BCIS basics: understanding preliminaries in construction

Preliminaries or ‘prelims’ in construction refer to costed items in pricing documents covering activities required to establish, manage and support building works and the delivery of a project.

They do not form part of the measured works comprising the completed structures. They are also separate to risk allowances – financial provisions that account for identified risks, uncertainties and potential future requirements that may affect the final project cost.

The Royal Institution of Chartered Surveyors’ (RICS)⁽¹⁾ describes main contractor preliminaries as “items that cannot be allocated to a specific element, sub-element or component” that “exclude costs associated with subcontractors’ or work package contractors’ preliminaries.” It further defines work package contractors’ preliminaries as those relating to the work that is to be carried out by a works package contractor.

Within a traditional bill of quantities (BQ), the preliminaries section typically sets out the employer’s requirements and conditions for the project that the main contractor must consider and price for when preparing their tender. It usually provides a framework for contractors to price the additional resources, services and management activities required to support and deliver the project.

RICS’s New Rules of Measurement 2 (NRM 2) states that, where BQs are used, preliminaries are typically structured into two sections: information and requirements and the pricing schedule.

The information and requirements section is the descriptive section of the preliminaries.

Specific examples of information commonly included are:

• The drawings the BQ was based on
• Details of existing assets and mains services on or near the site
• Site constraints or limitations that may affect the contractor’s proposed construction methodology
• The client’s expectations regarding the management and delivery of the works, including security, safety, quality and protection measures or standards to be met
• Requirements relating to the operation and maintenance of the completed asset

The pricing schedule provides a structured format for contractors to price the items of their preliminaries. RICS guidance templates suggest this be separated into two cost centres – employer’s requirements, such as site accommodation for the employer’s representatives or training on the operation and maintenance of the asset, together with the main contractor’s cost items.

The latter cover a broad range of costs including but not limited to management and staff, site establishment, security, mechanical plant, temporary works, cleaning, site services and insurance bonds, guarantees and warranties.

The pricing schedule will usually provide clear headings under which contractors are required to price the various items with a fixed or time-related rate.

Guidance for analysing the cost of preliminaries

As stated in the BCIS elemental standard form of cost analysis: principles, instructions, elements and definitions, the cost of preliminaries for the focus asset should be stated and expressed as a percentage of the contract sum excluding preliminaries, contingencies and, where appropriate, contractor’s design fees.

If elemental costs are expressed as £/m² floor area or £/element unit quantity, it should be stated whether the costs include preliminaries and/or the main contractor’s overheads and profit.

To establish an appropriate percentage for preliminaries, those involved in pricing may review benchmark data from previously completed projects of a similar type, size and complexity. These historical benchmarks can provide a useful indication of the level of preliminaries likely to be required on a new project. However, allowances must be made where there are special circumstances, such as split sites, a long contract period, extensive site fencing or limited on-site storage.

Once a suitable percentage has been selected, the estimated cost of the main contractor’s preliminaries is calculated by applying this percentage to the estimated cost of the building works. This approach provides a practical and consistent method for estimating preliminaries during the early stages of project cost planning.

Main contractor’s preliminaries typically represent a significant proportion of construction costs and are affected by the selected construction methodology. In many cases, the construction approach has a greater impact on preliminary costs than any other project element.

The assessment of preliminaries should be treated as a continuous process throughout the cost planning stages. As project information becomes more developed, the preliminary cost allowance should be revisited and validated at each formal cost plan to ensure it remains appropriate and reflects the current project requirements.

As a related point, some contractors have historically included overheads and profit in the preliminaries percentage. When this happens, the preliminaries percentage can react to broader market conditions.

Further, if this practice occurs in periods of strong demand, contractors may seek to recover higher overhead and profit expectations through increased preliminaries percentages. Conversely, in more competitive markets, those percentages may reduce as contractors sharpen their pricing to secure work. This can make it difficult to distinguish between genuine project overhead requirements and broader market-driven pricing adjustments.

Using BCIS to analyse the cost of preliminaries

BCIS data is a valuable resource when estimating and reviewing the cost of preliminaries.

By analysing data based on completed projects within the BCIS database, typical preliminary percentages for robust comparators can be identified.

This benchmarking exercise helps establish a realistic preliminary allowance and reduces reliance on subjective judgement alone. For instance, BCIS Contract Percentages, available under BCIS CapX, can be used to assess preliminary percentages applied on projects of different values. These range from those under £620,000 to those with a value exceeding £8.3 million.

Elsewhere, BCIS Schedule of Rates, also available under BCIS CapX, can be used to assess how the percentage for preliminaries can change the overall project cost on projects of different value.

For example, within BCIS Major Works Estimating Prices – a database that provides construction professionals with a comprehensive guide to current net-cost unit rates for building work – users can add rates for different works to a customised abstract and adjust the preliminaries percentage applied.

They can also amend the anticipated contract value, overheads and profit percentage, apply either the BCIS All-in Tender Price Index or BCIS General Building Cost Index, and select a location factor. Together, these adjustments generate a robust guide-price breakdown tailored to the specific requirements of their project.

BCIS data provide a useful starting point, supporting both the initial estimation of preliminaries and the ongoing validation of cost plans throughout the design and procurement process.

Allowances for preliminaries should still be assessed and adjusted further where necessary to reflect specific project conditions. Factors such as site location, access restrictions and health and safety obligations can all have a substantial impact on the final cost of preliminaries.

Learn more about analysing preliminaries with BCIS, and discover how to make the most of your BCIS CapX subscription, by contacting our team today.

To keep up to date with the latest industry news and insights from BCIS, register for our newsletter here.

More BCIS Basics

Are you using the right construction index?

Managing inflationary risk in construction 

Taking the labour out of labour calculations

Six principles of benchmarking in construction

Six reasons to benchmark in construction

Using location factors in construction

^{(1) RICS NRM: New Rules of Measurement – here}