current prices, a forecast tender-date basis or a future expenditure basis.

5. Deliverables and information quality

Typical QS deliverables include:

• feasibility and order-of-cost reports;
• elemental cost plans;
• value-management reports;
• bills of quantities and schedules of works;
• pre-tender estimates;
• tender reports;
• cash-flow forecasts;
• interim valuations and payment recommendations;
• variation registers;
• cost reports and forecast final accounts;
• life-cycle cost studies; and
• final accounts and commercial close-out reports.

Each deliverable should identify its purpose, date, price base, scope, assumptions, exclusions, data source, uncertainty and approval status. Version control is essential. A cost report that does not show what changed since the previous report is difficult to audit and easy to misunderstand.

Reliable measurement and cost information also depends on coordinated drawings, specifications, schedules and digital models. Incomplete or contradictory information should be reported rather than silently interpreted.

6. Competencies and employability

A graduate quantity surveyor requires a balanced competence profile.

Technical competence

This includes construction technology, measurement rules, estimating, cost planning, contract administration, procurement, construction programming, risk management, sustainability and basic financial analysis.

Digital competence

Employers increasingly expect competence in spreadsheets, estimating and measurement software, document-control systems, common data environments, building information modelling (BIM), digital take-off and data visualisation. Technology supports professional judgement; it does not replace responsibility for checking inputs and outputs.

Analytical competence

The QS must interpret incomplete data, test assumptions, compare options, identify trends and explain uncertainty. A cost variance is not meaningful until its cause, timing and consequence are understood.

Communication and collaboration

The QS works with designers, contractors, clients, lawyers, authorities and suppliers. Reports should be concise but sufficiently transparent for another professional to reproduce the reasoning. Negotiation requires firmness about evidence without damaging productive relationships.

Ethical and professional competence

The professional should act with integrity, competence, impartiality where required, confidentiality and respect for law and public safety. Conflicts of interest must be disclosed and managed. Records must not be manipulated to create unjustified cost certainty or conceal errors.

7. A framework for interpreting cost information

A useful way to analyse any cost figure is to ask five questions:

1. What scope does it cover? Does it include land, design fees, taxes, finance, furniture, external works or operation?
2. Whose perspective is being used? Client, contractor, funder, operator or public authority?
3. At what date and location is it priced? Prices must be comparable on a consistent basis.
4. What level of certainty is claimed? What assumptions and risks remain?
5. What decision will it support? Feasibility, design selection, tender approval, payment or final settlement?

For example, a client’s project budget might include construction, professional fees, statutory charges and contingency, while a contractor’s tender may include only the defined construction work and contractual obligations. Comparing the two without reconciling scope creates an apparent discrepancy that is not a genuine estimating error.

8. Illustrative applied case: community health centre

Background

A public authority proposes a 2,400 m² community health centre on an existing site. The initial funding limit is stated as 6.0 million currency units at the client’s approved price base. The brief requires consultation rooms, diagnostic spaces, administration, external works and energy-efficient services.

Problem

An early consultant estimate indicates a construction cost of 5.2 million. The client assumes that the project is affordable because this is below the 6.0 million limit. The QS identifies that the two figures do not have the same scope or price basis.

Analysis

The 5.2 million figure covers building construction at current market prices but excludes professional fees, statutory charges, furniture and equipment, and a defined risk allowance. It also assumes that the site has no abnormal ground conditions. The client’s 6.0 million limit is a total project budget.

The QS prepares a scope reconciliation and identifies:

The arithmetic is an addition of separately defined allowances. It is valid only because the components are stated on a consistent price basis and are non-overlapping.

Approach and solution

The QS recommends three actions. First, the team confirms the brief and removes duplicated scope between the construction estimate and the equipment schedule. Second, it conducts value management, focusing on functions rather than arbitrary reductions. For example, alternative façade systems and plant-room arrangements are assessed for capital cost, durability, maintenance and energy performance. Third, the client decides whether to increase the budget, reduce scope, or defer a non-essential package.

The QS also introduces a risk register. Each major risk is assigned an owner, response and review date. The estimate is reported as a forecast with assumptions rather than as a guaranteed final cost.

Outcome

The client approves a revised brief that preserves clinical functions, selects a lower-maintenance façade and defers a non-essential landscaping enhancement. The revised forecast is brought within the funding limit, subject to design development and procurement conditions. The design team understands the cost consequences of its decisions, and the client receives a defensible basis for approving the project.

