Our Quotation Was Not the Cheapest. We Read the Other One Line by Line.

We lost the first round of a job this year on price. Our number was higher than the other quotation by a margin the owner called significant, and he did the sensible thing: he sent us both documents side by side and asked us to explain the gap. He expected us to tell him the cheap one was cheap because it was bad. We did not say that, because when we read it properly it was not bad. It was a smaller job wearing the same name as ours.

This is the capital side of a comparison we have written about before from the other end. The cheaper quotation was not the cheaper plant is about what the plant costs every month once it is yours. This post is about the purchase price itself — where a lower number actually comes from, how we read a rival document when an owner asks us to, and what we refuse to do with it.

A price difference is a scope difference first, and almost never a margin story

When two quotations for the same building differ by a large amount, the instinct is to assume somebody is taking more profit or using worse steel. It is rarely either. The design decides the cost long before the commercial page does. In our experience the difference is nearly always sitting in what each document includes, and it is usually in the same handful of places. Civil works in or out — we now price the concrete three ways, and a quotation that excludes it is not comparable with one that includes it until you have a concrete number from somewhere. The front-end chambers — a screen channel, a grit chamber — which are easy to leave off a drawing and awkward to add once the cover slab is on. The grease interceptor, which we deliberately quote on its own line and never inside an STP package price, so our plant price looks dearer than one with the interceptor quietly absorbed or omitted. Equalisation, which is the first tank an owner is asked to delete and the one he will miss. Standby units, which on a small plant we would rather spend on a second quiet air pump than on a second large machine, and which parts of the equipment list we can support in five years. Sludge hauling and third-party laboratory, which we always show as estimates rather than leave out. Alkalinity correction and coagulant, shown as an estimate and marked if required.

Add those up on an ordinary commercial plant and you have accounted for most of a gap that looked like greed. That is not a defence of our price. It is just where the money actually is.

We do not tell an owner that the cheap plant must be imported junk

There is a line of argument available to us here that we have decided not to use. It is easy to look at a competitor's packaged plant at a low price and tell the client it must be a container shipped in from somewhere with no spare parts behind it. We do not say that, for a simple reason: it is often not true. Those units can be, and frequently are, built locally by people who know what they are doing. Assuming otherwise is how a company talks itself into believing its own price is fine when it is not.

So the discipline we hold ourselves to is that our number has to be right on its own terms, not right relative to a story we have told about somebody else's. If we cannot explain our price by what is in it, the problem is our price.

A low price is not proof that a corner was cut. Sometimes it is a company buying the job.

We should be honest that we do this ourselves at the entry end of our range. A thin margin on a first job with a new type of industry is a decision, not an accident, and the reason is that we would rather be building than quoting — the same reasoning that makes us hold a standard way of building rather than re-engineering every job. An owner reading two documents cannot tell the difference between a thin margin and a thin scope from the price alone — and the price alone is the one thing he can see.

Which is why the question that gets him somewhere is not why is yours more expensive but what is in each of these, and what will each of them cost me every month. The second half of that is the part that does not appear on either front page. Our own figures for that are published: roughly twenty-nine pesos a cubic metre to run a conventional biological plant with fixed-film media, against roughly ninety for an advanced oxidation train, on our contracts, with the usual caveat that every site differs — and the stage that moves it most is the one an owner is tempted to buy without needing, which is why we argue for designing to the end goal and no further.

Four things that have to match before two quotations are comparable at all

When an owner asks us to read the other document, this is what we actually check, and we check it before we look at either price.

First, the design basis. Both plants should be sized for the same flow and the same influent strength, and almost nobody has an influent result, so somebody has assumed. If one document assumed BOD 250 and ours assumed 400, we are not pricing the same plant, and we have written about showing several strengths side by side precisely so that the gap between them is visible instead of buried. We have also priced the same building three ways on technology alone, and the technology was not what decided the price.

