On a modular process project, equipment and vendor packages can be sixty percent of the direct cost. A quote that is misread by ten percent moves the estimate more than every labour norm combined. So we read them slowly.
That is the whole discipline in one sentence, but it deserves unpacking, because the reading is a skill in itself. A vendor quote arrives looking like the firmest number in the estimate: printed, signed, valid for thirty days. Firm-looking is not the same as complete, and the gap between the two is where equipment-heavy estimates fail.
Why quotes carry so much of the estimate
At Class 4 and Class 3, the equipment quotes are usually the best information in the file. The bulks are still factored, the labour is still normed, but the compressor has a price on letterhead. The temptation is to drop that price into the estimate and spend the review effort elsewhere.
Resist it. The quote is precise about what the vendor intends to sell, and silent about everything else: the freight, the duty, the motor that is “by others”, the commissioning engineer who bills separately, the price that quietly lapses before the project can commit. Every one of those silences is a cost, and they cluster. On a large package, the difference between the quoted number and the delivered-to-site number is routinely fifteen to twenty-five percent, and none of it is on the front page.
The checklist
Before a quote is allowed to carry an estimate line, it answers six questions.
- Scope split: what exactly is in the box, and what arrives separately? Instrumentation, first fills, spares, special tools, commissioning support. The vendor’s boundary is drawn for the vendor’s convenience, not for yours.
- Delivery terms: Ex Works (EXW), Free on Board (FOB) or Delivered at Place (DAP) change who pays freight, duty and insurance, and how much. An EXW price from another continent is missing an entire logistics project.
- Currency and validity: a 30-day quote in euros is a different number in the estimate than a 90-day quote in Canadian dollars, and the difference compounds if award is a year away.
- Escalation: is the price firm, or indexed to a steel or copper index? An indexed price is a formula, not a number, and the estimate has to carry the formula’s range.
- Exclusions: read the last page first. Taxes, bonds, warranties, site services and performance testing hide there, and each one reappears later as a change order if it is not priced now.
- Basis: is the quote against the current datasheet, or the revision from two design cycles ago? A quote for the wrong revision is a quote for a different machine.
The normalisation sheet
Every quote gets a normalisation sheet next to it that brings it to a common basis: delivered to site, in the estimate currency, at the estimate pricing date, with the excluded items added back from elsewhere in the estimate and the double counts removed. Only the normalised number is allowed into the estimate, and the sheet lives in the basis of estimate where a reviewer can follow every adjustment.
A worked example
Two quotes arrive for the same pump package. Vendor A quotes 1.8 million euros, EXW their works in Europe, motors excluded, thirty days validity. Vendor B quotes 2.9 million Canadian dollars, delivered to site, motors and commissioning support included, firm for ninety days.
On the front pages, A looks far cheaper. Normalise it. Convert at the estimate’s rate, call it 1.48, and A becomes 2.66 million Canadian. Add ocean freight, inland haul and insurance, call it six percent, and duty at the applicable rate: roughly 240,000 together. Add the motors A excluded, call them 180,000, and the commissioning support at 60,000. Vendor A now stands at about 3.14 million Canadian delivered and complete, against B’s 2.9 million. The cheap quote is the expensive one, and the thirty-day validity means A’s number may not even survive until award.
The point is not that Vendor A did anything wrong. Their quote was accurate about their scope. The point is that the comparison only became real after normalisation, and an estimate that compared the front pages would have picked the wrong number and banked a saving that never existed.
The quote is the vendor’s estimate of their scope. It is not yet an estimate of yours.
Where this goes wrong
Front-page comparison. Two quotes with different terms compared as printed. The procurement recommendation inherits the error, and the “saving” evaporates one freight invoice at a time.
The budget quote hardened. A vendor’s budgetary indication, given in a week without engineering, gets carried through two estimate revisions and quietly becomes firm in everyone’s memory. Label quotes by their class the way estimates are labelled by theirs.
The lapsed validity. The estimate carries a price whose validity expired eight months before sanction. In a rising market, that gap belongs in escalation or risk, and pretending the old price still stands is optimism dressed as data.
The missing split. A lump-sum quote with no scope breakdown cannot be checked, normalised or compared. Ask for the split. A vendor who will not provide one is telling you where the margin is hiding.
What the discipline buys
A normalisation sheet takes an hour per major quote. It converts the shakiest habit in equipment-heavy estimating, trusting the letterhead, into one of the most defensible parts of the file. When the review asks why the estimate carries 3.1 million against a 1.8 million quote, the answer is a sheet, line by line, and the conversation moves on.
Emerald Group develops and reviews estimates for equipment-heavy energy, e-fuels and industrial projects, where the vendor packages carry most of the cost and most of the risk. If your estimate leans on quotes, get in touch.