Learning points

• A budget and an estimate may have different scopes.
• A cost figure is meaningless without a price date and inclusions.
• Value management should protect required functions.
• Contingency must be visible and governed.
• Early QS advice can prevent a later affordability crisis.

9. Challenges, limitations and governance

Uncertainty and incomplete information

Early estimates are uncertain because design and market information is incomplete. The QS should use ranges, sensitivity analysis, explicit assumptions and risk registers where appropriate. A single number can be useful for approval, but it should not disguise uncertainty.

Market volatility

Materials, energy, labour and finance costs can change rapidly. Supply-chain disruption and exchange-rate movements may affect both price and programme. Historical rates require adjustment and professional review; they should not be transferred uncritically to a new project.

Scope change and information inconsistency

Late design changes cause remeasurement, rework, procurement disruption and possible claims. A disciplined change-control process should identify the origin, reason, cost, time effect, risk and approval status of each change.

Measurement and classification errors

Errors may arise from omitted work, double counting, inconsistent units, incorrect descriptions or using the wrong measurement rule. Independent checks, reconciliations and clear audit trails are basic controls.

Ethical risks

Commercial professionals may face pressure to understate estimates to secure approval, favour a bidder, conceal an error or certify unsupported work. Such behaviour undermines trust and may cause legal, financial and safety consequences. The QS should maintain evidence, disclose uncertainty and follow professional and organisational codes.

Artificial intelligence and automation

AI-assisted measurement, document comparison, cost prediction and anomaly detection are increasingly relevant. These tools can improve speed and identify patterns, but outputs depend on training data, classification conventions and the quality of source documents. Human review remains essential, particularly where an output affects payment, procurement fairness, contractual rights or safety. Organisations should govern data privacy, model transparency, permissions, cyber security and accountability.

Sustainability and carbon

Clients increasingly require carbon and resource information alongside monetary cost. A QS may support embodied-carbon measurement, life-cycle costing, circular-economy decisions and climate-resilience assessment. Monetary and environmental indicators should be presented transparently; a low initial cost is not necessarily a low-impact or high-value solution.

10. Best-practice principles

1. Define scope before comparing costs.
2. State the price base, currency, tax treatment and location.
3. Record assumptions, exclusions and uncertainties.
4. Use recognised measurement and contract procedures.
5. Reconcile design, specification, model and cost information.
6. Separate direct cost, overhead, risk and profit where useful.
7. Report changes from the previous estimate, not only the current total.
8. Use market evidence appropriate to the project and procurement route.
9. Check calculations and maintain an auditable record.
10. Communicate commercial implications early and clearly.
11. Protect confidentiality and disclose conflicts of interest.
12. Combine digital efficiency with professional judgement and accountability.

Chapter Summary

Quantity surveying is the professional management of construction measurement, cost, value, procurement and commercial risk. The QS contributes from feasibility through design, tendering, construction, completion and operation. Early work focuses on affordability, options and cost planning; pre-contract work focuses on measurement, documentation and tender analysis; construction-stage work focuses on valuation, change, forecasting and claims; and close-out work focuses on final measurement and the final account.

Cost, price, value, budget, estimate, tender, contract sum and final account describe different concepts and must not be used as synonyms. Their meaning depends on scope, perspective, price date, contractual status and uncertainty. Effective QS practice requires technical, analytical, digital, communication and ethical competence. Contemporary practice also addresses whole-life cost, sustainability, data governance and AI-assisted workflows. The profession’s central contribution is to make the economic consequences of construction decisions visible, reliable and professionally defensible.

Key Terms

Quantity surveying: Professional discipline concerned with construction measurement, cost, value, procurement and commercial management.

Quantity surveyor: Professional who provides construction cost, measurement, procurement and contract-related advice.

Cost: Resources consumed or payable to produce, acquire, operate or dispose of an asset.

Price: Amount quoted, charged or paid in an exchange.

Value: Worth or usefulness attributed to an outcome by a defined stakeholder.

Budget: Approved financial limit or allocation for a defined scope and period.

Estimate: Forecast of probable cost based on information available at a stated time.

Tender: Formal offer submitted in response to procurement documents.

Contract sum: Amount stated or determined under a construction contract.

Final account: Final agreed or determined contractual valuation after adjustments.

Cost plan: Structured allocation of a cost target among elements or work packages.

Bill of quantities: Measured and described list of construction work for pricing.

