Site and building costs
These are almost always the buyer's, and almost always underestimated at the quotation stage.
- 1. Civil works: levelling, compaction, foundations, floor slab, aprons and drainage
- 2. Power distribution: transformer, main panel, cable routes, trays and terminations from the panel to each device
- 3. Water supply and treatment: borehole or connection, storage, pumps, filtration, chlorination or acidification
- 4. Standby power: generator, ATS, fuel storage, base and exhaust — a heat-related outage without it is a total-loss event
Logistics costs
These appear only when the Incoterm is read carefully, and they differ between bidders quoting the same goods.
- 5. Ocean or road freight and insurance to the correct delivery point
- 6. Import duty, VAT treatment, clearance agent fees and any demurrage exposure
- 7. Inland transport, offloading, cranes or forklifts and secure on-site storage
Installation and handover costs
A supply-only price and a commissioned-house price are different products.
- 8. Erection labour — local crew cost when the offer includes supervision only
- 9. Supervisor travel, accommodation, per diem, visas and standby days caused by site delays
- 10. Commissioning, calibration and a documented performance demonstration
- 11. Operator and maintenance training, plus as-built drawings, schematics and manuals
Operating readiness costs
Costs that fall due immediately after handover and rarely appear in the CAPEX budget.
- 12. First-year spare parts and consumables: pads, nipples, belts, sensors, motor spares, controller board
- Plus: local certification or inspection fees, and software or remote-monitoring subscriptions where applicable
How to neutralise them in the comparison
Build one evaluation sheet with a row per item above. Enter each bidder's price where it is included, and your own locally sourced estimate where it is excluded. The bottom line then reflects the cost of the finished house, not the cost of the crate.
Where an estimate is uncertain, carry the same figure for every bidder so the comparison is not distorted by your own assumption.
Exclusions checklist to send back to every bidder
- Confirm in writing whether each of the twelve items is included or excluded
- State the Incoterm and delivery point used for the offer
- State supervision days included and the day rate beyond them
- State commissioning criteria and who signs acceptance
- State the recommended first-year spare parts list with prices
- State the warranty start event: shipment, delivery or commissioning
- State what voids the warranty, including installation by others
Frequently asked questions
Civil works and foundations, power distribution from the panel to the equipment, water supply and treatment, standby power, offloading and cranes, inland transport, duty and clearance, erection labour where only supervision is offered, commissioning in some cases, training, documentation and first-year spare parts.
Because a lower total usually reflects a smaller scope or a lower specification: fewer fans for the same design temperature, thinner insulation, a simpler controller, supply without installation, or exclusions that you must buy locally at short notice. Once those are added back, the ranking often reverses.
That depends on how firm the scope and site data are. Projects tendered from a complete written specification with site and climate data carry far less uncertainty than projects tendered from a phone brief; the practical response is to reduce uncertainty before award rather than to rely on a single contingency percentage.
No. Exclusions are normal trade practice. What matters is that they are stated clearly, priced by you, and compared on the same basis across all bidders.