Need to get in a contractor but not sure what the difference is between a quotation, an estimate and a tender?
Don't take a guess for a bid nor guess on a bid - let us explain the differences in simple terms
Quotation, estimate and tender are three words that are seen to be synonymous by the average consumer but they aren't and the customer should beware of abuse by an unscrupulous contractor. It is very easy to think that a price is fixed when, in fact, the offer is completely meaningless.In fairness, many contractors (and particularly sole traders) genuinely don't understand the difference themselves but that does not make it any better. They will often refer to their offer as a quotation when it clearly isn't.
First, let us begin with a very basic law lesson. A contract consists of three elements; offer, acceptance and consideration. The latter is simply what you pay for the work. If you are looking for the price of decorating your house, for example, then you need to be very clear about what the offer is before you communicate your acceptance. If you are not clear then you need to be tenacious enough to keep at it until you completely understand exactly what you are getting for your money.
This offer should be in writing although there is nothing wrong per se with a contractor making a verbal offer first just to see if it's within your budget but it needs to be set out in writing before you accept it.
"Don't worry, mate - it's all the same, quote, estimate - same difference. Just sign here."
OK, so you now have your written offer - what does it call itself? Is it a quotation or not?
An estimate is a guess as to what the work will cost, no more no less - it is not a quotation. For an honest contractor, this is intended to be a realistic appraisal of what you can expect to be charged but it is not a guarantee. Theoretically your final bill could bear absolutely no resemblance to the estimate you were handed before work started even if you adhered rigidly to the specification of work required. Since it is so easy to abuse, there are those out there who will deliberately hand out a low estimate knowing full well that they can charge whatever they like when it comes to settling up. If you see 'Estimate' written over the top of your 'quote' ask for it to be changed to 'Quotation' before you accept it.
A quotation is a fixed price for a fixed quota of work carried out to a fixed specification. Thus, if you stick to the specification and don't deviate from it, the final price you pay will be the figure given you in the original quotation.
A tender is a formal bid document which is prepared by a client for the contractor to cost out. Unless you are having a lot of work done then this is not the sort of document you would be expected to produce. Its principal advantage is that it is a legal document prepared by the client therefore it should not contain any clauses or conditions that might have an adverse effect. Tender documents are normally prepared by quantity surveyors, architects or engineers.
Avoid the 'estimate' - the safest bet in most cases is to look for the word 'quotation'.