Second, the target. The discharge class decides the parameters, and the difference between Class C and Class B is ammonia at 4 against 3 milligrams per litre and phosphate as P at 4 against 1.5. That is a different plant, not a different finish. Establishing the receiving water and its class is work we do at our own cost before quoting, because an owner should not have to buy the answer to that question twice. Our parameters by industry page is the shortest way to see which numbers are likely to govern, and the nutrient field guide is where the ammonia and phosphate arithmetic sits.

Third, the civil route. Our concrete benchmark is about fourteen thousand pesos per cubic metre of tank volume at 3,000 psi — roughly 1.2 million for a 70,000-litre three-chamber tank — and how the tanks are drawn moves that number more than any equipment choice does. Whether the tanks go in the ground or on it moves it again, and the clarifier detail is where we stopped letting it move at all. If one quotation builds it and the other does not, the owner is comparing a complete number against a deposit.

Fourth, the definition of finished. Energised is not commissioned, and the two documents may well be promising different things by the same word. A plant handed over the week the panel goes live and a plant handed over when a third-party sample comes back inside the limits are separated by several weeks of somebody's attention, and that attention has a cost whether or not it has a line item. The same is true of the programme: equipment was never the long part, so a short promised timeline usually means the concrete has been left to somebody else.

Sometimes the other quotation is genuinely cheaper, and we say so

This has happened. We have gone through a rival document, found that it covered the same scope, sized the plant on a defensible basis, and arrived at a lower number than ours, and we told the owner exactly that. We lose work that way and we would rather lose it that way than win it by making him doubt something that was fine. A review that always concludes the reviewer should get the job is not a review, it is a sales document, and we have said the same thing when reading a client's own drawing.

There is also a version of this where we are the ones who need to change, not the document. If a competitor is building the same plant properly for less, that is information about our cost base, our fabrication, our concrete, our overhead — and it is more useful to us than the job would have been.

What we will not do with somebody else's quotation

We do not call the other designer incompetent. On the drawings we have reviewed, what looks like incompetence is nearly always an information problem — he was given a flow figure and no strength, no survey, and an operator who will be asked to carry the result, or nobody had established the receiving water before he started.

We do not price-match by silently thinning our own scope. If we drop to a number, we drop the scope with it in writing, and the owner is told which chambers and which units left the document. We hold the same line on what a quotation discloses: assumptions and genuine client decisions stay in, whatever the length. A cheaper quotation that is a smaller scope wearing the same name is the thing we are warning him about; we are not going to produce one.

And we do not hand him a list of accusations to read out to the other supplier. What we hand him is a comparison of what each document contains, because the questions worth asking before signing are about scope and assumptions, not about character. He is the one living with the plant; he is entitled to the arithmetic rather than our opinion of a competitor.

Where this stops being transferable

All of the above assumes an owner who will read two documents properly, and most of the gap we have described only becomes visible if both suppliers wrote down their assumptions. Against a one-page quotation with a model number and a total, there is nothing to compare — the honest answer is that nobody can tell you what that price includes, including us.

It assumes a plant in our range, which is small and mid-sized commercial buildings. On a large contract with a procurement department, itemisation is mandated and the comparison is easier — on a small job we argue the opposite way, that the document should be two pages, and a two-page quotation is harder to compare line by line by design. On a tender with a fixed bid format, none of this applies — the format decides.

And our own cost positions rest on things that are local to us: a Cebu fabrication and civil network, concrete and labour we can price within a narrow band, and the ability to absorb a remedy into base scope without the number moving much. A supplier importing the same equipment has a genuinely different cost structure and may be right to quote it differently. The part we would still hold to anywhere is narrower than our prices: two numbers are not comparable until you know what each of them includes, and the owner is the only person who can insist on that.

If you are holding two quotations for the same plant and the gap does not make sense, our STP price estimator and design generator will give you an independent third number to read them against, and our completed projects show the kind of work the figures above come from. If you would rather talk it through, tell us about the building, ask us to read both documents with you, or book a free 15-minute consultation.