Preliminaries: Project-specific costs of managing and supporting construction.

Contingency: Allowance for defined or undefined uncertainty, according to stated rules.

Provisional sum: Contract allowance for work not fully defined or measurable at tender stage.

Value management: Structured process for achieving required functions with efficient resource use.

Whole-life cost: Cost incurred across acquisition, operation, maintenance, renewal and disposal.

Variation: Change to the work or obligation made under the contract.

Commercial risk: Possibility of an event affecting cost, time, entitlement or financial outcome.

Cost report: Periodic statement of forecast cost, commitments, changes, risks and variances.

Review Questions

Short Answer Questions

1. What is the principal purpose of quantity surveying?
2. State two responsibilities of a QS during the feasibility stage.
3. Distinguish a budget from an estimate.
4. What is a final account?
5. Give two examples of information that should accompany a cost figure.

Long Answer Questions

1. Explain the role of the QS across the project life cycle, from feasibility to final account.
2. Compare cost, price and value, using a construction example.
3. Discuss the contents and importance of a cost plan.
4. Explain the factors that should be considered when analysing tenders.
5. Discuss the technical, digital, analytical and ethical competencies required of a graduate QS.

Analytical / Application Questions

1. A client’s approved budget is lower than the consultant’s estimate. Develop a structured procedure for reconciling the difference before recommending scope reductions.
2. A contractor submits a tender that is 12% below the next compliant tender but contains several exclusions. Explain how you would analyse the tender and what evidence you would request.
3. A project experiences major material-price increases after tender acceptance. Analyse the possible commercial consequences and identify the records and contractual provisions that should be reviewed.

Multiple Choice Questions with Answers

Question 1

Which activity is most characteristic of the feasibility stage of a project?

A. Agreeing the final account

B. Preparing an initial order-of-cost estimate

C. Measuring completed work for interim payment

D. Settling subcontractor defects

Correct Answer: B. Preparing an initial order-of-cost estimate

Question 2

Which statement best distinguishes a budget from an estimate?

A. A budget is always a contractor’s tender

B. An estimate is an approved financial limit

C. A budget is an approved financial framework, while an estimate forecasts probable cost

D. There is no professional distinction between them

Correct Answer: C. A budget is an approved financial framework, while an estimate forecasts probable cost

Question 3

What is the principal purpose of a bill of quantities?

A. To record the client’s funding source

B. To provide measured and described work items for pricing

C. To replace the construction programme

D. To certify the building’s operational performance

Correct Answer: B. To provide measured and described work items for pricing

Question 4

Which item is normally associated with project-specific site support and management?

A. Profit

B. Preliminaries

C. Land value

D. Final account

Correct Answer: B. Preliminaries

Question 5

A tender is best described as:

A. A formal offer submitted in response to procurement documents

B. An approved client budget

C. A record of completed maintenance work

D. An estimate prepared after project completion

Correct Answer: A. A formal offer submitted in response to procurement documents

Question 6

Which statement about value management is correct?

A. It means removing the cheapest work items first

B. It seeks required functions at an efficient relationship between performance and resources

C. It is identical to reducing the contract sum regardless of performance

D. It applies only after construction is complete

Correct Answer: B. It seeks required functions at an efficient relationship between performance and resources

Question 7

Which document normally represents the final agreed or determined valuation of the contractor’s entitlement?

A. Initial feasibility estimate

B. Tender invitation

C. Final account

D. Concept brief

Correct Answer: C. Final account

Question 8

Why should a cost report state its price base and assumptions?

A. To make the report longer

B. To allow meaningful interpretation and comparison of the figure

C. To eliminate all project risk

D. To guarantee that the tender will be accepted

Correct Answer: B. To allow meaningful interpretation and comparison of the figure

Question 9

Which professional behaviour is most appropriate when an estimate contains substantial uncertainty?

A. Presenting a precise figure without qualifications

B. Hiding assumptions to avoid client concern

C. Reporting assumptions, risks and an appropriate level of uncertainty

D. Changing historical rates without review

Correct Answer: C. Reporting assumptions, risks and an appropriate level of uncertainty

Question 10

A simplified tender-price model adds direct cost, indirect cost, overhead, risk allowance and profit. If these categories are non-overlapping, what does the model represent?

A. An additive pricing structure

B. A guaranteed final account

C. A measurement rule for concrete

D. A statutory tax calculation

Correct Answer: A. An additive pricing structure