BOQ vs lump sum: which pricing model works?

When a client asks for a construction quote, there are broadly two ways to price it: a detailed Bill of Quantities (BOQ) or a lump sum. The choice matters more than most clients realise — it directly affects transparency, risk allocation and final cost.

A BOQ breaks every element of work into measured items — 45 cum of RCC M25, 500 sqm of plastering, 200 rmt of drainage. Each item has a unit rate. The client pays for actual measured quantities. If the wall is 5% longer than estimated, they pay 5% more for that item — fair and transparent.

A lump sum is a single fixed price for the entire scope. It seems simpler, but the risk sits with whoever got the estimate wrong. Contractors pad lump sums with contingency to cover unknowns. Clients pay for that padding even when the unknowns do not materialise.

At Buildora, we use BOQ-driven pricing for almost everything. Here is why: construction has too many variables for lump sum to be fair to either party. Soil conditions change. Designs get revised. Quantities vary from drawing takeoffs to actual site dimensions.

BOQ pricing means the client sees exactly what they are paying for. Every item, every rate, every measurement. If the scope changes, we measure the change and price it from the same rate schedule. No arguments, no surprises.

The practical advice: use BOQ for any project above 25 lakh. Use lump sum only for small, well-defined scopes where the risk of variation is minimal — like a boundary wall with fixed dimensions.